tag:blogger.com,1999:blog-58135253658349117572024-03-13T12:07:16.243-05:00the Hipcrime VocabWhat's a Hipcrime? You committed one when you opened this blog. Keep it up. It's our only hope.Unknownnoreply@blogger.comBlogger63125tag:blogger.com,1999:blog-5813525365834911757.post-56433215066623329642016-08-23T16:33:00.001-05:002016-08-23T16:33:28.117-05:00New LocationSo I was informed that some readers may not be aware of the new WordPress site. I guess this will be the official announcement (several months late):<br />
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<a href="http://hipcrimevocab.com/" target="_blank">http://hipcrimevocab.com/ </a><br />
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I don't plan on this site going anywhere (Blogger willing), so all old posts will remain. Thanks.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5813525365834911757.post-23158759433274104942016-04-19T10:37:00.000-05:002016-04-19T10:37:05.221-05:00New Site Up.The previous three posts about automation have been put up over at the new site:<br />
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<a href="http://www.hipcrimevocab.com/">www.hipcrimevocab.com</a><br />
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Thanks, and see you over there!<br />
<br />Unknownnoreply@blogger.com10tag:blogger.com,1999:blog-5813525365834911757.post-52350887861387590452016-04-10T14:54:00.000-05:002016-04-10T17:34:03.156-05:00Automation and The Future of Work: Black Lives Matter - part 2<b>The Politics of Unemployment and Automation</b><br />
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So what can we learn about the future of technologically-based unemployment based on the African-American experience? A lot, I think.<br />
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As the black employment situation deteriorated thanks to automation, the government attempted a number of ham-fisted responses to the problem that ultimately ended up making the situation worse, not better. It's probably an overstatement to say that all of the political events in the latter-half of the twentieth century in America derive from those actions, but surveying the history, one is struck by how much this is the underlying factor in every major political development since the 1960s, when President Johnson was first warned of the situation.<br />
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Governments promoted "affirmative action" schemes--differential hiring policies--to give African-Americans an advantage in the job market, theoretically to make up for the disadvantages noted earlier. It favored the hiring of blacks for local government jobs which could not be shipped off to the suburbs. And it promoted minority scholarships to help blacks pay for higher education.<br />
<br />
To cope with segregated schools, it began busing students from inner-cities to facilities throughout the city. The government funded housing "projects" to house the African-Americans unable to afford suburban homes of their own. These projects were based on utopian schemes promoted by European modernists after the war that the Europeans themselves had soundly rejected (Brutalist concrete towers devoid of green space surrounded by freeways).<br />
<br />
The social-safety net, always statistically serving more white people than black people in absolute numbers, increasingly became relied upon by urban blacks who had their jobs eliminated due to suburbanization and automation and had nowhere else to turn as their jobs vanished. In such places, entire generations exist who have never known steady employment, leading to dysfunctional behavior patterns. Generations before, such people had worked in the factories which were now long gone.<br />
<br />
What these policies ultimately did, however, was to drive a racial wedge between the population. Government became increasingly seen as serving "those people." The narrative that government does nothing but steal hard-working (white) people's money and give it to lazy (black) freeloaders became commonplace among the white population, fomented by a generously-funded right-wing media machine targeted to lower-income rural and suburban white voters. Conservative forces mined this racial resentment as a vehicle to dismantle the government which they had long despised due to it being a check on their power and limiting their wealth accumulation. Blacks were depicted as a parasitical "community" looking for handouts, whereas suburban whites were "rugged individualists" who earned their wealth by working hard in the "free market," and taxes, although never popular, came to be seen as simply "theft."<br />
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Busing became the match on the gasoline of suburbanization, as the last holdouts in the cities joined the mass exodus, leading to even more urban isolation and impoverishment. Affirmative action and minority scholarships fueled the racial resentment of lower-income whites, who had increasing difficulty finding jobs and funding expensive college educations for their own kids. Government and educational "quotas" became another reason for outrage directed at the Federal government. Housing projects promoted social stigma and exclusion, and ended up concentrating poverty, not alleviating it. The dense modernist flats looked more like cell blocks than homes, and were universally regarded as failures, with some even being <a href="http://www.theguardian.com/cities/2015/apr/22/pruitt-igoe-high-rise-urban-america-history-cities" target="_blank">torn down just decades after being built</a>.<br />
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The Republican Party increasingly became the vehicle of white racial resentment and irrational hatred of government. Southern Whites, increasingly seeing the federal government as an agent of enforcing racial equality, flocked to the Republican banner. The Southern states had always resented the Federal Government going back to the Civil War and Reconstruction, and this now intensified due to its support for the Civil Rights movement under Democratic presidents. The movement of population to the Sun Belt states (encouraged by air conditioning) gave the states in Dixie more and more political influence over the entire nation. The "Southern Strategy" pioneered by Richard Nixon recast the Republican Party as the maintainer of hierarchical racial order in the face of black assertiveness. The entirely of Dixie switched overnight from Democrats to Republicans, to the extent that The South and Sunbelt became effective one-party states under Republican rule.<br />
<br />
But it wasn't just the South--much of the country where blacks had migrated became <i>"Dixiefied"</i>--animated primarily by fanatical hatred and resentment of government at every level, and suspicion and disparagement of metropolitan areas (which nonetheless remained the major sources of economic activity and population growth).<br />
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In areas of the Northeast and Midwest that had seen a significant influx of black migrants who were now unemployed due to automation, racial resentment pushed working class whites into the arms of the Republican Party here too. The party transformed its identity from one that represented wealthy business interests and advocated limited government (The Rockefeller/Goldwater era), to one animated by downscale suburban and rural whites fueled by racial resentment and hatred (as well as <a href="http://www.politico.com/magazine/story/2014/05/religious-right-real-origins-107133?paginate=false" target="_blank">religion</a>). The Republicans cast themselves as the party of "law and order"-- coded dog-whistle words for keeping minorities in their place. Democrats became seen as the party of minorities, and later "political correctness" in the eyes of rural and suburban white Americans. In other words, "the other team."<br />
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This was cemented in 1980, when Ronald Reagan's <a href="https://en.wikipedia.org/wiki/Philadelphia,_Mississippi#Reagan.27s_visit" target="_blank">first campaign stop was in Philadelphia Mississippi</a>, the site of the murder of several civil-rights activists, calling for an assertion of "state's rights." (a common dog-whistle phrase opposing Civil Rights). Reagan touted the <i>"Cadillac-driving welfare queen"</i> (in reality a myth inspired by a <a href="http://www.slate.com/articles/news_and_politics/history/2013/12/linda_taylor_welfare_queen_ronald_reagan_made_her_a_notorious_american_villain.html" target="_blank">single person</a>), and <i>"strapping young bucks buying T-bone steaks,"</i> as a way to gain support for destroying the social welfare system, something conservatives in America had desired since the New Deal. Affirmative action polices and quotas were used to stoke white racial grievance against the federal government. Even today, with the safety net in tatters, Obama is touted as a "food-stamp president" handing out free cell phones to poor urban blacks in right-wing Republican circles. (In reality, the size of the debt and the federal government has expanded much more slowly under Obama than under Republican presidents, especially Reagan).<br />
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The 1990's began a conservative counter-revolution with the construction of think-tanks (The Heritage Foundation, The American Enterprise Institute, etc.), lobbying groups (ALEC, the Chamber of Commerce), and a right-wing media machine with vast reach and unlimited funds (FOX news, talk radio, et. al). In 1981, famed Republican strategist Lee Atwater admitted:<br />
<blockquote class="tr_bq">
You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger” — that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “Nigger, nigger.”</blockquote>
<a href="http://www.stirjournal.com/2016/04/01/i-know-why-poor-whites-chant-trump-trump-trump/" target="_blank">I Know Why Poor Whites Chant Trump, Trump, Trump</a> (Stir)<br />
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Then came the drug war. It began under Nixon and ramped up under Reagan. Ostensibly to stamp out teenage "drug abuse," it resulted in an incarceration boom unprecedented in all of human history except for perhaps under Stalinist dictatorships (somehow, white taxpayers had no problem footing the bill for this). The illegal drug trade became one of the few avenues of decent incomes and entrepreneurship available to African-Americans due to its underground nature. There is even some evidence that drug abuse was encouraged in black communities to provide justification for this state of affairs. Police forces increasingly became, in <a href="http://www.theguardian.com/media/2015/apr/29/david-simon-baltimore-police-army-occupation" target="_blank">David Simon's words</a>, "An army of occupation." "Three strikes" laws, "Zero-tolerance" polices, "broken windows" policing, and "stop and frisk," were all theoretical justifications for cracking down on crime, but enforced disproportionately against urban black populations. Some places became notoriously predatory, as demonstrated by the Federal investigation of Ferguson, Missouri (a ghetto created by the loss of St. Louis' manufacturing economy).<br />
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Today, there are more African Americans in the legal system than there were slaves in 1860. One in four of the world's prisoners rots away in U.S jails (despite having less than five percent of the world's population), often under conditions described by the U.N as "torture."Many of these prisoners are coerced to work for giant corporations for pennies (slavery for convicted criminals is legal under the Constitution). The United States is the only country where more men are raped than women thanks to the brutal conditions in U.S. prisons. Inner-city schools spend more money on police than on counselors, and <a href="http://www.huffingtonpost.com/christopher-zoukis/the-school-to-prison-pipe_1_b_9644700.html" target="_blank">a school-to-prison pipeline has emerged</a> for African-American youth. The average black teenager is statistically more likely to go to jail than attend college. the U.S. has more internal police and locks up more people than Stalinist Russia.<br />
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<i>Everything worked out okay???</i><br />
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Much like white women today, black women adapted better overall to the new "caring and service-oriented" job market than did men. The few inner-city jobs left in the ghettos after suburban flight were typically minimum wage service jobs, especially in the fast-food industry, and government work. Men no longer had the wages to form a family, and predictably family formation went down. Single mothers became the norm, much to sneering derision of wealthy, conservative whites (<i>"baby mommas"</i>). Many black men rationally chose a shorter life and higher income potential in the dangerous black market drug trade to humiliating dead-end work at pitiful wages.<br />
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Men increasingly took out their lack of self-esteem on women, and a misogynistic culture emerged (<i>"pimps and ho's"</i>). Gangsters became lionized as heroes. "Thug culture" became a thing. Women increasingly turned up their noses at the black men who faced such bleak prospects, choosing rather to go it alone than have a potentially dangerous man in the house who was dead weight. The lack of hope on the part of men became institutionalized, leading to destructive attitudes passed along from generation to generation. Generations grew up without knowing their fathers, which became the norm due to lack of job and career opportunities.<br />
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At the same time, a small segment of African Americans took advantage of the new opportunities and did very well, indeed. Many moved into the professional class in various capacities--lawyers, doctors, businessmen, etc. In the post-civil rights world, this segment enjoyed opportunities that their ancestors could have only dreamed of. A few even became multi-millionaires, especially in music, acting, entertainment and professional sports. And, of course, the nation elected a president of African descent in the 2008 election.<br />
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The spectacular success of this small segment was held up as evidence that the blacks who had been left behind were simply not working hard enough, and were responsible for their own plight due to their bad behavior (rather than poor schools or a lack of jobs). Because the legalized, institutionalized racism had been removed, white America adopted a blame game where the African community simply refused to pull themselves up by their bootstraps.<br />
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This is why the <i>"automation came along and everything worked out allright"</i> attitude is, in my estimation, extremely racist. It dismisses the pain and suffering of an entire class of people as just somehow inevitable, or as their own fault due to their inherent nature. The social pathologies that resulted from the fallout are then pointed to as a cause of the devastation. Ask any inner-city activist the biggest problem facing their community and what will they tell you? Typically the same thing: "lack of jobs" (or perhaps substandard schools, which is just the flip side of the same coin).<br />
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<b>The White Ghetto and Trumpism</b><br />
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In the 1990's two new factors emerged in this situation. The 1960s and 1970s began the rise of automation and movement of good-paying factory jobs to the suburbs and overseas for some industries (notably textiles). But economic activity still assured plenty of jobs for whites with enough family wealth to move to the suburbs throughout the 1980's and into the 1990's.<br />
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In 2001, China joined the World trade Organization (WTO). With its bottomless supply of poor rural workers moving to cities, it could outcompete nearly the entire world on labor costs. Places like Shenzen and Pearl River Delta became the world's factory floor, hollowing out manufacturing centers all across the United States and Europe. It was the death blow to these industrial economies (temporarily masked by real estate bubbles and banking fraud). China quickly became the world's largest industrial economy in the span of only a few decades.<br />
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Several rounds of "free trade" deals swept across the world as economic Neoliberalism became the predominant economic philosophy of the global economy. Capital became fluid and mobile, even as labor remained tied to <a href="https://medium.com/@johnrobb/hollow-states-and-failed-states-52e85af64f68#.qwqb83qwd" target="_blank">hollowed-out nation states</a>. Billions of people joined the global labor pool, empowered by the Internet. The Democratic party in America abandoned its support for unions and the white working class (who had abandoned them in droves anyway), and fully embraced Neoliberalism, although tempered with a few nods toward the safety net (the programs that primarily benefited whites), and "politically correct" social inclusiveness rhetoric. <br />
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The movement of jobs overseas became an absolute deluge. The loss of factory jobs swelled, and the final shreds of industrial America were torn apart. Vast areas of the American "heartland" were hollowed out, leading to the rural landscape of shuttered factories, meth labs and boarded up storefronts along main streets we are familiar with. Automation had finally come for rural and suburban white America. Cheap Chinese goods also enabled corporate behemoths such as Wal-Mart to undercut local businesses on price, destroying any vestige of a locally-owned economy and small businesses. McJobs replaced factory jobs as the base of the economy in most places.<br />
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As "more education" was touted as the lifeboat to get out of these communities, this, along with the aging of the the Baby Boomer population, caused an "eds and meds" economy to spring up. Education and health care became the only stable forms of employment in these remote places, ultimately sustained by government money (Medicare and student loans). These two industries quickly became predatory, leaving Americans wallowing in unpayable debts for their overpriced services. Campaign contributions ensured politicians looked the other way.<br />
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The job drain was slow enough and diffuse enough to prevent any sort of coordinated response on the part of unemployed workers. Instead they went as lambs to the slaughter, often voting for the very same people who had enabled it due to racial grievance and hot-button social issues of cultural affiliation (abortion, guns, <a href="http://screengrabber.deadspin.com/nascar-invocation-features-prayer-to-elect-a-republican-1770094804" target="_blank">NASCAR</a>, etc.). Conservative media blamed "liberal permissiveness," "entitlements," and "Ivy-League elites" for the problems plaguing rural America, and stoked anger over imaginary issues such as "The war on Christmas." Americans gleefully ate-up anti-union rhetoric promoted by the corporate-owned media.<br />
<blockquote class="tr_bq">
Republicans, he said, use their support of gun rights as a cornerstone in their strategy to win elections by launching “an all-out, no-holds-barred assault on government”. </blockquote>
<blockquote class="tr_bq">
“The Republicans in some way, shape or form have become a neo-anarchist party, in that they don’t accept that there is much legitimacy at all to the existence of public functions,” he said. </blockquote>
<blockquote class="tr_bq">
“The second amendment has become sacred because it’s the best way for them to express how furious they are at government. They are willing to defend the right of individuals to take up arms against it. There’s no way to get farther right on anti-government rhetoric than that.” </blockquote>
<a href="http://www.theguardian.com/us-news/2016/apr/09/gun-control-senator-chris-murphy-republicans-us-election" target="_blank">Senator: gun control discussions won't change 'neo-anarchist' Republican party</a> (Guardian)<br />
<br />
Note that this level of government hatred and gun fanaticism was decidedly fringe, even among white America, prior to the Civil Rights era. Now it drives what is arguably the nation's most powerful political party. <br />
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Drive though America's small towns and inner-ring suburbs, and what do you see? Good things? <i>Everything just worked out okay?</i> Really??? To dismiss the effects of automation, we have to pretend that all of this doesn't exist. <i>Does automation truly create more jobs than it destroys?</i> Drive through the urban ghettos and abandoned small towns of the Rust Belt and say that.<br />
<blockquote class="tr_bq">
To say that “nothing happened to them” is stunningly wrong. Over the past 35 years the working class has been devalued, the result of an economic version of the Hunger Games. It has pitted everyone against each other, regardless of where they started. Some contestants, such as business owners, were equipped with the fanciest weapons. The working class only had their hands. They lost and have been left to deal on their own.</blockquote>
<blockquote>
The consequences can be seen in nearly every town and rural county and aren’t confined to the industrial north or the hills of Kentucky either. My home town in Florida, a small town built around two orange juice factories, lost its first factory in 1985 and its last in 2005.<br />
<br />
In the South Buffalo neighborhood of Lackawanna, homes have yet to recover from the closing of an old steel mill that looms over them. The plant, once one of many, provided the community with jobs and stability. The parts that haven’t been torn down are now used mainly for storage.<br />
<br />
In Utica, New York, a boarded-up GE plant that’s been closed for more than 20 years sits behind Mr Nostalgia’s, a boarded-up bar where workers once spent nights. Jobs moved out of state and out of the country. The new jobs don’t pay as well and don’t offer the same benefits, so folks now go to the casino outside of town to try to supplement their income.<br />
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When you go into these communities and leave the small bubbles of success –Manhattan, Los Angeles, northern Virginia, Cambridge – and listen to people who work with their hands, you hear a uniform frustration and a constant anxiety. In a country of such amazing wealth, a large percentage of people are trying not to sink.</blockquote>
<blockquote>
In Blossburg, Pennsylvania, Arnie Knapp walks five miles into town every morning, trying to keep his body in shape and not succumb to the various injuries he suffered working the mills. He started working at 14 and once they closed, he worked a series of lower-paying jobs. Unlike the characters profiled in the National Review article, he isn’t looking for a handout: “I haven’t asked for anything but work from anyone. Problem is, there aren’t a lot of jobs around here any more.”</blockquote>
<a href="http://www.theguardian.com/politics/2016/mar/24/white-working-class-issues-free-trade-american-south" target="_blank">Mocked and forgotten: who will speak for the American white working class?</a> (Guardian)<br />
<br />
Now, it's true that cheap Chinese labor and the invention of shipping containers temporarily eliminated the need for automation due to the oversupply of labor and ultra-low wages. But had the Chinese workers not been there, automation would have done the job anyway. In fact, manufacturing output in America continued to rise during this period, even as manufacturing employment declined. China just happened to provide a quicker, cheaper way to temporarily increase profits and lower labor costs during this period thanks to global wage arbitrage.<br />
<blockquote class="tr_bq">
Here’s the problem: Whether or not those manufacturing jobs could have been saved, they aren’t coming back, at least not most of them. How do we know? Because in recent years, factories have been coming back, but the jobs haven’t. Because of rising wages in China, the need for shorter supply chains and other factors, a small but growing group of companies are shifting production back to the U.S. But the factories they build here are heavily automated, employing a small fraction of the workers they would have a generation ago. </blockquote>
<a href="http://fivethirtyeight.com/features/manufacturing-jobs-are-never-coming-back/" target="_blank">Manufacturing Jobs Are Never Coming Back</a> (FiveThirtyEight)<br />
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A significant number of Americans simply weren't needed in the economic order anymore. The were useless as workers, and as they became ever-poorer, as consumers. Companies increasingly preferred citizens of the Third World not only workers, but also as consumers, as their disposable incomes were rising even as American wages were falling. Poorer Americans had no choice but to buy cheap Chinese made-consumer goods because it was all they could afford, leading to a downward spiral of lower wage jobs, offshoring, and ever-cheaper and shoddier goods.<br />
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The second major factor was the signing of the North American Free Trade Agreement in 1994.<br />
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Third-party candidate Ross Perot warned of <i>"A giant sucking sound"</i> of jobs leaving the United States if it were signed into law, and he was right, despite losing the race. Not only did NAFTA allow jobs to migrate across the border, the dumping of heavily subsidized and mechanized U.S. corn on the Mexican market (see the cotton example in the previous entry), devastated the rural Mexican economy. The non-mechanized small farmers of rural Mexico couldn't compete and threw in the towel.<br />
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Much like African Americans half a century before, they too began a mass migration to <i>"El Norte"</i> to look for work. Millions of migrants, primarily from Northern Mexico, flooded into the United States in a very short time span to do the work Americans supposedly "didn't want to do." Rural economies, especially in the Southwest, had long depended upon migrant labor from Mexico, but now that model was expanded to all aspects of the unskilled labor market--building and construction, child-care, cooking, cleaning, gardening, landscaping, laundry, food-service, delivery, manual labor, and so forth. America became a bilingual society overnight, and the ability to speak Spanish increasingly became a job requirement for many positions.<br />
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<a href="http://www.mcclatchydc.com/news/nation-world/world/article24609829.html" target="_blank">Free trade: As U.S. corn flows south, Mexicans stop farming</a> (McClatchy) <br />
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Unlike blacks who had been confined to the ghetto outside of Dixie, Mexicans went to all locations--rural, urban and suburban, forming a massive exploited proletariat willing to work for much, much less than native-born Americans. The third largest influx of foreign currency into the Mexican economy is remittances from Mexicans living abroad, mainly in the United States. The Mexican government no longer had to deal with poverty or unemployment within their own borders; they could export their poverty to the United States and watch the currency roll in. Despite handwringing, both major parties supported this trend, supported by campaign cash, even as they condemned it in public. Wages dropped and profits soared.<br />
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<a href="https://fabiusmaximus.com/2008/11/06/padron-3/" target="_blank">Immigration as a reverse election: our leaders get a new people</a> (Fabius Maximus)<br />
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In the 1990-2000's, competition from Chinese workers abroad and Mexican immigrants at home finally decisively broke the back of the white working class who had been able to escape the devastation wrought on black community due to automation in the 1960-1970s. At the same time, the costs of higher education soared into the stratosphere as college increasingly became the tollbooth to the few remaining middle-class jobs which had not been not offshored. Americans were required to mortgage their future and become indentured servants for even just a chance at acquiring jobs which paid more than minimum wage in the new "service economy" promoted by professional economists.<br />
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Older whites who were made redundant when factory jobs shut down used disability as a <i>de-facto</i> basic income guarantee scheme. Disability became the "white welfare," even as whites continued to disparage black "welfare queens." While welfare "reform" had shifted responsibility onto cash-strapped state and local governments, disability was still paid for by federal dollars. Just as with blacks, a lot of lip-service was paid to "worker retraining" for the nonexistent jobs supposedly created by automation. Social work, health care and government jobs became the only economic activity in vast swaths of middle America as the circle of prosperity receded. And, just like blacks, the whites were increasingly blamed for the reality of their own circumstances as the jobs disappeared. Here's Paul Krugman discussing the shift:<br />
<blockquote class="tr_bq">
...there was a great deal of alarm over the troubles of the African-American community, where social disorder was on the rise even as explicit legal discrimination (although not de facto discrimination) was coming to an end...There were all kinds of theories, ranging from cultural hand-waving to claims that it was all because of welfare. <b>But some people, notably William Julius Wilson, argued that the underlying cause was economic: good jobs, while still fairly plentiful in America as a whole, were disappearing from the urban centers where the A-A population was concentrated. And the social collapse, while real, followed from that underlying cause.</b></blockquote>
<blockquote>
<b>This story contained a clear prediction — namely, that if whites were to face a similar disappearance of opportunity, they would develop similar behavior patterns.</b> And sure enough, with the hollowing out of the middle class, we saw (via Mark Thoma) what Kevin Williamson at National Review describes as<br />
<br />
<i> the welfare dependency, the drug and alcohol addiction, the family anarchy</i><br />
<br />
And what is the lesson? <b>Why, that poor whites are moral failures, and they should move to where there are opportunities (where?).</b> It’s really extraordinary.<br />
<br />
<b>Oh, and lots of swipes at food stamps, welfare programs, disability insurance</b> (which conservatives insist is riddled with fraud, despite lots of evidence to the contrary.)<br />
<br />
It’s surely worth noting that other advanced countries, with much more generous welfare states, aren’t showing anything like the kind of social collapse we’re seeing in the U.S. heartland....the idea that somehow food stamps are why we’re breaking bad is utterly at odds with the evidence. (Just as an aside, since someone will bring it up: all of those other advanced economies are just as open to trade as we are — so whatever you think of free trade, it doesn’t necessarily cause social collapse.)</blockquote>
<a href="http://krugman.blogs.nytimes.com/2016/03/15/return-of-the-undeserving-poor/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body" target="_blank">Return of the Undeserving Poor</a> (Paul Krugman)<br />
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<a href="http://www.slate.com/articles/news_and_politics/politics/2016/03/why_conservatives_are_talking_about_poor_white_people_the_way_they_usually.html" target="_blank">Why conservatives are talking about struggling white people the way they usually talk about black people</a> (Slate)<br />
<br />
The rise of Donald Trump comes as no surprise, then. Trump combines the white racial grievance and hatred wielded by the Republican party to win lower-income white votes with a critique of the vanishing jobs and hollowing out of the labor market for lower-income whites due to outsourcing and mass immigration from Mexico. Other Republicans, dependent upon funding from the donor class who benefited disproportionately from outsourcing and immigration, could not pursue this line of rhetoric. Trump, a real estate magnate self-funding his own campaign for vanity reasons, <i>could</i> say these things. Polls show that a majority of Trump voters see discrimination against whites as a major concern. White Americans who had seen their lives and communities decimated by decades of globalism finally had a champion who promised to bring their jobs back, while keeping blacks and Mexicans in line; in other words, to <i>"Make America great again."</i><br />
<br />
<a href="http://money.cnn.com/2016/03/16/news/economy/donald-trump-bernie-sanders-us-election/" target="_blank">Americans fear a life of 'dead-end crap jobs with crap wages'</a> (CNN Money)<br />
<br />
<b>Detroitification</b><br />
<br />
There was no Universal Basic Income for blacks left jobless by automation. There was no wealth redistribution. There was no compensating the "losers". There was no "sharing the fruits of the technology." Rather, there was scapegoating, dehumanizing, divide and conquer, blame, hatred, discrimination, resentment and abuse from the hard-working "winners" against the lazy, growing pile of "losers." In the past that was mainly along color lines. Now, it's increasingly along class lines.<br />
<br />
<b>What makes you think the new effects from ongoing automation will be any different?</b> Does anyone think we will come to our senses and realize that there simply aren't enough jobs to go around? Or will we continue to insist on individual solutions for what are ultimately societal problems? While education may be fine to help one's individual standing, it has never, in and of itself, produced jobs where there are none to be had.<br />
<br />
<a href="https://fabiusmaximus.com/2015/03/04/automation-education-college-solutions-79851/" target="_blank">Education is not a solution to automation</a> (Fabius Maximus) <br />
<br />
What does the African-American experience portend about our future in the age of automation?<br />
<br />
- The poor majority will become trapped in ghettos, homeless encampments, and "slumburbs," as America Balkanizes along income lines. Your fate will be increasingly tied to the accident of where you were born. Already, social mobility is primarily determined by your ZIP code and what your parents' income is. Libertarian economists <a href="http://hipcrime.blogspot.com/2014/06/let-them-eat-beans.html" target="_blank">are already predicting a future</a> where 80-90 percent of us are "zero-marginal product" workers living in internet-enabled shantytowns with minimal public services and dining on canned beans, while 10-15 percent of Americans live "like today's millionaires."<br />
<br />
- Rather than invest in methods to create new jobs, we will instead opt for a massive police state, prisons, guard labor, and mass incarceration. Already we see the police routinely using weapons that we would normally associate with war zones. Increasingly, keeping other Americans in line will become a major source of employment, and building prisons and <a href="http://www.huffingtonpost.com/2015/06/10/prison-phone-profits_n_7552464.html" target="_blank">exploiting prisoners</a> will become a major profit center for corporate America, instead of selling new and innovative products, which most Americans will be too poor to buy anyway (aside from a few electronic toys).<br />
<br />
- Education will continue to be touted as the "salvation" for people even as the amount of jobs declines and the educational and experience requirements keep going up for even the most basic jobs. People who are not able to acquire this lengthy and expensive education, for whatever reason, will be blamed for their own plight. Already <a href="http://i.imgur.com/VxWMA2o.png" target="_blank">employers are charging workers just to apply for jobs</a>.<br />
<br />
The social maladies caused by a disappearance of family supporting jobs and hope for the future will increasingly be pointed to as the <i>cause</i> of the dysfunction. Drug abuse is now causing devastation in the white community just as thoroughly as it has in the black community.<br />
<br />
Charles Murray, an intellectual for conservative think-tanks, wrote a book called <i>The Bell Curve</i> in the 1990's arguing that African-Americans' inferior IQ's were at the root of their plight. Now he's saying similar things about poor whites left unemployed by automation. His new book <i>Coming Apart</i> argues that poor whites' inferior moral behavior is the ultimate cause of the ongoing destruction of their communities. If they would just get married and hit the books, he claims, there would be no problem. Expect to see a lot more of this line of thinking coming out of right-wing think tanks and promoted in the corporate media as jobs continue to disappear.<br />
<br />
<a href="http://www.nakedcapitalism.com/2016/04/bill-black-aei-pushes-government-propaganda-telling-women-to-marry-schlubs.html" target="_blank">Bill Black: AEI Pushes Government Propaganda Telling Women to Marry Schlubs</a> (Naked Capitalism)<br />
<br />
<a href="http://www.interfluidity.com/v2/4938.html" target="_blank">“Marriage promotion” is a destructive cargo cult</a> (Interfluidity)<br />
<br />
- You also have a recrudescence of Social Darwinist philosophy. Those who can't hack it in the "free market" deserve to die <i>"for the good of the species,"</i> according to a small but powerful segment of the business community enthralled by a crude combination of Ayn Rand's writings mixed with a bastardization of Charles Darwin. (e.g. the <i>"Dark Enlightenment"</i> philosophy popular in Silicon Valley).<br />
<br />
<a href="http://thebaffler.com/blog/mouthbreathing-machiavellis" target="_blank">Mouthbreathing Machiavellis Dream of a Silicon Reich</a> (The Baffler)<br />
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Even as certain quarters tout education as the way out, funding for education is being slashed at every level, particularly by Republicans. In his book, <i>The Falling Rate of Learning and the Neoliberal Endgame</i>, David J. Blacker points out that as corporate America needs less and less people, they simply don't see a need to invest in mass education anymore; hence it is being dismantled. The people who already have dynastic wealth and resources will be fine; everyone else will not. The ladder to the middle class is being pulled up. With perennially too few jobs for workers, employees will just have to compete for the few remaining slots using whatever resources they have at their disposal in a winner-take-all, musical-chairs game. As for the rest, as Blacker points out, the precedent here is the eliminationist literature of the German Holocaust--what is the best way for authorities to deal with the excess "undesirables" in society?<br />
<br />
In his online novel <a href="http://marshallbrain.com/manna1.htm" target="_blank"><i>Manna</i></a>, Marshall Brain imagines large amounts of people made jobless due to automation herded into vast open-air prisons and living as wards of the state. He's overly optimistic. We already have such prisons today, and they are nowhere near as pleasant. Benign neglect is the best-case scenario. The worst is the work camps of the Holocaust. <i>"Work makes us free."</i> <a href="https://theintercept.com/2016/04/04/prisoners-in-multiple-states-call-for-strikes-to-protest-forced-labor/" target="_blank">American prisoners are already a major source of labor for corporations.</a><br />
<br />
<a href="http://gawker.com/philadelphia-closes-23-schools-lays-off-thousands-bui-513577680" target="_blank">Philadelphia Closes 23 Schools, Lays Off Thousands, Builds Huge Prison</a> (Gawker) <br />
<br />
Forget Basic Income schemes. As the jobs disappeared over the past few decades, support for the safety net did not increase, in fact, <i>just the opposite!</i> The poorer people get, the stronger the desire to cast them as lazy freeloaders and shred what little remains of the social safety net, not expand it. In the 1990's, Clinton promised to <i>"end welfare as we know it."</i> Even as jobs disappear, more stringent requirements for working and finding a job are foisted upon the poor. As the percentage of "minorities" in America increases to become the majority (a contradiction, I know), it becomes easier to attribute the lack of jobs on people just "not wanting to work" to conservative suburban whites who still have jobs, even as their numbers shrink. Consider:<br />
<blockquote class="tr_bq">
Nearly all the states with the highest percentage of minimum wage workers — full-time jobholders making $290 a week, before taxes — are in the South. These are also the same states that refuse to expand Medicaid to allow the working poor to get health care. And it’s in the same cradle of the old Confederacy where discriminatory bills are rising. Don’t blame the cities; from Birmingham to Charlotte, people are trying to open doors to higher wages and tolerance of gays, only to be rebuffed at the state level.</blockquote>
<a href="http://www.nytimes.com/2016/04/08/opinion/a-mason-dixon-line-of-progress.html?_r=1" target="_blank">A Mason-Dixon Line of Progress</a> (New York Times)<br />
<blockquote class="tr_bq">
Hundreds of thousands of people could soon lose food stamps as states reimpose time limits and work requirements that were suspended in recent years because of high unemployment, state officials and advocates for the poor said Friday. </blockquote>
<a href="http://www.miamiherald.com/news/nation-world/national/article69587167.html" target="_blank">Hundreds of thousands could lose food stamps as states restore limits</a> (Miami Herald)<br />
<blockquote class="tr_bq">
Alabama Republicans say they want a new bill to drastically limit state welfare programs so that recipients will get jobs — but the bill eliminates the most common means of transportation to and from work...The bill, created by Republican Sen. Arthur Orr, cuts the time frame for assistance from five years to three. It also creates a new layer of bureaucracy for poor people seeking help, including the requirement that they sign a contract vowing to adhere to the program’s rules. It also disqualifies people from getting food stamps or financial assistance for families with children if the recipients own cars, according to the Montgomery Advertiser. </blockquote>
<a href="http://www.rawstory.com/2016/03/alabama-republican-wants-to-stop-people-on-food-stamps-from-owning-cars-but-expects-them-to-get-jobs/" target="_blank">Alabama Republican wants to stop people on food stamps from owning cars — but expects them to get jobs</a> (Raw Story)<br />
<br />
<a href="http://www.theatlantic.com/business/archive/2016/04/the-end-of-welfare-as-we-know-it/476322/" target="_blank">The End of Welfare as We Know It</a> (The Atlantic)<br />
<br />
Automation has already made a huge portion of the workforce irrelevant. We just pretend that it didn't happen. And the jobs intended to replace them, the ones "we couldn't even imagine" turned out not to exist (so no surprise we couldn't imagine them, then). This has been going on since the 1960's, we just dumped it one specific group of people until very recently, people that we could treat as nonhumans thanks to our attitudes about race. Now it coming for all of us outside of a tiny slice of hereditary wealthy and well-connected elites. As Jeremy Rifkin writes:<br />
<blockquote class="tr_bq">
Not surprisingly, the first community to be devastated by the cybernetic revolution was black America. With the introduction of automated machines, it was possible to substitute less costly, inanimate forms of labor for millions of African-Americans who had long toiled at the bottom of the economic pyramid, first as plantation slaves, then as sharecroppers, and finally as unskilled labor in northern factories and foundries.</blockquote>
<blockquote>
For the first time in American history, the African American was no longer needed in the economic system. Sidney Willhelm summed up the historical significance of what had taken place in his book Who Needs the Negro? "With the onset of automation the Negro moves out of his historical state of oppression into one of uselessness. Increasingly, he is not so much economically exploited as he is irrelevant...<b>The dominant whites no longer need to exploit the black minority: as automation proceeds, it will be easier for the former to disregard the latter.</b> In short, White America, by a more prefect application of mechanization and a vigorous reliance upon automation, disposes of the Negro; consequently, the Negro transforms from an exploited labor force into an outcast."</blockquote>
Now we're seeing white people join that same outcast community. And we're seeing the exact same techniques used to write them (us) off as nonpersons.<br />
<br />
Welcome to the future.<br />
<br />
Next: <i>The automation of the workforce has already occurred.</i>Unknownnoreply@blogger.com9tag:blogger.com,1999:blog-5813525365834911757.post-32597342468137273872016-04-07T09:58:00.001-05:002016-04-07T13:10:16.998-05:00Automation and The Future of Work: Black Lives MatterOne of the things I always hear about automation is that all the predictions of the imminent demise of jobs to date have proven false. Every time we automate work away, new jobs spring up like daisies in the springtime to take their place, says conventional thinking, and we happily go merrily along working our forty hour work weeks, because of all the gains in productivity juice the overall economy, ending up in a net gain, even as population increases. Or, if the commenters are a bit more circumspect, they at least acknowledge a difficult and troubling short "transition period," where a few people suffer a bit of hardship, but everything works out fine for everyone in the end. "Lump of labor fallacy" and all that.<br />
<br />
I'm sure you've heard these arguments too.<br />
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The analogies between "Peak Horse" and "Peak Human" are fundamentally flawed, say such analysts. Horses are just horses. Humans, on the other hand, are infinitely adaptable, and can just learn "new skills," whatever those happen to be, and will always be relevant to the economy. Permanent unemployment of a large portion of the workforce is just not possible, they argue.<br />
<br />
The 1930's The <a href="https://en.wikipedia.org/wiki/Technocracy_movement" target="_blank">Technocracy Movement</a>, a group of engineers and technicians, published a large amount of literature demonstrating that the productive forces that had been unleashed in the years prior, especially the mechanization of agriculture and the electrification of the assembly line, had made a large numbers of workers redundant. Overproduction would mean that the salaries necessary to purchase the products would not materialize, leading to economic crisis. During the Great Depression, when up to a quarter of the workforce could not find steady employment, it seemed their ideas were coming to fruition. The movement competed head-to-head politically for a time with Socialism the New Deal. After the global destruction unleashed by the war (which "stimulated" the economy), these issues were forgotten.<br />
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In 1964 a group of social activists and academics who called themselves "The Center for the Study of Democratic Institutions" sent an open letter to president Lyndon Johnson warning that automation would soon lead to mass unemployment. They signed it as "The Ad Hoc Committee on the Triple Revolution." The committee <i>"claimed that machines would usher in "a system of almost unlimited productive capacity" while continually reducing the number of manual laborers needed, and increasing the skill needed to work, thereby producing increasing levels of unemployment."</i> (<a href="https://en.wikipedia.org/wiki/The_Triple_Revolution" target="_blank">Wikipedia</a>). <br />
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<a href="https://www.marxists.org/history/etol/newspape/isr/vol25/no03/adhoc.html" target="_blank">The Triple Revolution: An Appraisal of the Major US Crises and Proposals for Action </a>(Marxists.org)<br />
<br />
Of course, those worries were all for nothing, say the economists. We have more jobs today than we did in 1964, and we're working more than ever! It was just another in a long line of Chicken Little predictions that didn't come true, because it can't come true, because the economy will always produce enough jobs for everyone who wants one if they're willing to work for it, say the economists. Say's Law, and all that. After all, it's 2016, and the "official" unemployment rate is only five percent!<br />
Here's an example of such a dismissal from a wealthy, white, Stanford University academic:<br />
<blockquote class="tr_bq">
This is not the first time society has fretted over the impact of ever-smarter machines on jobs and work—and not the first time we have overreacted. In the Depression-beset 1930s, labor Jeremiahs warned that robots would decimate American factory jobs. Three decades later, mid-1960s prognosticators offered a hopeful silver lining to an otherwise apocalyptic assessment of automation’s dark cloud: the displacement of work and workers would usher in a new “leisure society.”</blockquote>
<blockquote>
Reality stubbornly ignored 1930s and 1960s expectations. The robots of extravagant imagination never arrived. There was ample job turbulence but as Keynes forecast in 1930, machines created more jobs than they destroyed. Boosted by a World War, unemployment dropped from a high of 25 percent in 1933 to under two percent in 1944. And the hoped-for 1960s leisure society never arrived because the diffusion of information technologies created unprecedented demand for Drucker’s “knowledge workers,” and fueled the arrival of the service economy.<br />
<br />
Let’s not abandon Keynes just yet: In 1930, Keynes observed that technological unemployment was a self-solving problem. <b>On balance new technologies create more jobs than they destroy. Today’s job-shedding turbulence looks no different from what scared the bejesus out of observers in the 1930s and '60s.</b> For example, in 1965 the federal government reported that automation was wiping out 35,000 jobs per week, yet, just a few years later, it was clear that new jobs more than offset the losses. <b>Of course, now as then, the new jobs will arrive more slowly than the old jobs are destroyed, and require ever-higher skill levels. </b>We would be wise to worry less about extreme scenarios and focus on managing the transition.<br />
<br />
Follow the new scarcities to the new jobs: <b>Every new abundance creates a new scarcity that in turn leads to new economic activity. </b>The proliferation of computers made information abundant, creating the demand for Drucker’s knowledge workers. And the material abundance made possible by machine-enabled productivity gains in turn contributed to the rise of an economy hungry for service workers. This moment is no different; immediate job losses are highly visible, while entirely new job categories run beneath the radar. Jobs will be ever less secure, but work isn’t disappearing.</blockquote>
<a href="http://www.psmag.com/business-economics/the-future-of-work-we-have-been-here-before" target="_blank">The Future of Work: We Have Been Here Before</a> (Pacific Standard)<br />
<br />
Ah, yes the <i>"knowledge and service"</i> workers saved us, didn't they? And we all lived happily ever after. Stupid Luddites!<br />
<br />
I remember hearing a person making this argument recently. He was confidently assured that new technology would create new jobs, because it always did. He brought up the above track record (as they always do). He happened to work in tech. He happened to be white. He probably lived in the suburbs.<br />
<br />
We happened to be close to downtown. When I heard this, I thought, <i>"Take a walk a few blocks and look around. Do things seem to be going that great?"</i> Walk a bit further and you'll be in Milwaukee's "inner city," one of the most dangerous and segregated in the nation. Derelict buildings. Boarded up storefronts. Pop-up churches. Drug clinics. Homeless shelters. Food pantries. Shootings on a daily basis. People with cardboard signs asking for money standing at every street intersection. Vast areas of the city, and I mean vast, look like war-town Beirut, Sarajevo or Baghdad, and have for decades, and <i>we just accept this as a normal fact of life in modern-day America.</i><br />
<br />
How did it happen? It was not always like this. These neighborhoods were once prosperous, walkable, middle-class areas filled with factory workers. Well-kept bungalows and two-story flats occupied the narrow lots on each block, flanked on each corner by the corner tavern (the neighborhood social hangout) and the general store. Children walked to the neighborhood school. Public works were well-maintained, parkland was abundant, and the architecture was <a href="https://s-media-cache-ak0.pinimg.com/236x/ff/67/13/ff6713e7844217fe78807327f507da87.jpg" target="_blank">beautiful</a>.<br />
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<a href="http://www.pbs.org/wgbh/frontline/article/photos-milwaukees-industrial-past/" target="_blank">Photos: Milwaukee’s Industrial Past</a> (Frontline)<br />
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The factories have long since been closed and abandoned. Huge areas of town that employed thousands of people and made industrial products shipped all over the world a generation ago are as silent as the crumbling ruins of the Roman forum. Surrounding them are vast ghettos patrolled 24-7 by cops where residents live in daily fear of drive-by shootings.<br />
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<i>Everything just worked out okay.</i> Really??!<br />
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<b>In order to accept that point of view articulated above, one must refuse to acknowledge the effect that automation has <i>already had</i> on our society.</b><br />
<br />
You see, it's pretty easy to be dismissive and nonchalant about automation if you're white. And especially if you're suburban. <b>But to do that, you have to literally dismiss all of the above reality, which is exactly what we have done.</b><br />
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We've accepted the cratered cities, derelict neighborhoods, unemployment and social pathology as just the way things are. <b>We've done this by writing off a large segment of the American people as simply unemployable.</b> We forget that it was once any other way. Such is the power of creeping normalcy--things that would cause shock and action a generation ago just became <i>"the way things are." </i><br />
<br />
I think there is an important message here in how we will deal with automation in the near future, one that is being ignored.<br />
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So, to say that <i>"everything worked out okay,"</i> which is the conventional wisdom promoted by the media, you have to just ignore all of this - the drugs, the crime, the social decay, the segregation, the mass incarceration of African American men, the single parent families, the welfare, the hungry school kids eating free lunches, the homelessness, the casual violence and predatory behavior directed against the African-American community by militarized police forces. <b>To dismiss the effects of automation, all of the changes that have happened over the past forty years have to be simply imagined away.</b><br />
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This seems incredible, <i>yet it is exactly what we have done!</i> See the arguments, above, for example.<br />
The conventional wisdom that everything worked out okay is pitched to suburbanites who live in the comfortable white-separatist enclaves which popped up in the corn fields next to freeway off-ramps thanks to America's post-war freeway building frenzy. For whites, it was "drive until you qualify," and hence you get the exurban cul-de-sac Levittowns devoid of social activity where a twenty-minute drive is required for the smallest errand, and children are heavily guarded and chauffeured around like royalty. Blacks got redlining and being pulled over for "driving while black." A single African-American family moving into a suburban neighborhood would "bring down property values" for the entire neighborhood. Ponder that for a moment.<br />
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Essentially we dumped all out unemployment on one particular community, isolated them form the rest of society in urban ghettos, and then blamed them for their own plight through a variety of various and ever-shifting reasons. It was either their "low educational attainment" or perhaps "lack of family formation." As that community fell apart due to the lack of jobs, a large amount of literature was devoted to explaining how such people were "different" due to low-IQ's and "work-resistant personalities," or some other factor, possibly genetic (and thus futile to rectify). That is, it was simply their own fault--nothing could be done--such people were simply unemployable, went the arguments in the media.<br />
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Fearful whites watched nightly reports on the local news of epidemic crime and shootings in the cities which their parents and grandparents had abandoned. The only black people that these suburban whites ever saw were mug shots on the nightly news. Out of sight, out of mind. Blacks came to be regarded by these wealthy white suburbanites as little more than animals (<i>"superpredators"</i> in Hillary Clinton's words). They could maybe become wards of the state, perhaps, dependent upon handouts and make-work jobs, but they should definitely stop reproducing, that is "having kids they can't afford."<br />
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Not so different than horses after all, then.<br />
<br />
<b>2. Black Lives Matter</b><br />
<br />
In his excellent book, <i>The End of Work</i>, Jeremy Rifkin devotes an entire chapter describing the effects of technology on the African-American experience. Blacks, predominately in the lower echelons of American society due to racism and the legacy of slavery, have been the ones particularity hit by it. This allowed whites to completely ignore the effects of automation on the job market until relatively recently. There were still plenty of jobs in the exurban strip malls and office parks where whites had fled during the race riots and busing of the 1960-1970's. Even manual and construction labor was in demand as the suburbs continued to sprawl, amoeba like, away from the chaos and decay of America's crumbling and abandoned central city ghettos.<br />
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The dysfunction of the black community was not always the case, despite what you may have been told. In fact, it was largely brought about through automation, something we still refuse to face up to.<br />
<br />
The following are excerpted from chapter five of the book:<br />
<blockquote class="tr_bq">
The arrival of the mechanical cotton picker in the South was timely. Many black servicemen, recently back from the war, were beginning to challenge Jim Crow laws and segregation statutes that had kept them in virtual servitude since Reconstruction. Having fought for their country and been exposed to places in the United States and overseas where segregation laws did not exist, many veterans were no longer willing to accept the status quo. Some began to question their circumstances; others began to act...</blockquote>
<blockquote>
<b>In 1949 only 6 percent of the cotton in the South was harvested mechanically; by 1964, it was 78 percent. Eight years later, 100 percent of the cotton was picked by machines.</b><br />
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<b>For the first time since they had been brought over as slaves to work the agricultural fields in the South, black hands and backs were no longer needed.</b> Overnight, the sharecropper system was made obsolete by technology. Planters evicted millions of tenants from the land, leaving them homeless and jobless. Other developments hastened the process. Federal programs forced a 40 percent reduction in cotton acreage in the 1950s. Much of the land was converted to timber or pasture, which required little labor. Restrictions on tractor production were lifted after the war, greatly accelerating the substitution of tractors for manpower in the fields. The introduction of chemical defoliants to kill weeds reduced the workforce still further--black workers had traditionally been used to chop down weeds. When the Federal government extended the minimum wage to farm laborers, most southern planters found it more economical to substitute chemical defoliants for hand chopping, leaving blacks with no source of employment.<br />
<br />
The push for mechanization in southern agriculture combined with the pull of higher wages in the industrial cities of the North to create what Nicholas Lemann called "One of the largest and most rapid mass internal movements of people in history." More than 5 million black men, women, and children migrated north in search of work between 1940 and 1970. The migration routes ran from Georgia, the Carolinas and Virginia along the Atlantic Seaboard to New York City and Boston; from Mississippi, Tennessee, Arkansas, and Alabama north to Chicago and Detroit; and from Texas and Louisiana west to California. <b>By the time the migration was over, more than half of all black Americans had moved from South to North and from an entrenched rural way of life to become an urban industrial proletariat.</b><br />
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<b>The mechanical cotton picker proved far more effective than the Emancipation Proclamation in freeing blacks from a plantation economy. It did so, however, at a terrible price.</b> The forced eviction from the land and subsequent migration of millions of destitute black Americans to the North would soon unleash political forces of unimaginable proportions--forces that would come to test the very soul of the American compact.<br />
<br />
At first, blacks found limited access to unskilled jobs in the auto, steel, rubber, chemical, and meat-packing industries. Northern industrialists often used them as strikebreakers or to fill the vacuum left by the decline in immigrant workers from abroad. <b>The fortunes of black workers in the North improved steadily until 1954 and then began a forty-year historical decline.</b><br />
<br />
In the mid-1950s, automation began taking its toll in the nation's manufacturing sector. Hardest hit were unskilled jobs in the very industries where black workers were concentrated. Between 1953 and 1962, 1.6 million blue collar jobs were lost in the manufacturing sector. Whereas the unemployment rate for black Americans had never exceeded 8.5 percent between 1947 and 1953, and the white rate of unemployment had never gone beyond 4.6 percent, <b>by 1964 blacks were experiencing an unemployment rate of 12.4 percent while white unemployment was only 5.9 percent. Ever since 1964 black unemployment in the United States has remained twice that of whites.</b></blockquote>
Rifkin describes how factory work moved to the suburbs to take advantage of the fact that newer, smaller, suburban facilities were more amenable to automation, and the taxes were lower. The freeway system eliminated the need to be near railways and ports, so they could be located anywhere. The large-multi-story factories of the inner-city were replaced by one-story suburban facilities constructed in distant cornfields and wetlands accessible only bar car. Since union activity was centered in factories, these distant, diffuse facilities also permitted breaking union solidarity.<br />
<br />
Despite the fact that Ford's River Rouge plant had room for expansion, Ford's management decided to locate as much production as possible in automated suburban plants away from the city to weaken the power of labor unions. From the late 1940s through 1957, Ford spent more than 2.5 billion on automation and plant expansion, and the other large automakers also made huge investments.<br />
<br />
Together, the Big Three auto companies constructed twenty-five new, more automated plants in the suburbs surrounding Detroit. In addition, many smaller satellite manufacturers were forced to relocate or go out of business as automated production lines took over more of the piecemeal work, causing a further decline in urban manufacturing employment.<br />
<blockquote class="tr_bq">
The number of manufacturing jobs in Detroit fell dramatically beginning in the mid-1950s as a result of automation and suburbanization of production. <b>Black workers, who just a few years earlier were displaced by the mechanized cotton picker in the rural South, once again found themselves the victims of mechanization.</b> In the 1950s, 25.7 percent of Chrysler workers and 23 percent of General Motors workers were African-American. <b>Equally important, because the black workers made up the bulk of the unskilled labor force, they were the first to be let go because of automation.</b> In 1960 a mere twenty-four black workers were counted among the 7,425 skilled workers at Chrysler. At General Motors, only sixty-seven blacks were among the more than 11,000 skilled workers on the payroll.</blockquote>
<blockquote>
The productivity and unemployment figures tell the rest of the story. <b>Between 1957 and 1964, manufacturing output doubled in the United States, while the number of blue collar workers fell by 3 percent. Again, many of the first casualties of the new automation drive were black workers, who were disproportionately represented in unskilled jobs that were the first to be eliminated by the new machines</b>. In manufacturing operations across the entire northern and western industrial belt, the forces of automation and suburbanization continued to take their toll on unskilled black workers, leaving tens of thousands of permanently unemployed men and women in their wake.<br />
<br />
The corporate drive to automate and relocate manufacturing jobs split the black community into two separate and distinct economic groups. Millions of unskilled workers and their families became part of what social historians now call and underclass--a permanently unemployed part of the population whose unskilled labor is no longer required and who live hand-to-mouth, generation to generation, as wards of the state. A second smaller group of black middle-class professionals have been put on the public payroll to administer the many public assistance programs designed to assist this new urban underclass. The system represents a kind of "welfare colonialism" say authors Michael Brown and Steven Erie, "where blacks were called upon to administer their own state of dependence."<br />
<br />
<b>It is possible that the country might have taken greater notice of the impact that automation was having on black America in the 1960s and 1970s, had not a significant number of African-Americans been absorbed into public-sector jobs.</b> As early as 1970, sociologist Sidney Willhelm observed that "As the government becomes the foremost employer for the working force in general during the transition into automation, it becomes even more so for the black worker. Indeed, if it were not for the government, Negroes who lost their jobs in the business world would swell the unemployment ratio to fantastic heights."<br />
<br />
The public image of an affluent and growing black middle class was enough to partly deflect attention away from the growing plight of a large new black underclass that had become the first casualty of automation and the new displacement technologies.<br />
<br />
<b>Today, millions of African-Americans find themselves hopelessly trapped in a permanent underclass. Unskilled and unneeded, the commodity value of their labor has been rendered virtually useless by the automated technologies that have come to displace them in the new high-tech global economy.</b></blockquote>
Rifkin is one of the few economists smart enough to realize that automation is at the heart of all this, and to remind us of the of the history. There is nothing "normal" about this situation.<br />
<br />
So to just casually dismiss the effects if automation and nonchalantly say, "<i>everything worked out okay,"</i> is a very racist attitude, one which is all too commonplace. To accept this, one has to relegate African-Americans to the status of nonpeople, and these decaying communities as just an inevitable outcome of black people's natural behavioral inclinations.<br />
<br />
<b>Now we're seeing the exact same tactics being applied in the media, only this time, the casual dismissals of the unemployment situation, and the sneering derision of those being caught up in are increasingly directed at white people rather than just African-Americans.</b><br />
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Look at the black community today. <i>That's what's coming for you, While America.</i> Your dehumanization of black people has blinded you to this fact. Now the "betters" of your own race are giving you the same treatment you gave to them.<br />
<br />
How does it feel?<br />
<blockquote class="tr_bq">
<b>SMITH: </b>Bowen is a huge man, 6' 7. And as we wade into the field, the plants only come up to his belt buckle. He's going to send this crop around the world. Just like the Swiss make the best watches, the Germans perfected the sports car, Americans grow the most desired cotton in the world. <b>And just like those watches and cars, American cotton does it by being high-tech. </b></blockquote>
<blockquote class="tr_bq">
This is the John Deere 7760; iconic green color, big as a houseboat. Bowen bought five of them last year. And they were not cheap. </blockquote>
<blockquote class="tr_bq">
<b>FLOWERS: </b>They're right at 600,000 a piece. So we got in a big investment. We got to make something to make the payments on them every year. </blockquote>
<blockquote class="tr_bq">
<b>SMITH: You bought $3 million worth of equipment last year to pick cotton.</b> </blockquote>
<blockquote class="tr_bq">
<b>FLOWERS: </b>It's crazy, isn't it? Real crazy. We might need to have our brain examined. </blockquote>
<blockquote class="tr_bq">
<b>SMITH: </b>But these machines give Bowen an edge over small farmers in the rest of the world. He can pick cotton faster with fewer workers. <b>Bowen can watch the progress of the pickers from his iPad sitting at home. </b>And as cushy as it is for him, the driver up on top of the John Deere has an even sweeter gig. </blockquote>
<blockquote class="tr_bq">
Hey, we wanted to see if we could go a row with you. </blockquote>
<blockquote class="tr_bq">
I climb up a ladder up into picker number three to hitch a ride with Martovia Latrell Jones. </blockquote>
<blockquote class="tr_bq">
<b>MARTOVIA LATRELL JONES: </b>Oh. </blockquote>
<blockquote class="tr_bq">
<b>SMITH:</b> Hey, how's it going? </blockquote>
<blockquote class="tr_bq">
<b>JONES:</b> Good. </blockquote>
<blockquote class="tr_bq">
<b>SMITH:</b> Everyone calls him Toto. He puts the machine into gear. </blockquote>
<blockquote class="tr_bq">
Whoa. </blockquote>
<blockquote class="tr_bq">
And then he lets go. </blockquote>
<blockquote class="tr_bq">
<b>You just took your hands off the wheel. You didn't even have to touch it.</b> </blockquote>
<blockquote class="tr_bq">
<b>JONES: Yeah. Pretty much, everything's driving itself. </b></blockquote>
<blockquote class="tr_bq">
<b>SMITH: The picker feels the cotton plants. It makes all the adjustments itself. </b>Toto just sits there, calls his wife on the cell phone, cranks up the blues station. </blockquote>
<blockquote class="tr_bq">
(SOUNDBITE OF MUSIC) </blockquote>
<blockquote class="tr_bq">
<b>JONES: </b>You all might not like my singing. </blockquote>
<blockquote class="tr_bq">
<b>SMITH: </b>Toto has a lot of time up here to sit and think. He was raised by his grandfather, George, who worked on a cotton farm before all this technology. Toto heard the stories. </blockquote>
<blockquote class="tr_bq">
<b>JONES: </b>Had to get down on their hands and knees and get some blisters and splinters in their fingernails and everything. </blockquote>
<blockquote class="tr_bq">
<b>SMITH: You do realize that you probably harvest more in five minutes than he did all day long.</b> </blockquote>
<blockquote class="tr_bq">
<b>JONES: Ah, yeah. I can make a round and pick more than they picked in their whole lifetime.</b> </blockquote>
<blockquote class="tr_bq">
<b>SMITH: </b>These machines are not only fast but, by the end of the process, the cotton they produce is clean. It's pure. It's untouched by human hands. And this is a big deal to the complicated factories around the world that make our T-shirt...</blockquote>
<a href="http://www.npr.org/templates/transcript/transcript.php?storyId=248243399">http://www.npr.org/templates/transcript/transcript.php?storyId=248243399</a><br />
<br />
Next: Part 2 Unknownnoreply@blogger.com9tag:blogger.com,1999:blog-5813525365834911757.post-49029436115561536792016-02-27T12:59:00.001-06:002016-02-27T19:01:17.004-06:00Against Techno-Fetishism<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://mdrxa.files.wordpress.com/2012/08/mardi-elevations.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="http://mdrxa.files.wordpress.com/2012/08/mardi-elevations.jpg" height="226" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Either a vertical farm or Star Wars outpost. Hard to tell. <a href="http://agritecture.com/post/44791044477/this-is-a-rendering-of-the-mardi-vertical-farming" target="_blank">Source</a>.</td></tr>
</tbody></table>
A while back <a href="http://hipcrime.blogspot.com/2012/06/vertical-farms-and-lab-grown-meat-have.html" target="_blank">I criticized the current fashion for "vertical farms,"</a> essentially skyscrapers designed to do what anyone armed with sun and soil can do--grow plants, as a prime instance of our techno-fetishism. This is the application of high technology to the simplest of problems even where its not required, and where simpler solutions are more cost-effective, to make us feel like we're somehow more "advanced" or "clever," or to create "economic activity." Architects, always looking for some new novelty to distinguish themselves from the herd, leaped on board <a href="http://www.kpbs.org/news/2013/feb/27/aspiring-architect-envisions-vertical-farm-downtow/" target="_blank">producing fantastic renderings of buildings that would take many millions to construct</a>, all to do what a simple wooden barn or urban greenhouse can accomplish.<br />
<br />
It's part of a larger trend in our society--technology for technology's sake--meaning we can not see beyond high-tech solutions even when simpler ones will do. Not only <i>do</i>--they are often <i>superior </i>in terms of performance, cost effectiveness, resource use, bang-for-the-buck, etc. But instead we would rather use technology because it is "cool"--the very definition of a fetish.<br />
<br />
So I was glad to see this excellent and very effective takedown of the vertical farming idea:<br />
<br />
<a href="http://www.alternet.org/food/why-growing-vegetables-high-rises-wrong-so-many-levels" target="_blank">Why Growing Vegetables in High Rises is Wrong on So Many Levels</a> (Alternet)<br />
<br />
It's good to know I'm not alone in the common-sense-based community. Routing sunlight through solar panels to power indoor lights is not more environmentally friendly, than, you know, USING THE SUN! You know, <i>the great glowing ball in the sky that does it all for free</i>. However, most consumers of American news are probably unaware of the sun since they spend all their time indoors staring at screens or driving around in cars.<br />
<blockquote class="tr_bq">
No one would consider stacking photovoltaic solar panels one above the other. In such a system, only the top panel would produce electric current. The leaves of plants also need to be directly and strongly illuminated if they are to activate the photosynthesis that powers their growth. </blockquote>
<blockquote class="tr_bq">
If plants are living indoors, even if they are in an entirely glass-walled room, they can't capture enough sunlight to perform those functions. Plants nearest the windows will receive weak sideways illumination for part of the day, while interior plants will get much less than that; for both, the light intensity would be wholly inadequate to produce a significant quantity of food.</blockquote>
Growing plants indoors. <i>Sheesh</i>. Maybe if you're trying to avoid being arrested for growing that plant, but otherwise it's like developing high technology to raise fish on land. People already complain that salad greens and broccoli are too expensive; imagine what happens when you've got to recoup real-estate costs, property taxes, rental fees, and so on. There's a reason businesses move to the the suburbs. Do you really want lettuce at $20.00 a head?<br />
<br />
And the idea that we don't have land is absurd on its face. Every city is surrounded by an abandoned farm belt. You could just bike
that produce in if you had to, or, heck, carry it by horse-drawn wagon.<br />
<blockquote class="tr_bq">
In the United States, we produce 4,000 calories worth of food per resident daily, twice what's required. We have ample land; we just need to stop abusing the soil we have.<br />
<br />
Consider what it would take to provide fresh produce to just 15,000 city dwellers; that would be about 2 percent of the population of the District of Columbia. </blockquote>
<blockquote class="tr_bq">
That was the objective of a favorable 2013 analysis of vertical gardening by GIZ, a German engineering group. They estimated that the project would require a 150 x 150 square-foot building with 37 stories. It would cost a quarter billion dollars to construct and equip and would consume $7 million worth of electricity annually. Those estimates led them to conclude, “It is possible to grow only high value crops for consumers who have disposable income for such products.”</blockquote>
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<br />
The article is brilliant, backed with facts and figures that I didn't have available. I wish stuff like this would squelch the techno-fetishism promoted by the media, but since their job is to peddle novel non-solutions to maintain the status-quo, I kind of doubt it.<br />
<blockquote class="tr_bq">
Reduced energy consumption for transportation is an excellent argument for urban gardening and farming within or close to cities, but it's no justification for indoor gardening. The climate impact of shipping food over long distances is significant, but the impact of energy-intensive food raising methods can be far larger than that. Dependence on artificial lighting in particular makes the impact of food production vastly larger than the impact of food transport. </blockquote>
<blockquote class="tr_bq">
Defenders of vertical gardening claim that it can produce much more food per acre of land per year than sun-and-soil agriculture. But not only are many of these comparisons exaggerated; they are also irrelevant. No matter how big the improvement in production per square foot per year, it will have no effect on the key number in vertical gardening's energy predicament: the quantity of photosynthetically active light required to produce each and every kilogram of plant tissue. That's a basic biochemical requirement. </blockquote>
<blockquote class="tr_bq">
Increasing a food-production building's yield by stacking in more and more plants per floor or operating year-round only increases the demand for electric lighting.</blockquote>
What's the alternative? As the article points out, rooftop gardening is one. The roofs are already there anyway and exposed to direct sunlight; plus sunlight actually degrades roofing membranes. Thus, protecting the membranes from UV degradation and growing plants, whether for edible or medicinal purposes or just to clean the air, makes sense. Vertical walls can now be used as well (though difficult to harvest).<br />
<br />
And of course, there are ideas like urban food forests, raised bed gardening on empty lots, or just tearing up your lawn and planting a victory garden. A few years ago on this blog I wrote about French Market Gardening:<br />
<br />
<a href="http://hipcrime.blogspot.com/2011/12/french-market-gardens-la-culture.html" target="_blank">French Market Gardens - La Culture Maraîchère</a><br />
<br />
Here's another example from <i>Low-Tech Magazine</i>: <a href="http://www.lowtechmagazine.com/2015/12/fruit-walls-urban-farming.html#more" target="_blank">Fruit Walls: Urban Farming in the 1600s</a><br />
<br />
And another great example of using greenhouse technology on an appropriate scale to grow citrus fruits on the Great Plains in the middle of winter!<br />
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<br />
It is these kinds of solutions that actually make sense, rather than the grandiloquent top-down megatechnic solutions promoted by the corporate media.<br />
<br />
It also makes me wonder what the real agenda is in trying to automate every tiny scrap of agricultural labor in a world where millions of people are unemployed and desperate all over the planet. Control the food and you control the people. If people can produce their own, they have freedom, which is what the people in power definitely do NOT want.<br />
<br />
Here's Lloyd Alter's coverage: <a href="http://www.treehugger.com/green-architecture/vertical-farms-wrong-so-many-levels.html" target="_blank">Vertical farms: Wrong on so many levels</a> (Treehugger). Lloyd takes on some other green fantasies, too, for example, the solar-panel highways concept. Again, just like growing plants indoors, burying solar panels under streets seems like a silly idea on its face, yet it was again greeted with raptures of "change the world" excitement. One would think it would make more sense to put solar panels (made with difficult to extract elements and often toxic to produce) where, you know, <i>the sun might shine on them</i>.<br />
<blockquote class="tr_bq">
[The solar bike path in the Netherlands] has been in operation for a full year, and the developers are calling it a huge success. <b>The $ 3.7 million project has generated 9,800 kWh, which at $0.20 per kWh is worth a whopping $1,960! That's a 0.0057 percent return on investment! </b></blockquote>
<blockquote class="tr_bq">
Now of course this roadway was a prototype and would cost a lot less if mass produced. But solar plants in Germany are now delivering power at 9 cents per kWh. It's predicted that by 2025 it will drop to between 4 and 6 cents per kWh. <b>The Solaroad people claim that their system will pay for itself in 15 years, but at those rates it will cost more to rake the leaves off their solar panels than it will get out of them in electricity.</b> </blockquote>
<blockquote class="tr_bq">
Adele Peters of Fast Company goes so far as to claim that "A solar-paved street could ultimately be cheaper than something made of asphalt or concrete."I am sorry, but that defies logic. The solar roadway has to sit on top of a very stable and strong concrete base, and the return on this investment is not fifteen years, it is never...OK, they have proven that they can do it. They still have not proven that it makes any sense.</blockquote>
<a href="http://www.treehugger.com/solar-technology/solar-bicycle-lanes-first-year-great-success.html" target="_blank">Solar bicycle lane's first year is "a great success"</a> (Treehugger)<br />
<br />
As he <a href="http://www.treehugger.com/solar-technology/solaroad-opens-first-solar-bike-path.html" target="_blank">pointed out when it was built</a>:<br />
<blockquote class="tr_bq">
Get those darn kids off the solar bike lane! They're blocking the sun! They're standing on US$ 3.7 million of photovoltaics and precast concrete bike lane, running all of 230 feet, that's going to generate enough energy to supply enough electricity for <b>three houses!</b><br />
<br />
The Solaroad people, who built this bike lane in Krommenie, near Amsterdam, admit that because of the angle (lying almost flat), these solar panels will only generate 30% of what a conventional roof mounted panel would produces. They are also protected by heavy textured tempered glass, that probably costs a whole lot more than solar panels do these days.</blockquote>
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<br />
Another sacred cow that Lloyd takes on is trendy shipping container architecture, yet another example of architecture's bandwagon effect. Originally, shipping container architecture was about appropriating waste products to produce low-cost housing for underserved communities. Now they are being produced<i> just to make houses out of! </i><a href="http://www.treehugger.com/modular-design/does-shipping-container-architecture-make-sense.html" target="_blank">He links to an article</a> from Arch Daily:<br />
<blockquote class="tr_bq">
...there are a lot of downsides to building with cargo containers. For instance, the coatings used to make the containers durable for ocean transport also happen to contain a number of harmful chemicals, such as chromate, phosphorous, and lead-based paints. Moreover, wood floors that line the majority of shipping container buildings are infused with hazardous chemical pesticides like arsenic and chromium to keep pests away. </blockquote>
<blockquote class="tr_bq">
Reusing containers seems to be a low energy alternative, however, few people factor in the amount of energy required to make the box habitable. The entire structure needs to be sandblasted bare, floors need to be replaced, and openings need to be cut with a torch or fireman’s saw. The average container eventually produces nearly a thousand pounds of hazardous waste before it can be used as a structure. All of this, coupled with the fossil fuels required to move the container into place with heavy machinery, contribute significantly to its ecological footprint. </blockquote>
<blockquote class="tr_bq">
Another downside is that dimensionally, an individual container creates awkward living/working spaces. Taking into account added insulation, you have a long narrow box with less than eight foot ceiling. To make an adequate sized space, multiple boxes need to be combined, which again, requires energy.<br />
<br />
In many areas, it is cheaper and less energy to build a similarly scaled structure using wood framing. Shipping container homes makes sense where resources are scarce, containers are in abundance, and where people are in need of immediate shelter such as, developing nations and disaster relief. While there are certainly striking and innovative examples of architecture using cargo containers, it is typically not the best method of design and construction.</blockquote>
<a href="http://www.archdaily.com/160892/the-pros-and-cons-of-cargo-container-architecture/" target="_blank">The Pros and Cons of Cargo Container Architecture</a> (Arch Daily)<br />
<br />
Here's another critical take:<br />
<blockquote class="tr_bq">
Housing is usually not a technology problem. All parts of the world have vernacular housing, and it usually works quite well for the local climate. There are certainly places with material shortages, or situations where factory built housing might be appropriate- especially when an area is recovering from a disaster. In this case prefab buildings would make sense- but doing them in containers does not. </blockquote>
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<blockquote class="tr_bq">
You’ve seen the proposals with cantilevers everywhere. Containers stacked like Lego building blocks, or with one layer perpendicular to the next. Architects love stuff like this, just like they throw around usually misleading/meaningless phrases like “kit of parts.” Guess what- the second you don’t stack the containers on their corners, the structure that is built into the containers needs to be duplicated with heavy steel reinforcing. The rails at the top and the roof of the container are not structural at all (the roof of a container is light gauge steel, and will dent easily if you step on it). If you cut openings in the container walls, the entire structure starts to deflect and needs to be reinforced because the corrugated sides act like the flange of beam and once big pieces are removed, the beam stops working. All of this steel reinforcing is very expensive, and it’s the only way you can build a “double-wide.”</blockquote>
<a href="http://www.treehugger.com/sustainable-product-design/whats-wrong-shipping-container-housing-one-architect-says-everything.html" target="_blank">What's wrong with shipping container housing? One architect says "everything."</a> (Treehugger) For another take with economics in mind, see: <a href="http://www.nakedcapitalism.com/2015/02/home-sweet-shipping-container-not.html" target="_blank">Home, Sweet Shipping Container, and Why Not?</a> (Naked Capitalism)<br />
<br />
I'm glad at least a few of these ridiculous sacred cows that are endlessly being recycled in the media are finally being taken on. The emperor has no clothes, and architects are often the worst offenders. There are architects, however, who really do work to create affordable, appropriate-tech solutions, and it's too bad they don't get the coverage they deserve. Maybe we'll finally get to discuss real solutions that don't pad the profits of the one percent. Feel free to include your own favorite examples of techno-fetishism in the comments.Unknownnoreply@blogger.com7tag:blogger.com,1999:blog-5813525365834911757.post-43121246615170640442015-12-19T19:54:00.000-06:002015-12-21T17:47:35.715-06:00Corn-Pone Hitler?<div class="separator" style="clear: both; text-align: center;">
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<br />
I had intended to write about <i>¡Trumpismo!</i>, and given the comments to my last piece, now seems like a good time. I don't normally like to cover domestic politics, since it's mostly irrelevant to the "big picture" issues I like to deal with here, but I do think the alternative candidates running now do reveal something about the future, chiefly that the center cannot hold and things are breaking down. As I've said so often, <i>sometimes countries just go crazy.</i><br />
<br />
First, the obvious. Trump is running a right-wing populist proto-fascist campaign. His campaign is predicated on national decline and humiliation, and animated by white racial grievance. The current Neoliberal duopoly has basically painted a happy face on several decades of decline in living standards for the vast majority of people in the previously rich industrialized countries, along with widespread unemployment, corruption, a crisis in housing affordability and a gutting of social services. <br />
<br />
Given that, how could we<i> not </i>expect some kind of counter-reaction to emerge? Sooner or later it was going to happen. It makes sense that the person able to break through the corporate-owned media's peddling of Neoliberal economic orthodoxy and consent manufacturing would be someone with both the financial means and media savvy to do so.<br />
<br />
The mainstream parties offer no solutions to the problems named above. Neither does Trump for that matter, but at least he acknowledges the situation, which is more that can be said for the hapless mainstream political parties. Both parties have had their crack at bat over the last few decades with precisely the same result: they have both have failed to do anything substantial for anyone outside of the donor class. As I've said before, American presidents are similar to their former Soviet counterparts, presiding over and caretaking a system that has no future and is rapidly falling apart. Nation-states have ceded real power to do anything apart from enforce the Neoliberal consensus that the only real duty of governments is to manage international capital markets. The mainstream "safe" candidates have presided over a precipitous and ominous rise of hopelessness, despair and decline, coupled with an epidemic of fraud, graft and corruption at the highest institutions of society. Is it any wonder people are losing faith in institutions? The mainstream parties are the parties of the small circle of winners at the top of society - the financiers, the university presidents, the executive directors, the CEO's, the superstars, and all the grifters who are making out like bandits at the expense of the rest of us.<br />
<br />
<a href="http://www.nakedcapitalism.com/2015/12/the-predictability-of-political-extremism.html" target="_blank">The Predictability of Political Extremism</a> (Naked Capitalism) <br />
<br />
To me, what's most fascinating about Trump is the degree to which<b> he reveals how disgusted downscale white voters are with the party they have been fanatically supporting since Reagan</b>. It is a constant source of wonderment from astute political observers the world over, that the white American working class consistently votes for a party that seems to want to destroy them based on their rhetoric and legislative aims. This is chalked up to a number of reasons, usually tied to the manipulation of racism and religious fundamentalism.<br />
<br />
That's partially true, of course, but what I think is the case is that people vote Republican because it's their "team." That is, <i>what the Republicans do and how they govern is largely irrelevant to the people who vote for them.</i> For example, people are Packers fans whether or not the team makes it to
the Superbowl or loses a few games. It's their "team," and being a fan is a par of your identity. People are loyal
to their team through thick and thin, win or lose (just ask Cubs fans). Voting Republican is largely an exercise to affirm one's affiliation to a particular segment of the American population - uneducated, white, rural, religious, gun-toting, church-going and fetus-fetishizing. The Republican party has become the party of affiliation for the downscale whites who have been left behind by Neoliberalism; what I've termed the "rump." As it cynically catered to this demographic to gain political power, it soon adopted all their worst elements - their bellicose and hypocritical religiosity, their lust for war and violence and disdain for the arts and culture, their xenophobia and their hatred. The Republicans are the "team" of rural whites and the executive class. Strange bedfellows to be sure, and that difference is partly behind the recent internal Republican civil war and the rise of Trump.<br />
<br />
At the same time, the Democrats are increasingly portrayed as (exclusively) the party of gays, women, and minorities. Inaccurately, in my opinion. I think that the Democrats have let themselves be tarred and feathered with the most extreme elements of the "New Left" at the same time as they abandoned their commitment to putting up even a token resistance to Neoliberal consensus. This is why they are seen as "anti-white." In defense of the Democrats, at the time of the Reagan "revolution," there were plenty of Democrats who were pro-union and opposed to deregulation, outsourcing, and mass immigration. But they pretty consistently lost, so they figured that since that rhetoric got them no votes and alienated the donor class, they might just as well abandon those opinions and start getting the corporate cheddar that was necessary to buy the airtime needed to win modern elections. That was how they survived as a party.<br />
<br />
So let's talk about immigration.<br />
<br />
Now, I don't think that mass immigration is part of any so-called "conspiracy" against whites in this country. <b>It's all about the money.</b> Cheaper immigrants have always been used to keep wages low and suppress the wages of native-born workers. Employers would hire genetically-engineered chimpanzees or aliens from Zeta Reticuli if they thought they could break the back of the working class, without giving two fucks about the Americans they were screwing over. If blonde, apple-cheeked Nordics were happy to wash dishes for a few bucks an hour, they would be displacing the native population too. The Market cares for nothing besides cheap labor; it has no loyalty to nation, race or class. As I've said before (and as Morris Berman has repeatedly pointed out), there is no loyalty or solidarity in American society; it is purely a competition between alienated individuals over who can rook over the next guy and end up with the most. As Berman writes, unremitting competition is not a social glue, its a solvent, so it's no wonder America is coming apart at the seams.<br />
<br />
A century ago, it was immigrants from Central Europe, particularly Austria-Hungary and the old Hapsburg empire who fit that bill. And many of them weren't considered white at the time. They were too swarthy and too Catholic for that. Most immigration prior to that was from Western Europe, particularly the British Isles, along with some French and Dutch. But the new wave was the Central slice of Europe west of France and east of Russia, from Scandinavia down through Sicily: Germans, Austrians, Swiss, Poles, Italians, Scandinavians, Bohemians, Serbians, Greeks, Croatians, Dalmatians, Romanians, Moravians, Hungarians, Slovaks, Bulgarians, and so on, including large numbers of Jews along with Irish fleeing the famine. Milwaukee, where I live, is pretty much comprised of those people today; the descendants of the Central European peasants whose ancestors crossed the Atlantic to survive, in contrast to the Anglo-Saxon-dominated East Coast. My own ancestors were a part of that wave from what is today Eastern Germany (now Poland since the end of the Second World War). My great-grandparents never did bother learning English, getting by with their native <i>Plattdeutsch</i>.<br />
<br />
And you heard the exact same rhetoric then as you do today - that the new immigrants were a threat to native workers, which was not entirely false, and that were more loyal to their homelands than America, which turned out not to be true. Now the great-grandchildren of those same immigrants are attending Trump rallies and demanding that the borders be closed.<br />
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<br />
Note that every spike in immigration is followed by an economic collapse. The supply of workers grows too large, driving down wages. The drop in wages depresses consumption and leads to an economic crisis in a capitalist system devoted to overproduction. The jobs then dry up and the crab mentality sets in. Competition for increasingly scarce jobs leads to xenophobic finger-pointing and scapegoating. In the past, however, the adults were in charge, and took steps to rectify the situation, keeping it from boiling over.<br />
<br />
Not anymore.<br />
<br />
The current wave is a bit different. They look a lot more like the original inhabitants of this part of the world we wiped out a long time ago. They know how to be poor, which gives them an inherent advantage in a contracting society. The big difference between this wave and the ones that preceded them is that <b>the age of mass employment is over</b>. This is very different from the relatively open country that the previous wave of immigrants found themselves in (many of whom ended up in a largely empty Middle America from Pennsylvania to Oregon). The other is that, since they did not have to cross an ocean and their ancestry is on this continent, there is a lot less pressure or need for them to assimilate. Plus it's a lot easier to get here and harder to close the border, since the ocean is not involved. Rather, America is changing to accommodate <i>them</i>. Sure, previous waves of immigration produced ethnic niche communities and material which catered to them, but they were eventually assimilated. In just a couple of decades, we have essentially become a bilingual society - you can conduct every aspect of life entirely in Spanish (not necessarily a bad thing in my opinion - Americans should learn to speak more languages).<br />
<br />
This mass immigration is cheered on conservative websites that cater to the libertarian, business-oriented, anti-worker, think-tank-funded country-club arm of the Republican party--the ones funded by people like the Koch Brothers. I'm thinking of sites like Marginal Revolution and Bloomberg. "Left-leaning" economists like Noah Smith and "small-'L'-libertarian economists like Tyler Cowen are constantly beating the drum for more immigration, even as they freely acknowledge the death of the working class and the rise of automation. That mass immigration and unlimited free trade are good things is one of the few things that the mainstream corporate-funded Left and Right consistently agree on.<br />
<br />
<a href="http://marginalrevolution.com/marginalrevolution/2014/02/the-moral-is-the-practical.html" target="_blank">The Moral Is the Practical</a> (MR)<br />
<br />
<a href="http://marginalrevolution.com/marginalrevolution/2013/10/does-increasing-inequality-weaken-the-case-for-additional-low-skilled-immigration.html" target="_blank">Does increasing inequality weaken the case for additional low-skilled immigration?</a> (MR)<br />
<br />
<a href="http://www.bloombergview.com/articles/2015-12-18/an-immigrant-isn-t-going-to-steal-your-pay-raise" target="_blank">An Immigrant Won't Steal Your Raise</a> (Bloomberg)<br />
<br />
In fact, the Left and Right uniting against Neoliberal corporate rule is the elites' worst nightmare.<br />
That's
the reason behind the divide-and-conquer strategies that have been
deployed so effectively by the wealthy and the media - to keep people
from realizing their common enemy. It's an old tactic - Jay Gould quipped
that he could hire half the poor to kill the other half. Today it would be rural gun-toting white Christian fundamentalists
fighting Hispanic lesbian union activists or latte-sipping urban hipster
professionals. Simple pie.<br />
<br />
In fact, they've been so good at divide
and conquer that they are tearing the nation apart for their own selfish
ends. As long as people are preoccupied on racial/gender issues on so
forth, they will never form a united opposition to the forces that are
skinning us alive. The problem is that they've done it so effectively
that the the country simply cannot function to accomplish any coherent
goals at all. This power vacuum is good for powerful elites who can use their money to act as a <i>de-facto</i> government unto themselves. By cynically manipulating the fissures in American society, big
business has successfully neutralized any opposition to its hostile takeover of
the levers of power, but it has left a hollowed out country desperate
for a savior in its wake. As Lincoln so aptly said, a house divided against itself
cannot stand.<br />
<blockquote class="tr_bq">
“Open borders? No, that’s a Koch brothers proposal,” [Bernie] Sanders said in a wide-ranging interview with the website. “That’s a right-wing proposal, which says essentially there is no United States.” </blockquote>
<blockquote class="tr_bq">
Sanders frequently targets the libertarian industrialists Charles and David Koch as unhealthy influences on American democracy — but he’s not the first to notice their support for an open borders policy. </blockquote>
<blockquote class="tr_bq">
The conservative Breitbart and the white supremacist VDARE website each blasted the Koch brothers for sponsoring a “pro-amnesty Buzzfeed event” in 2013, and two writers for the Koch-sponsored Reason — former contributing editor David Weigel and current editor-in-chief Nick Gillespie — have always been supportive of immigration reform.<br />
That’s at odds with what many Republicans believe, and Sanders told Vox that an open border would be disastrous to the American economy. </blockquote>
<blockquote class="tr_bq">
“It would make everybody in America poorer — you’re doing away with the concept of a nation state, and I don’t think there’s any country in the world that believes in that,” Sanders said. “If you believe in a nation state or in a country called the United States or (the United Kingdom) or Denmark or any other country, you have an obligation in my view to do everything we can to help poor people.”
He said conservative corporate interests pushed for open borders, not liberals.</blockquote>
<a href="http://www.rawstory.com/2015/07/bernie-sanders-explodes-a-right-wing-myth-open-borders-no-thats-a-koch-brothers-proposal/" target="_blank">Bernie Sanders explodes a right-wing myth: ‘Open borders? No, that’s a Koch brothers proposal’</a> (Raw Story)<br />
<br />
Note how it is couched in the rhetoric of "freedom." Footloose and desperate labor is a plutocrat's dream. As I like to say, if you see the words "Freedom" or "Liberty" in connection with "Economics," look very closely at where the money is coming from and who benefits for their proposals.<br />
<br />
However, on the ground, Republican voters are not stupid. they are well-aware that if they hire workers to fix their pluming or install a new roof, those workers are all going to be speaking Spanish. They know that the kitchen staff of every restaurant they go to is filled with people straight out the beanfields of Mixoacan. And they don't understand why those people can travel thousands of miles not speaking a word of English and have a job ready and waiting for them while their own unemployment benefits are running out and they are turned down for even the most trivial service job. They also wonder why their children are the ones populating urban schools and parks. And if you point this out, the corporate-owned media is eager to denigrate you with labels like "racist" and "nativist." Trump is largely a reaction to this.<br />
<br />
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Now, I don't think that immigrants are in any way "threatening" America's culture. Quite the opposite, actually. You cannot threaten American culture because there is no culture. America's only "culture" is making money. It is not so much a civilization as a business proposition. Its soul is hollow and empty inside, and there is nothing in it's back heart besides pandering to the lowest common denominator, Social Darwinism, and the eternal need for "more." You can't destroy what never existed.<br />
<br />
What it will do it make it crowded enough that the uniquely American fantasies of rising living standards in perpetuity and social mobility will wither and die on the vine. Right now the generations who experienced those things are having an emotional tantrum and looking for a daddy/Santa Claus figure who will promise them all the goodies they think they so richly deserve, and Trump is all to happy to occupy that role in the service of his own ego. When yet another savior fails to deliver, there will be yet another meltdown, accompanied by all the same symptoms - political extremism, class warfare, ethnic scapegoating and mass shootings of the poor by the poor. After a few centuries of madness, we may end up with a society more in line with a shrinking world and with a polity that can be trusted to make mature decisions not based knee-jerk reactions and fear.<br />
<br />
Robert Reich has been touring the country promoting his latest book, and to his credit, he is one so-called leftists who tries very hard to understand the perspective of those who disagree with him. What he finds is that on the economic issues, there is surprisingly little difference between the so-called liberals and conservatives who are constantly played against each other:<br />
<blockquote class="tr_bq">
It turned out that many of the conservative Republicans and Tea Partiers I met agreed with much of what I had to say, and I agreed with them. For example, most condemned what they called “crony capitalism,” by which they mean big corporations getting sweetheart deals from the government because of lobbying and campaign contributions.<br />
I met with group of small farmers in Missouri who were livid about growth of “factory farms” owned and run by big corporations, that abused land and cattle, damaged the environment, and ultimately harmed consumers.They claimed giant food processors were using their monopoly power to squeeze the farmers dry, and the government was doing squat about it because of Big Agriculture’s money. </blockquote>
<blockquote class="tr_bq">
I met in Cincinnati with Republican small-business owners who are still hurting from the bursting of the housing bubble and the bailout of Wall Street. “Why didn’t underwater homeowners get any help?” one of them asked rhetorically. “Because Wall Street has all the power.” Others nodded in agreement. Whenever I suggested that big Wall Street banks be busted up – “any bank that’s too big to fail is too big, period” – I got loud applause. </blockquote>
<blockquote class="tr_bq">
In Kansas City I met with Tea Partiers who were angry that hedge-fund managers had wangled their own special “carried interest” tax deal. “No reason for it,” said one. “They’re not investing a dime of their own money. But they’ve paid off the politicians.”<br />
In Raleigh, I heard from local bankers who thought Bill Clinton should never have repealed the Glass-Steagall Act. “Clinton was in the pockets of Wall Street just like George W. Bush was,” said one. </blockquote>
<blockquote class="tr_bq">
Most of the people I met in America’s heartland want big money out of politics, and think the Supreme Court’s “Citizens United” decision was shameful. Most are also dead-set against the Trans Pacific Partnership. In fact, they’re opposed to trade agreements, including NAFTA, that they believe have made it easier for corporations to outsource American jobs abroad. A surprising number think the economic system is biased in favor of the rich. (That’s consistent with a recent Quinnipiac poll in which 46 percent of Republicans believe “the system favors the wealthy.”)</blockquote>
Reich goes on to describe the attraction of Trump to these voters. He couples the rhetoric and white racial affiliation of the Republican party with the pro-capitalist "everyone can get rich rhetoric," while mining the grievance of Americans who see the inexorable decay of their living standards and communities along with feeling like strangers in their own country. To some extent, he's doing what the Democrats did long ago - steal rhetoric from the other side that appeals to the marginalized middle. The Leftist views find no articulation of these views on the Democratic side save for Bernie Sanders. So why not vote for Sanders? Well, especially for the older white voters of Middle America who grew up during the Cold War, the constant demonization of "socialism" (and Bernie's Jewishness) are deal-breakers. But they can feel good about Trump.<br />
<blockquote class="tr_bq">
I...began to understand why many of them are attracted to Donald Trump. I had assumed they were attracted by Trump’s blunderbuss and his scapegoating of immigrants. That’s part of it. But mostly, I think, they see Trump as someone who’ll stand up for them – a countervailing power against the perceived conspiracy of big corporations, Wall Street, and big government. </blockquote>
<blockquote class="tr_bq">
Trump isn’t saying what the moneyed interests in the GOP want to hear. He’d impose tariffs on American companies that send manufacturing overseas, for example. He’d raise taxes on hedge-fund managers. (“The hedge-fund guys didn’t build this country,” Trump says. “They’re “getting away with murder.”) He’d protect Social Security and Medicare. I kept hearing “Trump is so rich he can’t be bought.”...</blockquote>
<a href="http://robertreich.org/post/132819483625" target="_blank">What I Learned on My Red State Book Tour</a> (Robert Reich)<br />
<br />
<a href="http://robertreich.org/post/135202830270" target="_blank">The Revolt of the Anxious Class</a> (Robert Reich)<br />
<blockquote class="tr_bq">
A focus group of Trump supporters conducted by pollster Frank Luntz earlier this week revealed that, by and large, Trump's backers are pessimistic about the future of the country and passionately hate President Barack Obama and the mainstream media. They're wary of Muslims and steadfast in their support of their candidate, even to the point of being willing to follow him in an independent presidential bid if he leaves the Republican Party. <br />
<br />
In September David Brady and Douglas Rivers of the Hoover Institution took a closer look at the demographics of Mr Trump's enduring coalition. They painted a picture of Trump supporters as largely older, less wealthy and less educated. They found that more than half of Trump-backers are female. About a third are over the age of 65. Only 2% are younger than 30. Half of his voters have a high-school diploma, but just 19% have a college degree. Just over a third earn less than $50,000, while 11% make six figures or more. Ideologically, Mr Trump's people are all over the board, with 20% identifying as moderate, 65% as conservative and 13% as very conservative. When the New Yorker entered the race, he pulled support from nearly every candidate in the field.<br />
<br />
All of this raises what the Washington Post's Max Ehrenfreund calls a "fundamental, universal and uncomfortable" truth about Donald Trump and his now more than four-month run as the man to beat in the Republican primary. He spoke to a number of psychologists and came up with three key sources of Mr Trump's appeal. "We like people who talk big," he writes. "We like people who tell us that our problems are simple and easy to solve, even when they aren't. And we don't like people who don't look like us." </blockquote>
<a href="http://www.bbc.com/news/world-us-canada-35047233" target="_blank">Who are Donald Trump's loyal supporters?</a> (BBC)<br />
<br />
In other words, the peasants that have been dutifully turning out and voting in radical right politicians over the last few decades are fully aware they're being screwed. They just don't see Democrats as a viable alternative, and who could blame them? And a true leftist movement which could articulate these fears and unite the diverse elements in American society who are usually at war with one another has been successively stymied to date. Trump says the things everybody knows are true, but cannot be articulated by parties dedicated to the pursuing policies demanded by the donor class. And unlike Sanders, Trump has enough celebrity to make past he media gatekeepers. He is fully aware that modern elections are a circus, and treats it as such. In fact, the media has been so discredited by parroting the Panglossian corporate rhetoric in the face of decline that they have undermined their credibility to such an extent that anything they say, even if it's true (such as there were not thousands of Muslims in New York celebrating 9-11, or that climate change is real), will be dismissed.<br />
<br />
It's no surprise populism needs to be the "right-wing" variety in a country like the U.S. As I've said before, the Republican party is no longer a party, it is an <i>authoritarian movement</i>, and authoritarian movements need a leader. What's also interesting is the degree to which Putinism, a Russian nationalist authoritarian movement, is admired by right-wing Republicans in the US. I guess Russkies are OK as long as they aren't commies.<br />
<br />
<a href="http://gawker.com/donald-trumps-putin-admiration-is-completely-within-the-1748721848" target="_blank">Donald Trump's Putin Admiration Is Completely Within the Political Mainstream</a> (Gawker) <br />
<br />
Note that the desire for a strong and decisive leader whom humiliated males emasculated by an economy that no longer needs them as workers or soldiers can live vicariously through is preciously the same sentiment that propelled the rise of politicians like Hitler and Mussolini, among others.<br />
<br />
Which brings us to the Fascist part. In an intelligent article at Slate, the columnist uses Umberto Eco's definition of Fascism to point out that Trump's campaign first the bill rather nicely:<br />
<blockquote class="tr_bq">
Part of the problem of talking about fascism, at least in American political culture, is that there’s nothing close to a common definition. ...Most often, it’s a political insult, usually directed from the left to the right, but often in the reverse too, always in service of narrow partisan points. This is too bad because fascist and fascism are terms that actually mean something apart from contemporary political combat and the particulars of early- to mid–20th-century Europe. And while that meaning is fuzzy, contested, and contingent, there are elements that scholars can agree on. </blockquote>
<blockquote class="tr_bq">
[Umberto] Eco emphasizes the extent to which fascism is ad hoc and opportunistic. It’s “philosophically out of joint,” he writes, with features that “cannot be organized into a system” since “many of them contradict each other, and are also typical of other kinds of despotism or fanacticism.” </blockquote>
<blockquote class="tr_bq">
...A cult of “action for action’s sake,” where “thinking is a form of emasculation”; an intolerance of “analytical criticism,” where disagreement is condemned; a profound “fear of difference,” where leaders appeal against “intruders”; appeals to individual and social frustration and specifically a “frustrated middle class” suffering from “feelings of political humiliation and frightened by the pressure of lower social groups”; a nationalist identity set against internal and external enemies (an “obsession with a plot”); a feeling of humiliation by the “ostentatious wealth and force of their enemies”; a “popular elitism” where “every citizen belongs to the best people of the world” and underscored by contempt for the weak; and a celebration of aggressive (and often violent) masculinity. </blockquote>
<blockquote class="tr_bq">
How does [Trump] build favor with Republican voters? He shows bravado and “strength,” disparaging weak opponents. He indulges racist rhetoric and encourages violence against protesters. He speaks directly to the petite bourgeoisie in American life: managers, public employees, small-business owners. People squeezed on all ends and desperate for economic and cultural security against capitalist instability and rapid demographic shifts, as represented by President Obama. Elect him, Trump says, and he’ll restore your security and American greatness. “You’re going to say to your children, and you’re going to say to anybody else, that we were part of a movement to take back our country. … And we will make America great again.”</blockquote>
<a href="http://www.slate.com/articles/news_and_politics/politics/2015/11/donald_trump_is_a_fascist_it_is_the_political_label_that_best_describes.html" target="_blank">Why Fascist Is the Term That Best Describes Donald Trump</a> (Slate)<br />
<br />
Trump has also called for the mass detention and incarceration of individuals based on nothing more than their ethnic/religious affiliation.<br />
<br />
Here's what I think. I think Trump is a narcissist and opportunist, and that he realized that the Republican party had become a right-wing authoritarian movement comprised of the downwardly mobile angry white temporary majority, and that furthermore it had built effective distributed institutions to catapult the propaganda and rally troops to the cause, but it lacked a single charismatic leader (with the long-dead Reagan as a stand-in). The organization was there, built by a diffuse group of unconnected plutocrats to
get lower taxes and higher profits; it just needed someone to come along who knew how
to wield it effectively and had no shame in pandering to its worst
elements.<br />
<br />
<a href="https://www.washingtonpost.com/opinions/how-donald-trump-courted-the-right-wing-fringe-to-conquer-the-gop/2015/11/26/42e38150-92b6-11e5-a2d6-f57908580b1f_story.html?tid=pm_opinions_pop_b" target="_blank">How Donald Trump courted the right-wing fringe to conquer the GOP</a> (Washington Post)<br />
<br />
Most of the evidence shows that many of the opinions Trump is spouting contradict things he himself said years ago. I doubt he believes half the things he says, but he realized that by articulating the things conventional politicians can't or won't say to avoid offending their donors, he can fill a vacuum in American politics. And if this rabble includes the most ugly racist and crackpot elements in society, who cares so long as it gets you more power and popularity? The only thing that matters is getting the votes to win, because winning is all that counts in a morally nihilistic society. <br />
<br />
This article is by far the best analysis yet of the Fascist angle of Trump's campaign and the American ultra-right in general: <a href="http://dneiwert.blogspot.com/2015/11/donald-trump-may-not-be-fascist-but-he.html" target="_blank">Donald Trump May Not Be a Fascist, But He is Leading Us Merrily Down That Path</a> (Orcinus) It's quite long, and you need to read it all. One thing it points out is that most of the popular definitions of Fascism are simply wrong:<br />
<blockquote class="tr_bq">
What it’s decidedly not, no matter what you might have read, is the simple-minded definition you’ll see in Internet memes attributed to Benito Mussolini: “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.” As Chip Berlet has explained ad nauseam, not only did Mussolini never say or write such a thing, neither did the fascist philosopher Giovanni Gentile, to whom it is also often attributed.<br />
<br />
For one thing, as Berlet explains: “When Mussolini wrote about corporatism, he was not writing about modern commercial corporations. He was writing about a form of vertical syndicalist corporatism based on early guilds.” ...the term “corporatism” and “corporate” meant an entirely different thing in 1920s Italy than it means today...<br />
<br />
Another thing that fascism decidedly is NOT is the grotesque distortion made by Jonah Goldberg, to wit, that fascism is a kind of socialism and therefore “properly understood as a phenomenon of the left.” This claim, in fact, is such a travesty of the idea of fascism that it functionally negates its meaning, rendering it, as George Orwell might describe it, a form of Newspeak. Indeed, it was Orwell himself who wrote that “the idea underlying Fascism is irreconcilably different from that which underlies Socialism. Socialism aims, ultimately, at a world-state of free and equal human beings. It takes the equality of human rights for granted. Nazism assumes just the opposite.” Fascism, in reality, is a much more complex phenomenon than either of these definitions...</blockquote>
Yet in many ways, Trump's campaign is quite different from the Fascist campaigns that have existed historically: <br />
<blockquote class="tr_bq">
...as we consider the attributes of real fascism, we also can begin to discern the difference between that phenomenon and the Trump candidacy. Fascists have, in the past, always relied upon an independent, movement-driven paramilitary force capable of enacting various forms of thuggery on their opponents...Trump, however, has no such force at his disposal.</blockquote>
<blockquote>
What Trump does have is the avid support not only of various white-supremacist organizations, as well as that of very real paramilitary organizations in the form of the Oath Keepers and the “III Percent” movement, many of whose members are avid Trump backers, but neither of which have explicitly endorsed him. Moreover, Trump has never referenced any desire to form an alliance or to make use of such paramilitary forces.<br />
<br />
What Trump has done is wink, nudge, and generally encouraged spontaneous violence as a response to his critics. This includes his winking and nudging at those “enthusiastic supporters” who committed anti-Latino hate crimes, his encouragement of the people at a campaign appearance who assaulted a Latino protester, and most recently, his endorsement of the people who “maybe should have roughed up” the “disgusting” Black Lives Matter protester who interrupted his speech. </blockquote>
<blockquote>
That’s a clearly fascistic response. It also helps us understand why Trump is an extraordinarily dangerous right-wing populist demagogue, and not a genuine, in-the-flesh fascist. A serious fascist would have called upon not just the crowd to respond with violence, but also his paramilitary allies to respond with retaliatory strikes. Trump didn’t do that.<br />
<br />
That, in a tiny nutshell, is an example of the problem with Trump’s fascism: He is not really an ideologue, acting out of a rigid adherence to a consistent worldview, as all fascists are. Trump’s only real ideology is the Worship of the Donald, and he will do and say anything that appeals to the lowest common denominator of the American body politic in order to attract their support – the nation’s id, the near-feral segment that breathes and lives on fear and paranoia and hatred.<br />
<br />
There’s no question these supporters bring a singular, visceral energy to the limited universe of the GOP primary, though I don’t know anyone who expects that such a campaign can survive the oxygen and exposure of a general election. Indeed, it is in many signs an indication of the doom that is descending upon a Republican Party in freefall, flailing about in a death spiral, that it is finally resorting to a campaign as nakedly fascistic as Trump’s in its attempts to secure the presidency. </blockquote>
<blockquote>
Trump is not fascist primarily because he lacks any kind of coherent, or even semi-coherent, ideology. What he represents instead is the kind of id-driven feral politics common to the radical right, a sort of gut-level reactionarism that lacks the rigor and absolutism, the demand for ideological purity, that are characteristic of full-bore fascism.<br />
<br />
That does not, however, mean he is any less dangerous to American democracy. Indeed, he may be more dangerous than an outright fascist, who would in reality be far less appealing and far less likely to succeed in the current milieu. What Trump is doing, by exploiting the strands of right-wing populism in the country, is making the large and growing body of proto-fascists in America larger and even more vicious – that is, he is creating the conditions that could easily lead to a genuine and potentially irrevocable outbreak of fascism.<br />
<br />
Recall, if you will, the lessons of Milton Mayer in his book, They Thought They Were Free: The Germans 1933-1945 – namely, the way these changes happen not overnight, but incrementally, like the legendary slow boiling of frogs... It is by small steps of incremental meanness and viciousness that we lose our humanity. The Nazis, in the end, embodied the ascension of utter demonic inhumanity, but they didn't get that way overnight. They got that way through, day after day, attacking and demonizing and urging the elimination of those they deemed their enemies.<br />
<br />
And this is what has been happening to America – in particular, to the conservative movement and the Republican Party – for a very long time. Donald Trump represents the apotheosis of this, the culmination of a very long-growing trend that really began in the 1990s....All of which underscores the central fact: Donald Trump may not be a fascist, but his vicious brand of right-wing populism is not just empowering the latent fascist elements in America, he is leading a whole nation of followers merrily down a path that leads directly to fascism.<br />
<br />
Consider, if you will, what did occur in the immediate aftermath of Trump’s remarks about “roughing up” Black Lives Matter protesters: Two nights later, a trio of white supremacists in Minneapolis invaded a Black Lives Matter protest there and shot five people, in an act that had been carefully planned and networked through the Internet.<br />
<br />
What this powerfully implies is that Trump has achieved that kind of twilight-zone level of influence where he can simply demonize a target with rhetoric suggestive of violent retribution and his admirers will act out that very suggestion. It’s only a step removed from the fascist leader who calls out his paramilitary thugs to engage in violence.<br />
<br />
America, thanks to Trump, has now reached that fork in the road where it must choose down which path its future lies – with democracy and its often fumbling ministrations, or with the appealing rule of plutocratic authoritarianism, ushered in on a tide of fascistic populism. For myself, I remain confident that Americans will choose the former and demolish the latter – that Trump’s candidacy will founder, and the tide of right-wing populism will reach its high-water mark under him and then recede with him.</blockquote>
Trump seems to be sort of a Rorschach test, people see in him what they wish to see, which is obvious from the divergent views in the comments. This is a quality that the most successful politicians need to have in order to succeed. Everyone sees in him their own fears and their own needs.<br />
<br />
Personally, it's hard to take the hyperbolic rhetoric, mugging for the camera and shock of comical orange hair seriously as some sort of threat to civilization. But then again, I'm sure a lot of people made fun of Hitler's spittle-flecked speeches and silly-looking mustache and cowlick too. But the joke was on us. It wasn't so funny anymore in the prison yards of Dachau or the ruins of Berlin circa 1945. My guess is that Trump is nothing so sinister, and I hope that's the case. But I guess we'll have to wait and see.<br />
<br />
P.S. More evidence of the dieoff: <a href="http://www.bbc.com/news/world-us-canada-35138647" target="_blank">Drug overdose deaths in the US reach record levels</a> (BBC) Unknownnoreply@blogger.com23tag:blogger.com,1999:blog-5813525365834911757.post-54057001443901127032015-12-05T13:20:00.000-06:002015-12-07T13:24:04.461-06:00The Other DieoffsLast week I realized that there were a few subtleties left out of my (rather depressing) topic. I argued that America was doing more than just throwing its working class under the bus; it was actively trying to eliminate them. Meanwhile, the media, especially that tailored to the richest twenty percent of news consumers, is consistently waxing ecstatic on how this is the <i>"best, richest, most peaceful time, ever,"</i> because Facebook, even though most of us Americans are living in communities that are in an advanced state of decay, if not outright collapse.<br />
<br />
The point I wanted to make is that the dieoff is happening not only at the end of life as we saw last week, but also at the beginning. By this I mean that it's simply too expensive to have kids anymore. Lowered birthrates are a sort of <i>"stealth dieoff"</i> among the lower classes, and the upper ones too.<br />
<br />
Now, lowered birthrates is certainly something I can get behind, but I would rather it have come from choice rather than economic necessity. I realize that not everyone is like me, and for some, the desire to breed is unstoppable. The rich are perennially complaining that the poor are having children they can't afford, a very Anglo-Saxon complaint that goes back several hundred years. Of course, the poor will continue to breed no matter what because a child costs nothing to produce, and if their ancestors hadn't behaved the same way after all, they wouldn't be here. The idea that poverty will stop the poor and indigent from breeding has a poor track record, especially with the numbers of poor and indigent consistently rising. All it means is that more children will be born in poverty, and we now know that there are a host of behavioral and epigenetic consequences of that. Most certainly, the fallout from that will once again be placed on individual failure rather than social circumstance.<br />
<br />
<a href="http://www.huffingtonpost.com/2015/05/08/poverty-race-ethnicity-dna-telomeres_n_7228530.html" target="_blank">Scientists Find Alarming Deterioration In DNA Of The Urban Poor</a> (HuffPo) <br />
<br />
<a href="http://www.vox.com/2014/5/6/5686520/the-number-of-kids-in-the-us-would-be-shrinking-if-it-werent-for" target="_blank">The number of kids in the US would be shrinking if it weren't for immigrants.</a> Americans are castigated for having children they can't afford, with entire communities, especially rural ones, bereft of well-paying jobs. Meanwhile people in these communities see a massive influx immigrants with huge families working in all the blue collar occupations that they used to do. Is it any wonder that anti-immigrant demagoguery is a political winner in decaying Middle America? Corporate America felt they could keep a lid on this situation forever, even as they cynically stoked this reactionary fervor to delegitimize the very idea of the common good to gain tax benefits and hide the stealth takeover of government. Now they cannot control the demon they have unleashed. The nihilistic philosophy purveyed by the Right of every man for himself has reaped a whirlwind that even they can no longer control. It was only a matter of time <a href="https://www.washingtonpost.com/opinions/how-donald-trump-courted-the-right-wing-fringe-to-conquer-the-gop/2015/11/26/42e38150-92b6-11e5-a2d6-f57908580b1f_story.html?tid=pm_opinions_pop_b" target="_blank">before someone hijacked it and used it for their own personal ends</a>.<br />
<br />
This article is from the British newspaper <i>The Guardian</i>, but is just as relevant to the United States:<br />
<blockquote class="tr_bq">
These hurdles to the world of adulthood continue to be a great source of sadness and anxiety, and I’m not alone. For swathes of people in their 20s and 30s, who largely thought they would be at least a bit sorted by now, achieving the adult lives they want seems a distant fantasy. Spiralling property prices coupled with the fetishisation of housing as an investment – expressed through buy-to-let properties and often poor rental conditions – means secure housing is off the table for many of us as we continue to subsidise our much richer landlords...The recession, unstable and unreliable unemployment, low pay compounded by a pensions shortfall and an ageing population, have all led to a situation in which many members of my generation feel not only short-changed, but helpless when it comes to building some semblance of a stable family life. While our generational predecessors, the baby boomers, reaped the rewards of free university education and affordable property prices, we have been disproportionately affected by austerity... </blockquote>
<blockquote class="tr_bq">
Jealousy towards baby boomers is an everyday occurrence. You’ll be sitting in a bar with friends and hear them lament the fact that their parents had bought a house by the time they were 27. .. Generation Y – or millennials, if you must – are still often portrayed as existing in a state of perpetual kidulthood; we’re Peter Pans who never want to grow up. Yet many of us are desperate to do so. </blockquote>
<blockquote class="tr_bq">
Unaffordable housing and living costs are often portrayed as a “London problem”. “Why not simply move?” detractors say, as though career opportunity, family ties or personal finances are not an issue. Yet I spoke to people in their 20s and 30s from all over the UK, and many felt the same way: that their chances of getting to the point where they are stable enough to settle down and have children are slim to none. Many of them feel great sadness about this, not only because they look to their parents’ generation and see opportunities they’ve never had, but because a gulf is opening within our own generation – between those who can start a family or whose parents can help them get on the property ladder, and those who can’t.... </blockquote>
<blockquote class="tr_bq">
The more people I spoke to, the more apparent it became that this is not just about generational divides, but about class. Interviewees were forever mentioning friends or acquaintances who had been privileged enough to buy, while those from low-income backgrounds lost out.</blockquote>
<a href="http://www.theguardian.com/lifeandstyle/2015/nov/14/babies-an-impossible-dream-the-millennials-priced-out-of-parenthood" target="_blank">'Babies? An impossible dream': the millennials priced out of parenthood</a> (Guardian)<br />
<br />
The decay of America's working class is often chalked up sort of a moral turpitude, and this is depicted as something that emerged as a fallout of the permissive 1960's, despite the fact that it more exactly coincides with the shuttering of factories all over the country than the flower children. The lower classes are consistently depicted by the media as stupid and lazy, and thus deserving of their plight. Meanwhile, the wealthy are depicted as increasingly hard-working and morally upstanding, constantly either studying for another certification or working to the point of exhaustion, and pushing their sheltered, overprivileged children to study hard and get into a good college so they can keep up with the Joneses. Yet at the same time, these poor, working class white Americans are held up as moral exemplars of the nation; the "Real Americans," in contrast to the swarthy, godless, libertine city-dwellers living it up on welfare. Middle Americans get the mixed message that they are morally superior than the lazy, dark-skinned masses in the cities (where most of the economic activity takes place), at the same time as their communities are being overtaken by violence, family breakdown and chronic drug abuse. It's a rather schizophrenic view, to say the least.<br />
<br />
I recently read this comment on Disinfo :<br />
<blockquote class="tr_bq">
Viewing this site without Adblocking software is quite the experience. Right now, I've got two professional wrestling ads and an ad for Kohls up top. Down at the bottom: </blockquote>
<blockquote class="tr_bq">
"The way Kim Kardashian lost her virginity is disgusting!"<br />
"25 sexy girls who don't hide that they're bisexual!"<br />
"14 selfies taken right before death!"<br />
"20 unseemly moments caught on Walmart security cameras!"<br />
"24 stars who forgot to wear underwear in public!"<br />
Something about ultimate female fighter Ronda Rousey. </blockquote>
<blockquote class="tr_bq">
<b>It's like the server is emanating from "Idiocracy," </b>targeting the oh so coveted "13 Year Old Boy Who Jacks Off 23 Times a Day" demographic. </blockquote>
<blockquote class="tr_bq">
When I click on the banners, I'm brought to a site running so many simultaneous video ads that my computer freezes. "Gee, thanks! Say, could I perhaps buy something from you?"</blockquote>
This is in reply to a Matt Taibbi article, <a href="http://disinfo.com/2015/12/america-is-too-dumb-for-tv-news/" target="_blank">America is too dumb for TV news</a>.<br />
<blockquote class="tr_bq">
It's our fault. We in the media have spent decades turning the news into a consumer business that's basically indistinguishable from selling cheeseburgers or video games. You want bigger margins, you just cram the product full of more fat and sugar and violence and wait for your obese, over-stimulated customer to come waddling forth. </blockquote>
<blockquote class="tr_bq">
The old Edward R. Murrow, eat-your-broccoli version of the news was banished long ago. Once such whiny purists were driven from editorial posts and the ad people over the last four or five decades got invited in, things changed. Then it was nothing but murders, bombs, and panda births, delivered to thickening couch potatoes in ever briefer blasts of forty, thirty, twenty seconds. </blockquote>
<blockquote class="tr_bq">
What we call right-wing and liberal media in this country are really just two different strategies of the same kind of nihilistic lizard-brain sensationalism. The ideal CNN story is a baby down a well, while the ideal Fox story is probably a baby thrown down a well by a Muslim terrorist or an ACORN activist. Both companies offer the same service, it's just that the Fox version is a little kinkier.</blockquote>
And this coming not long after "Black Friday," in which we are treated to scenes from all over the country of herds of people camping out outside in the freezing cold on one of our few holidays outside the blank, cinderblock boxes of suburban wasteland, so that they can trample themselves to death to secure a new big-screen TV, video game or juicer.<br />
<br />
<b>It does seem like Idiocracy, which was theoretically a parody movie, is increasingly an accurate depsiction of our society right now.</b> We currently have a reality TV star running for president. What else is Donald Trump but <a href="https://www.youtube.com/watch?v=sGUNPMPrxvA" target="_blank">our very own President Camacho?</a><br />
<br />
<b>Idiocracy is now. </b><i>How much further can society plummet?</i><br />
<br />
On this news website, chronicling just one area (upstate New York),
every article was a depiction of the horror show that Middle America has
become:<br />
<br />
<a href="http://www.syracuse.com/us-news/index.ssf/2015/10/mother_hid_dead_body_of_11-year-old_daughter_missing_for_over_a_year_in_freezer.html#incart_most-commented_crime_article" target="_blank">Mother hid dead body of 11-year-old daughter missing for over a year in freezer, police say</a><br />
<br />
<a href="http://www.syracuse.com/crime/index.ssf/2015/11/police_man_charged_in_rome_shooting_death_of_baby_boy.html#incart_most-read_us-news_article" target="_blank">Rome police: Teen shot girlfriend's baby after trying to stand with loaded gun</a><br />
<br />
<a href="http://www.syracuse.com/crime/index.ssf/2015/11/man_checks_into_syracuse_emergency_room_with_gunshot_wound_but_wont_say_what_hap.html#incart_most-commented_us-news_article" target="_blank">Man checks into Syracuse hospital with gunshot wound, but won't say what happened</a><br />
<br />
<a href="http://www.syracuse.com/news/index.ssf/2015/11/armed_man_threatens_upstate_ny_islamic_community_report_says.html#incart_most-commented_crime_article" target="_blank">Armed Arizona man threatens Islamic community in Upstate NY</a><br />
<br />
<a href="http://www.syracuse.com/us-news/index.ssf/2015/11/in_in_louisiana_a_picture-perfect_family_of_4_is_dead_in_murder-suicide.html#incart_most-read_crime_article" target="_blank">In Louisiana, a 'picture-perfect' family of 4 is dead in murder-suicide</a><br />
<br />
<a href="http://www.alternet.org/news-amp-politics/mississippi-man-guns-down-waffle-house-waitress-after-she-asks-him-not-smoke?akid=13720.77792.zNyOYv&rd=1&src=newsletter1046472&t=24" target="_blank">Mississippi Man Guns Down Waffle House Waitress After She Asks Him Not to Smoke</a> (Alternet)<br />
<br />
<a href="http://www.syracuse.com/crime/index.ssf/2015/12/citing_mass_shootings_upstate_ny_sheriff_urges_citizens_to_carry_guns.html#incart_most-read_news_article" target="_blank">Citing mass shootings, Upstate NY sheriff urges citizens to carry guns</a><br />
<br />
<i>This is not the sign of a healthy society.</i> <b>This is a society in the grip of madness.</b> This is the other dieoff.<br />
<br />
America is one giant tapestry of scam artistry. From pedophiles in Congress, to hedge-funders jacking the price of drugs, to shaking down taxpayers to fund sports stadiums for billionaires, to gutting finance laws, everywhere you turn there is a scam where someone is either trying to rip someone off, or is getting ripped off. And those who are getting ripped off are busily looking to get in on the hustle where they take advantage of someone else below them. It's a society of predators and prey. And we think this is somehow normal. <i>How much longer can a society like this last?</i><br />
<br />
Isn't it time we start acknowledging that <i>this is what capitalism is.</i> I mean inherently. It's the law of the jungle. It's every man for himself. It's the "survival of the fittest." It's everyone jockeying for some sort of advantage, every minute of every day, morality be damned. It's a society dedicated to nothing else besides getting every last dollar from the next guy by any means possible. <b>It's appealing to the lowest and basest instincts in humanity.</b> Yet we're told that "naked self interest" is natural and is the sole engine of prosperity, and that extreme inequality drives us to "achieve" by the pseudoscience of economics, and most of us appear to believe it.<br />
<br />
This is the society we've made for ourselves. Are your proud of it? So is it any wonder there's a backlash, whether from religious fundamentalists or radical political ideologies like Trumpism?<br />
<blockquote class="tr_bq">
...on the free market it is legal and customary to instrumentalize our fellow human beings, violating their dignity because our goal is not to protect it. Our goal is to gain personal advantage, and in many cases this can be achieved more easily if we take advantage of others and violate their dignity...What is decisive is my attitude and my priority: am I interested in the greatest good and the preservation of the dignity of all, which is something which affects me automatically and which I benefit from as well, or am I primarily interested in my own welfare and my own advantage, which others might, but will not necessarily draw benefit from? If we pursue our own advantage as our supreme goal, the customary practice is to use others as means to achieve this goal and to take advantage of them accordingly. </blockquote>
<blockquote class="tr_bq">
If we must constantly fear that our fellow human beings will take advantage of us in the market as soon as they are in a position to do so, something else will be systematically destroyed: trust. Some economists say this doesn’t matter because the economy focuses completely on efficiency. But such a view must be disputed, for trust is the highest social and cultural good we know. Trust is what holds societies together from the inside – not efficiency!..The interim conclusion to be drawn is radical: so long as a market economy is based on pursuit of profit and competition and the mutual exploitation that results from it, it is reconcilable with neither human dignity nor liberty. It systematically destroys societal trust in the hope that the efficiency it yields will surpass that achieved by any other form of economy.</blockquote>
<a href="http://www.alternet.org/books/10-moral-crises-have-resulted-unfettered-free-market-capitalism" target="_blank">10 Moral Crises That Have Resulted From Unfettered, Free Market Capitalism</a> (Alternet)<br />
<br />
This comment to a Barbara Ehrenreich piece at Naked Capitalism describes one major reason the white working classes, especially who have bought into the "rugged individualism" ethos, are being skinned alive by this economic system.<br />
<blockquote class="tr_bq">
I believe this analysis is missing a very important component. True, historically poor whites have experiences somewhat more privileged conditions than minorities (admittedly even today they still do), but that traditional privilege has simultaneously caused them to be somewhat more fragile, less resilient than other oppressed groups. Poor whites are more atomized, isolated people in America. They do not have, nor have access to, the same cohesive social structures that have tended to develop among minorities as a survival mechanism against white oppression in the past. </blockquote>
<blockquote class="tr_bq">
I don’t say that as a theory, but rather as experienced reality. In the trailer park my family still lives in minority groups tend be gregarious and social among themselves (and honestly among others as well if one were inclined to invite himself as I often was). From my experience they were mostly psychologically stable and had a good ability to roll with the punches. The poor whites on the other hand were near universally drug addicts and thieves, and even when they did (or do–they’re still there I mean) form (weak) social bonds they’d nevertheless steal from each other or rat each other out to the police regardless. This was something I never saw happen among minorities (though I’m sure it does happen; I just didn’t see it at all). </blockquote>
<blockquote class="tr_bq">
Anyway to continue on, I believe that our economic system is in decline across the board, and that everyone’s wealth and prosperity are taking a hit on average (and the poor are getting the worst of it, as is common in collapsing societies–as I believe I understood from Jared Diamond’s work as well as a Sciencedaily anthropology article I read a while back). This being the case, I put the two together and come up with the idea that poor whites simply do not have the social frameworks, that were previously forged by oppression among the minorities, required to survive a declining society–and thus are dying off.</blockquote>
<a href="http://www.nakedcapitalism.com/2015/12/america-to-working-class-whites-drop-dead.html#comment-2520049">http://www.nakedcapitalism.com/2015/12/america-to-working-class-whites-drop-dead.html#comment-2520049</a><br />
<br />
Which coincides with my observations.<br />
<br />
Of course there are no social bonds in a society where it's every man for himself trying to gain personal advantage. Humans were not meant to live like this. The endgame of such a society is <a href="http://hipcrime.blogspot.com/2012/03/are-americians-ik-y.html" target="_blank">Colin Turnbull's description of the Ik in Uganda</a>, also brought about by a rapid onset of scarcity and deracination. We're doing the elite's dirtywork ourselves. <i>They don't have to massacre us if they can get us to massacre each other.</i><br />
<br />
Meanwhile, among the "meritocratic elite" winners, things are not looking so rosy either:<br />
<blockquote class="tr_bq">
<b>The rich middle- and high-school kids Luthar and her collaborators have studied show higher rates of alcohol and drug abuse on average than poor kids, and much higher rates than the national norm. They report clinically significant depression or anxiety or delinquent behaviors at a rate two to three times the national average.</b> Starting in seventh grade, the rich cohort includes just as many kids who display troubling levels of delinquency as the poor cohort, although the rule-breaking takes different forms. The poor kids, for example, fight and carry weapons more frequently, which Luthar explains as possibly self-protective. The rich kids, meanwhile, report higher levels of lying, cheating, and theft. </blockquote>
<blockquote class="tr_bq">
One of the two major causes of distress, Luthar found, was the “pressure to excel at multiple academic and extracurricular pursuits.” ...From their answers, Luthar constructed a profile of elite American adolescents whose self-worth is tied to their achievements and who see themselves as catastrophically flawed if they don’t meet the highest standards of success. <b>Because a certain kind of success seems well within reach, they feel they have to attain it at all costs—a phenomenon she refers to as “I can, therefore I must.”</b> Middle-class kids, she told me, generally do not live with the expectation that they should go to Stanford or earn $200,000 a year. “If I’ve never been to the moon,” she said of middle-class families, “why would I expect my kids to go there?” The yardstick for the children of the meritocratic elite is different, and it can intimidate as much as it can empower. </blockquote>
<blockquote class="tr_bq">
The second major cause of distress that Luthar identified was perhaps more surprising: Affluent kids felt remarkably isolated from their parents.... </blockquote>
<blockquote class="tr_bq">
<b>Since Levine wrote <i>The Price of Privilege</i>, she’s watched the stress in the Bay Area and in affluent communities all over the country become more pervasive and more acute.</b> What disturbs her most is that the teenagers she sees no longer rebel. A decade ago, she used to referee family fights in her office, she told me, where the teens would tell their parents, “This is bad for me! I’m not doing this.” Now, she reports, the teenagers have no sense of agency. They still complain bitterly about all the same things, but they feel they have no choice. <b>Many have also fallen prey to what Levine calls a “mass delusion” that there is but one path to a successful life, and that it is very narrow.</b> Adolescents no longer typically identify parents or peers as the greatest source of their stress, Levine says. They point to school. But that itself may suggest a submission of sorts—the unquestioned adoption of parental norms.</blockquote>
<a href="http://www.theatlantic.com/magazine/archive/2015/12/the-silicon-valley-suicides/413140/" target="_blank">The Silicon Valley Suicides</a> (The Atlantic) <br />
<br />
One of the reason the children of the elites feel such a sense of anxiety is by design. We've made sure that anyone who doesn't make it into the "cognitive elite" now lives a life of persistent humiliation, desperation and scarcity, constantly trying to stay one step ahead of the debt collectors and predatory law enforcement. And now they can't even afford to have a family, as we saw above. Add to that the fact that the social safety net is being gutted every day because it is "unaffordable," even as the pool of jobs is inexorably shrinking. Is it any wonder they're being driven to neurosis, even to the point of taking their own lives?<br />
<br />
It's yet another dieoff.<br />
<br />
<b>So who exactly is thriving in a society like this?</b> Because I can't find anyone. Yet we're constantly told by economists that this is just the "natural" evolution of society, as inevitable as the phases of the moon or the law of gravity. There is simply nothing to be done but stomp down on the pedal of more growth and innovation. <i>Really?</i><br />
<br />
Can there be any doubt after reading stories like those above, that something is seriously wrong? for those of us who don't live in gated communities, or the rarefied communities in Manhattan, Washington D.C. or Los Angeles where all of our media originates, we can see this with our own two eyes. We see the dysfunction around us. Yet the media constantly denies it. It's dedicated to stoking our fears and insecurities to push product. Can there be any surprise that people in this frightened and decaying nation are turning to someone like Trump who ignores the economists and promises to "<i>make us great again?</i>" It was only a matter of time before someone did it.<br />
<br />
Now, you might accuse me of cherry-picking the sordid and sensationalist stories above. I collected them last week entirely by happenstance intending to write about them, but in the interim, <a href="http://www.bbc.com/news/world-us-canada-34991855" target="_blank">something else happened that you may have heard about.</a> As cynical as I am, even my breath is constantly getting taken away.<br />
<br />
I once wrote that mass-shootings will become so common in America that the media won't even bother to cover them anymore. One remarkable thing about the massacre in San Bernardino was that <a href="https://www.washingtonpost.com/news/wonk/wp/2015/12/02/the-other-mass-shooting-that-happened-today-in-the-united-states/" target="_blank">it managed to completely obscure the other gun massacre that took place on the very same day!</a> And it pushed coverage off of the religious fundamentalist massacre at an abortion clinic less than a week before. In other words, <i>there are so many gun massacres that the media cant even cover them all!</i><br />
<blockquote class="tr_bq">
Of the 30,000-plus people killed by firearms each year in the United States, more than 11,000 of those are homicides. That means there are more than 30 gun-related murders daily. </blockquote>
<blockquote class="tr_bq">
The San Bernardino massacre marked the 353rd mass shooting in America this year alone, according to the Mass Shooting Tracker, which defines a mass shooting where at least four people are either injured or killed. </blockquote>
<blockquote class="tr_bq">
“You have 14 people dead in California, and that’s a horrible tragedy. But likely 88 other people died today from gun violence in the United States,” Everytown for Gun Safety’s Ted Alcorn told the New York Times. </blockquote>
<blockquote class="tr_bq">
In 2015 to date, according to the Gun Violence Archive, 12,223 people have died as a result of gun violence in America, while another 24,722 people have been injured.<br />
“We’re having a mass shooting every day, it’s just happening under the radar,” Jon Vernick, co-director of the Johns Hopkins Centre for Gun Policy and Research, told news.com.au.</blockquote>
<a href="http://www.news.com.au/" target="_blank">New York Daily News front cover divides America: ‘God Isn’t Fixing This’</a> (news.com.au)<br />
<blockquote class="tr_bq">
Legislation that was unobjectionable to the George W. Bush administration—laws that would simply prevent people on the FBI’s consolidated terrorist watch list from buying guns or explosives—are voted down in Congress. A physician, running for president, say, “I never saw a body with bullet holes that was more devastating than taking the right to arm ourselves away.” And 185,345 background checks to buy guns were processed on Black Friday alone—a new record. According to the FBI, “The previous high for receipts were the 177,170 received on 12/21/2012—a week after Adam Lanza killed 26 people at Sandy Hook Elementary School in Newtown, Conn.” <b>Mass killings turn out to be extremely good news for the gun industry. </b></blockquote>
<blockquote class="tr_bq">
Beyond the frequency and the brutality and the futility of effecting changes, maybe this is a statistic worth noting. As Joshua Holland writes: “Perhaps the most frightening thing we know about gun violence comes from a study conducted by researchers at Duke, Harvard, and Columbia that was published earlier this year in the journal Behavioral Sciences and the Law. <b>It found that almost one in 10 Americans who have access to guns are also prone to impulsive outbursts of rage.</b> Among this group are almost 4 million people who carry their guns around in public and say they ‘have tantrums or angry outbursts,’ ‘get so angry [that they] break or smash things’ and lose their temper and ‘get into physical fights.’ ” <b>This is not about mental illness; it’s about anger, violence, and fear. And in no small part because of mass shootings, we become more angry, violent, and more fearful all the time. </b></blockquote>
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And while we read the same articles, and make the same phone calls, and buy more guns, and grow more frightened, one other thing does change. Our schools go into lockdown. More and more. Thursday in Denver (“reports … of an armed person at the school”). Thursday in Pleasant Grove, Utah (“after a student reported another student with a gun”). Thursday in Chicago. Thursday in Palm Beach, Florida. Thursday in Dallas. Thursday in Savannah, Georgia. Thursday (and two other days this week) in Cambridge, Massachusetts. Friday in Philadelphia. <b>Wait, what? Kids bring guns to schools? In what universe does this surprise us? For our children, a world of daily shootings and daily lockdowns is the way they will have been raised. </b>For them, as a friend who lives near one of Thursday’s lockdowns puts it, “It’s not if. It’s when.”</blockquote>
<a href="http://www.slate.com/articles/news_and_politics/jurisprudence/2015/12/mass_shootings_are_changing_us_lockdowns_guns_and_fear.html" target="_blank">Mass Shootings are Changing Us</a> (Slate)<br />
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The irony is that, when it comes to real resources, America is one of the best placed societies in the world. We waste upwards of forty percent of our food and energy on a daily basis. While we do import oil, this is mainly due to our profligate ways rather than true scarcity or "need." Our population density compared to land area is the envy of Europe, much less places like India, China and Nigeria. We have the resources to give people a much higher standard of living in an industrial decline situation than much of the world, it's just that our frontier growth mentality and bootstrap ideals dictate that life must be a hard struggle, and that allowing the rich to accumulate massive fortunes is somehow not only morally, but also practically, ideal.<br />
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I feel somewhat fortunate that I understood from an early age that the American lifestyle is toxic just be observing the lives of people around me. I never bought into the bullshit, and it seems like the people who did are the ones who are struggling, particularly mentally. My circumstances are somewhat similar to this woman from the article cited above:<br />
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Some might argue that expectations are now simply too high. Thea, 26, certainly thinks so. “I come from a working-class background, so, while I have had some financial help from my parents when I’ve been desperate – I’m talking a couple of hundred quid a month – the onus has always been on me to achieve and get where I want to be in life. I’ve not had anything ‘handed’ to me, like a house or substantial amount of money that would help me settle down in future.” </blockquote>
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But it doesn’t bother her too much. “My upbringing and background have helped me accept my current situation. Despite not having much money as a kid – we never went abroad, for example – I never felt I missed out on anything. I do think my expectations of what constitute necessities – foreign holidays, owning a house or car – are lower than those of some of my peers who had more middle-class upbringings.” </blockquote>
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Thea has never wanted children and, as an only child, knows that she will inherit her parents’ house when they die. “I think the country, as far as wages, property, poverty and my generation actually being able to build secure finances, is in an absolute state and something undoubtedly needs to be done. But I also think part of the problem is that so many people go to uni now: it devalues a degree (I don’t have one) and doesn’t guarantee anyone a job. So you’re left with broke, unemployed twentysomethings in debt.”</blockquote>
In my office context, I saw countless examples of people pursuing the "American Dream" of going deep into debt for a fancy degree, clawing their way up the career ladder by working 80-hour weeks and hitting the links, marrying someone from a suitable class background, pumping out the babies immediately thereafter, and moving out of their cozy, walkable neighborhoods to a bloated starter mansion out in the distant exurban wastelands, with the requisite hour-plus commute to be in a good school district (and moving another ten miles out with every raise or promotion). <i>This is the good life? </i>Really? I had no intention (or even opportunity) to get into the competition of who has the bigger house, or whose kids have the best SAT scores, or any of that nonsense. Being born on the bottom with no family has its advantages. You don't have to be a hermit to not buy into this society's bullshit, you just have to think for yourself, something most people are conditioned never to do, because if they did the whole thing might fall apart.<br />
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But then, again it's all falling apart anyway.<br />
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UPDATE: <a href="http://www.huffingtonpost.com/entry/shots-hostages-wisconsin-motorcycle-shop_5663307be4b072e9d1c66fd0" target="_blank">Apparently there was a hostage/shooting situation in Wisconsin today</a>. Unknownnoreply@blogger.com19tag:blogger.com,1999:blog-5813525365834911757.post-4113939456822319742015-11-27T14:23:00.001-06:002016-04-17T19:02:26.780-05:00The Dying AmericansI've often used the term "<i>the final solution for the working class,</i>" in reference to the current American policy towards its vast intercoastal peasantry who, for reasons of circumstance or inclination, do not subject themselves to the decade or so of wildly expensive education that qualifies them for the remaining jobs on offer. It may be a reflection of my readership that I haven't received any pushback. As someone who is in that same working class, I can clearly see what is happening around me, and I'm not alone. David J. Blacker, in his book, <a href="https://books.google.com/books?id=XL5YAgAAQBAJ&printsec=frontcover#v=onepage&q&f=false" target="_blank">The Falling Rate of Learning and the Neoliberal Endgame</a>, also broached the subject of eliminationism, going so far as to study the German holocaust literature of the 1930's which calmly and rationally discussed how to deal with the problem of getting rid of the millions of excess people whom the elites determined were "undesirable" in the brave new world they were creating.<br />
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After last week, it's hard to argue that this is hyperbole. The news that America's white working class between the ages of 45-65 <a href="http://www.slate.com/blogs/xx_factor/2015/11/04/drug_abuse_and_suicide_why_death_rates_have_spiked_among_middle_aged_white.html" target="_blank">has dramatically falling life expectancy</a>, alone against nearly the entire world, received a surprising (to me) bit of coverage. When I first read it, I assumed it would be just another footnote story that I would write about here, but would be ignored everywhere else. But it received a surprising amount of coverage: <a href="http://krugman.blogs.nytimes.com/2015/11/04/heartland-of-darkness/" target="_blank">even Paul Krugman wrote about it</a>. I suspect a large part of that was due to the fact that it was research by the most recent economics "Nobel" laureate Angus Deaton and his wife, so it was harder to ignore than if it had been from some unknown researcher.<br />
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Often times you hear about a "dieoff" due to our situation. I think this study confirms beyond a doubt that<i> </i><b>the dieoff is already happening</b>. Yet, consider that, before this study became popularized, you would have never heard about it in the mainstream press. Still doubt the collapse is real?<br />
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It's not people dying in the streets, though, unlike some of the more feverish TEOTWAKI peak oil predictions. From the research, elevated levels of suicide and drug abuse are the prime culprits. It's the million little deaths that go unnoticed in the obituary columns of decaying communities all across this formerly prosperous nation. Someone overdosed in a back alley. Or a meth lab exploded. Or maybe they were killed in a car accident, or decapitated while driving their motorcycle too fast. Or they were shot by police. Or they are dying of liver failure by age 40. Or, increasingly, they are ground down slowly by the many chronic diseases such as diabetes that are symptomatic of the chronic stress and horrid (yet highly profitable) junk food diet of most Americans. It's a dieoff all right, <i>but it's never framed as such.</i> You can see it all around you: the overcrowded jails filled with unemployed people, the overcrowded hospitals filled with sick, obese people, the folks standing on the medians and freeway offramps with cardboard signs and living their cars, all while the media just goes on reporting about spectator sports and celebrity gossip as though nothing bad is happening. Ignorance really is bliss.<br />
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The obvious analogy here is Russia after the fall of the Soviet Union, as many people writing about the study have pointed out: <a href="http://www.nybooks.com/blogs/nyrblog/2014/sep/02/dying-russians/" target="_blank">The Dying Russians</a> (New York Review of Books). But there was no "collapse" of the United States. <i>Or was there?</i> Instead, we're told by the media and politicians that everything in every way is getting better and better for everyone. Just look at the latest iPhone! Television screens are huge! Even the very poor have indoor plumbing! And you can Google anything you like, so what are you complaining about, loser?<br />
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Everything is famed as personal failure, thus the dieoff is just a million stories of individual failure with no overall pattern. Nothing to see here, move along. Study and "work hard" (whatever that means), and you'll be okay. Certainly that fear is behind the epidemic of overwork, presenteeism and grinding hours of unpaid overtime Americans are putting in at work in the hope of not being next. It's like being the model prisoner in a concentration camp, though. Ask the turkeys this month if being a good turkey had any effect on their ultimate fate. <a href="http://globalguerrillas.typepad.com/globalguerrillas/2011/11/are-you-a-turkey.html" target="_blank">The Parable of the Happy Turkey</a> (Global Guerrillas)<br />
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Up until now, Americans have been happy turkeys. Thus, they cannot comprehend what is happening to them. In America it is taken for granted that the ultimate locus of control is on the individual, and that there is no such thing as society. That belief has been heavily promoted over the past thirty years, along with the "create your own reality" and other assorted positive thinking nonsense (thanks Oprah!), and I think we can see why.<br />
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And since we see this always as <i>personal</i> failure and are not allowed to see it as systemic failure, the poor and formerly middle classes take it out on <i>themselves</i> instead of the system. After all, America is the land of opportunity; if you don't "make it' (whatever that means), you have no one to blame but yourself! Of course it is not true; the musical chairs job market and winner-take-all economy means that only a tiny number of people even have a shot at the middle class anymore, and a lot of that is due to geography, pre-existing social connections and luck.<br />
<i><br />They don't have to kill you if they can get you to kill yourself.</i><br />
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And although framed as a tragedy, <b>I wonder if to some extent this behavior on the part of working class males is a logical response to living in the kind of society that the United States has become</b><i>.</i> In a society that has no use for them anymore and where they have no sense of purpose and no hope for the future, <i>it seems like suicide is a rational response</i>. After a certain age, you realize that you have been sorted to the "losers" pile. If you live in the vast suburban flatland of Middle America, you likely live in a decrepit house somewhere in the anonymous miasma of strip-mall suburbia, buy disposable plastic crap made in China from baleful fluorescent-lit Dollar Stores, drive an older model pickup truck or SUV with a bad muffler and bad brakes over potholed streets and under rusty bridges, while all the jobs around you aside from the hospital and the university (which are mainly female-staffed) are minimum wage, dead-end jobs where you have to smile and wear a uniform. You realize you're never going to meet the girl of your dreams since hypergamy is still baked into female mating choice, despite what some feminists claim. You realize you will never get that that great job that will allow you to be upwardly mobile and live in relative ease and comfort, and life is a bitter, hard struggle relieved only by the occasional joint and video games. Or you're divorced and paying child support to your former wife who's managed to keep herself presentable enough to hook up with one of the few remain<strike>in</strike>g alpha-males, and half your income goes to support the kids you never see. Or your deadbeat loser children have been working multiple McJobs and living in the basement for years with no hope of even affording a one-bedroom apartment, and between them and the wife you never speak to anymore, you can't even get into your own damn bathroom. You realize that, like most Americans, you will never afford to retire and will have to work your boring, dead-end job under your asshole supervisor until you literally drop dead. So why wait?<br />
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I mean, who <i>wouldn't</i> kill themselves or anesthetize themselves with drugs and booze in an environment like this?<br />
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I once read an online commenter say that the rich are the beta testers for the lifestyles we will all be living in the future (and thus no restraints must be put on their wealth accumulation if we are to experience that future). But that commenter had it wrong. Rather, it is the <i>poor</i>--those living on less than a few dollars a day; those who live in ghettos marred by gangs and drug abuse; those with their heat, water, and streetlights turned off, who are the beta testers for the lifestyles that most of us will be "enjoying" in the near future. As William Gibson said, the future is already here, just not evenly distributed.<br />
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Given the above, I can't help but think of the "Rat Park" experiment. Rats in a cage, when given a choice between water and drugs, would overdose themselves to death on the drugs, neglecting even basic self-maintenance. But a cage is a boring, repetitive, stressful environment for a rat, so you might <i>expect</i> the animals to anesthetize themselves with whatever was on offer. But rats living in an environment specifically designed to be pleasant and give the rats what they needed to thrive did not overdose themselves to death; they preferred healthier behaviors instead. It's worth noting that most of the drugs we use today have been known for hundreds or even thousands of years, but were not abused by the native peoples who discovered them. That is reserved for modern, "advanced" societies. <a href="http://io9.com/the-rat-park-experiment-486168637" target="_blank">The Rat Park experiment</a> (io9)<br />
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I once wrote that if you wanted to <i>intentionally design</i> a social environment to drive a primate insane, you would develop something pretty much identical to modern-day America (advertising, chronic stress, inequality, separation from nature and each other, boring, repetitive work, constant surveillance, and on and on...). It's pretty obvious how Rat Park parallels life in twenty-first century America with its ubiquitous television, concentration-camp schools complete with metal detectors, freeways and cul-de-sacs and landscapes of Applebees™ and Walmarts; along with a steady diet of Pizza Hut and Taco Bell. It's hardly an environment designed for human flourishing, is it? Rather, it is designed to maximize "economic growth" at all costs. The results of that experiment are as plain to see as they are predictable.<br />
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Most people who are still relatively comfortable are content to write off the people who are living in deprived circumstances among them right now, especially in the United States where so many of those poor are African-American. But more and more, whites are experiencing what they had previously dismissed as "black problems" due to their racist attitudes: the hopelessness and despair, the unemployment, the sociological pathologies; the drug abuse, divorces, domestic violence, youth gangs and so on. It's not race, it's environment, as Rat Park showed. Given a certain environment, an animal--<i>any animal</i>--will behave a certain way. Its totally predictable. We know this, <i>but why do we pretend it is not true?</i> Instead we reliably chalk it all up to "the Cult of Personal Failure."<br />
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But this leads to an even larger question, one that gets to the heart of our modern predicament. We have to ask ourselves, <b>what kind of society are we creating where so many people see death as preferable to living in such a society?</b> In what kind of a society do people see life as so miserable that they prefer to kill themsleves, either slowly or immediately? That is, <i>why is this the end result of hundreds of years of supposed "progress?"</i><br />
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Fundamentally, <b>how do you feel about this society?</b> Do you feel good about this society? Do you feel good about the school-to-prison pipeline? Do you feel good that there are more prisoners than small yeoman farmers? Do you feel good that it is a <i>felony </i>to show us how our food is produced? Do you feel good about students mortgaging their future for jobs that won't exist by the time the bill comes due? Do you feel good about hospitals treating chronic diseases taking the place of farming and making things as basis of the America's rural economies? Do you feel good about police armed with body armor and and tear gas? Do you feel good about wall-to-wall advertising preying on our weakness and insecurities? Do you feel good about the atmosphere of incessant adversarial competition against everyone else for the shrinking pool of jobs on offer which pay enough to afford rent?<br />
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If so, <i>why</i>?<br />
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This puts a crimp on the Panglossian "<i>everything in every way is getting better for everyone</i>," rhetoric that you hear so often in the media. What I find amusing is that this rhetoric used to come from the Left--that the welfare state would eliminate poverty, racism, that everything was under control and circles of cooperation would get larger and larger, and so on. But now, I mostly hear the Panglossian rhetoric coming primarily from the Right, whose preferred God is the unregulated "free" market. It's in the Right-wing propaganda now that I constantly hear how wonderful everything is, and that those who are complaining are either delusional misfits or just jealous. Here is a prime example from the Right-wing National Review:<br />
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Good news abroad, and good news at home: In 1990, there were 2,245 murders in New York City. That number has fallen by 85 percent. Murders are down, often dramatically, in cities across the country. The overall rate of violent crime has fallen by about half in recent decades. U.S. manufacturing output per worker trebled from 1975 to 2005, and our total manufacturing output continues to climb. Despite the no-knowthings [sic] who go around complaining that “we don’t make things here anymore,” the United States continues to make the very best of almost everything and, thanks to our relatively free-trading ways, to consume the best of everything, too. General-price inflation, the bane of the U.S. economy for some decades, is hardly to be seen. Flexible and effective institutions helped ensure that we weathered one of the worst financial crises of modern times with surprisingly little disruption in the wider economy. Despite politicians who would usurp our rights, our courts keep reliably saying that the First Amendment and the Second Amendment pretty much mean what they say. I just filled up my car for $1.78 a gallon. </blockquote>
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The world isn’t ending. </blockquote>
<blockquote class="tr_bq">
The world is healthier, wealthier, and less hungry mainly because of the efforts of millions of unknown investors, entrepreneurs, farmers, workers, bankers, etc., all working without any central coordinating authority....There is much left to do: We have unsustainable fiscal situations in the Western welfare states, irreconcilable Islamist fanatics originating in points east but spread around the world, environmental challenges, and that tenth of the human race that still needs lifting out of hardcore poverty. But we have achieved a remarkable thing in that unless we mess things up really badly, in 50 years we’ll be having to explain to our grandchildren what a famine was, how it came to be that millions of people died every year for want of clean water — and they will look at us incredulously, wondering what it must have been like to live in the caveman times of the early 21st century.</blockquote>
<a href="http://www.nationalreview.com/article/426029/economics-wealth-global-liberal-democracy-free-markets" target="_blank">Liberal Democracy and Free Markets, Take a Bow</a> (National Review) Or better yet, strap on flight suit and hang up a "Mission Accomplished" banner.<br />
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Yes, for the folks on the Right, it truly is a Golden Age. There are a few flaws in the ointment like those pesky welfare states and all that but, hey, gas is cheap! Can't you just feel the bright, shiny future ahead? Here's a another sampling from <i>The Wall Street Journal</i>:<br />
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The trajectory of the world doesn’t justify this pessimism. People are living longer on every continent. They’re doing less arduous, backbreaking work. Natural disasters are killing fewer people. Fewer crops are failing. Some 100,000 people are being lifted out of poverty every day, according to World Bank data. </blockquote>
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Life is also getting better in the U.S., on multiple measures, but the survey found that 55% of Americans think the “rich get richer” and the “poor get poorer” under capitalism. Sixty-five percent agree that most big businesses have “dodged taxes, damaged the environment or bought special favors from politicians,” and 58% want restrictions on the import of manufactured goods.</blockquote>
<a href="http://www.wsj.com/articles/has-the-world-lost-faith-in-capitalism-1446833869" target="_blank">Has the World Lost Faith in Capitalism?</a> (WSJ) Silly people, how dare they "lose faith!" Once we stamp out every last vestige of "socialism" we can restore that faith.<br />
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So what's going on here? Listening to the Right, one gets the appearance that things have never been better, and that people are just totally irrational and determined to complain no matter how good they have it, despite voluminous scientific literature portraying optimism bias as the default cognitive condition for most people.<br />
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I think it stems from two areas - the Neoliberal experiment has clearly been an unmitigated disaster, so the literature constantly has to portray a rosy picture for those still living in the elite ideological bubble by cherry-picking data: <a href="http://www.pieria.co.uk/articles/cheer_-_inequality_is_falling_globally_and_similar_nonsense" target="_blank">Cheer - Inequality is Falling Globally!! (and similar nonsense)</a> (Pieria). It's much like the "happy peasant" literature that prevailed on the eve of the French Revolution and during early Industrialism to convince upper-class readers that their efforts were actually for the good of all, not just themselves; it's just that the feckless peasants were too short-sighted to realize it. The elites, for some reason, have a need to believe, <i>despite all the evidence to the contrary</i>, that the free-market fundamentalism they subscribe to is making everyone--not just them--better off. Perhaps it is a remedy for cognitive dissonance and a guilty conscience.<br />
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The second agenda might be to cover up the agenda of eliminationism referred to above. <br />
Going back to the original topic, it's fairly clear that getting rid of the lower classes is, as The Joker put it in <i>The Dark Knight</i>, "all part of the plan."<br />
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Now that might seem a bit paranoid, but consider this - the governors of many states are withdrawing basic social protections for their poorest citizens, <i>and actually paying for the priviliege!</i> Here' Kevin Drum:<br />
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...the states that refuse to expand Medicaid are denying health care to the needy and paying about $2 billion for the privilege. <b>Try to comprehend the kind of people who do this. </b></blockquote>
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The residents of every state pay taxes to fund Obamacare, whether they like it or not. Residents of the states that refuse to expand Medicaid are paying about $50 billion in Obamacare taxes each year, and about $20 billion of that is for Medicaid expansion. Instead of flowing back into their states, this money is going straight to Washington DC, never to be seen again. <b>So they're willing to let $20 billion go down a black hole and pay $2 billion extra in order to prevent Obamacare from helping the needy. It's hard to fathom, isn't it?</b></blockquote>
<a href="http://www.motherjones.com/kevin-drum/2015/10/red-states-spent-2-billion-2015-screw-poor" target="_blank">Red States Spent $2 Billion in 2015 to Screw the Poor</a> (Mother Jones)<br />
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Last week, McClatchy documented the unnecessary pain being inflicted on red state residents by their elected Republican representatives...Roughly 260 million Americans (roughly 85 percent) already have health insurance provided by their employers, the government or through individual policies they purchased. In places like Oregon, Colorado, New York, California and other, mostly Democratic states, governors and state legislators accepted the expansion of Medicaid to provide free health insurance for those earning up to 138 percent of the federal poverty (FPL). For those earning between 138 and 400 percent of the FPL, the Affordable Care Act's subsidies will help them purchase insurance in the private market. <b>But in the states where Republicans said "no" to the expansion of Medicaid, the picture is much different.</b> As the AP explained the coverage gap:<br />
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<i>Nearly 2 in 3 uninsured people who would qualify for health coverage under an expansion of Medicaid live in states which won't broaden the program or have not yet decided on expansion.</i><br />
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<b>The resulting Republican body count is staggering. </b>Thanks to the GOP's rejection of Medicaid expansion, 1.3 million people in Texas, 1 million in Florida, 534,000 in Georgia and 267,000 in Missouri will be ensnared in the coverage gap. </blockquote>
<a href="http://crooksandliars.com/jon-perr/health-insurance-coverage-gap-coming-red-states" target="_blank">Health Insurance "Coverage Gap" Coming To A Red State Near You</a> (Crooks and Liars)<br />
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That's right, Republican governors are blowing a hole in their budget <i>just to remove social protections for the poor.</i> Often times, "unaffordability" is cited as a justification, but clearly this is not at work here. <i>It's pure ideology.</i> But what is that ideology? Here's more detail:<br />
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<b>American conservatives for the past several decades have shown a remarkable hostility to poor people in our country.</b> The recent effort to slash the SNAP food stamp program in the House; the astounding refusal of 26 Republican governors to expand Medicaid coverage in their states -- depriving millions of poor people from access to Medicaid health coverage; and the general legislative indifference to a rising poverty rate in the United States -- <b>all this suggests something beyond ideology or neglect.</b></blockquote>
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<b>The indifference to low-income and uninsured people in their states of conservative governors and legislators in Texas, Florida, and other states is almost incomprehensible.</b> Here is a piece in Bustle that reviews some of the facts about expanding Medicaid coverage: </blockquote>
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<i>In total, 26 states have rejected the expansion, including the state of Mississippi, which has the highest rate of uninsured poor people in the country. Sixty-eight percent of uninsured single mothers live in the states that rejected the expansion, as do 60 percent of the nation’s uninsured working poor.</i> </blockquote>
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These attitudes and legislative efforts didn't begin yesterday. They extend back at least to the Reagan administration in the early 1980s... <br />
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Most shameful, many would feel, is the attempt to reduce food assistance in a time of rising poverty and deprivation. <b>It's hard to see how a government or party could justify taking food assistance away from hungry adults and children, especially in a time of rising poverty.</b> And yet this is precisely the effort we have witnessed in the past several months in revisions to the farm bill in the House of Representatives. In a recent post Dave Johnson debunks the myths and falsehoods underlying conservative attacks on the food stamp program in the House revision of the farm bill. </blockquote>
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This tenor of our politics indicates an overt hostility and animus towards poor people. How is it possible to explain this part of contemporary politics on the right? <b>What can account for this persistent and unblinking hostility towards poor people?</b></blockquote>
<a href="http://understandingsociety.blogspot.com/2013/10/why-war-on-poor-people.html" target="_blank">Why a war on poor people?</a> (Understanding Society)<br />
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Let's restate this to be clear to make sure the point is not lost: <i>these states are willing to lose money in order to make sure their poor die quicker.</i> Clear enough? And we're not even talking about things like the outright cold-blooded murder of the homeless by police, the breaking up of homeless encampments, the mass incarceration, and return of debtors' prisons, and so on. <a href="http://www.theatlantic.com/business/archive/2014/01/it-is-expensive-to-be-poor/282979/" target="_blank">It's expensive to be poor in America</a>. We do everything by the <a href="https://en.wikipedia.org/wiki/Matthew_effect" target="_blank">Matthew Effect</a> from jobs to education, and wonder why class mobility is nonexistent. Yet we're still told that everyone wants to be an American, that it's the land of opportunity, and that things have literally never been better.<br />
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<a href="http://www.theguardian.com/money/2014/mar/02/poor-for-profit-probation-prison-georgia" target="_blank">Thrown in jail for being poor: the booming for-profit probation industry</a> (Guardian)<br />
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Much of the well-funded efforts of plutocrats and their allies has been to repeal the Affordable Care Act (which was designed by Right-wing think tanks), not to reform it or replace it with something more effective, but to return to the predatory status quo ante. Now, businessmen may be greedy, short-sighted and sociopathic, but they are not stupid. They surely know that the American System is wildly more expensive than any other place on earth, but they are willing to lose billions of dollars in profit just to make sure people don't get health care! Think about that. A European friend said to me once that he didn't understand why American businesses seemed to want sick, insecure employees who either don't have access to health care, or are worried about going broke trying to pay for it. It seemed totally irrational to him. But it's only irrational if you don't understand the underlying ideology of eliminationism. Some societies actually <i>want </i>to kill off their own people, as Nazi Germany and other tragic examples have shown. <br />
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And it's of a piece with the withdrawal of mass education that Blacker documents in his book. The elites are disinvesting from society in every way because<i> they just don't need us anymore</i>. And their propaganda mills are dedicated to making sure the blame is squarely placed on individuals so that we will internalize learned helplessness which has prevented any effective resistance. Or their mills are insisting that it's just not happening, and everybody is really better off, as we saw above, except for a few churlish losers who have no one to blame but themselves (and are probably looking for a handout).<br />
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<a href="http://nmpolitics.net/index/2015/11/who-turned-my-blue-state-red/" target="_blank">Who turned my blue state red?</a> (NYT). A great explanation of America's <a href="https://en.wikipedia.org/wiki/Crab_mentality" target="_blank">crab mentality</a>. <br />
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I've featured the analogy of horses that some economists use before. Human beings may have found other jobs (which is debatable), but the population of horses just went down in line with the work that was available for them to do. I think it's obvious that this is a good analogy for what's happening.<br />
<blockquote class="tr_bq">
...Similarly, one could just as easily have said, a century ago, that: "Fundamental economic principles will continue to operate. Scarcities will still be with us.... Most horses will still have useful tasks to perform, even in an economy where the capacities of power sources and automation have increased considerably..." </blockquote>
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Yet demand for the labor of horses today is vastly less than it was a century ago, even though horses are extremely strong, fast, capable and intelligent animals. "Peak horse" in the U.S. came in the 1910s, I believe. After that there was no economic incentive to keep the horse population of America from declining sharply, as at the margin the horse was not worth its feed and care. And in a marginal-cost pricing world, in which humans are no longer the only plausible source of Turing-level cybernetic control mechanisms, what will happen to those who do not own property should the same come to be true, at the margin, of the human? What would "peak human" look like? Or--a related but somewhat different possibility--even "peak male"?</blockquote>
<a href="http://www.bradford-delong.com/2015/09/highlighted-the-history-of-technological-anxiety-and-the-future-of-economic-growth-is-this-time-different.html" target="_blank">Technological Progress Anxiety: Thinking About "Peak Horse" and the Possibility of "Peak Human"</a> (Brad DeLong) <br />
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Off to the glue factory with the middle class, then. As long as it's kept diffuse enough, it will never be picked up on; <i>"Work Makes You Free"</i> hangs in the air over our heads instead of over the entry gates. Perhaps we should just inscribe it on the Gateway Arch.<br />
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So, all told, the self-destructive habits of the middle-aged white poor are hardly irrational. Rather, it seems to be to be the most rational response to the type of world we've created. The only question is, why do so many of us apparently want to stay on this path?Unknownnoreply@blogger.comtag:blogger.com,1999:blog-5813525365834911757.post-3534118650155887002015-11-20T18:39:00.000-06:002015-11-20T18:39:01.621-06:00The Hipcrime Vocab on JRE<iframe src="https://player.vimeo.com/video/144591016" width="500" height="281" frameborder="0" webkitallowfullscreen mozallowfullscreen allowfullscreen></iframe> <p><a href="https://vimeo.com/144591016">JRE #718 - Christopher Ryan</a> from <a href="https://vimeo.com/joeroganexperience">JoeRogan</a> on <a href="https://vimeo.com">Vimeo</a>.</p>
Okay, not really, but at 56:00 Chris Ryan mentions my Reddit post to Joe, so I figure this is probably the closest I'm going to get to be on either <i>Tangentially Speaking</i> or <i>The Joe Rogan Experience</i>. But who knows...?</p>
The Reddit post is here: <a href="https://www.reddit.com/r/tangentiallyspeaking/comments/3r3eaz/chris_ryan_duncan_trussell_charting_a_prehistoric/">Chris Ryan, Duncan Trussell - Charting A Prehistoric Path Into The Future</a>Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-5813525365834911757.post-2440824992012936812015-10-01T12:07:00.002-05:002015-10-01T12:16:10.916-05:00Oil and Money - Lessons Learned<div class="separator" style="clear: both; text-align: center;">
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The first thing I learned is that I bit off more than I could chew, lol. I was intending a simple book review, and it turned into a lot more than I intended to write. I also learned how difficult and thankless a task blogging can be. I’m glad at least a few of you chimed in to let me know you enjoyed it.<br />
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One major thing I learned (which I already sort-of knew) is how <i>much </i>real resources have to do with the economy, and economic history, despite economists’ insistence that land, labor and capital are all that matter. In fact, real resources appear to be the MAJOR driver of our economic fortunes. Even Forbes magazine had to admit: <a href="http://www.forbes.com/sites/robertlenzner/2013/09/01/higher-oil-prices-are-being-caused-by-events-in-libya-iraq-nigeria-and-egypt-as-well-as-syria/">The Recessions of 1973,1980,1991,2001,2008 Were Caused By High Oil Prices</a>. Energy doesn't matter, huh?<br />
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I was really taken aback at how <i>recent</i> this all is. I was somewhat aware the historic problem with oil was that there was <i>too much</i> of the stuff. Eric Roston, in <i>The Carbon Age</i>, writes, <i>"Gasoline was a throwaway by product of kerosene refining until the early 1900s, used sometimes in solvents or as fuel for stoves. In 1892, two cents a gallon was a decent price. For another thirty years, apothecaries were the makeshift filling stations."</i><br />
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But I had no idea just how much of a glut there was and how people thought it would last forever. That it was so cheap we needed the Texas Railroad Commission to hold back production so that the prices would be high enough. I mean, this substance contains the equivalent of ten to eleven years of human labor (1750 Kilowatt hours of human labor), for crying out loud! And it is a non-renewable resource! I was amazed at how far we went in coming up with new uses for the stuff, to the point destroying perfectly good and workable infrastructure just so we could use more of it. Can anything be more insane?<br />
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<a href="http://www.treehugger.com/bikes/los-angeles-once-had-bike-highways-sky.html">Los Angeles once had bike highways in the sky</a> (Treehugger)<br />
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The long boom was driven by the exploitation of oil as a resource. This led to the dominance of the ICE (Internal Combustion Engine). All of the knock-on effects of the ICE were behind the post-war boom. I mean, you could write a book about all the economic development caused by cars and trucks. In fact, truck driver/delivery is <a href="http://www.npr.org/sections/money/2015/02/05/382664837/map-the-most-common-job-in-every-state">still the most common job in most states</a> <i>to this day!</i> The ability to deliver goods cheaply anywhere had so many knock-on effects, from the creation of whole new cities to the rise of big-box retailers. Let’s not forget that everything in that big-box retailer is made from plastic which is made from petroleum feedstocks. Kunstler calls the suburbs the greatest misallocation of resources in human history. It’s easy to see how that’s true.<br />
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I didn’t know that it was only as late as 1959 that petroleum overtook coal to be more than 50 percent of our energy use. I didn’t know that coal only became the world's predominant energy source after 1900. Before that, we were still essentially in a wood/biofuel economy. <a href="http://hipcrime.blogspot.com/2013/09/progress-was-invented-around-1870.html">As I wrote before</a>, that’s pretty recent – less than three generations.<br />
<blockquote class="tr_bq">
We think of the 19th century as the era of coal, but as the distinguished Canadian energy economist Vaclav Smil has pointed out, coal only reached 5% of world energy supply in 1840, and it didn’t get to 50% until about 1900. </blockquote>
<blockquote class="tr_bq">
The modern oil industry began in 1859, but it took more than a century for oil to eclipse coal as the world’s No. 1 source. “The most important historical lesson,” Dr. Smil says, is that “energy resources require extended periods of development.” </blockquote>
<a href="https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB4QFjAAahUKEwiv67L3qqHIAhVKPz4KHWgbBxY&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fthe-power-revolutions-1440172598&usg=AFQjCNEevDWM2hue0enFy0IriIfSDZN2sA&sig2=tv3F3FHtxqVDcB7bUUJ4bw">The Power Revolutions</a> (WSJ)<br />
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Peak oil ideas made it sound like oil (specifically petroleum) was the only resource that matters to the economy, so that once oil production stops growing, the economy will collapse. That’s clearly not the case (oil is 36 percent of the world's energy). There are lots of other fuels in the mix. However, things like fracking, tar sands, and offshore drilling clearly mean that cheap, easy-to-get oil is on the wane. Oil is cheap now because of fracking – not the tight oil <i>itself</i>, but rather because the fear of it is keeping prices low by the Saudis. That will change. I’m always amazed at the people who run out and buy SUVs the minute the oil price goes down. Do they expect it to be cheap forever or do they expect to drive their car for only a year? It's also cheap because our economy is in the crapper.<br />
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Forget who the candidates are and all the campaigning and the billions of dollars spent-- If oil prices are high, the economy is in recession, and the incumbent party will lose power. You can pretty much predict any presidential election by this fact alone. Two-thousand is the only one that sort-of breaks the mold, and that was such a bizarre election between the hanging chads, the voting fraud and the Supreme Court. In other words, it’s not just the economy driven by energy prices – it’s the political world too. Everything else is just meaningless fluff.<br />
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At the end of the day, whether a president presides over a good economy or a bad economy is almost entirely down to oil prices.<br />
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The other thing that strikes you is the “Groundhog Day” nature of the situation. Oil prices get high, we get worried about the environment, and there’s a great boom in alternative energy, energy efficiency, environmental impacts, worries about the economy and supply chains, and so forth. Then oil prices go down and we forget all about alternative energy and all the inherent problems with relying on a finite resource. All the progress toward getting off of oil stagnates, and people assume oil will be cheap forever. Then they get high again, and suddenly it all becomes important again, and we have to go back to square one (compare the <a href="https://en.wikipedia.org/wiki/General_Motors_EV1">EV-1</a> to <a href="https://en.wikipedia.org/wiki/Tesla_Motors">Tesla</a>, for example. Heck, <a href="http://www.wired.com/2010/06/henry-ford-thomas-edison-ev/">Edison built an electric car!</a>). Charles Mann had a great line along the lines of “The human propensity to see flukes of good fortune as never coming to an end,” or something like that. <br />
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Given the manipulation of oil prices, it’s hard to see natural economic factors as ever being able to do the right thing when it comes to energy. When prices get high, new supply comes online and alternatives are pursued. But then oil prices crush the economy, demand falls more in line with supply, the price falls, and the initiatives are halted. It feels like the invisible hand is attached to an idiot. Maybe this time we’ll finally get serious.<br />
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Prices are temporary conditions. Peak oil is permanent.<br />
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The drug dealer analogy of us being addicted to oil is shopworn, but it is just so accurate. It was only once we were addicted to the product that they could jack up the price, and then we HAD to pay what they demanded. But like a drug that devastates the lives of its users, when you hit rock-bottom you try to get on the twelve-step program and get your life back. Then, the dealers will lower the price to keep you addicted, and the cycle begins again. Plus, every dealer wants to be <i>your</i> dealer, so they need to be just a little bit cheaper than the next guy. Barring that, they will bind together with the other dealers to keep the price high and protect their “turf.” The economics of drug dealing and oil are eerily similar. I wonder if anyone’s formally studied this.<br />
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In the past each new energy source was added on to the previous ones. Now we are talking about substitution – a totally different ballgame. That is, new energy sources will <i>replace</i> old. That’s <i>substitution</i>, not expansion.<br />
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Cheap oil combined with the opening up of China drove globalization. There is no way we could build the largest moving structures ever built to transport goods if we didn’t have a fuel source cheap enough to make it worthwhile. <a href="http://www.bbc.com/news/uk-england-suffolk-30700269">A single ship can move 19,000 containers, enough to move 300 million tablet computers</a>.<br />
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That oil played a role in foreign policy shouldn’t be a surprise, but looking at exactly how it led to the invasions of Afghanistan and Iraq, the civil war in Syria, the removal of Qaddafi, the propping up or removing of dictators, and the positioning of armies around the globe was still eye-opening. So much foreign policy is dictated by access to oil. <i>So much…</i><br />
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I was actually unaware of the Eurodollar and how I caused the fall of Bretton Woods. As Smith illustrates, going back to the gold standard is practically impossible (sorry libertarians). I was unaware of the role that Petrodollar recycling played in the Latin American debt crisis. I was aware of how the Petrodollars funded terrorism. I’m sure readers of Dmitry Orlov were familiar with the role oil and grain prices played in the fall of the Soviet Union. Again, this made Reagan look like a genius.<br />
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What I really wanted to describe is how the oil price crisis came about and how it led directly to the rise of Neoliberalism. I also wanted to show how Jimmy Carter’s “failure” and Ronald Reagan’s “success” was based mostly on oil prices. Some people would take issue with that, but it’s hard to separate one from the other. Is it 100 percent? Maybe not, but what percentage was oil prices? Seventy? Fifty? Twenty-five? Surely it played a role.<br />
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The problem is that it made Neoliberalism look like a success. People came to believe that unions were evil, and tax cuts for the rich and corporations, deregulation, and speculation were the magic keys to prosperity. But throughout the Neoliberal reign, oil prices were either stable or crashing. When that wasn’t the case, as in 2007-2008, the system came apart. The rise of China also made Neoliberalism appear to work. But it was smoke and mirrors – cheap uneducated labor, overinvestment, state-controlled enterprises, artificially cheap currencies, entire cities built with no people in them, etc. It was a Potemkin’s village on the scale of a nation. Globalization is a Ponzi scheme.<br />
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But now Neoliberalism is literally tearing the world apart. Some major reasons:<br />
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1.) Turning the speculators loose. The oil price rise and the food price rise seem to be mainly problems of market speculations (i.e. greed and fear, always the <i>real </i>movers of markets, not supply and demand). This has, in turn, led to political turmoil as we saw in the Arab Spring. If speculation continues to cause price rises for essentials like food, fuel and water to pad the fortunes of speculators, expect more chaos and collapse. Even in the U.S., the actions of Enron and “Kenny-boy” lay caused serious <i>harm</i> to economies, not expansion. And we spent enough on the bailouts to give every unemployed person a job and every homeless person a home, with billions left over. Is this how economies should be run?<br />
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2.) The suppression of worker wages has caused massive hardship around the world. The abandonment of full employment as a policy goal has led to a worldwide unemployment crisis that is destabilizing the world. Unemployed people have nothing to lose. People with nothing to lose tend to revolt (see above). The gutting of social services and welfare safety nets has also led to poverty and desperation all around the world. It calls into question the ability of capitalism to deliver broad increases in living standards everywhere. We are clearly not seeing that. We’ve been in reverse for some time. Shouldn’t an economic system make us ALL richer, rather than provide winners and losers? If it can't, what kind of system is it?<br />
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3.) Globalism spreads not only the wealth around, but the poverty too. Some countries, notably Western Europe, have attempted to defend their citizens, while others like the United States, did nothing to insulate its workers from third-world wages and working conditions (and even encouraged them). Rising living standards in China and India are one thing, but falling living standards in formerly wealthy countries make the rich capitalists richer, but cause anger and consternation which is easily exploited by the unscrupulous and power-hungry. This is also destabilizing. Just look at all the anger in the U.S. today searching for a scapegoat.<br />
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4.) Austerity and the straitjacketing of governments has led to wealthy, industrialized countries “undeveloping.” The United States is a nation of private affluence and public squalor, with one-third of its children living in poverty, entire cities abandoned and crumbling, urban areas too expensive for median income workers, the infrastructure of a banana republic, poor access to education and healthcare, pockets of poverty, ghettoes, etc. Greece is being gutted as an example to the West. This is leading to rise of right-wing parties in Europe, again redolent of the run-up to the Second World War.<br />
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5.) The faith in Markets to solve all problems is especially disastrous with an ongoing environmental crisis. Instead of rationing or capping, instead we get easily gamed “cap and trade” markets to reduce emissions. Nature is just “natural capital,” and every drop of water, tree leaf, and grain of sand must be assigned an owner and a price. In other words, all of nature must be subsumed into the market, because <i>markets are the only way we can solve our problems</i>! This is a Neoliberal idea. Look at how the United States responded to the crisis in the seventies by contrast.<br />
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6.) Debt crises have caused massive hardship around the world. As I learned, Mexico’s reputation as a haven for poverty, prostitution, drug gangs, etc. was only <i>after</i> the Latin American debt crisis of 1982. That, in turn, led the massive influx of Latin American refugees into the United States turning America into a Latin country overnight. Prior to 1979, places like Afghanistan, Iran, Lebanon, Egypt, Iraq, Algeria, Syria and Libya were stable, secular, relatively prosperous places (See <a href="http://tywkiwdbi.blogspot.com/2015/09/egypt-1958.html">this</a>. And <a href="http://www.theatlantic.com/photo/2013/07/afghanistan-in-the-1950s-and-60s/100544/">this</a>). Now look at them. Yes, they had dictators and human rights violations. But compare it to today. Latin America has fared somewhat better, largely by finding a way to reject or bypass Neoliberalism. Africa has not fared well, either. Note that you only heard about collapse and famine after the 1980’s (remember Ethiopia?). Yes, Africa was poor before then, but it seemed to be heading in the right direction. Not any more.<br />
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7.) People from these wrecked countries are heading to the Western industrialized countries in massive waves of migration--Latin America for the United States and Canada, and the Middle East and Africa for the European Union. This has driven down wages and caused the rise of nativist parties. Everyone is heading for the lifeboats as more and more countries become failed states. There is simply not enough room for all. But rebuilding these countries would mean abandoning the Neoliberal paradigm, forgoing debt and putting into place quasi-socialist policies. Then again, the rich <a href="http://www.treehugger.com/sustainable-product-design/wretched-excess-private-yachts-are-so-yesterday-now-its-private-floating-islands.html">can always retreat to floating offshore islands</a> (and eventually space colonies).<br />
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It’s clear that much of the money that has not been collected by governments has gone not only into speculation as opposed to productive activity, but in purchasing political representation. This has led to democracies devolving into oligarchies and a mistrust of democracy in general. The buying of politicians and the media blocks any attempts to deal with collapsing systems. We've seen ever greater instability and ever greater bubbles under Neoliberalism now that government has been "contained" and workers have been "disciplined."<br />
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The answer to our problems should be clear: abandon Neoliberalism and return to the mixed economy. Stop hamstringing governments. End speculation. Tax the rich. Close offshore tax shelters. Raise tariffs. Defend domestic industries. Write down the debts. Pursue full employment policies such as a job guarantee, reduced working hours and an basic income guarantee. Distribute essential social services through the government, and let the market handle non-necessities. Regulate to deal with externalities. Impose limits on natural resource extraction. Decarbonize energy. <br />
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All of this used to be common-sense. Now it beyond the pale.<br />
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The problem is, it’s a ratchet effect. We cannot go back, because TPTB will not allow it. And since the 1970s, they learned they had to not only control the government, but the<i> information</i> we imbibe day after day, otherwise we would instruct our government to do something the powerful may not want. Instead, we had to be convinced that Neoliberalism is the only valid economy – hence the think tanks, talk radio, publishing mills, Fox news, etc. Any sense of common purpose or solidarity is evil "socialism." As we learned, even “liberal" news sources are fully dedicated to defending this paradigm at all costs, even at the cost of credibility. And the funding of the political classes by the wealthy will ensure that anything that threatens the fortunes of the oligarchs will be a non-starter, even if people do see past the media rhetoric.<br />
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The change in economics swallowed the hope of the sixties. How much does it have to do with Neoliberalism, and how much with oil prices? A lot of commenters say, "Hey, the oil is gone, we just need to learn to be peasants." They point out that American wages stopped growing in 1973, around the time domestic oil production peaked in the U.S. But I think that's simplistic. <i>American</i> wages stopped growing, not everyone else's--not what we'd expect in an energy descent scenario. Rather, I think it was the wealth <i>transfer </i>of the seventies, and the politics it engendered, that was the primary culprit. The oil shock opened the door for globalized Neoliberalism, and that is the primary cause of our misfortune. By using oil as an excuse to be politically passive, we remove any chance at creating an economy that works better for all and play into the hands of the powerful.<br />
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I think old economy Steve puts it best. Or shall we say, "mixed economy" Steve:<br />
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Unknownnoreply@blogger.com12tag:blogger.com,1999:blog-5813525365834911757.post-52928659697420006472015-09-27T12:28:00.001-05:002015-09-27T19:09:47.320-05:00The Secret History of Oil and Money - Part 7<div class="separator" style="clear: both; text-align: center;">
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Where we are now is a massive topic, but here are what I see as the major highlights of the post financial crisis era:<br />
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1. The oil price spike of 2007-2008 and the financial crisis/housing bubble burst.<br />
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2. The “recovery" and QE for the bankers and Wall Street.<br />
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3. Spiking resource prices and the “Arab Spring.” Increasing scarcity of raw materials, foodstuffs, and fresh water.<br />
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4. The Shale oil fracking “revolution” and "Saudi America." Increasing U.S. production rates.<br />
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5. Climate change takes center stage. The political urgency of moving post-carbon energy intensifies. Unstable climate leads to drought, rising seas, and other destabilizing effects.<br />
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6. Renewables get better and cheaper. Efficiency measures and "green alternatives" become popular again.<br />
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7. China overtakes the U.S. as the world's largest user of natural resources and key economy for global growth.<br />
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8. The recession that never ends except on Wall Street. Falling economies means falling demand for energy. The gap between rich and poor has never been higher.<br />
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9. The Middle East goes up in flames. The rise of ISIS. Afghanistan and and Iraq fall apart. America’s foreign policy meltdown.<br />
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10. The Saudis engineer a plunge in oil prices to shut down competition from renewables and unconventional oil sources. OPEC is attempting to prevent the impetus to wean ourselves off of oil.<br />
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11. Globalization peaks.<br />
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12. China slows down and emerging markets can no longer make up for declinining wages in industrialized countires.<br />
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13. The future of Capitalism and Neoliberalism is in serious doubt.<br />
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It had been twenty-five years of falling or stable oil prices since the mid-eighties. The Seventies were a distant memory that people thought would never happen again.<br />
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In 2007, oil prices crossed the $100/barrel barrier. The causes are in dispute. There was no major supply shock like there was in the 1970s that could be pointed to. The Saudis blamed the weak dollar, because, remember, oil is priced in dollars, so a weaker dollar will cause oil producers to ask for more dollars for their oil. Speculation has also been blamed as a major culprit. And, of course, the concerns brought forth about Peak Oil played a role as well. The fear of Peak Oil can be said to have caused the fears to become realized.<i> "In 2000, the phrase "peak oil" occurred just 2.5 times in every billion words published in English, according to Google's N-gram language-analysis tool, which can search an enormous corpus of books, articles and websites published in English and other languages. By 2008, the number of references had risen 65-fold to 160 occurrences per billion words."</i> (<a href="http://www.thefiscaltimes.com/Articles/2013/07/22/The-Death-of-Peak-Oil-End-of-a-Flawed-Theory#page1">source</a>)<br />
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This caused a slow increase in oil, which spiked in 2008:<br />
<blockquote class="tr_bq">
From the mid-1980s to September 2003, the inflation-adjusted price of a barrel of crude oil on NYMEX was generally under $25/barrel. During 2003, the price rose above $30, reached $60 by 11 August 2005, and peaked at $147.30 in July 2008. Commentators attributed these price increases to many factors, including the falling value of the U.S. dollar, reports from the United States Department of Energy and others showing a decline in petroleum reserves worries over peak oil, Middle East tension, and oil price speculation.<br />
[…]<br />
The price of crude oil in 2003 traded in a range between $20–$30/bbl. Between 2003 and July 2008, prices steadily rose, reaching $100/bbl in late 2007, coming close to the previous all time inflation-adjusted record set in 1980. A steep rise in the price of oil in 2008 – also mirrored by other commodities – culminated in an all-time high of $147.27 during trading on 11 July 2008, more than a third above the previous inflation-adjusted high. </blockquote>
<blockquote class="tr_bq">
High oil prices and economic weakness contributed to a demand contraction in 2007–2008. In the United States, gasoline consumption declined by 0.4% in 2007, then fell by 0.5% in the first two months of 2008 alone. Record-setting oil prices in the first half of 2008 and economic weakness in the second half of the year prompted a 1.2 Mbbl/day contraction in US consumption of petroleum products, representing 5.5% of total US consumption, the largest decline since 1980 at the climax of the 1979 energy crisis.</blockquote>
<a href="https://en.wikipedia.org/wiki/2000s_energy_crisis">2000s Energy Crisis</a> (Wikipedia)<br />
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A Brookings Institution study questioned whether it was oil prices, not the housing bubble, that caused the 2008 recession:<br />
<blockquote class="tr_bq">
In a nutshell: Higher oil and gasoline prices whacked the U.S. auto industry, the effects of which cascaded through large swathes of the rest of the economy and helped curtail spending. Energy prices also pummeled consumers’ disposable income and confidence. To the extent that the housing meltdown did play a huge part in the recession, that too can be partially chalked up to higher oil prices: Cheap digs in the distant suburbs went underwater with $4 gasoline. </blockquote>
<blockquote class="tr_bq">
If true—and even [economist James] Hamilton is skeptical of his own findings—the implications are scary. First, it would mean vast improvements in energy efficiency in recent decades did not in fact insulate the U.S. economy from an oil shock. That was one of the main arguments economists wielded in explaining how the U.S (and other big economies) could weather $100 oil. </blockquote>
<blockquote class="tr_bq">
Second, it means the fate of the U.S. auto industry is even more important than thought. </blockquote>
<blockquote class="tr_bq">
Third, it makes the prospect of an imminent oil-price spike even more troubling. Lots of oil bulls, not to mention OPEC, figure today’s lowish oil prices are just setting the stage for a virulent rebound as soon as the economy gets off the canvas. That would crush any green shoots in a hurry.</blockquote>
<a href="http://blogs.wsj.com/environmentalcapital/2009/04/22/oil-shock-did-high-oil-prices-cause-the-recession/">Did High Oil Prices Cause the Recession?</a> (Wall Street Journal)<br />
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It wasn't just oil, the prices of all commodities was going up. Copper, wheat, and other foodstuffs also spiked in 2008, causing turmoil. Neoliberalism, having financialized the world and eliminated all restraints on the "free " market, had "freed" bankers and speculators<a href="http://www.theguardian.com/global-development/poverty-matters/2011/dec/20/speculative-scrum-driving-food-prices"> to manipulate markets based on greed and fear</a>. Wild speculation and price swings ruled the day. A spike in wheat prices caused turmoil across the Middle East and North Africa. While speculation played a role in the spike, so did the diversion of cereal grains as feedstocks for biofuel projects.<br />
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<a href="https://upload.wikimedia.org/wikipedia/commons/thumb/c/c0/FAO_Food_Price_Index.png/300px-FAO_Food_Price_Index.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://upload.wikimedia.org/wikipedia/commons/thumb/c/c0/FAO_Food_Price_Index.png/300px-FAO_Food_Price_Index.png" /></a></div>
Oil wealth had made many countries in the Middle East rich, but had also caused population explosions based around imported food, and had cemented the rule of dictators, kings, and military strongmen. In 2008, the "Arab Spring" revolutions occurred across the Middle East. Normally, high oil prices would strengthen governments in oil producing countries as the rulers could throw more money at their people, but the price spike in food wasn't offset by government subsidies. Muammar Gaddafi, the Arab leader whose taking on of the oil companies back in 1970 led to rise of OPEC, was toppled from power.<br />
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Many of the Arab countries went into chaos. Some never recovered. Syria was plunged into a civil war and Iraq fell into sectarian fighting between Sunni, Shia and Kurds as many had predicted beforehand. When there is chaos, people will flock to whatever organization can wrest order from it. The only force uniting people in the artificial boundaries of the Middle East was fundamentalist Islam (funded in large part by Petrodollars), giving rise the the Islamic State, which increasingly took control in the power vacuum of Iraq and Syria.<br />
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After the invasion of Iraq, the Neocons in George W. Bush's cabinet wanted to go further.<i> "Everyone wants to go to Baghdad. Real men want to go to Tehran,"</i> were the words of one official. If Iran and Iraq were under U.S. control, imagine how much control over oil prices we would have. Plus, there were persistent rumors that the Iranian government planned to open an oil bourse where oil could be traded in Euros rather than dollars, which may have been behind the belligerent rhetoric against Iran.<br />
<blockquote class="tr_bq">
The Iranian Oil Bourse ...is a commodity exchange, which opened its first phase on 17 February 2008. ...The IOB is intended as an oil bourse for petroleum, petrochemicals and gas in various currencies other than the United States dollar, primarily the euro and Iranian rial and a basket of other major (non-US) currencies. The geographical location is at the Persian Gulf island of Kish which is designated by Iran as a free trade zone. </blockquote>
<blockquote class="tr_bq">
During 2007, Iran asked its petroleum customers to pay in non US dollar currencies. By December 8, 2007, Iran reported to have converted all of its oil export payments to non-dollar currencies. The Kish Bourse was officially opened in a videoconference ceremony on 17 February 2008, despite last minute disruptions to the internet services to the Persian Gulf regions. Currently the Kish Bourse is only trading in oil-derived products, generally those used as feedstock for the plastics and pharmaceutical industries. However, officially published statements by Iranian oil minister Gholamhossein Nozari indicate that the second phase, to establish trading in crude oil directly, which has been suggested might one day perhaps create a "Caspian Crude" benchmark price analogous to Brent Crude or WTI will only be started after the Bourse has demonstrated a reasonable period of trouble-free running.</blockquote>
<a href="https://en.wikipedia.org/wiki/Iranian_oil_bourse">Iranian Oil Bourse</a> (Wikipedia)<br />
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There are also convincing arguments that the reasons Hussein and Gaddafi were ousted when they were, after decades of despotic rule, had to do with challenging the international banking establishment:<br />
<blockquote class="tr_bq">
Ellen Brown argues in the Asia Times that there were even deeper reasons for the war than gold, oil or middle eastern regime change.Brown argues that Libya – like Iraq under Hussein – challenged the supremacy of the dollar and the Western banks:<br />
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Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers’ central bank in Switzerland.<br />
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The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr, writing on Examiner.com, noted that “[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.”<br />
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According to a Russian article titled “Bombing of Libya – Punishment for Ghaddafi for His Attempt to Refuse US Dollar”, Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.</blockquote>
<a href="http://www.washingtonsblog.com/2012/01/are-the-middle-east-wars-really-about-forcing-the-world-into-dollars-and-private-central-banking.html">Are The Middle East Wars Really About Forcing the World Into Dollars and Private Central Banking?</a> (Washington's Blog)<br />
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Similarly, the invasion of Afghanistan also had to do with oil, as did the Syrian civil war:<br />
<blockquote class="tr_bq">
...According to French intelligence officers, the U.S. wanted to run an oil pipeline through Afghanistan to transport Central Asian oil more easily and cheaply. And so the U.S. told the Taliban shortly before 9/11 that they would either get “a carpet of gold or a carpet of bombs”, the former if they greenlighted the pipeline, the second if they didn’t...Negotiations eventually broke down because of those pesky transit fees the Taliban demanded. Beware the Empire’s fury. At a Group of Eight summit meeting in Genoa in July 2001, Western diplomats indicated that the Bush administration had decided to take the Taliban down before year’s end...Soon after the start of the Afghan war, Karzai became president ...a mere year later, a U.S.-friendly Afghani regime signed onto TAPI. India just formally signed on to Tapi. This ended the long-proposed competitor: an Iran-Pakistan-India (IPI) pipeline.<br />
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Virtually all of the current global geopolitical tension is based upon whose vision of the “New Silk Road” will control. Iran and Pakistan are still discussing a pipeline without India, and Russia backs the proposal as well...the “Great Game” being played right now by the world powers largely boils down to the United States and Russia fighting for control over Eurasian oil and gas resources...Russia and the USA have been in a state of competition in this region, ever since the former Soviet Union split up, and Russia is adamant on keeping the Americans out of its Central Asian backyard. <br />
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The third “big player” in this New Great Game is China, soon to be the world’s biggest energy consumer, which is already importing gas from Turkmenistan via Kazakhstan and Uzbekistan to its Xinjiang province — known as the Central Asia-China Pipeline — which may tilt the balance towards Asia...China’s need for energy is projected to increase by 150 per cent which explains why it has signed probably the largest number of deals not just with the Central Asian republics but also with the heavily sanctioned Iran and even Afghanistan. China has planned around five west-east gas pipelines, within China, of which one is operational (domestically from Xinjiang to Shanghai) and others are under construction and will be connected to Central Asian gas reserves.<br />
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You might ask why there is so much focus on Syria right now. Well, Syria is an integral part of the proposed 1,200km Arab Gas Pipeline...So yes, regime change was planned against Syria (as well as Iraq, Libya, Lebanon, Somalia, Sudan and Iran) 20 years ago.And yes, attacking Syria weakens its close allies Iran and Russia … and indirectly China.But Syria’s central role in the Arab gas pipeline is also a key to why it is now being targeted...Assad is being targeted because he is not a reliable “player”. Specifically, Turkey, Israel and their ally the U.S. want an assured flow of gas through Syria, and don’t want a Syrian regime which is not unquestionably loyal to those 3 countries to stand in the way of the pipeline … or which demands too big a cut of the profits...</blockquote>
<a href="http://www.globalresearch.ca/its-not-just-the-oil-the-middle-east-war-and-the-conquest-of-natural-gas-reserves/5307589">It’s Not Just the Oil. The Middle East War and the Conquest of Natural Gas Reserves</a> (Center for Research on Globalization)<br />
<blockquote class="tr_bq">
The <b>Trans-Afghanistan Pipeline</b> (also known as <b>Turkmenistan–Afghanistan–Pakistan–India Pipeline</b>, <b>TAP</b> or <b>TAPI</b>) is a proposed natural gas pipeline being developed by the Asian Development Bank. The pipeline will transport Caspian Sea natural gas from Turkmenistan through Afghanistan into Pakistan and then to India. Physical work on the pipeline is expected to start in December 2015. The framework for the project's launch, as well as its completion, has been pushed back for many years: for instance, according to an April 2015 statement by Afghan President, the pipeline should become operational in 2020. The abbreviation TAPI comes from the first letters of those countries. Proponents of the project see it as a modern continuation of the Silk Road. </blockquote>
<a href="https://en.wikipedia.org/wiki/Trans-Afghanistan_Pipeline">Trans-Afghanistan Pipeline</a> (Wikipedia) <br />
<blockquote class="tr_bq">
According to retired NATO Secretary General Wesley Clark, a memo from the Office of the US Secretary of Defense just a few weeks after 9/11 revealed plans to "attack and destroy the governments in 7 countries in five years", starting with Iraq and moving on to "Syria, Lebanon, Libya, Somalia, Sudan and Iran." In a subsequent interview, Clark argues that this strategy is fundamentally about control of the region's vast oil and gas resources.<br />
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Much of the strategy currently at play was candidly described in a 2008 US Army-funded RAND report, Unfolding the Future of the Long War. The report noted that "the economies of the industrialized states will continue to rely heavily on oil, thus making it a strategically important resource." As most oil will be produced in the Middle East, the US has "motive for maintaining stability in and good relations with Middle Eastern states"...Exploring different scenarios for this trajectory, the report speculated that the US may concentrate "on shoring up the traditional Sunni regimes in Saudi Arabia, Egypt, and Pakistan as a way of containing Iranian power and influence in the Middle East and Persian Gulf." Noting that this could actually empower al-Qaeda jihadists, the report concluded that doing so might work in western interests by bogging down jihadi activity with internal sectarian rivalry rather than targeting the US.<br />
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The report noted especially that Syria is among several "downstream countries that are becoming increasingly water scarce as their populations grow", increasing a risk of conflict. Thus, although the RAND document fell far short of recognising the prospect of an 'Arab Spring', it illustrates that three years before the 2011 uprisings, US defence officials were alive to the region's growing instabilities, and concerned by the potential consequences for stability of Gulf oil.<br />
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These strategic concerns, motivated by fear of expanding Iranian influence, impacted Syria primarily in relation to pipeline geopolitics. In 2009 - the same year former French foreign minister Dumas alleges the British began planning operations in Syria - Assad refused to sign a proposed agreement with Qatar that would run a pipeline from the latter's North field, contiguous with Iran's South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets - albeit crucially bypassing Russia. Assad's rationale was "to protect the interests of [his] Russian ally, which is Europe's top supplier of natural gas."<br />
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Instead, the following year, Assad pursued negotiations for an alternative $10 billion pipeline plan with Iran, across Iraq to Syria, that would also potentially allow Iran to supply gas to Europe from its South Pars field shared with Qatar. The Memorandum of Understanding (MoU) for the project was signed in July 2012 - just as Syria's civil war was spreading to Damascus and Aleppo - and earlier this year Iraq signed a framework agreement for construction of the gas pipelines...It would seem that contradictory self-serving Saudi and Qatari oil interests are pulling the strings of an equally self-serving oil-focused US policy in Syria, if not the wider region....What is beyond doubt is that Assad is a war criminal whose government deserves to be overthrown. The question is by whom, and for what interests?</blockquote>
<a href="http://www.theguardian.com/environment/earth-insight/2013/aug/30/syria-chemical-attack-war-intervention-oil-gas-energy-pipelines">Syria intervention plan fueled by oil interests, not chemical weapon concern</a> (Nafeez Ahmed, The Guardian)<br />
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High oil prices combined with fears of Peak Oil led to the explorations of "alternative" sources of carbon and the exploitation of "tight" oil resources on the North American continent. These resources were uneconomical to exploit with cheap oil. The media reports centered around "technological innovation" bringing forth new oil, but in truth, many of these techniques were developed during the first oil crisis in the 1970s but were never implemented because oil was so cheap. Now they were dusted off and turned on the oil deposits in North America which had not previously been exploited.<br />
<blockquote class="tr_bq">
For the entire oil and gas age, drillers had searched for hydrocarbons that had seeped out of layers of sedimentary rock over millions of years and collected into large pools. Once found, they were easy to produce. Engineers merely had to drill into the pools and the natural pressure of the earth would send huge volumes of oil and gas up to the surface. These pools are exceedingly rare, though, and they were quickly being tapped out as the world's consumption grew, raising fears that the end of the oil and gas age would soon be at hand and raising prices to alarming levels.<br />
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[George P.] Mitchell's idea: Go directly to the sedimentary rock holding the oil and gas, essentially speeding up geological processes by thousands of millennia. He figured out how to drill into and then along layers of gas-laden rock, then force a slurry of water, sand and chemicals under high pressure into the rock to crack it open and release the hydrocarbons. This process, horizontal drilling and hydraulic fracturing, is the now-common industry practice known generally as fracking.<br />
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Engineers after Mitchell learned to adapt the process to oil-bearing rock. The U.S. is now the world's largest producer of natural gas and is on track to overtake Saudi Arabia as the world's biggest oil producer by the end of the decade, according to the International Energy Agency. The fracking boom sent natural gas prices plummeting, reducing energy costs for U.S. consumers and businesses. And by boosting U.S. oil production, it has sharply reduced oil imports. Electric utilities used more natural gas to generate power because of its low price, while reducing the use of coal. This has led to a substantial reduction in emissions of carbon dioxide and toxic chemicals such as mercury by U.S. utilities.<br />
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But the practice has also sparked powerful antagonism, especially in the Northeast, from residents and environmentalists opposed to increased industrial activity in rural areas and concerned that the fracking process or the wastewater it generates can contaminate drinking water supplies.</blockquote>
<a href="http://bigstory.ap.org/article/texas-oilman-fracking-pioneer-mitchell-dies-94">Texas oilman, fracking pioneer Mitchell dies at 94</a> (AP)<br />
<blockquote class="tr_bq">
That shale has changed the oil landscape of the US would be a gross understatement. In fact, the present energy revolution in the US is mainly due to shale... Oil Shale is nothing but a type of sedimentary oil bearing rock with low permeability which contains a mixture of natural gas and liquids including oil (Shale oil). It's controversial as the extraction process, fracking, is harmful to the environment. There's also the looming fear of induced earthquakes because of fracking. </blockquote>
<blockquote class="tr_bq">
Fracking is the method used to extract gas from the shale formations. A hole is drilled into the rock and a mixture of sand, chemicals and water are injected at high pressure. Under the impact, the rock splits releasing the gas. Irrespective of popular opinion, extracting shale is expensive. But, what wasn't possible a decade ago is happening today not only because of technological advances, but also due to the current price of oil...In the US, Shale oil production is mainly concentrated in Texas and North Dakota. Drilling in the Permian Basin and the Eagle Ford shale formation has enabled oil production in Texas to grow from 31,661,000 barrels per month in September 2008 to 61,500,000 barrels per month in September 2012. Oil production in North Dakota is mainly from the Bakken shale formation. According to estimates of the US Geological Survey there are about 4.3 billion barrels of recoverable oil in Bakken and drilling in this formation has helped North Dakota's oil production to shoot by more than 250,000 barrels per day (between September 2011 and September 2012).<br />
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The IEA predicts the US to overtake Saudi Arabia and Russia as the world's biggest producer of oil by 2017. Also, on the anvil: US becoming self-sufficient in oil by 2035 and North America trudging on to become a net oil exporter sometime around the year 2030. Exxon Mobil Corp.'s annual outlook, for its part, expects North America as an exporter of oil and gas 'by the middle of the next decade.' Both these reports, if you care, are closely monitored by oil investors... </blockquote>
<blockquote class="tr_bq">
Of course, talking about energy, it's not only shale, there's the Canadian Oil sands or tar sands too. Like Shale, this unconventional oil reached people only after the dramatic price rise in oil. In fact, compared to a conventional oil well, the extraction of these sands is about twelve percent dirtier, not to mention the pristine forests destroyed. If the Keystone XL pipeline manages to transport this oil to the Texas refineries, it would be a victory to the oil pundits at the expense of the environment. The Canadian tar sands produce about 1.5 million barrels a day, most of them coming from the Alberta oil fields. As a result, Canada is rather over-enthusiastic for pipelines to conduit the excess oil.</blockquote>
<a href="http://www.oil-price.net/en/articles/american-oil-revolution.php">American Oil Revolution</a> (OilPrice)<br />
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Tight oil is expensive and polluting, but if the prices of oil are high enough, there is enough of the stuff to keep the oil age limping along. But for the first time, people realized that the cheap, easy-to-get oil was no longer increasing. The problem was that oil needed to be expensive for fracking to be viable, but expensive oil hurt the economy, and hence, reduced demand. Also, unconventional oil sources were not only more expensive to get at, but more difficult to refine, meaning that new supply cannot be brought to market fast enough to smooth over price swings without Saudi Arabia's easily accessible and refined oil, which could enter the market quickly. Tar sands, for example, have no "flow rate" since there is no flow. Production cannot increase quickly.<br />
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Some analysts, however, believe that tight oil is just hype. They point to the massive capital expenditures needed to keep the wells going, and the very fast depletion rates. New wells need to constantly be drilled because of this, they argue. And even though U.S. oil production is increasing for the first time since the 1970's, it will be short lived. Here's Arthur Berman:<br />
<blockquote class="tr_bq">
<b>Arthur Berman: </b>First of all, I’m not sure that the premise of the question is correct. Who said that technology is responsible for increasing production? Higher price has led to drilling more wells. That has increased production. It’s true that many of these wells were drilled using advances in technology like horizontal drilling and hydraulic fracturing but these weren’t free. Has the unit cost of a barrel of oil gas gone down in recent years? No, it has gone up. That’s why the price of oil is such a big deal right now.<br />
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Domestic oil prices were below about $30/barrel until 2004 and companies made enough money to stay in business. WTI averaged about $97/barrel from 2011 until August of 2014. That’s when we saw the tight oil boom. I would say that technology followed price and that price was the driver. Now that prices are low, all the technology in the world won’t stop falling production.<br />
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Many people think that the resurgence of U.S. oil production shows that Peak Oil was wrong. <b>Peak oil doesn’t mean that we are running out of oil. It simply means that once conventional oil production begins to decline, future supply will have to come from more difficult sources that will be more expensive or of lower quality or both. This means production from deep water, shale and heavy oil</b>. It seems to me that Peak Oil predictions are right on track.<br />
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<b>Technology will not reduce the break-even price of oil. The cost of technology requires high oil prices.</b> The companies involved in these plays never stop singing the praises of their increasing efficiency through technology—this has been a constant litany since about 2007—but we never see those improvements reflected in their financial statements. I don’t doubt that the companies learn and get better at things like drilling time but other costs must be increasing to explain the continued negative cash flow and high debt of most of these companies.<br />
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<b>The price of oil will recover. Opinions that it will remain low for a long time do not take into account that all producers need about $100/barrel. The big exporting nations need this price to balance their fiscal budgets. The deep-water, shale and heavy oil producers need $100 oil to make a small profit on their expensive projects. If oil price stays at $80 or lower, only conventional producers will be able to stay in business by ignoring the cost of social overhead to support their regimes.</b> If this happens, global supply will fall and the price will increase above $80/barrel. Only a global economic collapse would permit low oil prices to persist for very long.</blockquote>
<a href="http://www.nakedcapitalism.com/2015/01/real-cause-low-oil-prices-interview-arthur-berman.html">The Real Cause of Low Oil Prices</a> (Naked Capitalism) <br />
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Renewables had never gone away, but after the 1980s oil glut, they were sidelined as fossil fuels were too cheap for renewables to be competitive at a large scale. But they continued to be developed, mainly for places where oil couldn't be used like remote areas where photovoltaic panels made more sense.<br />
<blockquote class="tr_bq">
If solar energy was to become a practical terrestrial source of electricity, the cells needed to be cheaper—much cheaper. One of the pioneers in that effort was a chemist named Peter Varadi. In 1973, he and fellow Hungarian refugee Joseph Lindmayer launched a company called Solarex in Rockville, Md.<br />
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When they started, there was hardly a market for photovoltaic cells. Then customers began to emerge, mainly for applications in remote locations, off the grid. The U.S. Coast Guard bought solar cells to power its buoys. The oil industry did the same for offshore platforms. Illicit marijuana producers needed a lot of power for their greenhouses but also wanted to avoid getting fingered by the police because of oversize electric bills.<br />
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But it seemed like the solar business would never reach sufficient scale. Solarex was profitable but short of capital, and Dr. Varadi and Dr. Lindmayer ended up selling it in 1983. Exxon, the other early entrant in the field, got out in 1984 because it couldn’t see a significant market ahead in any reasonable time frame. By the beginning of the 1990s, the Economist was calling the solar industry “a commercial graveyard for ecologically minded dreamers.” For struggling solar (and wind) entrepreneurs, the decade became known as the “valley of death.”<br />
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But then, at the beginning of this century, solar came back to life. The reason was Germany. In pursuit of a low-carbon future, the country launched its Energiewende (energy transition), which provided rich subsidies for renewable electricity.<br />
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The biggest beneficiary of Germany’s solar policy turned out to be not German industry, as had been expected, but China. Chinese companies rapidly built up low-cost manufacturing facilities and captured the German market, driving Q-Cells, the leading German company, into bankruptcy.<br />
The resulting overcapacity of Chinese factories pushed down costs, as did the falling price of silicon, the raw material that goes into solar cells. As a result, the cost of a solar cell has fallen by as much as 85% since 2006. Installation costs have also come down, though not to the same extent. </blockquote>
<a href="http://www.wsj.com/articles/the-power-revolutions-1440172598">The Power Revolutions</a> (Daniel Yergin, Wall Street Journal)<br />
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But what really pushed renewables to the forefront was a new wrinkle in the story. As far back as the late 1800's, scientists had speculated that increasing carbon in the atmosphere could have an effect on the climate. By the 1970's, it was already known that the burning of carbon was having deliterious climatic effects. <a href="http://insideclimatenews.org/news/15092015/Exxons-own-research-confirmed-fossil-fuels-role-in-global-warming">The oil companies' own research demonstrated this</a>, but instead they launched a campaign of denialism and misinformation.<br />
<blockquote class="tr_bq">
...the world is drifting further towards dangerous levels of average temperature rise and runaway climate change; the IEA projects an increase of 3.6 to 5.3 degrees Celsius by the end of the century. Scientists warn this level of warming could threaten civilization as we know it.<br />
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In its “4-for-2 degrees Celsius” scenario, the report proposes four near-term “pragmatic and achievable” measures to put the world on track to limiting warming to safer levels and could reduce emissions by eight percent on levels otherwise expected by 2020 without harming economic growth.<br />
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Targeted energy efficiency measures in buildings, industry and transport would account for nearly half of these savings by 2020 while limiting the construction and use of the least-efficient coal-fired power plants could deliver another 20 percent of these savings—while helping to curb local air pollution. The report estimated renewable energy generation would increase from around 20 percent to 27 percent over the same period to fill the void created.</blockquote>
<a href="http://ecowatch.com/2013/06/10/iea-report-calls-for-energy-revolution-avoid-climate-catastrophe/">New IEA Report Calls for Energy Revolution to Avoid Climate Catastrophe</a> (EcoWatch)<br />
<br />
The desire to have non-polluting sources of energy and ones that could not be controlled by foreign countries drove the expansion of renewables before 2008, but now they were actually price-competitive with fossil fuels due to high prices. Photovoltaic panels are silicon-based, so they fall in price like computer chips. That is, the marginal cost to produce another one goes down over time. In contrast, the marginal cost of extracting each additional barrel of oil goes up, so there are hopes that renewables will outcompete fossil fuels in the market and reduce demand to the point where oil demand stays constant even as energy increases.<br />
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<a href="http://www.treehugger.com/renewable-energy/graph-shows-why-solar-power-will-take-over-world.html">This graph shows why solar power will take over the world</a> (Treehugger)<br />
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The recession, however, continued to grind on. It was the same dynamic as the 1970s - when oil prices spike, the economy goes into recession lowering oil demand. Economic activity is curtailed, businesses close their doors, employees are laid off and don't drive to work, people don't take vacations, etc. Demand goes down and oil supplies are less tight, leading to lower prices. It's the same dynamic over and over again.<br />
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In order to stimulate the economy, the Federal Reserve typically lowers interest rates. But interest rates had been low thought the 2000s, contributing to the housing bubble and the financialization of the economy. They were now lowered to essentially zero (ZIRP - Zero Interest Rate Policy). We know that more money is created when new loans are taken out. The idea is to create additional money to offset imaginary credit destroyed during the financial crisis which had financed the bubble.<br />
<br />
This led to fears of 'debasing" the currency. Every country wants to make its currency weak to make its exports cheaper and to drive up demand for its currency. Nobody wants the "strong" currency in an economy like this one. Thus, there is no loss of confidence and flight from the dollar into safe currencies on the part of the investor class, because there are no safe currencies.<br />
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The problem is, once central banks set interest rates at essentially zero, there is little else they can do. Just like a volume knob, it cannot go below zero. Rather than "stimulate" the economy, The increased money has gone into speculation, into corporate cash hoarding, into offshore accounts, and into real estate, driving prices in major cities into the stratosphere and pricing out ordinary people. the gap between the rich and the poor has soared to the greatest level ever seen. While addition money printing via "keystrokes" caused angst in certain Neoliberal quarters, the Federal Reserve was now doing something unthinkable in the 1970's - trying to prevent <i>deflation</i>, that is, dollar being worth more over time causing people to hoard money.<br />
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Quantitative easing has made the rich richer and driven up asset prices. It hasn't done much to help ordinary people, however. <i>"The current form of QE is merely an asset swap: dollars for existing financial assets (federal securities or mortgage-backed securities). The rich are getting richer from bank bailouts and very low interest rates, but the money is not going into the real economy, which remains starved of the funds necessary to create the demand that would create jobs."</i> (<a href="http://www.counterpunch.org/2015/09/03/quantitative-easing-for-people-jeremy-corbyns-radical-proposal/">source</a>). For ordinary people without assets, stocks or bonds, they get "austerity."<br />
<br />
"Austerity" is a key policy from Neoliberal disaster capitalism. It declares that governments cannot have a debt to GDP ratio over a certain amount, and if they do, they must balance their budgets by reducing social spending, increasing user fees, firing government employees, ending pensions, selling off common-pool assets, etc. It was the same playbook used against New York in the Seventies, throughout Latin America in the Eighties, and the developing world in the Nineties. Now, the debt crisis had come home to the Western Industrialized countries - Europe, Japan and the United States.<br />
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Austerity was embraced by political and economic elites. But austerity is self-defeating. As governments tighten their belts, the private sector has less money to spend, driving demand down even further. The crippled economy cannot generate sufficient tax revenues to balance the budget, so the cycle begins anew causing economic contraction and hardship. Often widespread hardship lesds to political instability.<br />
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In addition, labor, having been crushed in the past 25 years, could not earn enough to buy what the economy was producing. Capitalism depended on colonizing new emerging markets to sell to, sort of a Ponzi dynamic, but that appears to have run its course. The typical male U.S. worker earned less in 2014 than in 1973 (<a href="http://blogs.wsj.com/washwire/2015/09/18/the-typical-male-u-s-worker-earned-less-in-2014-than-in-1973/">Wall Street Journal</a>). With governments unable to spend and consumers unable to spend, the economy continued to deteriorate. As it deteriorates, revenues decline, exacerbating the crisis. Even lowered oil prices giving theoretical boosts to consumer spending have had little stimulative effect so far.<br />
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With energy prices increasing and a youth bubble played out, sufficient growth rates to pay off debt appear unlikely. Rather than write off debts, the banking establishment insisted on being paid in full. Greece's "public" debt was caused by paying back German banks after the crash. It was exacerbated by the use of the Euro, whose behavior is not controlled by a central bank of Greece and can not be adjusted to suit the needs of that country due to it being yoked to many other countries. The Euro is a one-size-fits-all model for vastly disparate economies. Greece plunged into a crisis worse that the Great Depression of the 1930's. Other European economies suffered too.<br />
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The response to this financial crisis was markedly different from that of the Great Depression of the 1930's. In the Keynesian concept, when demand is suppressed, the government can go into deficit by injecting money directly into the economy giving unemployed people work and businesses more revenue (it is the private sector which government hires to do its business). As their spending and confidence increases, the underutilized capacity is once again realized.<br />
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Neoliberalism, which portrays governments as the enemy of the free market, balanced budgets as sacrosanct, and markets as self-correcting and heading toward equilibrium, would have egg on its face if governments were required to make the system work. It would acknowledge the role of the government to make the free market work for all, a concept that the wealthy and powerful had been determined to suppress since the Powell Memorandum.<br />
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The corporations who backed Neoliberalism are deeply, deeply afraid of Keynesian economics coming back after tree decades of Neoliberalism. It's easy to see why. The Keynesian consensus and the attitudes toward capitalism in the aftermath of the Great Depression and the War led to thirty years of increasing wages for labor and decreasing fortunes for the one percent. They do not want to go back to that. They will do anything to make sure that does not happen again, and now they own the media.<br />
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<a href="http://krugman.blogs.nytimes.com/2015/03/08/slandering-the-70s/">Slandering the 70s</a> (Paul Krugman) <br />
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And that's just Keynesian capitalism, not Marxism, or other more radical critiques of the system. Potential problems with capitalism are too numerous to go into, but they include declining populations, resource limits, climate change, mass automation, "secular stagnation," a slowdown in innovation, government corruption, extreme inequality, debt crises, and so on. Increasing stock market values are caused by speculation and gaming the system, rather than additional production.<br />
<blockquote class="tr_bq">
The troubles in the oil patch are mainly attributable to the Fed’s easy money policies. By dropping rates to zero and flooding the markets with liquidity, the Fed made it possible for every Tom, Dick and Harry to borrow in the bond market regardless of the quality of the debt. No one figured that the bottom would drop out leaving an entire sector high and dry. Everyone thought the all-powerful Fed could print its way out of any mess. After last week’s bloodbath, however, they’re not nearly as confident. Here’s how Bloomberg sums it up:<br />
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“The danger of stimulus-induced bubbles is starting to play out in the market for energy-company debt…Since early 2010, energy producers have raised $550 billion of new bonds and loans as the Federal Reserve held borrowing costs near zero, according to Deutsche Bank AG. With oil prices plunging, investors are questioning the ability of some issuers to meet their debt obligations…<br />
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The Fed’s decision to keep benchmark interest rates at record lows for six years has encouraged investors to funnel cash into speculative-grade securities to generate returns, raising concern that risks were being overlooked. A report from Moody’s Investors Service this week found that investor protections in corporate debt are at an all-time low, while average yields on junk bonds were recently lower than what investment-grade companies were paying before the credit crisis.” </blockquote>
<blockquote class="tr_bq">
The Fed’s role in this debacle couldn’t be clearer. Investors piled into these dodgy debt-instruments because they thought Bernanke had their back and would intervene at the first sign of trouble. Now that the bubble has burst and the losses are piling up, the Fed is nowhere to be seen.<br />
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In the last week, falling oil prices have started to impact the credit markets where investors are ditching debt on anything that looks at all shaky. The signs of contagion are already apparent and likely to get worse. Investors fear that if they don’t hit the “sell” button now, they won’t be able to find a buyer later. In other words, liquidity is drying up fast which is accelerating the rate of decline. Naturally, this has affected US Treasuries which are still seen as “risk free”. As investors increasingly load up on USTs, long-term yields have been pounded into the ground like a tentpeg. As of Friday, the benchmark 10-year Treasury checked in at a miniscule 2.08 percent, the kind of reading one would expect in the middle of a Depression.<br />
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The Saudi-led insurgency has reversed the direction of the market, put global stocks into a nosedive and triggered a panic in the credit markets. And while the financial system edges closer to a full-blown crisis every day, policymakers in Washington have remained resolutely silent on the issue, never uttering as much as a peep of protest for a Saudi policy that can only be described as a deliberate act of financial terrorism.</blockquote>
<a href="http://www.globalresearch.ca/the-oil-coup/5420293">The Oil Coup</a> (Center for Research on Globalization)<br />
<br />
The other major story since 1970 has been the rise of China. The corporations of the world have relied on China for the cheap labor that they used to crush the working classes of the developed world. They've also relied upon "emerging markets" to sell the goods that Western consumers can no longer afford to buy. Cheap Chinese good have kept inflation low.<br />
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China's resource use is staggering. It is the world's most populous country. In 2014 by some measures it passed the United States as the world's largest. Even if demand fell in the United States, demand from China would keep demand for oil high, a situation very different from the 1970's. China passed the United states as the world's largest oil importer in April of this year (2015). China is now the world's factory floor, and feeding the Chinese industrial machine keeps commodity producers in business and feeds the world's growth. China's growing "middle class" is touted even as living standards in the developed countries continuously fell during this period:<br />
<blockquote class="tr_bq">
Over the last 20 years, the world economy has relied on the Chinese economic growth engine more than it would like to admit. <b>The 1.4 billion people living in the world’s most populous country account for 13% of global GDP, which is significant no matter how it is interpreted</b>. However, in the commodity sector, China has another magnitude of importance. The fact is that China consumes mind-bending amounts of materials, energy, and food. <b>That’s why the prospect of slowing Chinese growth is likely to continue as a source of nightmares for investors focused on the commodity sector. </b></blockquote>
<blockquote class="tr_bq">
The country consumes a big proportion of the world’s materials used in infrastructure. It consumes 54% of aluminum, 48% of copper, 50% of nickel, 45% of all steel, and 60% of concrete. In fact, the country has consumed more concrete in the last three years than the United States did in all of the 20th century.<br />
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China is also prolific in accumulating precious metals – the country buys or mines 23% of gold and 15% of the world’s silver supply.<br />
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With many mouths to feed, China also needs large amounts of food. About 30% of rice, 22% of corn, and 17% of wheat gets eaten by the Chinese.<br />
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Lastly, the country is no hack in terms of burning fuel either. Notably, China uses 49% of coal for power generation as well as metallurgical processes in making steel. It also uses 13% of the world’s uranium and 12% of all oil.</blockquote>
<a href="http://www.visualcapitalist.com/china-consumes-mind-boggling-amounts-of-raw-materials-chart/">China Consumes Mind-Boggling Amounts of Raw Materials</a> (Visual Capitalist)<br />
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<a href="http://www.bbc.com/news/world-asia-china-20069627">China's economic miracle</a> (BBC)<br />
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Globalization also slowed down due to high oil prices. World trade appears to have peaked in 2008:<br />
<blockquote class="tr_bq">
The “great trade collapse” occurred between the third quarter of 2008 and the second quarter of 2009. Signs are that it has ended and recovery has begun, but it was huge – the steepest fall of world trade in recorded history and the deepest fall since the Great Depression. The drop was sudden, severe, and synchronised. A few facts justify the label: The Great Trade Collapse.</blockquote>
<a href="http://www.voxeu.org/article/great-trade-collapse-what-caused-it-and-what-does-it-mean">The great trade collapse: What caused it and what does it mean?</a> (Vox EU)<br />
<blockquote class="tr_bq">
The latest World Trade Monitor showed the volume of world trade falling in May by 1.2 per cent. It slid in four out of five months in 2015 and risen just 1.5 per cent in the past 12 months — less than the growth in global output and far below the long-term average of about 7 per cent a year. </blockquote>
<blockquote class="tr_bq">
The problem has been getting worse for some time. Trade bounced back fairly well in 2010 after the global recession but it has disappointed ever since, growing by barely 3 per cent in 2012 and 2013. Now it seems the world cannot manage even that.</blockquote>
<a href="http://marginalrevolution.com/marginalrevolution/2015/07/the-world-trade-slowdown-continues-and-worsens.html">The world trade slowdown continues, and worsens</a> (Marginal Revolution)<br />
<br />
In the years since the crisis, oil prices have come down dramatically, to the point where oil is allegedly "cheap" and plentiful again. Early on, the slower demand was due to the recession, which "officially" ended in 2012. But the drop in prices since then has less to do with shale oil and more to do with the Saudis abandoning their role in managing the oil market. The Saudis learned the undesirable (from their standpoint) effects of
high-priced oil from the seventies and are determined to not let it
happen again. The goal is threefold 1.) To keep oil cheap enough to avoid destruction of demand. 2.) To avoid the use of substitutes such as natural gas and renewables like wind, tidal, geothermal and solar. 3.) To shut down the unconventional oil producers in North America and take back market share from high-cost producers like Norway and Canada. Personally, I think the Saudis are terrified of the electirifcation of the world's vehicle fleet, the largest source of global oil demand.<br />
<blockquote class="tr_bq">
...[F]rom mid-September to the middle of November, while benchmark crude prices plunged 21 percent to a four-year low, [Ali al-Naimi, Saudi Arabia’s petroleum minister and the world’s de facto energy czar] didn’t utter a word in public...<b>Twice during previous routs—amid the Asian financial crisis in 1998 and again when the global economy melted down 10 years later—Naimi reversed oil’s free fall by orchestrating production cutbacks among members of OPEC.</b> This time, he went to ground.<br />
<br />
<b>At the cartel’s semiannual meeting on Nov. 27 in Vienna, Naimi shot down proposed output reductions supported by a majority of the 12 members in favor of a more daring strategy: keep pumping and wait for lower prices to force high-cost suppliers out of the market. Oil prices fell a further 10 percent by the end of the next day and kept going.</b> Having averaged $110 a barrel from 2011 through the middle of 2014, Brent crude, the global benchmark, dipped below $50 in January.<br />
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<b>“What they did was historic,” </b>Daniel Yergin, the pre-eminent historian of the oil industry, told Bloomberg in February. <b>“They said: ‘We resign. We quit. We’re no longer going to be the manager of the market. Let the market manage the market.’</b> That’s when you got this sort of shocked reaction that took prices down to those levels we saw.”<br />
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<b>Naimi, 79,...told his OPEC counterparts they should maintain output to protect market share from rising supplies of U.S. shale oil, which costs more to get out of the ground and thus becomes less viable as prices fall. </b>In December, he said much the same thing in a press interview, arguing that it was “crooked logic” for low-cost producers such as Saudi Arabia to pump less to balance the market. </blockquote>
<blockquote class="tr_bq">
Supply was only half the calculus, though. While the new Saudi stance was being trumpeted as a war on shale, <b>Naimi’s not-so-invisible hand pushing prices lower also addressed an even deeper Saudi fear: flagging long-term demand.</b><br />
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U.S. State Department cables released by WikiLeaks show that the Saudis’ interest in prolonging the world’s dependence on oil dates back at least a decade...“Saudi officials are very concerned that a climate change treaty would significantly reduce their income,” James Smith, the U.S. ambassador to Riyadh, wrote in a 2010 memo to U.S. Energy Secretary Steven Chu. “Effectively, peak oil arguments have been replaced by peak demand."...Before oil prices tanked last year, Saudi officials were bracing for global demand to level off as soon as 2025... By letting prices fall, they may have bought themselves some time. At $60 to $70 a barrel, peak demand gets pushed back at least five more years,..Such a delay would be bad news for renewable energy companies and for anyone hoping to bend the demand curve lower—slowing or stopping the relentless rise of global oil consumption that has transformed the planet since the first commercial deposit was developed in Pennsylvania in the early 1860s.<br />
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Crude prices above $100 a barrel had been bringing a demand peak closer. ..Saudi officials were in a state of “near panic” last summer, when they recognized how quickly demand growth in China was leveling off, in part because of persistently high crude prices...</blockquote>
<a href="http://www.bloomberg.com/news/articles/2015-04-12/saudi-arabia-s-plan-to-extend-the-age-of-oil">Saudi Arabia's Plan to Extend the Age of Oil</a> (Bloomberg)<br />
<blockquote class="tr_bq">
While the latest 25 percent slide in oil prices to below $90 a barrel is so far modest compared with the 1980s slump that took crude from $35 to below $10, many observers see similarities in a global market that is on the brink of a pivotal turn from an era of scarcity to one of abundance.<br />
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Three decades ago, the spike in prices caused by the 1973 Arab oil embargo and Iran's 1979 revolution sapped global oil demand, while the discovery of oil offshore in the North Sea spurred a new influx of non-OPEC crude. With world markets awash in oil, Saudi Arabia embarked on a strategy of defending prices, which at the time were largely set by exporters rather than the nascent futures market. The kingdom slashed its own output from more than 10 million barrels per day in 1980 to less than 2.5 million bpd in 1985-86.<br />
<br />
Other producers failed to follow suit, however, both within the Organization of the Petroleum Exporting Countries and among new petroleum powers such as Britain and Norway. Prices fell into a years-long slump, leading to 16 years of Saudi budget deficits that left the country deeply in debt. </blockquote>
<blockquote class="tr_bq">
Finally, in 1985, Riyadh shifted gears, revving up output and cutting prices in a move that triggered a final slump in markets but ultimately paved the way for a gradual recovery. <b>"The big mistake was that they continued to cut production to try to prop the prices and the price fell anyway," said analyst Yasser Elguindi of Medley Global Advisors. Instead they should have fought for market share, allowing "higher cost producers to shut in as the price fell - which is what they are doing now.” </b></blockquote>
<blockquote class="tr_bq">
Last week, Saudi officials briefed oil market participants in New York on the kingdom's shift in policy, <b>making clear for the first time that Saudi is prepared to tolerate a period of lower prices - perhaps as low as $80 a barrel </b>- in order to retain market share, Reuters reported on Monday.<br />
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<b>In the 1980s, it was a drop in U.S. and European consumption coupled with the rise of the North Sea; now it is fears of easing demand from Asia and the unexpected growth of U.S. shale oil. The net effect is the same: An oil market potentially facing years worth of oversupply, a scenario the Saudis and OPEC have not been forced to grapple with since the early 2000s, before the rise of China triggered a decade-long price boom.</b><br />
<br />
During the 1980s, Riyadh learned the hard way that it could not count on fellow OPEC producers, many of whom continued to pump at higher rates than their agreed-upon quotas, leaving Saudi Arabia to bear the brunt of output cuts.<br />
<br />
Much of the disharmony was on public display. <b>Iran and Iraq were engaged in an eight-year all-out war. Accusations by Iraq that Kuwait had been pumping above its OPEC quota led ultimately to the first Gulf War in the early 1990s. It was not until late 1985 that the issue came to a head. The kingdom and OPEC finally agreed to reclaim market share, driving prices down to $10 a barrel but reestablishing themselves in the market. It took 16 years for prices to fully recover.</b><br />
<br />
This time around, Riyadh appears to be taking that stance from the start, with a focus on preserving the medium-term revenue of its 266 billion barrels of crude oil reserves rather than chase falling prices and sacrifice their market. "From an economics point of view, it’s much better to let prices go way down," according to Philip K. Verleger, president of consultancy PKVerleger LLC and a former advisor to President Carter. The emerging price war is "a war of necessity."</blockquote>
<a href="http://www.reuters.com/article/2014/10/14/us-saudi-oil-policy-analysis-idUSKCN0I229320141014">Facing new oil glut, Saudis avoid 1980s mistakes to halt price slide</a> (Reuters)<br />
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The last thing the Saudis want is a serious attempt to reduce oil demand and get serious about a less oil dependent, non-carbon economy. It should be noted that the Saudis are major investors in FOX News, which is pretty much controls the Republican party. That explains much of their anti climate stance and "drill baby drill" rhetoric.<i>"We have a strategic alliance with Rupert Murdoch for sure and I have been with him for the last 15 or 20 years," [Saudi Prince Alwaleed bin Talal] said. "My backing of Rupert Murdoch is definitely unwavering."</i> (<a href="http://money.cnn.com/2015/02/04/media/prince-alwaleed-news-corp/">source</a>)<br />
<blockquote class="tr_bq">
OPEC is looking for a longer-lasting impact on other high-cost production oil field plans, many in deep oceans, with bigger time scales, even if that means a period of cheap oil prices lasting for years. <b>Privately, OPEC's core Gulf members say they have resigned themselves to the idea that the U.S. shale industry's high-tech flexibility means it will respond quickly when prices start rising again, making the United States the new swing producer in world oil, the role held for so long by Saudi Arabia...</b><br />
<br />
"Shale will be a new swing producer of sorts," said Yasser Elguindi of economic consultants Medley Global Advisors. "Because of its shorter investment cycle, when prices fall shale producers will be the ones to cut first, but likewise when prices go up, they will also be the first to bring up production. The drop in oil prices has forced companies to free up capital to help balance their books at the expense of allocating cash to expensive new projects. In some cases, investment decisions have been delayed to allow more time to reset cost structures on projects.<br />
<br />
<b>Companies such as BP, Total and Norway's Statoil have postponed projects ranging from the Gulf of Mexico to the UK North Sea, Nigeria and Indonesia and dozens of other projects would be also likely delayed, </b>according to Norwegian consultancy Rystad Energy. Consultancy Wood Mackenzie estimated around 10.6 billion barrels of oil equivalent potentially retrievable from deep and ultra-deep offshore projects has been deferred, followed by 5.6 billion barrels trapped in oil sands.<br />
<br />
In its new medium-term forecast,<b> OPEC sees oil prices rising by no more than $5 a barrel a year to reach $80 by 2020</b>, with higher demand for the group's oil and lower supplies from other non-OPEC producers...<b>"Next year the oversupply will put pressure on prices, and that's why no one is expecting $100 (a barrel) till 2040,"</b> said one OPEC source.</blockquote>
<a href="http://www.reuters.com/article/2015/09/23/opec-shale-idUSL5N11R0OZ20150923">OPEC focuses on rival mega projects, lives with shale swing output</a> (Reuters)<br />
<br />
Meanwhile, the Middle East and Afghanistan continue to go up in flames:<br />
<blockquote class="tr_bq">
Many of the countries most threatened by the onslaught of the extremist group [ISIL], which has grown out of the chaos of Syria but was initially dismissed as a wider threat to regional stability, will gather at the end of this week in Vienna for the meetings of the Organisation of the Petroleum Exporting Countries (Opec). </blockquote>
<blockquote class="tr_bq">
Iraq, Saudi Arabia, the Gulf states and Iraq – which together account for two thirds of the cartel's production – are all now affected by the inexorable march of the Isil jihadists but appear powerless to prevent it due to the widening sectarian schism between the Sunni and Shia Muslims across the region in the wake of the Arab spring uprisings five years ago.</blockquote>
<a href="http://www.businessinsider.com/isis-is-making-the-biggest-threat-to-oil-prices-even-worse-2015-5">ISIS is Making the Biggest Threat to Oil Prices Even Worse</a> (Business Insider)<br />
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This has sent waves of refugees from the crisis into Europe, <a href="http://www.vox.com/2015/9/27/9394959/syria-refugee-map">a crisis which is still ongoing</a>. Europe is currently seeing the greatest wave of refugees since the second world war. Low oil prices are wreaking havoc on the middle east including the "Fragile Five:"<br />
<blockquote class="tr_bq">
There are several countries in which the risks are the greatest – Algeria, Iraq, Libya, Nigeria, and Venezuela – and RBC Capital Markets has labeled them the “Fragile Five.” </blockquote>
<blockquote class="tr_bq">
<b>Iraq, facing instability from the ongoing fight with ISIS, has seen its problems compounded by the fall in oil prices, causing its budget to shrink significantly.</b> The government is moving to tap the bond markets for the first time in years, looking to issue $6 billion in new debt. ..<b>with Brent crude now dropping well below $50 per barrel, Iraq’s finances are worsening.</b> According to Fitch Ratings, Iraq may post a fiscal deficit in excess of 10 percent this year, and all the savings accrued during the years of high oil prices have been depleted. </blockquote>
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<b>Low oil prices could also push Venezuela into a deeper crisis.</b> The cost of insuring Venezuelan government bonds has hit its highest level in 12 years, indicating the growing probability of default. Critical parliamentary elections loom in December, but the government has already cracked down on opposition candidates and will likely prevent a fair election from taking place, even while President Maduro’s popularity sinks. The economy is already in crisis, but it is teetering on the brink of something more acute. <b>Bloomberg’s editors openly wonder whether Venezuela’s neighbors are prepared for its collapse. </b></blockquote>
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<b>For Libya, already torn apart by civil war and the growing presence of ISIS militants, low oil prices are the last thing the country needs. ISIS violently crushed a civilian rebellion last week in the coastal city of Sirte, according to Al-Jazeera. </b>Libya’s internationally-recognized government has called upon Arab states for help in fighting ISIS, something that the Arab League has endorsed. Meanwhile, the country’s oil sector – the backbone of the economy – is producing less than 400,000 barrels per day, well below the 1.6 million barrels per day Libya produced during the Gaddafi era. In other words, Libya is selling far less oil than it used to, and at prices far below what they were as recently as last year. </blockquote>
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Saudi Arabia does not belong in the same category of troubled countries, but it is also not immune to oil prices at multiyear lows, despite its vast reserves of foreign exchange. <b>Saudi Arabia could run a fiscal deficit that is equivalent to about 20 percent of GDP.</b></blockquote>
<a href="http://oilprice.com/Energy/Energy-General/Low-Oil-Prices-Could-Break-The-Fragile-Five-Producing-Nations.html">Low Oil Prices Could Break The “Fragile Five” Producing Nations</a> (OilPrice)<br />
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And now China, the growth engine of the world, appears to be slowing down:<br />
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China is the world's biggest importer of crude oil.It took top spot in April this year and even before that was behind only the United Sates. <b>Slower economic growth in China means less demand for oil than there would otherwise have been.</b> Of course there are other factors behind the oil price collapse of the last year, some of them leading to abundant supplies. The rise of shale oil in the United States and Saudi Arabia's unwillingness to respond by curbing its own output have also put pressure on the oil price. <b>But demand is an important element.</b><br />
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And just look at what the impact of all these factors has been. The price of Brent crude oil roughly halved in the second six months of last year. It recovered a bit and then fell by nearly 40% from the level it reached at about the same time (in June) that the Chinese stock market began its sharp decline. <b>That's not to say the Chinese stock market is directly responsible for oil's fall. But it has reinforced concerns about whether China's economic growth is going to slow very abruptly, and has undermined expectations about future oil sales - driving down the price now.</b><br />
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<b>Cheaper oil is a great boon for struggling economies that have to import the stuff. ...But it is an increasingly serious problem, certainly economically and perhaps politically too, for oil-exporting countries. Oil accounts for a very large share of government revenue in many countries. </b>The IMF says it's more than half for many oil exporters and as high as 80-90% in some, including Iraq, Qatar, Oman and Equatorial Guinea.<br />
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The IMF has also estimated the oil price it would take for some countries in the Middle East and North Africa (and a couple in the former Soviet Union) to balance their government budgets. For all of them that "breakeven" price is higher than today's level. For several, including Saudi Arabia and Iran it would take a lot more than double what it is now to balance the budget. For Libya it is more than $200 a barrel, higher than the oil price has ever been.<br />
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The state has had a central role in the economic life of many countries across the Middle East and North Africa. It has been called a social contract. The World Bank said:<b> "The old development model - or social contract - where the state provided free health and education, subsidized food and fuel, and jobs in the public sector, has reached its limits."</b> ...<b>The limits on this social contract were a key factor behind the political turmoil known as the Arab Spring</b>. And many of the big oil exporters in the region are relatively authoritarian political regimes. Rising living standards and public services funded by oil revenue play an important part in the political balance in countries such as Saudi Arabia.<br />
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Venezuela is another stark case. It has the world's largest oil reserves, although a large part is in the form of very heavy oil that is expensive to refine. The country had acute economic problems even before the oil price drop. The government's finances have been in deficit to the tune of more than 10% of national income or GDP since 2010, and this year the IMF has forecast a figure of 20%. The IMF is also forecasting an economic contraction of 7% and inflation of more than 1,000% - that means prices increasing more than tenfold in a year...There have been protests against President Nicolas Maduro, in what has been called "a deepening political crisis… leading to civil violence and potential regional instability".<br />
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Russia is another big oil producer, which has reserves to draw on. It too has an inflation and economic contraction problem, though not on Venezuela's scale.<b> A key factor there has been the low oil price driving down the value of the rouble which makes imports more expensive.</b><br />
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Iran is a rather different story. Of course a high price for oil exports would be helpful. But the government is hoping for rapid increases in the volume of oil sales if, as it expects, the western sanctions are lifted following the deal on the country's nuclear programme. In fact the resumption of more normal levels of Iranian exports would exacerbate the weakness of the oil price, assuming the market doesn't turn a corner in the meantime. But for Iran, the priority is to regain lost market share.</blockquote>
<b>The Future:</b><br />
<br />
So what does it all mean? Oil and other fossil fuels underpin all of industrial civilization. Oil is world's major transportation fuel and a lifeblood of the economy, and is likely to remain so. The living standards of today are entirely dependent upon the burning of fossil fuels and a stable climate, one of which is now undermining the other. Fossil fuels have allowed us to exploit raw materials to such an extent that we are running out of them, regardless of how many fossil fuels are left in the ground (for example, fresh water and topsoil). Oil is a finite resource, and we are using it at an industrial scale. To an extent, fossil fuels are fungible - one can substitute for the other. Electrification can be thought of as a sort of substitution - fossil fuels are burned to produce additional electricity instead of refined and used directly. Even renewable energy is in the same category - fossil fuels are burned in the factories to manufacture solar panels and windmills instead of creating electricity or used in transportation. Technology can be used to access preciously inaccessible supplies, yes, but getting at oil is harder and harder, making it more and more expensive. This ripples through the economy. As oil becomes harder to get at and refine, bottlenecks will become more common.<br />
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Fundamentally, what it means is that the massive growth of societies over the past two hundred years is no longer possible. Increasingly it is a "Red Queen" situation - running faster and faster to remain in the same place. "Decoupling" - the idea that growth can occur without growth in energy seems unrealistic. It seems unlikely that the entire world can be brought up to industrial world living standards without substantially increasing the amount of energy consumed. Even if the world economy grew at only one percent, it would double in the lifetime of someone born today (about 70 years). If inflation and population increase without energy consumption, it seems unlikely that real living standards will increase, only decrease. Global <i>per capita</i> energy consumption (the amount used by every single person alive if usage were equal) peaked already in the 1970's.<br />
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Here is Arthur Berman's take on the near future:<br />
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<b>Arthur Berman: </b>The global energy mix will move increasingly to natural gas and more slowly to renewable energy. Global conventional oil production peaked in 2005-2008. U.S. shale gas production will peak in the next 5 to 7 years but Russia, Iran, Qatar and Turkmenistan have sufficient conventional gas reserves to supply Europe and Asia for several decades. Huge discoveries have been made in the greater Indian Ocean region—Madagascar, offshore India, the Northwest Shelf of Australia and Papua New Guinea. These will provide the world with natural gas for several more decades. Other large finds have been made in the eastern Mediterranean.<br />
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There will be challenges as we move from an era of oil- to an era of gas-dominated energy supply. The most serious will be in the transport sector where we are thoroughly reliant on liquid fuels today —mostly gasoline and diesel. Part of the transformation will be electric transport using natural gas to generate the power. Increasingly, LNG will be a factor especially in regions that lack indigenous gas supply or where that supply will be depleted in the medium term and no alternative pipeline supply is available like in North America.<br />
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Of course, natural gas and renewable energy go hand-in-hand. Since renewable energy—primarily solar and wind—are intermittent, natural gas backup or base-load is necessary. I think that extreme views on either side of the renewable energy issue will have to moderate. On the one hand, renewable advocates are unrealistic about how quickly and easily the world can get off of fossil fuels. On the other hand, fossil fuel advocates ignore the fact that government is already on board with renewables and that, despite the economic issues that they raise, renewables are going to move forward albeit at considerable cost.</blockquote>
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Time is rarely considered adequately. Renewable energy accounts for a little more than 2% of U.S. total energy consumption. No matter how much people want to replace fossil fuel with renewable energy, we cannot go from 2% to 20% or 30% in less than a decade no matter how aggressively we support or even mandate its use. In order to get to 50% or more of primary energy supply from renewable sources it will take decades.</blockquote>
<a href="http://www.nakedcapitalism.com/2015/01/real-cause-low-oil-prices-interview-arthur-berman.html">The Real Cause of Low Oil Prices</a> (Naked Capitalism) <br />
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It will also mean a radical shift in the economy. Neoliberalism, the free market fundamentalism paradigm that is the dominant economic ideology since the 1980's, is destabilizing the world. Gaps between rich and poor are enormous, and the wealthy are engaged in a zero-sum seizing of the world's assets as profit centers in a world where genuine investment opportunities have dried up. There seems to be a pushback from below, whether it is Occupy Wall Street, Syriza in Greece, or the support for candidates like Bernie Sanders and Jeremy Corbyn. As economist Richard Smith explains, there can never be a "sustainable" capitalism, as growth is an absolute requirement:<br />
<blockquote class="tr_bq">
As Smith shows, the problem isn't that we are "addicted to growth" or that perpetual growth is a "spell," as Bill McKibben put it (and Smith cites). Even Naomi Klein's important book, <i>This Changes Everything: Capitalism vs. the Climate</i>, which Smith critiques in Chapter 4, focuses largely on "unregulated capitalism" as opposed to capitalism. Consider also the obsession with neoliberalism by so many writers in the mainstream progressive media, who rarely if ever indict capitalism without a preceding adjective. The villains for them are "corporate capitalism," "casino capitalism," etc., rather than capitalism itself.<br />
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<b>In sharp contrast and with refreshing clarity of thought, Smith explains, "why ecologically suicidal growth is built into the nature of any conceivable capitalism. </b> This means ... that the project of a steady-state capitalism is impossible and a distraction."<b> In particular, "under capitalism, the whole point of using resources efficiently is just to use the saved resources to produce even more commodities, to accelerate the conversion of even more natural resources into products." This cannot be avoided under capitalism without causing economic collapse.</b><br />
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<b>"Insatiable consumerism is an everyday requirement of capitalist reproduction ... No overconsumption, no growth, no jobs." Why no jobs? Consider that "more than two-thirds of market sales and therefore most jobs, depend on direct sales to consumers while most of the rest of the economy including the infrastructure and military is dedicated to propping up this consumerist 'American way of life.'</b> " Even ignoring that, how could capitalism ever achieve a steady state? "<b>Are Toyota or General Motors looking to produce the same number of steel cars next year as this year?" Smith asks.</b><br />
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Similarly in Chapter 3, which bears the same title as the book, Smith demolishes green capitalist hopes through five theses on the nature of any capitalism. The fifth of these directly challenges popular myths of "spells" and addiction to growth:<br />
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<b> "Consumerism and overconsumption are not 'disposable' and cannot be exorcised because they are not just 'cultural' or 'habitual.' They are built into capitalism and indispensible for the day-to-day reproduction of corporate producers in a competitive market system in which capitalists, workers, consumers and governments alike are all dependent upon an endless cycle of perpetually increasing consumption to maintain profits, jobs, and tax revenues ...</b>"<br />
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In the final two chapters, Smith outlines ecological constraints necessary for any post capitalist economy and describes ecosocialist alternatives to capitalism. The necessary changes are staggering. The entire economy must contract and be restructured with international cooperation. <b>Capitalism is incapable of finding jobs for workers unemployed by degrowth, even though much expansion is needed in social services like health care, education, environmental remediation, etc.</b><br />
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"[S]ince we live under capitalism, not socialism, no one is promising new jobs to all those coal miners, oil drillers, gas frackers, power plant operators, farmers and fertilizer manufacturers, loggers and builders, autobuilders, truck drivers, airplane builders, airline pilots and crews and the countless other occupations whose jobs would be at risk if fossil fuel use were really seriously curtailed." <br />
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Smith recognizes that building a movement requires more than being against ecocidal destruction; it requires a vision for the future. To that end he outlines a number of attractive and attainable features of an ecosocialist society.</blockquote>
<a href="http://www.truth-out.org/opinion/item/31959-book-review-green-capitalism-the-god-that-failed">Capitalism, Green or Otherwise, Is ''Ecological Suicide'' </a>(Truthout)<br />
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Here's Chris Martenson giving us the "really really big picture:"<br />
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The really big picture goes like this: Humans discovered about 400 million years worth of stored sunlight in the form of coal, oil, and natural gas, and have developed technologies that will essentially see all of that treasure burned up in just 300 to 400 years. <br />
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On the faulty assumption that fossil fuels will always be a resource we could draw upon, we fashioned economic, monetary, and other assorted belief systems based on permanent abundance, plus a species population on track to number around 9 billion souls by 2050.<br />
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There are two numbers to keep firmly in mind. The first is 22, and the other is 10. In the past 22 years, half of all of the oil ever burned has been burned. Such is the nature of exponentially increasing demand. And the oil burned in the last 22 years was the easy and cheap stuff discovered 30 to 40 years ago. Which brings us to the number 10. <br />
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In every calorie of food that comes to your table are hidden 10 calories of fossil fuels, making modern agriculture and food delivery the first type in history that consumes more energy than it delivers. Someday fossil fuels will be all gone. That day may be far off in the future, but preparing for that day could (and one could argue should) easily require every bit of time we have.<br />
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What galls me at this stage is that all of the pronouncements of additional oil being squeezed, fractured, and otherwise expensively coaxed out of the ground are being delivered with the message that there's so much available, there's nothing to worry about (at least, not yet.) The message seems to be that we can just leave those challenges for future people, who we expect to be at least as clever as us, so they'll surely manage just fine.<br />
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Instead, the chart above illustrates that on a reasonably significant timeline, the age of fossil fuels will be intense and historically quite short. The real question is not Will it run out? but Where would we like to be, and what should the future look like when it finally runs out? The former question suggests that "maintain the status quo" is the correct response, while the latter question suggests that we had better be investing this once-in-a-species bequeathment very judiciously and wisely. <br />
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Energy is vital to our economy and our easy, modern lives. Without energy, there would be no economy. The more expensive our energy is, the more of our economy is dedicated to getting energy instead of other pursuits and activities. Among the various forms of energy, petroleum is the king of transportation fuels and is indispensible to our global economy and way of life.<br />
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To what do we owe the recent explosion in technology and living standards? To me the answer is simple: energy...Because a very large proportion of our society was no longer tied up with the time-consuming tasks of growing their own food or building and heating their own shelter, they were free to do other very clever things, like devote their lives to advancing technology. <br />
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Like every other organism bestowed with abundant food – in this case, fossil fuels that we have converted into food, mobility, shelter, warmth, and a vast array of consumer goods – we first embarked on a remarkable path of exponential population growth. Along with these assorted freedoms from securing the basics of living, we also fashioned monetary and economic systems that are fully dependent on perpetual exponential growth for their vitality and well-being. These, too, owe their very sustenance to energy.<br />
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It bears repeating: Not just energy is important here, but net energy. It's the energy left over after we find and produce energy that is available for society to do all of its complicated and clever things. Not only is the world struggling right now to increase global oil production, but all of the new and unconventional finds offer us dramatically less net energy to use as we wish. </blockquote>
<a href="http://www.peakprosperity.com/blog/80506/really-really-big-picture">The Really, Really Big Picture: There isn't going to be enough net energy</a> (Peak Prosperity)<br />
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Here's a comment by Reddit user "Erinaceous, "summing up the big picture nicely:<br />
<blockquote class="tr_bq">
Conventional oil production actually peaked in 2006 and has been declining slightly since that point. Unconventional oil is largely keeping us on the 'oscillating plateau' but many sources consider this to be a short term phenomenon due to the rapid decline rates of tight oil, and geological and capital constraints.
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What happens post peak largely depends on what the total decline rates of conventional fields are. Typically an conventional oil field declines at about 6% a but unconventionals and substitution may flatten this out to a long term plateau or mild decline. The IMF released a policy paper on peak oil and considers a 2% a decline an unlikely scenario. However in their model this would produce an unsustainable 800% increase in oil prices. Since the economy could not sustain that price Kumhoff speculates the system would become nonlinear and demand destruction would drive the price down. In the scenario they consider most probable the IMF team projects a doubling of oil prices with the decade. This is close to what other modelling approaches have shown including this one that uses network models to examine sectorial [sic] vulnerabilities.<br />
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Other authors expect that because of the lack of easily substitutable at scale alternatives to oil and oil's energetic importance to the economy declining oil production will lead to shrinking discretionary spending. ...Since discretionary spending is what finances new technology and infrastructure this would have a negative effect on transitioning to alternatives (ie. it's hard to buy a $35,000 electric car when you've just been laid off).<br />
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Mostly we don't really know. A lot depends on decline rates and how rapidly transition to alternative energy sources can take place. The Hirsch Report states that we would need at least 20 years before the start of peak oil to make a smooth transition to alternatives. Since we are already post peak we are clearly too late for that. Additionally workhorse economic substitution models don't perform terribly well against the data so there isn't much guidance there. Historically it has taken energy systems at least 30 years to go from proof of concept to the point where they can scale exponentially. We might be there with solar but the total percentage of solar capacity is still rather small and our timelines are rather short. In most transition scenarios we are tracking the more pessimistic projections rather than the optimistic so it makes sense to shade on the side of negativity. </blockquote>
<blockquote class="tr_bq">
Another very open question in this field is the role of finance and how to integrate the financial system into the fairly well studied biophysical systems. Additionally there is the issue of climate change and whether high oil prices will drive substitution to green technology or cheap but carbon intensive brown coal...<br />
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The only low hanging fruit left is degrowth and conservation. Any growth paradigm, even a 100% renewable paradigm leads to overshoot and isn't remotely possible within our time frame. To stay below 450 ppm/carbon in the atmosphere would require a 130 fold improvement in dollar GDP per gram carbon of emissions. Given that anything that costs a dollar represents roughly 7 MJ of energy there's basically no way to make those numbers square unless we stop growing the economies and working on poverty reduction, relocalization, ecological agroforestry, rebuilding soil and working less.<br />
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That's kind of the interesting part actually. The way we get out of this mess is by having more time and economies based around art, culture and the humanities ie. the parts of culture that can produce value with very little energy inputs.<br />
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What's the alternative to oil? Local food production based around perennial vegetables and tree crops would require very little energy input and produce as much nutrition per acre as energy intensive agriculture. Plus it would build soil and sequester carbon. This seems like a no brainer. The 500 km salad is gone. I mean it's gone anyways when oil tops 160-190$/bbl.<br />
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Kill the military. The military uses more oil that the entire civilian domestic consumption. Getting rid of that buys us a few years.<br />
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Reducing the work week and doing more telecommuting saves a huge amount. A simple legislation that would require employers to pay for commuting time would make a huge difference in how labour is used.<br />
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Eric Toensmeier is currently writing a book on perennial plants that can act as industrial feedstocks. Basically every chemical precursor can be replaced, in theory at least, with a naturally occurring perennial plant product. For example, milkweed can produce something like 7 of the precursors for rubber and plastic. Ironically the two trickiest substitutions are sugar and fibre crops. The only thing in the pipeline that might act as a perennial fibre crop is a hybrid hemp/thistle which may or may not end up being non-stinging.<br />
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So that gets us down to a level where we might be able to run things on what oil or on a 100% renewable energy system. We're talking about a society running on a net energy of between 5 and 10 (which is about the net energy of current fossil fuel sources now anyways with the exception of coal). To put that in context that's about the energy surplus of a developing world slash and burn agriculture system (7.6 if you're curious) so that should give you an idea of what life would look like. In the post war period our societies were running on an energy surplus of about 50 or 60 so we've dropped an order of magnitude and will go into overshoot if we continue this way. Really the only way we can stabilise the system with a war effort style mobilisation that actually has the right game plan. It's technically possible (or was technically possible a decade ago) but it's not politically possible. So what's actually going to happen? See the Ukraine, Syria, Egypt, Venezuela, Greece? That's the endgame if we don't do an orderly energy descent.<br />
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In terms of cheap high flow rate conventional oil [we have hit peak oil]. What's left is expensive and comes out of the ground slower so this means that the rate of flow won't be enough to supply demand. If you look at the stocks they are enough but they don't produce fast enough. It also means swing producers like Saudi Arabia that can come in and stabilize markets are sidelined.
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[E]very energy transition we've had has gone from a lower EROEI energy source to a higher EROEI energy source. we really no idea what happens when a society transitions down to a lower energy gradient. the examples we have from ecology and history (for example Tainter's 'Collapse of Complex Societies') suggests that it's a rough ride down. <br />
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Honestly, I'm not optimistic. A lot of people are going to die. That's pretty much baked in at this point. I don't blame you or oil people. Half my family works in the oil patch but the facts are we're using scarce and precious freshwater to mine an energy source that barely produces any surplus energy (last i checked the net energy of tight oil was below 5) but produces excess amounts of carbon. It's fucking insane. All we have left when this retirement party is over is natural and human capital and every watershed we pollute or aquifer we drain reduces the ability of that natural capital to sustain life.</blockquote>
<a href="https://www.reddit.com/r/environment/comments/206yzo/i_work_in_oil_and_want_to_discuss_fracking/cg0gchm">https://www.reddit.com/r/environment/comments/206yzo/i_work_in_oil_and_want_to_discuss_fracking/cg0gchm</a><br />
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<a href="https://www.reddit.com/r/AskSocialScience/comments/1swepv/what_will_happen_to_the_economy_when_global_oil/ce21f17">https://www.reddit.com/r/AskSocialScience/comments/1swepv/what_will_happen_to_the_economy_when_global_oil/ce21f17 </a><br />
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So, it seems we will have a period of chaos ahead as we attempt to move toward a new world order not based around fossil fuels, even as the age of fossil fuels clings desperately on due to the fear of alternative economic models and "lower" living standards. And here we sit right at the cusp of this historical Great Transformation which is just getting started. The death of one world is the birth of another.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-5813525365834911757.post-62200173710180512102015-09-22T21:20:00.003-05:002015-09-27T12:39:19.150-05:00The Secret History of Oil and Money - Part 6<div class="separator" style="clear: both; text-align: center;">
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For this chapter, I will use the excellent book, <i>The End of Oil</i> by Paul Roberts as a guide.<br />
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Last time we saw how oil prices crashed in the 1980's setting up the emergence of Neoliberalism as the predominant theory governing the planet's economy. Oil prices played a role in the collapse of the Soviet Union, the Latin American debt crisis, and the rise of Islamic Fundamentalism in the Middle East.<br />
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Starting in the mid-1970s the Islamic resurgence was funded by an abundance of money from Saudi Arabian oil exports. The tens of billions of dollars in "petro-Islam" largess obtained from the recently heightened price of oil funded an estimated "90% of the expenses of the entire faith."<br />
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Throughout the Sunni Muslim world, religious institutions for people both young and old, from children's maddrassas to high-level scholarships received Saudi funding, "books, scholarships, fellowships, and mosques" (for example, "more than 1500 mosques were built and paid for with money obtained from public Saudi funds over the last 50 years"), along with training in the Kingdom for the preachers and teachers who went on to teach and work at these universities, schools, mosques, etc. The funding was also used to reward journalists and academics who followed the Saudis' strict interpretation of Islam; and satellite campuses were built around Egypt for Al Azhar, the world's oldest and most influential Islamic university.<br />
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The interpretation of Islam promoted by this funding was the strict, conservative Saudi-based Wahhabism or Salafism. In its harshest form it preached that Muslims should not only "always oppose" infidels "in every way," but "hate them for their religion ... for Allah's sake," that democracy "is responsible for all the horrible wars of the 20th century," that Shia and other non-Wahhabi Muslims were "infidels", etc. While this effort has by no means converted all, or even most, Muslims to the Wahhabist interpretation of Islam, it has done much to overwhelm more moderate local interpretations, and has set the Saudi-interpretation of Islam as the "gold standard" of religion in Muslims' minds.</blockquote>
<a href="https://en.wikipedia.org/wiki/State-sponsored_terrorism#Saudi_Arabia">State-sponsored terrorism</a> (Wikipedia) <br />
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The arrival of the OPEC cartel and the boycotts and revolutions caused oil prices to rise tenfold during the decade of the 1970's. Control over the world's oil supplies now resided with the governments of a handful of countries rather than the oil companies (who nevertheless also benefited from higher oil prices). This created the greatest transfer of wealth in the history of the modern world.<br />
The countries who were the beneficiaries of this windfall changed dramatically, from desert backwaters with small populations to wealthy nations enmeshed in global geopolitics.<br />
<blockquote class="tr_bq">
Take Sheikh Rashid of Dubai. Dubai is one of what the British called the Trucial States when, in the nineteenth century, they established a military presence in this lightly populated area of desert and salt marshes on the Persian Gulf. Sheikh Rashid, before the oil, had derived his income from the dhows, the wooden sailing ships that called at his customs house, on the way to "reexport"—some said smuggle—gold and silver to India, before the oil—the first strike was not until 1957—Sheikh Rashid feuded with Deira, the rival village across the creek. The weapons used in this feud were the cannons from old ships, some of them hundreds of years old. The cannons were stuffed with rags and pistons from hijacked cars, and since cannonballs were in short supply, a nightly truce after sunset prayers permitted the combatants to comb the battlefields and retrieve the cannon balls.<br />
<br />
One day, in the pre-oil era. Sheikh Rashid accepted a dinner invitation across the creek, and then had his men kill off his hosts. In the best Middle Eastern tradition— and not unlike Richard III—he consolidated his victory by marrying the thirteen-year-old daughter of the vanquished ruler of Deira to his brother. The Sheikha Sana, as she is called, is a high-spirited woman who once shot her husband's fourth wife. She says, of her early years, that her experiences made her strong, and she has now built up a thriving taxi fleet. Sheikh Rashid married his daughter, Miriam, to the neighboring Sheikh of Qatar, who lent him the money for a bridge across the creek.<br />
<br />
Sheikh Rashid's income is now about $1 billion a year, and no one hunts for cannonballs anymore in Dubai. His in-law, the Sheikh of Qatar, produces more oil and is even richer. In the nineteenth century the British navy sailed the Persian Gulf to protect the routes to India; now their former Persian Gulf wards come to London. Sheikh Rashid's ambassador, Mohammed Mahdi al-Tajir, drove the British press to xenophobic frenzy by purchasing $60 million in English real estate in two years: town houses, country houses, and the centuries-old castles of dukes. "Arabs like beautiful things," he said simply. The British press shuddered deliciously at the new, Mephistophelian image of its visitors. The Daily Mirror warned of "school girls missing after dating Arabs," whisked off to "exclusive restaurants in Rolls Royces."<br />
<br />
<i>Paper Money</i>; pp. 187-188</blockquote>
Oil prices are a funny thing. Too high and you slow down the economies you need to sell to, driving demand down. Killing the goose, as it were. If they are low, by contrast, your buyers will use plenty of oil driving around in their SUV's, but you will not make enough revenues. Your budgets will collapse. High oil prices hurt oil-importing nations but help oil-exporting nations. Low oil prices help oil-importing nations, but hurt oil-exporting nations. You need a Goldilocks price.<br />
<br />
In the 1970'sThe OPEC nations got greedy. The high prices made them rich beyond imagination, while bringing the industrialized nations to their knees. But the thing is, high prices have effects.<br />
<br />
1.) When they get high, the demand for oil goes down. People don't drive as much. They don't take a vacation. Construction slows down. Businesses refuse to expand. If people pay more for the gas they absolutely need, they spend less on other things. There is less economic activity overall. This means there is less demand because the economy is shrinking. Even if supply remains constant, decreased demand will lower prices.<br />
<br />
2.) Efficiency measures that do not make sense with cheap oil make sense with expensive oil. People buy more efficient cars. Automakers raise the energy efficiency of their designs. People insulate their homes and turn down the thermostats. Tankers move slower to save oil. Businesses seek more efficient ways to do things, and engineers get to work on using energy more efficiently.<br />
<br />
3.) Higher prices make alternatives economically viable. This could be renewables like solar and wind. It could mean small-scale ethanol and biodiesel. It can also mean things like electric cars. But it can also mean other fossil fuels like coal and natural gas:<br />
<blockquote class="tr_bq">
Until the early 1950s, natural gas sold for less than three cents per thousand cubic feet. Drillers looking for oil learned to avoid areas that had been, or were today, deeper than the oil window. Today, natural gas sells for more than $3 per thousand cubic feet. Increasing the price by a factor of one hundred is a morale builder. Suddenly, all those natural-gas-only terrains were profitable targets. The "oil boom" of the early 1980s was actually a gas boom. Kenneth Deffeyes, <i>When Oil Peaked</i>; pp. 98-99 </blockquote>
4.) Higher prices call forth additional production as it becomes more profitable to search for oil elsewhere. This is what happened back in the 1980's. As oil prices went high, it created an incentive to scour the world in non-OPEC countries seeking out new oil fields. Fields that previously would have been too expensive to develop suddenly become viable; the North Sea and Alaska for example. It becomes economically viable to build pipelines to move oil from distant fields that were too distant to develop before.<br />
<br />
5.) Higher prices cause you to lose market share. Sell your oil for too much money, and if someone can sell it cheaper they will do so, decreasing your share of the market. Since OPEC was a price-setting cartel, any seller outside of OPEC was free to undercut not only them, but each other.<br />
<br />
As OPEC loses market share, so will its individual members. This may cause individual members to want to defect, sewing discord among members and setting off price squabbles. They will try and hide this from other members by doing things like lying about their true reserves, cheating on their production quotas, etc.<br />
<br />
All of these factors combined to create the oil glut.<br />
<blockquote class="tr_bq">
But OPEC's biggest weakness was its profound misapprehension of the mechanics of oil power, particularly the setting of prices. As the owner of the world's cheapest oil, OPEC could easily have used its lower production costs to outsell its rivals, like Russia or Mexico — countries that needed to charge more per barrel to make a profit. Such a low-cost strategy would have let OPE C gain a majority share of the world oil market, while still earning a reasonable price for its oil. To succeed at such a strategy, how ever, OPEC couldn't get too greedy. If cartel members tried to push prices too far up by withholding their own production (and thus tightening world supply), the effects would be disastrous. Importing nations would either turn to non-OPEC suppliers (thus reducing OPEC's precious market share), or they would simply use less oil, either by switching to cheaper fuels, like coal or gas, or by becoming more energy-efficient. <br />
<br />
So when oil prices skyrocketed during the 1970s and early 1980s, OPEC would have been wise to pump a little more oil and let prices fall slightly. That way, the cartel would have ensured a long-term market tor oil by reassuring the big consumers, like the United States, Europe, and Japan, that oil was a reliable, economical, long-term energy source. True, OPEC's revenues would have fallen off a bit; but by protecting its market share and its customers, the cartel could have made up any losses later, when prices recovered, as they inevitably would have. </blockquote>
<blockquote>
Instead, OPEC did the opposite. Addicted to the higher oil revenues of the 1970s, OPEC members refused to reduce their prices. The high prices acted as a brake on global economies accustomed to cheap energy, and the entirely predictable result was widespread recession. Energy demand fell, and importing nations tried to "wean themselves from "foreign oil. Utilities and other industrial users switched to coal, natural gas, and nuclear power, which were now cheaper. Homeowners began heating with natural gas instead of furnace oil. Governments in the United States, Japan, and Europe, embarking on a crusade for energy conservation, poured billions of dollars into alternative fuels and technologies and forced automakers to build fuel-efficient vehicles. For the first time in nearly a century, oil was losing its allure as the miracle energy source, and the impact was staggering. By 1986, world oil demand had fallen by five million barrels a day.<br />
<br />
Worse, just as oil demand was falling, a wave of new oil production hit the market. Norway, the United Kingdom, the United States, the Soviet Union, and other non-OPEG countries, whose oil was normally too expensive to compete with OPEC's, now scrambled to take advantage or the high oil prices. Between 1978 and 1986, non-OPEC oil production jumped by fourteen million barrels a day — and most of this increase came at OPEC's expense. Between falling demand for its own oil and rising non-OPEC production, OPEC saw its share of a dwindling market shrink from more than 50 percent to just 29 percent. In retrospect, says one former U.S. State Department official, it is clear that "OPEC [members] had no idea what they were doing. It was totally unrealistic of them to think they could keep prices that high for as long as they did and not have a huge impact on demand."<br />
<br />
Desperate to avoid further damage, Saudi Arabia, OPEC's most powerful member, tried enforcing a production limit, or quota, on each member, to reduce supply and shore up prices. But other OPEC members refused. While most saw that cutting production could bring higher prices eventually, in the short term, it would mean an immediate loss of oil income — something no formerly free-spending petrostate could withstand. In Nigeria, desperate oil officials actually cut their prices in an attempt to boost sales and grab back some market share from non-OPEC countries. Mexico, too, lowered its prices.<br />
<br />
The Saudis now found themselves in the classic cartel bind: the only way to keep prices high was to cut their own production, as they reluctantly did, letting it fall from lo million barrels a day in 1980 to a mere 2.5 million by 1985. However, this remedy too proved disastrous. Although prices did rise, the Saudi market share was now so tiny that its overall oil revenues remained dangerously low. As the situation worsened, the Saudi royal family felt it had little choice but to turn the "oil weapon" on OPEC itself. Opening its taps, the Saudis flooded the world market with cheap oil.<br />
<br />
This first use of "capacity cleansing" was brutal but effective. As price plunged below ten dollars a barrel, Venezuela and other OPEC quota-busters capitulated and cut their production. Saudi Arabia regained its lost market share. Better still, from OPEC's point of view, rival oil operations in high-cost areas like the North Sea and Alaska suddenly became uneconomical, and many were scaled back or even put on hold. These developments hit the Soviet Union, until then the world's largest producer of oil, particularly hard. As falling oil prices cut Moscow's hard-currency income in half, the Soviet oil industry — and the Saudis' biggest oil rival — was knocked out for years. </blockquote>
<blockquote>
<i>The End of Oil</i>, pp. 102-103</blockquote>
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<br />
Now it's important to know that Saudi Arabia's oil is ultra-cheap to produce. Their massive oil fields are under high pressure against the surface rock formation. The oil comes out via wells and does not need to be pumped. Just stick a straw in, as it were. Compare that to the massive offshore oil rigs in the North Sea, for example. Plus, Saudi oil is light crude which is very easy to refine. Only Iraq's oil is cheaper to produce.<br />
<br />
Because Saudi oil was so cheap, they could produce it for a price that would drive other countries out of the business. The would "open the spigot" and send oil prices crashing. This would cause expensive oil to no longer be viable and drive other, higher-cost producers out of the market. Saudi Arabia even does this with their own cartel members to enforce discipline. Step out of line and the Saudis will send the prices down screwing up your budgets. It's called "capacity cleansing."<br />
<br />
The other thing "opening the spigot" means is that Saudi Arabia can quickly add oil to the market to smooth over price swings. Demand goes up, price gets a bit high, and the Saudis will turn the tap. If it gets too low, they will close the tap.<br />
<br />
All these factors are important to understand what is going on today. We will return to them shortly.<br />
<br />
In 1989, Iraq's dictator Saddam Hussein had just concluded a costly war with Iran. He needed a high price for his oil to rebuild Iraq. His neighbors, however, did not want Saddam, with his huge military and imperial ambitions, to get more money.<br />
<blockquote class="tr_bq">
In 1989, having just finished a long and costly war with Iran, Saddam was desperate to sell as much of his oil as he could to replenish his depleted treasury. His neighbors, however, had no interest in seeing Saddam get any richer or stronger. Kuwait in particular feared Saddam and, in an effort to deprive the Iraqi leader of oil revenues, stepped up its own production, intentionally flooding the market and as a result depressing prices. Saddam was not amused. He regarded the Kuwaitis' tactics as tantamount to economic war — he could claim that Kuwait was "stealing" Iraqi oil revenues — and made it clear he would take military action. Too late, the Saudis saw the danger: if Saddam invaded Kuwait, he would probably press on into Saudi Arabia. Desperate to placate the well-armed Iraqi dictator, the Saudis cut their own production and begged Kuwait and other OPEC states to do the same, to push prices back up to twenty-one dollars — high enough, it was hoped, to mollify Saddam and dissuade him from attacking anyone. </blockquote>
<blockquote>
The tactic might have worked. Now, however, Venezuela refused to play along. Still reeling from the price collapse of the 1980s — and never terribly interested in Middle Eastern politics — the Venezuelans opened the taps. That move, coupled with similar cheating by United Arab Emirates, effectively destroyed any hope of price appeasement. By 1990, Saddam had massed troops on the Kuwaiti border and, believing the United States to be unwilling to risk a war just for oil, launched his invasion. </blockquote>
<blockquote>
<i>The End of Oil</i>, p. 105</blockquote>
The Gulf War caused a spike in oil prices. As one would expect, the U.S. went into a short but painful recession. The conservative governments which had ruled since 1980 were finally toppled. Reagan's vice president, George Herbert Walker Bush, was defeated by Democrat Bill Clinton who campaigned on "It's the economy, stupid!" Tony Blair's labor party took over from John Major, Thatcher's successor. However, Clinton was a "third way" politician combining Neoliberal economic policies with slightly more worker friendly attitude and more progressive social policies. In essence, both parties had adopted the Neoliberal economic paradigm. Clinton ran on reducing welfare and making government more efficient. He declared, "The era of big government is over." He repealed the Glass-Steagall act which had been put in place during the Great Depression to regulate the excesses of the banking industry.<br />
<br />
The 1970's oil shock and the 1980's oil glut taught a valuable lesson. Rather than mutually assured destruction, <i>stability </i>became the overriding goal. It was the swings in cost, even more than cost <i>per se</i> which screwed up the world economy. Price swings hurt both producers and consumers. A Goldilocks price which would allow for both interests is what was required. Thus a new alliance was formed. The Saudis would arrange price stability as the "swing producer," with the Americans providing the military protection as the preeminent power in the Middle East. The post-Gulf War Era was a golden era of price stability. The economy performed even better than in the 1980's (which people tend to forget). Jobs were plentiful. The internet economy started up (and formed a bubble). Clinton built his "bridge to the 21 century" on low and stable oil prices.<br />
<br />
Concerns grew over the stability of the Middle East, however. The Islamic fundamentalism that the Saudis funded and encouraged threatened to destabilize the region. Despite the price stability, America was still an oil importer whose production had peaked in 1970. Saudi Arabia, with it's ailing king and corrupt family of princes, seemed perpetually at risk of implosion from within. Other oil producing nations like Venezuela under Hugo Chavez were openly hostile the the U.S. (prompting a U.S. backed coup attempt in 2006).<br />
<br />
In 2000 the Supreme Court appointed George H.W. Bush's son, George W. Bush as president. Bush and his vice president were former oil men, as were many of his advisers and cabinet members. It was as if the oil industry had taken over the government. Islamic terrorism was about take a big bite, however, with the September 11 attacks. Although the attacks were carried out by 15 Saudi Nationals and 4 Egyptians, the Bush administration used it as an excuse to attack Saddam Hussein's Iraq through a campaign of innuendo, misinformation, and outright lies. The invasion, in violation of the UN charter against preemptive war, began on March 20, 2003.<br />
<br />
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<br />
The concept behind the invasion of Iraq is often misunderstood. The real purpose was less to control oil, and more about breaking OPEC. The Neocons believed that the fall of the Soviet Union meant that the only real threat to American hegemony came from Islamic terrorism and OPEC's control over the "oil weapon." Iraq's oil, as we mentioned, is even easier to get at then Saudi Arabia's. There was also a lot of it due to Saddam's mismanagement. If American oil companies could control the Iraqi oil, they could stabilize oil prices without Saudi Arabia's help. They would have their own "spigot" as it were, under America's control. When America took Iraq, the first thing they did was protect the oil wells. In Baghdad, the first building to be secured was the oil ministry. Despite the disruption, Saudi Arabia's "swing" capacity was remarkably able to keep oil prices stable throughout the war.<br />
<blockquote class="tr_bq">
As far back as 1975, as the Arab oil embargo slowly strangled American economic might, conservative economists and policymakers were searching for ways to defeat OPEC. Although the Nixon administration's plans to take OPEC's Middle Eastern oil fields physically were shelved, the dream of a post-OPEC oil order was kept alive by a cadre of neoconservative American analysts and policymakers — among them, Paul Wolfowitz, now deputy defense secretary, Richard Perle, a top adviser to Defense Secretary Donald Rumsfeld, and, of course, Rumsfeld himself.<br />
<br />
In the 1980s, the neocons had supported sanctions against oil sales from Libya and Iran, in hopes of depleting their terrorist budgets — a move that earned them the scorn of big oil companies. A few years later, some neocons began arguing that even Saudi Arabia, that stalwart oil ally, was looking less and less loyal: not only were members of the Saudi royal family reported to have spent five hundred million dollars to export radical Islam, but Riyadh was the ringleader of a pricing regime that was hurting American interests. "For a lot of conservatives, the Middle East, or a significant part of the Middle East, has effectively been at war with the United States ever since the 1970s," says a policy analyst with close ties to the Bush administration. September 11 "was just one final argument that these elements need to be taken care of."<br />
<br />
And the key to "taking care" of those elements was Iraq, a country that had at least 150 billion barrels of crude and, except for Saudi Arabia, the cheapest production costs in the world.' Months before the September 11 attacks, when Vice President Cheney (another former oilman) was drawing up a new national energy policy, he and other White House energy strategists had pored over maps of Iraqi oil fields to estimate how much Iraqi oil might be dumped quickly on the market. Before the war, Iraq had been producing 3.5 million barrels a day, and many in the industry and the administration believed that the volume could easily be increased to seven million by 2010. If so — and if Iraq could be convinced to ignore its OPEC quota and start producing at maximum capacity — the flood of new oil would effectively end OPEC's ability to control prices. As supply expanded, prices would fall dramatically, and not even the Saudis with their crying revenue needs would be able to cut production deeply enough to stop the slide. Caught between falling revenues and escalating debts, the Saudis, too, would be forced to open their oil fields to Western oil companies, as would other OPEC countries. The oil markets, free at last from decades of manipulation, would seek a more natural level, which, according to some analysts, would be around fourteen dollars a barrel, or even lower — a price much more conducive to long-term economic growth.<br />
<br />
Toppling OPEC wouldn't be easy. Reviving Iraq's moribund oil industry would take massive infusions of capital. By some estimates, it will cost five billion dollars just to resume prewar production levels, and at least forty billion over the long haul. That kind of money could come from only one source — the international oil companies — which would invest in Iraq only if a) Saddam were gone and b) they received some assurance that they would have a share in production revenues and that the market, and not OPEC, would determine production levels.<br />
<br />
It is a radical vision. At a stroke, the administration hopes to depoliticize what has for nearly a century been the quintessential political commodity and, in the process, remove the last real obstacle to American power. As Michael Klare, professor of world security studies at Hampshire College, told the Toronto Star last year, in the eyes of the Bush administration, unlocking OPEC oil, "combined with being a decade ahead of everybody else in military technology, will guarantee American supremacy for the next fifty to one hundred years."' Cheney and Rumsfeld "see control of oil as merely part of a much bigger geostrategic vision," argues Chris Toensing, an analyst who works on the Middle East Research and Information Project. "By controlling the Gulf and the Middle East, the United States gains leverage over countries that are more dependent on the Gulf for oil, like China and Europe." </blockquote>
<blockquote class="tr_bq">
<i>The End of Oil</i>, pp. 111-112 </blockquote>
The stable oil prices meant that inflation was low or nonexistent. This led to very low interest rates throughout the 1990's and 2000's. Clinton had deregulated wall street. Currencies floated against each other was we saw. The economy had been globalized thanks to the cheap costs of shipping due to improved tankers and cheap oil. All of this caused a massive housing bubble to inflate. As long as housing prices were increasing faster than interest rates, it mad sense to borrow to a buy house and "flip" it to another buyer. Owners could also refinance their homes to come up with extra cash, using their homes as an ATM machine thanks to inflated property values. Corruption reigned in both Washington and Wall Street, but people were doing well, so they looked the other way. Alan Greenspan, a Neoliberal Ayn Rand acolyte and advocate of rational, self-regulating markets, presided over the Federal Reserve.<br />
<br />
Post Gulf War 2, things seemed to be going well. The stock market was riding high. House prices were rising. Banks were flush with money. Growth rates were good and "official" unemployment was low. The American worker however, thanks to Neliberalism, has not seen an increase in real wages since 1973.<br />
<br />
In the late 1990's and early 2000's a group of retired engineers started to echo M. King Hubbert's warnings from the 1950's. They formed groups like ASPO and argued that the globe as a whole was approaching Peak Oil. The slowdowns of the 1970's had postponed the day of reckoning, but the three decades of cheap oil had led to the abandonment of any alternatives. No new major oil fields had been discovered, and the world was running on supergiant oil fields that had been discovered in the 1940's-1960s which would inevitably decline. Since oil was a global commodity in which exports and imports had to balance, the exporting nations could not make up for countries in decline.<br />
<br />
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<br />
In 2008, gasoline prices spiked, with price almost trebling in eighteen months. In July 2008, oil skyrocketed to $147 a barrel, more
than doubling the price of crude over the 12 months to that time. Many
thought oil would race past the $150 mark on the way to $200 and to $300
a barrel. This set a new record high in both absolute and inflation-adjusted terms. The economy went into freefall. "This sucker could go down," was George W. Bush's sage pronouncement. Thanks to the fiat money we talked about in part 3, billions of dollars were conjured out of thin air by "keystrokes" to keep the banking industry solvent. <br />
<blockquote class="tr_bq">
The three developments noted above – growing inequality, a speculative financial sector, and a series of large asset bubbles – account for the long, if not very vigorous, economic expansions in the US economy during 1982-90, 1991-2000, and 2001-07. The rising profits spurred economic expansion while the risk-seeking financial institutions found ways to lend money to hard-pressed families whose wages were stagnating or falling. The resulting debt-fueled consumer spending made long expansions possible despite declining wages and slow growth of government spending. The big asset bubbles provided the collateral enabling families to borrow to pay their bills.<br />
<br />
However, this process brought trends that were unsustainable in the long-run. The debt of households doubled relative to household income from 1980 to 2007. Financial institutions, finding limitless profit opportunities in the wild financial markets of the period, borrowed heavily to pursue those opportunities. As a result, financial sector debt increased from 21% of GDP in 1980 to 117% of GDP in 2007. At the same time, financial institutions’ holdings of the new high-risk securities grew rapidly. In addition, excess productive capacity in the industrial sector gradually crept upward over the period from 1979 to 2007, as consumer demand increasingly lagged behind the full-capacity output level.<br />
<br />
The above trends were sustainable only as long as a big asset bubble continued to inflate. However, every asset bubble eventually must burst. When the biggest one – the real estate bubble – started to deflate in 2007, the crash followed. As households lost the ability to borrow against their no longer inflating home values, consumer spending dropped at the beginning 2008, driving the economy into recession. Falling consumer demand meant more excess productive capacity, leading business to reduce its investment in plant and equipment. The deflating housing bubble also worsened investor expectations, further depressing investment. Finally, in the fall of 2008 the plummeting market value of the new financial securities, which had been dependent on real estate prices, suddenly drove the highly leveraged major commercial banks and investment banks into insolvency, bringing a financial meltdown.<br />
<br />
Thus, the big financial and broader economic crisis that began in 2008 can be explained based on the way neoliberal capitalism has worked. The very same mechanisms produced by neoliberal capitalism that brought 25 years of long expansions were bound to eventually give rise to a big bang crisis.</blockquote>
<a href="http://triplecrisis.com/understanding-contemporary-capitalism-part-1/">Understanding Contemporary Capitalism, Part 1</a> (Triple Crisis)<br />
<br />
This occurred during the election season. In the midst of the crisis,
the nation voted for "hope and change" in the person of Democrat Barack Obama. It
looked the most apocalyptic prophesies of Peak Oil might be coming true.<br />
<br />
Next - Strange Days, the final chapter. Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-5813525365834911757.post-63447675276318429652015-09-19T12:59:00.001-05:002015-09-20T08:42:49.457-05:00The Secret History of Oil and Money - Part 5<div class="separator" style="clear: both; text-align: center;">
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<br />
<i>Paper Money </i>was published in 1981, so the readers don't know what happened next. But we do, of course, because we are living through it. I'll try and sketch in the details briefly with the help of Wikipedia and a few other sources.<br />
<br />
The late 1970s were a time of discontent. Jimmy Carter gave his "<a href="https://en.wikipedia.org/wiki/Presidency_of_Jimmy_Carter#.22Crisis_of_Confidence.22_speech">Crisis of Confidence</a>" speech (sometimes called the "Malaise" Speech), Britain experienced the "<a href="https://en.wikipedia.org/wiki/Winter_of_Discontent">Winter of Discontent</a>," and the Soviet Union entered the <a href="https://en.wikipedia.org/wiki/Era_of_Stagnation">Era of Stagnation</a>. It all had to do with high energy prices. Oil, having driven the boom, and now the major energy source of the industrialized world, had risen tenfold in a decade bringing down the industrialized economies. <a href="http://www.theatlantic.com/photo/2011/11/documerica-images-of-america-in-crisis-in-the-1970s/100190/">The industrial nations were also heavily polluted in the late 1970's</a>. Confidence in nuclear power, once seen as the energy source of the space age, evaporated at Three Mile Island in 1979, and later at Chernobyl. It seemed like the post-war Keynesian consensus had let everyone down.<br />
<br />
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<br />
1974-1975 was a terrible recession. Unions, hit by the cost increases, went on strike. Garbage piled up in the streets of New York City. In 1975, New York went into debt restructuring. There was even a spike in crime and lawlessness that defied explanation. Some have convincingly argued that the introduction of lead into gasoline to stop engine knock was the cause of the crime outbreak due to lead poisoning:<br />
<blockquote class="tr_bq">
Fourteen years ago, Prof Jessica Wolpaw-Reyes, an economist at Amherst College Massachusetts, was pregnant and doing what many expectant mothers do - learning about the risks to her unborn child's health. She started to read up on lead in the environment and, like Nevin before her, began pondering its link to crime.<br />
<br />
"Everyone was trying to understand why crime was going down," she recalls. "So I wanted to test if there was a causal link between lead and violent crime and the way I did that was to look at the removal of leaded petrol from US states in the 1970s, to see if that could be linked to patterns of crime reduction in the 1990s."<br />
<br />
Wolpaw-Reyes gathered lead data from each state, including figures for gasoline sales. She plotted the crime rates in each area and then used common statistical techniques to exclude other factors that could cause crime. Her results backed the lead-crime hypothesis.<br />
<br />
"There is a substantial causal relationship," she says. "I can see it in the state-to-state variations. States that experienced particularly early or particularly sharp declines in lead experienced particularly early or particularly sharp declines in violent crime 20 years later."</blockquote>
<a href="http://www.bbc.com/news/magazine-27067615">Did removing lead from petrol spark a decline in crime?</a> (BBC)<br />
<br />
The unions, striking to gain higher wages to cope with higher gasoline prices, came to be seen as part of the problem. Anti-union forces portrayed them as corrupt anachronisms holding back economic growth. They played up the corruption and ties to organized crime (true of a very small percentage of big city unions). I've always found this comical because it assumes that the enemies of unions - Wall Street, the corporate boardrooms, the big banks and the politicians--are somehow paragons of honesty and fairness. Give me a break. It's all corruption - it's just who benefits from it.<br />
<br />
To some extent it was irrelevant. The opening of China (see below) led to the deindustrialization of the Industrial Heartland of America and the creation of the "Rust Belt." Entire swaths of the country became depopulated hellholes while politicians in both parties looked the other way. People were told that they had to go back to school to get more education (leading to the soaring costs of college as it became the tollbooth to what remains of the middle class), and economists touted the "service economy," i.e. low-wage McJobs as the base of the employment pyramid in place of value-added manufacturing. Automation played a role here too, despite assurances that automation always creates more jobs than it destroys.<br />
<br />
This also accelerated the flood of migrants to the Sunbelt.The settling of the sunbelt also changed political attitudes. Because of the hot climate, the Sunbelt was a fairly undeveloped agricultural backwater. Industry was historically located near water transport, rail transport, sources of timber, coal and iron ore, and nearby farmland to feed workers. As industry left the United Sates, the geographical advantages of manufacturing cities dwindled. Most older industrial cities were built on ports, but trucking reduced the need to bring in goods by water or rail. Because the Sunbelt cities had little in the way of investment in existing infrastructure to maintain, they could offer low, low taxes to attract business, unlike the older cities of the Northeast, Upper Midwest and Ohio Valley which had infrastructure dating back to the 1800s. In addition, the lack of snow and the freeze-thaw cycle meant that infrastructure costs could be lower because roads and buildings did not decay as fast. As businesses moved, so did the people. Once air conditioning made it livable, people began to move to escape the harsh winters.<br />
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Thus Americans adopted the attitude of getting something for nothing that pervades American politics today. As long as new development was taking place, taxes could be kept low, attracting more people funding further development which kept taxes low and so on - a classic feedback loop. But this accustomed Americans to expecting to pay very low taxes no matter what. In effect, the Sunbelt was built out as a giant Ponzi scheme that voters mistook for a permanent condition. As the American population moved to these low-tax, warm weather havens, they just assumed low taxes as a birthright giving rise to the “no new taxes” attitudes we see today. With economic expansion, no aging infrastructure, and no cold winters, it was easy to adopt the minimalist government/rugged individualist ethos of the original Sunbelt farmers and ranchers, no matter how incompatible with the new reality of air-conditioned offices and globalized corporations. As the American population center of gravity began to shift south and west, these political attitudes became the dominant force in American politics. (i.e. the “Dixiefication” of American politics).<br />
<blockquote class="tr_bq">
The rise of the US sunbelt can be understood largely as a response to the emergence of widespread air conditioning, which made places that are warm in the winter attractive despite humid, muggy summers. It’s a gradual, long-drawn-out response, because location decisions have a lot of inertia; few people would choose de novo to live in the old industrial towns of upstate New York, but the existing housing stock and the fact that people have family and social networks prevent quick abandonment. So to this day temperature is a good predictor of state population growth. <br />
<br />
Now, these states have several things in common besides high temperatures. They’re all very conservative. And all of them that were states before the Civil War were slave states. These commonalities are, of course, all interrelated. Hot states had slaves because they were suitable for planation agriculture; and today’s red states are, pretty much, the slave states of 150 years ago.<br />
<br />
Now, all of this raises some interesting problems for the assessment of economic policy. Because they’re politically conservative, hot states tend to have low minimum wages and low taxes on rich people. And someone who is careless, cynical, or both, could easily take the faster growth of these states as evidence that conservative economic policies work. That is, charlatans and cranks can, all too easily, end up claiming credit for economic and demographic trends that are actually the result of air conditioning.</blockquote>
<a href="http://krugman.blogs.nytimes.com/2015/03/23/charlatans-cranks-and-cooling/">Charlatans, Cranks, and Cooling</a> (Paul Krugman)<br />
<br />
Beginning in the mid-1960s inflation increased rapidly. Now, inflation is of two kinds – <i>cost push</i> and <i>demand pull</i>. <i>Demand pull</i> is when the amount of money in circulation exceeds the amount of goods and services we can reasonably buy. This can occur from too much money or too few goods, as when rationing or a war takes goods out of production. Thus, the only result is for the things already in existence to cost more. <i>Cost push</i> is when a crucial input into production, such as land, labor, capital or energy, increases in cost. To keep profits steady, the producers must raise the prices of the things they sell.<br />
<br />
It is thought that the Vietnam war began this acceleration. Taxes were not raised to pay for the war, so the money spent into existence for the war was not “umprinted” via taxes causing an increase in the amount of dollars with the economy at capacity due to the war. Military needs competed with civilian ones. The goods produced via government spending were mainly shipped to Southeast Asia and blown up. There were also some commodity shocks:<br />
<blockquote class="tr_bq">
We have gotten so used to inflation now that we have forgotten what it was like to operate in an environment in which prices did not leap and sellers did not build in an extra piece for inflation. The inflation rate in the United States in the first half of the 1960s was between 1 percent and 2 percent. </blockquote>
<blockquote class="tr_bq">
So, while some elements of this story go back to 1928, and 1717, and 1913, 1965 makes a very good starting point. The economy was running at full capacity then, and the United States was escalating its presence in Vietnam. The planes and the jet fuel and the combat boots were going to cost something, and the bill had to be paid. But Lyndon Johnson chose to duck the explicit way, which would have been to raise the money in taxes.<br />
<br />
President Johnson, as quoted by David Halberstam, said: "I don't know much about economics, but I do know the Congress. And I can get the Great Society through right now—this is a golden time. We've got a good Congress and I'm the right President and I can do it. But if I talk about the cost of the war, the Great Society won't go through. Old Wilbur Mills will sit down there and he'll thank me kindly and send me back my Great Society, and then he'll tell me that they'll be glad to spend whatever we need for the war."<br />
<br />
When the Council of Economic Advisers began to press him for a tax increase, Johnson summoned key members of the House Ways and Means Committee to ask their advice. But the figures he gave them for Vietnam were deliberately low, and with those figures the Ways and Means Committee let him go back to the council and say that he had gone to Congress and discussed it but could not get the votes.<br />
<br />
With the civilian economy already operating at capacity military needs competed with civilian needs, army boots with civilian shoes, military industries with civilian industries, producing a classic excess-demand inflation: not enough goods. All wars must be paid for; in this case the tax was not explicit, a special tax, but implicit: inflation. So we began with the unpaid bill of the Vietnam War.<br />
<br />
The inflation that President Nixon faced was modest by current standards, but at roughly 5 percent it was still double its pre-Vietnam standard. Classic medicine was spooned out: tighter credit, higher taxes. The economy slowed down, but the inflation didn't. It had more momentum than the medicine spooners figured. By August 1971 Nixon had to face a decision, just as Johnson had. The polls showed that Nixon was running behind Edmund Muskie in a potential reelection fight. So Nixon adopted a twofold approach: he ordered wage and price controls, and at the same time his fiscal policies stimulated the economy. Arthur Burns, who had picked zero as a good rate of inflation, was at the helm when the money supply ballooned, which led his critics to say that his goal was all pipe smoke. Nixon's tactic worked in its timing; at election time the economy was rosy and prices, by law, relatively stable. But once the election was over, the controls had to come off. The suppressed inflation burst forth again; all the businesses that had frozen their prices marked them up as soon as they were legally able to, and demand was high because of all the excess money around.<br />
<br />
To the political moves of Presidents Johnson and Nixon you could also add the weather and the missing anchovies. The weather helped to produce a bad wheat crop in Russia, and the Nixon administration saw an opportunity to win some points from the farmers in the election. But it sold too much wheat. Once the Russians took their purchased wheat away, Americans scrambled to buy their own grain.<br />
<br />
There is always some out-of-place variable like the anchovies. In this case the anchovies swam away from the coast of Peru, no one knows where to, and the fish that ate the anchovies followed them, and the fishermen came back without the fish, and the European cattle feeders who normally used fish meal as feed switched to grain, and flew to Minneapolis and occupied the hotel rooms the Russians were just checking out of. The result was an explosion in grain prices.<br />
<br />
So our overture has political decisions and industrial inflation and agricultural inflation—a nice running head start, but so far, all very classic kinds of inflation, not enough goods for the money. </blockquote>
<blockquote class="tr_bq">
And while the hotels of Minneapolis were filling with grain traders, and the money was flowing and business was good, OPEC was yawning and stretching its muscles like an aroused leopard, and that is such a major change we will come back to it in a while.<br />
<br />
Inflation is complex, as you can see, and all the simple stories about it are too simple. There are two simple factors involved, though, which you already know.<br />
<br />
The first is that when you pay more dollars for something, one of your fellow citizens gets those extra dollars. Obviously. Our economy is already "indexed" to some degree. If it were perfectly indexed, everything would go up at exactly the same rate—wages and prices and dividends. So one problem is that some things go up more than others, leaving unhappy those who lag in the escalation. </blockquote>
<blockquote class="tr_bq">
The second point you already know is that things used to go up and down, and they don't do that anymore. They go up and up. Or they go up, pause, look around, and go up again.<br />
<br />
The way economists put this is to say that wages and prices have lost their sensitivity to changes in business. Automobile sales may fall apart, but the price of automobiles doesn't go down, nor do the wages of auto workers. What do you think is going to get cheaper? Do you put off buying anything until the price comes down? Some things do get cheaper: electronic calculators, home computers, items whose technology is leapfrogging. Some things we don't notice much and don't complain about: toasters, electric alarm clocks. Everything else seems to go up: houses, shoes, doctor bills, tuition, cars, food, haircuts, lipstick, chewing gum. In a period of slack, prices are, the economists say, "sticky downward." When business improves, the prices unstick and go upward.<br />
<br />
We don't really know why prices are sticky downward, but one probable reason is that this is the price we have paid for the prosperity and stability we have had since the Great Depression. If recessions are short and contained, sellers stand pat and wait for the upturn, to cover their costs. Unemployed workers draw their benefits; they usually don't go out and take any job at any price. But most businesses don't fire people when their sales slack off, because they think sales will pick up again and they don't want to lose good people to their competitors.<br />
<br />
If businesses were as frightened as they were in the 1930s, they would sell at a loss and let their workers go, and workers would take any job. But we don't have that kind of fear as a motivation, and we certainly wouldn't want to have it.<br />
<br />
In the past decade we developed not only inflation but the expectation of inflation, and that psychological force is easily the equal of all the technical economic forces. (pp.20-22)</blockquote>
Milton Friedman argued that inflation was caused by too much money floating around. <i>“Inflation is always and everywhere a monetary phenomenon,”</i> was his motto. Remember, this was the same guy who said OPEC would not last eighteen months. He did not believe in cost-push inflation. He believed that the ten-fold increase of the substance that came to literally underpin the entire industrial economy had no effect on inflation. It was just an excess of money. The cure was simple – get rid of the excess money. This view was called “Monetarism.”<br />
<blockquote class="tr_bq">
There are two other elements in the story of paper money that sometimes carry the whole blame for inflation. Unless you're used to the terms, they can sound very abstract. The first such element is deficits in the federal budget: the government spends more than it takes in. There is one obvious way this adds to inflation. When the government doesn't take in as much money as it spends, it has to go to the marketplace and borrow the rest. In the marketplace it meets private borrowers, who might be borrowing to build new plants or new houses. When the government competes heavily with those borrowers, that competition forces interest rates up, and interest is one of the costs of doing business. <br />
<br />
But some folks say more than that; they say all our problems would be solved if only the government balanced its budget. Before we agree to that, though, we have to see what the federal government does with its money. What if the federal government gave the money it borrowed to the cities and states? Sometimes the states are in surplus when the federal government is in deficit. So we have to take all the governments together, federal, state, and local; and match the inflation rate. Governments obviously ought not to be in deficit all the time, because then they are attempting to be the first beneficiaries of inflation: they borrow from savers and repay with cheaper dollars. If the government does not believe in the currency, who will? Lenders get more and more reluctant to lend to governments that borrow more and more. The government and its budget are indeed a problem, but not the only problem. </blockquote>
<blockquote class="tr_bq">
The second element that some folks assign all the blame to is another part of the government: the Federal Reserve. Some folks" in this case are the monetarists, who can play many tunes on one fiddle string. They say, for example, that if the Federal Reserve kept the supply of money to a low, predictable rate, all else would follow. There's no question that a supply of money growing faster than the output of goods and services contributes to inflation. The Federal Reserve says it is committed to slowing down growth in the supply of money. Yet, in the Notes of this book, you will find a simple table of two measures of the money supply; in the past five years, inflation increases even as the money supply begins to contract. So the money supply alone is not the cause of inflation. The money supply, like energy, is a subject for arguments of theological intensity, and you can find a great deal already published if you wish to pursue this. </blockquote>
Now, the reason economists don't believe in cost-push inflation is the same reason as they don't accept the role of energy in the economy. Oil is seen as just another commodity and one that is "only" 5 percent of GDP or so. <br />
<br />
In the 1970's as inflation increased, the Federal Reserve did not want to raise interest rates too high. It wanted to pursue what was called “full employment polices” – they did not want to cause the widespread unemployment that a recession would cause. Even in the recession of '74-'75, unemployment was relatively low.<br />
<br />
By contrast, Volcker would pursue a “tight money” policy. Instead of pursuing full employment as a goal, the message from the Federal Reserve to the nation’s employees was the same as Persident Ford’s alleged advice to New York City, <i>“Drop dead.”</i> This also coincided with aggressive anti-union attitudes signified by the firing of the striking air traffic control employees in 1981.<br />
<blockquote class="tr_bq">
Until the 1970s, many economists believed that there was a stable inverse relationship between inflation and unemployment. They believed that inflation was tolerable because it meant the economy was growing and unemployment would be low. Their general belief was that an increase in the demand for goods would drive up prices, which in turn would encourage firms to expand and hire additional employees. This would then create additional demand throughout the economy. </blockquote>
<blockquote class="tr_bq">
According to this theory, if the economy slowed, unemployment would rise, but inflation would fall. Therefore, to promote economic growth, a country's central bank could increase the money supply to drive up demand and prices without being terribly concerned about inflation. According to this theory, the growth in money supply would increase employment and promote economic growth. These beliefs were based on the Keynesian school of economic thought, named after twentieth-century British economist John Maynard Keynes.<br />
<br />
In the 1970s, Keynesian economists had to reconsider their beliefs as the U.S. and other industrialized countries entered a period of stagflation. Stagflation is defined as slow economic growth occurring simultaneously with high rates of inflation.<br />
<br />
When people think of the U.S. economy in the 1970s the following comes to mind:<br />
<br />
High oil prices<br />
Inflation<br />
Unemployment<br />
Recession<br />
<br />
Indeed, the average price of a barrel of oil reached a peak of $104.06 (as measured in 2007 dollars) in December of 1979. In the 1970s, there was a two-year period of economic contraction as measured by gross domestic product (GDP) in year 2000 dollars (i.e. Real GDP): 1974 GDP contracted 0.5%, and in 1975, GDP contracted 0.2% and unemployment reached 8.5%. In 1980, GDP contracted 0.2%.<br />
<br />
The prevailing belief as promulgated by the media has been that high levels of inflation were the result of an oil supply shock and the resulting increase in the price of gasoline, which drove the prices of everything else higher. This is known as cost push inflation. According to the Keynesian economic theories prevalent at the time, inflation should have had an inverse relationship with unemployment, and a positive relationship with economic growth. Rising oil prices should have contributed to economic growth. In reality, the 1970s was an era of rising prices and rising unemployment; the periods of poor economic growth could all be explained as the result of the cost push inflation of high oil prices, but it was unexplainable according to Keynesian economic theory.<br />
<br />
A now well-founded principle of economics is that excess liquidity in the money supply can lead to price inflation; monetary policy was expansive during the 1970s, which could explain the rampant inflation at the time. <br />
<br />
Milton Friedman was an American economist who won a Nobel Prize in 1976 for his work on consumption, monetary history and theory, and for his demonstration of the complexity of stabilization policy. In a 2003 speech, the chairman of the Federal Reserve, Ben Bernanke, said, "Friedman's monetary framework has been so influential that in its broad outlines at least, it has nearly become identical with modern monetary theory … His thinking has so permeated modern macroeconomics that the worst pitfall in reading him today is to fail to appreciate the originality and even revolutionary character of his ideas in relation to the dominant views at the time that he formulated them."<br />
<br />
Milton Friedman did not believe in cost push inflation. He believed that "inflation is always and everywhere a monetary phenomenon." In other words, he believed prices could not increase without an increase in the money supply. To get the economically devastating effects of inflation under control in the 1970s, the Federal Reserve should have followed a constrictive monetary policy. This finally happened in 1979 when Federal Reserve Chairman Paul Volcker put the monetarist theory into practice. This drove interest rates down to double-digit levels, reduced inflation down and sent the economy into a recession. </blockquote>
<a href="http://www.investopedia.com/articles/economics/08/1970-stagflation.asp">Stagflation, 1970s Style</a> (Investopedia) Of course, Keynesian economics, like most economic doctrines, was ignorant of the role of energy in the economy, being mainly concerned with prices and money flows.<br />
<blockquote class="tr_bq">
Through early 1978, the Federal Reserve had maintained a highly accommodative stance of monetary policy, hoping to combat rising unemployment. Ultimately, though, the policies showed little success in stifling the deterioration in the unemployment rate and likely fostered an environment that allowed the rising energy prices to be transmitted into more general inflation. Consumer inflation, which had already begun to accelerate in the United States, continued to rise—from below 5 percent in early 1976 to nearly 7 percent by March 1979. By that time, unease among members of the Federal Open Market Committee (FOMC) that inflation could continue to rise was growing. Records from the meeting of the FOMC on February 28, 1978, indicate that “considerable concern was expressed that the rate of inflation might accelerate significantly as the year progressed [and could] pose difficult questions concerning the appropriate role of monetary policy.” Nevertheless, the committee voted unanimously to keep the policy rate unchanged.<br />
<br />
Despite increasing concern among the public and members of the FOMC about the declining value of the dollar and rising pace of inflation, the committee remained hesitant to raise interest rates too aggressively, fearful of stifling fragile economic growth. The Fed raised the federal funds rate from 6.9 percent in April 1978 to 10 percent by the end of the year. The increase was a clear move to try to curb rising inflation. However, modern economic historians now see the increases as timid and insufficient to stem a surge in inflationary pressure, which had already become entrenched in the American psyche and economy. Twelve-month consumer price index inflation rose to 9 percent by the end of 1979.<br />
<br />
The Carter administration’s decision to appoint Paul Volcker as Fed chairman in August 1979 was a strong endorsement of using more aggressive monetary policy to try to break inflation’s stranglehold on the US economy. As the president of the Federal Reserve Bank of New York, Volcker had been an outspoken proponent of using monetary policy to combat rising inflation. According to Volcker, “If all the difficulties growing out of inflation were going to be dealt with at all, it would have to be through monetary policy…. [No] other approach could be successful without a successful demonstration that monetary restraint would be maintained.” Volcker and the policy-setting FOMC made taming inflation their top priority, even if it came at the detriment of short-term employment. The policies ultimately proved successful in breaking the cycle of stagflation in the United States.<br />
<br />
<b>Volcker guided the Fed in raising the federal funds rate from 11 percent at the time he took office to a peak of 19 percent in 1981, and the policy moves successfully lowered the rate of twelve-month inflation from a peak of nearly 15 percent to 4 percent by the end of 1982</b>. Though the Fed’s resolve under Volcker was effective in reducing inflation, the monetary contraction—combined with the impact from the oil price shock—pushed the economy into the most severe recession since the Great Depression and spurred strong popular opposition. </blockquote>
<a href="http://www.federalreservehistory.org/Events/DetailView/40">Oil Shock of 1978–79</a> (Federal Reserve History)<br />
<blockquote class="tr_bq">
The Federal Reserve board led by Volcker is widely credited with ending the United States' stagflation crisis of the 1970s. <b>Inflation, which peaked at 14.8 percent in March 1980, fell below 3 percent by 1983.</b><br />
<br />
<b>The Federal Reserve board led by Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well. Thus, the unemployment rate rose to over 10%.</b> The economy was restored since the tight-money policy was over in 1982. According to William Silber "His policy of preemptive restraint during the economic upturn after 1983 increased real interest rates and pushed Congress and the president to adopt a plan [the 1985 Gramm-Rudman-Hollings bill] to balance the budget. The combination of sound monetary and fiscal integrity sustained the goal of price stability."<br />
<br />
However, despite the Gramm-Rudman-Hollings bill, US debt as a percentage of GDP more than doubled between 1981 and 1993.</blockquote>
<a href="https://en.wikipedia.org/wiki/Paul_Volcker">Paul Volcker</a> (Wikipedia) <br />
<blockquote class="tr_bq">
...What we did have was a wage-price spiral: workers demanding large wage increases (those were the days when workers actually could make demands) because they expected lots of inflation, firms raising prices because of rising costs, all exacerbated by big oil shocks. It was mainly a case of self-fulfilling expectations, and the problem was to break the cycle.<br />
<br />
So why did we need a terrible recession? Not to pay for our past sins, but simply as a way to cool the action. Someone — I’m pretty sure it was Martin Baily — described the inflation problem as being like what happens when everyone at a football game stands up to see the action better, and the result is that everyone is uncomfortable but nobody actually gets a better view. And the recession was, in effect, stopping the game until everyone was seated again.<br />
<br />
The difference, of course, was that this timeout destroyed millions of jobs and wasted trillions of dollars.<br />
<br />
Was there a better way? Ideally, we should have been able to get all the relevant parties in a room and say, look, this inflation has to stop; you workers, reduce your wage demands, you businesses, cancel your price increases, and for our part, we agree to stop printing money so the whole thing is over. That way, you’d get price stability without the recession. And in some small, cohesive countries that is more or less what happened. (Check out the Israeli stabilization of 1985).<br />
<br />
But America wasn’t like that, and the decision was made to do it the hard, brutal way. This was not a policy triumph! It was, in a way, a confession of despair.<br />
<br />
It worked on the inflation front, although some of the other myths about all that are just as false as the myths about the 1970s. No, America didn’t return to vigorous productivity growth — that didn’t happen until the mid-1990s. 60-year-old men should remember that a decade after the Volcker disinflation we were still very much in a national funk; remember the old joke that the Cold War was over, and Japan won?</blockquote>
<a href="http://krugman.blogs.nytimes.com/2013/05/19/the-mythical-70s/">The Mythical 70's</a> (Paul Krugman)<br />
<br />
The success of monetarism in bringing down inflation appeared to validate Friedman’s ideas, and hence those of the Neoliberal school. Economics papers began to adopt these ideas. The University of Chicago graduated more economists. Neoliberal and Austrian economists began to win Nobel Prizes (Bank of Sweden prizes).<br />
<br />
All of these trends led led to the election of Ronald Reagan in 1980. <br />
<br />
But Reagan had a secret weapon - the 1980's oil glut.<br />
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<br />
The proximate causes of the oil glut were that other non-OPEC oil producers, spurred by the higher cost of oil, flooded the market. This included Britain and Norway, Russia (then the Soviet Union), Mexico, Nigeria, and Canada, combined with reduced oil demand from the U.S. and Europe thanks to a combination of the poor economy and conservation measures. By lowering the amount of oil on the market, this spurred an increase in price, and this increase in price spurred the development of oil in non-OPEC countries. Not subject to artificial OPEC quotas, they began flooding the market which had been depressed by the recessions caused by high inflation and interest rates. Oil consumption did not pass its 1973 level until 1983.<br />
<br />
Wikipedia <a href="https://en.wikipedia.org/wiki/1980s_oil_glut">has a good summary</a> of the oil glut:<br />
<blockquote class="tr_bq">
In April 1979, Jimmy Carter signed an executive order which was to remove market controls from petroleum products by October 1981, so that prices would be wholly determined by the free market. Ronald Reagan signed an executive order on January 28, 1981 which enacted this reform immediately, allowing the free market to adjust oil prices in the US. This ended the withdrawal of old oil from the market and artificial scarcity, encouraging increased oil production. The US Oil Windfall profits tax was lowered in August 1981 and removed in 1988, ending disincentives to US oil producers. Additionally, the Alaskan Prudhoe Bay Oil Field entered peak production, supplying the US West Coast with up to 2 million bpd of crude oil.<br />
<br />
From 1980 to 1986, OPEC decreased oil production several times and nearly in half to maintain oil's high prices. However, it failed to hold on to its preeminent position, and by 1981, its production was surpassed by Non-OPEC countries. <b>OPEC had seen its share of the world market drop to less than a third in 1985, from nearly half during the 1970s.</b> In February 1982, the Boston Globe reported that OPEC's production, which had previously peaked in 1977, was at its lowest level since 1969. Non-OPEC nations were at that time supplying most of the West's imports.<br />
<br />
OPEC's membership began to have divided opinions over what actions to take. In September 1985, Saudi Arabia became fed up with de facto propping up prices by lowering its own production in the face of high output from elsewhere in OPEC. In 1985, daily output was around 3.5 million bpd down from around 10 million in 1981. During this period, OPEC members were supposed to meet production quotas in order to maintain price stability, however, many countries inflated their reserves to achieve higher quotas, cheated, or outright refused to accord with the quotas.In 1985, the Saudis were fed up with this behavior and decided to punish the undisciplined OPEC countries. They abandoned their role as swing producer and began producing at full capacity, which created a "huge surplus that angered many of their colleagues in OPEC". High-cost oil production facilities became less or even not profitable. <b>Oil prices as a result fell to as low as $7 per barrel.</b></blockquote>
Nonetheless, this was seen as irrelevant by the money/banking establishment who saw Volcker's "tight money" policy as the answer. This was seen to validate Milton Friedman's ideas, and hence Neoliberalism. Because of the glut, it seemed like Reagan's policies of tax cuts for the rich, deregulation of the banks, and suppression of unions was the key to prosperity, a gospel which is still believed by a majority to this day. Keynesian economics was seen to have been invalidated.<br />
<br />
The corporate forces seized the opportunity to launch a counterrevolution that continues unabated to this day. The seeds had been sewn in the immediate postwar period by the establishment of the Mont Pelerin Society and the "Austrian" school, which attempted to rehabilitate unregulated markets in the aftermath of almost two decades of Depression and War caused by them. In 1971, Lewis Powell issued a memorandum calling on businesses to fight back and retake public opinion:<br />
<blockquote class="tr_bq">
August 23, 2011 will bring the 40th anniversary of one of the most successful efforts to transform America. Forty years ago the most influential representatives of our largest corporations despaired. They saw themselves on the losing side of history. They did not, however, give in to that despair, but rather sought advice from the man they viewed as their best and brightest about how to reverse their losses. That man advanced a comprehensive, sophisticated strategy, but it was also a strategy that embraced a consistent tactic – attack the critics and valorize corporations!<br />
<br />
He issued a clarion call for corporations to mobilize their economic power to further their economic interests by ensuring that corporations dominated every influential and powerful American institution. Lewis Powell’s call was answered by the CEOs who funded the creation of Cato, Heritage, and hundreds of other movement centers.</blockquote>
<a href="http://www.nakedcapitalism.com/2011/04/bill-black-my-class-right-or-wrong-%E2%80%93-the-powell-memorandum%E2%80%99s-40th-anniversary.html">Bill Black: My Class, right or wrong – the Powell Memorandum’s 40th Anniversary</a> (Naked Capitalism)<br />
<br />
Here's David Harvey explaining the change:<br />
<blockquote class="tr_bq">
<b>SL: </b>The welfare state was characterized by a compact of sorts between labor and capital, the idea of a social safety net, a commitment to full employment -- you call this "embedded liberalism." Up until the 1970s it was supported by most elites. Why was there a backlash against the welfare state and the push for a new political economic order in the 1970s that gave rise to the political implementation of neoliberal thought?<br />
<br />
<b>DH: </b>I think there were two main reasons for the backlash. The first was that the high growth rates that had characterized the embedded liberalism of the1950s and 1960s -- we had growth rates of around 4 percent during those years -- those growth rates disappeared towards the end of the 1960s. That had a lot to do with the stresses within the US economy, where the US was trying to fight a war in Vietnam and resolve social problems at home. It was what we call a guns and butter strategy. But that led to fiscal difficulties in the United States. The United States started printing dollars, we had inflation, and then we had stagnation, and then global stagnation set in in the 1970s. It was clear that the system that had worked very well in the 1950s and much of the 1960s was coming untacked and had to be constructed along some other lines. The other issue which is not so obvious, but the data I think show it very clearly, is that the incomes and assets of the elite classes were severely stressed in the 1970s. And therefore there was a sort of class revolt on the part of the elites, who suddenly found themselves in some considerable difficulty, for economic as well as for political reasons. The 1970s was, if you like, a moment of revolutionary transformation of economies away from the embedded liberalism of the postwar period to neoliberalism, which was really set in motion in the 1970s and consolidated in the 1980s and 1990s.</blockquote>
<a href="http://mrzine.monthlyreview.org/2006/lilley190606.html">On Neoliberalism: An Interview with David Harvey</a> (Monthly Review)<br />
<br />
Neoliberal economics, a free-market fundamentalist cult, became the world's predominant economic theory, as Keynesian economics was marginalized along with its practitioners. Rather than government being seen as a necessary force in mitigating the inherently unstable capitalist system and ensuring a relatively equitable distribution of surplus, it was recast as the problem--an impediment to the growth that would fix all problems. Unregulated markets where rational consumers could operate and "allocate capital" to wherever it was needed was the key to prosperity, the thinking went.<br />
<br />
The Neoliberal economists, proclaiming themselves validated by the events of the 1980s, took control of the world's economic institutions . Something called the <a href="https://en.wikipedia.org/wiki/Washington_Consensus">Washington Consensus</a> took shape, and its policies were dictated by the old Bretton Woods institutions - the IMF, WTO and World Bank.<br />
<br />
All tariffs would be abolished. Developing countries would be exposed to full competition from the heavily subsidized industries of the West. Workers in the West would now be in direct competition with workers everywhere, including in the the world's poorest countries. Even in the face of tax cuts on the rich, governments would no longer be allowed to run a deficit. Government spending, especially on vital social needs, would be curtailed. Debt crises caused selloffs of institutions to international investors who charged what the market would bear. Workers lost their pensions and were forced to invest in the unstable market for their retirement. Everyplace where these "reforms" were instituted, they were portrayed as great benefits for all. Economists proclaimed that the change was inevitable and irreverable. They pushed the idea of TINA - There Is No Alternative.<br />
<br />
Reagan removed the solar hot water panels from the White House in 1986.<br />
<br />
"Morning in America " unfolded alongside the 1980's oil glut.<br />
<br />
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<br />
The two largest Communist states realigned. The Soviet Union was already brittle, and the arms race with the U.S. had caused it to increase military spending. Gorbachev had begun to initiate tentative steps to reform, but was overtaken by events. When oil prices crashed due to the 1980's oil glut, the economy of the Soviet Union crashed along with it, as its exports could no longer fetch an adequate price on the world market. The Soviet Union collapsed in 1991.<br />
<blockquote class="tr_bq">
The timeline of the collapse of the Soviet Union can be traced to September 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market. During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms. </blockquote>
<blockquote class="tr_bq">
As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive. The Soviet leadership was confronted with a difficult decision on how to adjust. There were three options–or a combination of three options–available to the Soviet leadership.<br />
<br />
First, dissolve the Eastern European empire and effectively stop barter trade in oil and gas with the Socialist bloc countries, and start charging hard currency for the hydrocarbons. This choice, however, involved convincing the Soviet leadership in 1985 to negate completely the results of World War II. In reality, the leader who proposed this idea at the CPSU Central Committee meeting at that time risked losing his position as general secretary.<br />
<br />
Second, drastically reduce Soviet food imports by $20 billion, the amount the Soviet Union lost when oil prices collapsed. But in practical terms, this option meant the introduction of food rationing at rates similar to those used during World War II. The Soviet leadership understood the consequences: the Soviet system would not survive for even one month. This idea was never seriously discussed. </blockquote>
<blockquote class="tr_bq">
Third, implement radical cuts in the military-industrial complex. With this option, however, the Soviet leadership risked serious conflict with regional and industrial elites, since a large number of Soviet cities depended solely on the military-industrial complex. This choice was also never seriously considered.<br />
<br />
Unable to realize any of the above solutions, the Soviet leadership decided to adopt a policy of effectively disregarding the problem in hopes that it would somehow wither away. Instead of implementing actual reforms, the Soviet Union started to borrow money from abroad while its international credit rating was still strong. It borrowed heavily from 1985 to 1988, but in 1989 the Soviet economy stalled completely…<br />
<br />
The money was suddenly gone. The Soviet Union tried to create a consortium of 300 banks to provide a large loan for the Soviet Union in 1989, but was informed that only five of them would participate and, as a result, the loan would be twenty times smaller than needed. The Soviet Union then received a final warning from the Deutsche Bank and from its international partners that the funds would never come from commercial sources. Instead, if the Soviet Union urgently needed the money, it would have to start negotiations directly with Western governments about so-called politically motivated credits.<br />
<br />
In 1985 the idea that the Soviet Union would begin bargaining for money in exchange for political concessions would have sounded absolutely preposterous to the Soviet leadership. In 1989 it became a reality, and Gorbachev understood the need for at least $100 billion from the West to prop up the oil-dependent Soviet economy.</blockquote>
<a href="http://marginalrevolution.com/marginalrevolution/2007/06/why_did_the_sov.html">Why did the Soviet Union fall?</a> (Marginal Revolution)<br />
<br />
In China, by contrast, the Communist party opened up their economy to the West in a controlled experiment. They exploited their bottomless pool of cheap labor and plentiful domestic coal to become the world's factory floor. The State retained control and controlled the development of the economy. American companies, looking for greater profits, packed up America's industrial base and shipped it to China, leading the low-wage Wal-Mart economy of today. Global wage arbitrage became recast as "free trade:"<br />
<blockquote class="tr_bq">
...the news from China barely made a dent in the US in 1976. The Cultural Revolution was said to be winding down. Zhou Enlai died in February; an earthquake in Tangshan in July killed as many as 650,000 persons; Mao Zedong died in September. The Mandate of Heaven, an ancient governing concept in Chinese civilization, had, it was said, perhaps been lost. Americans were preoccupied with recovery from a recession, a presidential election, the bicentennial celebration of their Declaration of Independence; Europeans with their record-breaking hot summer.<br />
<br />
Barely two years later, the Communique of the Third Plenum of the Eleventh Central Committee announced a plan to “shift the emphasis of our party’s work and the attention of the people of the whole country to socialist modernization.” People’s material lives must be improved, it declared; bureaucratic self-indulgence would not be tolerated. A “new Long March” would make China “a great modern socialist power” by the end of the twentieth century.<br />
<br />
Lin was one of the very first movers in the epochal events that followed the third Plenum in December 1978. Millions followed, high and low, in accordance with Deng Xiaoping’s mantra, “Let some people get rich first.” By the end of the twentieth century, China was on the verge of becoming the second largest economy in the world. Average growth of ten percent for twenty years had lifted half a billion people out of poverty and changed the lives of countless others around the world.<br />
<br />
Entry of China into the world trading system was only one of those once-small clouds to have swiftly grown into all-encompassing developments in the ’90s and ’00s. The advent of the computer was another; financial deregulation after Mayday 1975 was a third. These are the changes we are concerned with here. Still others – gender convergence, for example – have only just begun to have their impact gauged.</blockquote>
<a href="http://www.economicprincipals.com/issues/2015.08.30/1792.html">“A small cloud, no bigger than a man’s hand…”</a> (Economic Principals)<br />
<br />
The flood of cheap goods from China offset workers' falling wages, once again giving a fig leaf to Neoliberal economics. The effects on Latin America, however, were a"lost decade" in Mexico caused by falling oil prices and a debt crisis throughout Latin America. It was these crises that drove the drug wars and poverty in Latin America. The response from international institutions was the full implementation of harsh austerity measures and the "disaster capitalism" of The Shock Doctrine.<br />
<blockquote class="tr_bq">
When the world economy went into recession in the 1970s and 80s, and oil prices skyrocketed, it created a breaking point for most countries in the region. Developing countries also found themselves in a desperate liquidity crunch. Petroleum exporting countries – flush with cash after the oil price increases of 1973-74 – invested their money with international banks, which 'recycled' a major portion of the capital as loans to Latin American governments. <b>The sharp increase in oil prices caused many countries to search out more loans to cover the high prices, and even oil producing countries wanted to use the opportunity to develop further. These oil producers believed that the high prices would remain and would allow them to pay off their additional debt.</b><br />
<br />
<b>As interest rates increased in the United States of America and in Europe in 1979, debt payments also increased, making it harder for borrowing countries to pay back their debts</b>. Deterioration in the exchange rate with the US dollar meant that Latin American governments ended up owing tremendous quantities of their national currencies, as well as losing purchasing power. The contraction of world trade in 1981 caused the prices of primary resources (Latin America's largest export) to fall. </blockquote>
<blockquote class="tr_bq">
While the dangerous accumulation of foreign debt occurred over a number of years, the debt crisis began when the international capital markets became aware that Latin America would not be able to pay back its loans. This occurred in August 1982 when Mexico's Finance Minister, Jesus Silva-Herzog declared that Mexico would no longer be able to serve its debt. Mexico declared that it couldn't meet its payment due-dates, and announced unilaterally, a moratorium of 90 days; it also requested a renegotiation of payment periods and new loans in order to fulfill its prior obligations.<br />
....<br />
<b>After the petroleum boom previous to the government of Mexican president José López Portillo (from 1976 to 1982), Mexican government began to rely heavily on export barrels to support the financial needs in the country.</b> These exports were mainly directed towards the United States, mainly due to the petroleum crisis of 1973, taking advantage of the high prices these barrels garnered. </blockquote>
<blockquote class="tr_bq">
<b>When the market finally settled, thus reducing the high prices per barrel, the financial stability of the country was endangered. </b>Diversification of income would have prevented the problem, but due to the inability of other production sectors to make up for the reduced profit, Mexico had to inflate the currency to by then historic levels. The Mexican peso would then be devaluated by a 500%. <br />
...<br />
In the wake of Mexico's default, most commercial banks reduced significantly or halted new lending to Latin America. As much of Latin America's loans were short-term, a crisis ensued when their refinancing was refused. Billions of dollars of loans that previously would have been refinanced, were now due immediately.<br />
...<br />
<b>The banks had to somehow restructure the debts to avoid financial panic; this usually involved new loans with very strict conditions, as well as the requirement that the debtor countries accept the intervention of the International Monetary Fund (IMF)</b>...<br />
<br />
Before the crisis, Latin American countries like Brazil and Mexico borrowed money to enhance economic stability and reduce the poverty rate. <b>However, as their inability to pay back their foreign debts became apparent, loans ceased, stopping the flow of resources previously available for the innovations and improvements of the past few years.</b> This rendered several half-finished projects useless, contributing to infrastructure problems in the affected countries.<br />
<br />
During the international recession of the 1970s, many major nations and countries attempted to slow down and stop inflation in their countries by raising the interest rates of the money that they loaned, causing Latin America's already enormous debt to increase further.<b> In between the years of 1970 to 1980, Latin America's debt levels increased by more than one-thousand percent.</b><br />
<br />
<b>The crisis caused the per capita income to drop and also increased poverty as the gap between the wealthy and poor increased dramatically. Due to the plummeting employment rate, children and young adults were forced into the drug trade and prostitution. The low employment rate also caused many problems like homicides and crime and made the affected countries undesirable places to live.</b> Frantically trying to solve these problems, debtor countries felt pressured to constantly pay back the money that they owed, which made it hard to rebuild an economy already in ruins.<br />
<br />
Latin America, unable to pay their debts, turned to the IMF (International Monetary Fund) who provided money for loans and unpaid debts. <b>In return, the IMF forced Latin America to make reforms that would favor free-market capitalism. The IMF also helped Latin America utilize austerity plans and programs that will lower total spending in an effort to recover from the debt crisis. </b>The efforts of the IMF brought Latin America's economy to become a capitalist free-trade type of economy which is a type of economy preferred by wealthy and fully developed countries.</blockquote>
<a href="https://en.wikipedia.org/wiki/Latin_American_debt_crisis">Latin American Debt Crisis</a> (Wikipedia) <br />
<br />
<a href="https://en.wikipedia.org/wiki/La_D%C3%A9cada_Perdida">La Década Perdida</a> (Wikipedia)<br />
<br />
Mexico signed onto NAFTA and Mexican farmers were exposed to competition from imports of America's heavily-subsidized corn (also cheap thanks to gasoline-powered agriculture - Mexican farms were less mechanized). The destruction of the rural Mexican economy sent millions of economic refugees from the beanfields into "El Norte" in the nineteen-nineties searching for work that Americans "wouldn't do," or rather, wouldn't do for the prices employers wanted to offer. This was another win for Neoliberalism as this drove down working class wages in the U.S. <br />
<br />
Thus the "Neoliberal Revolution" of the 1980's and 1990's across the world was underpinned by the price of oil from expensive to cheap.<br />
<blockquote class="tr_bq">
In 1981, before the brunt of the glut, Time Magazine wrote that in general, "A glut of crude causes tighter development budgets" in some oil-exporting nations.In a handful of heavily populated impoverished countries whose economies were largely dependent on oil production — including Mexico, Nigeria, Algeria, and Libya — government and business leaders failed to prepare for a market reversal.<br />
<br />
With the drop in oil prices, OPEC lost its unity. Oil exporters such as Mexico, Nigeria, and Venezuela, whose economies had expanded in the 1970s, were plunged into near-bankruptcy. Even Saudi Arabian economic power was significantly weakened.<br />
<br />
Iraq had fought a long and costly war against Iran, and had particularly weak revenues. It was upset by Kuwait contributing to the glut and allegedly pumping oil from the Rumaila field below their common border. Iraq invaded Kuwait territory in 1990, planning to increase reserves and revenues and cancel the debt, resulting in the first Gulf War.<br />
<br />
The USSR had become a major oil producer before the glut. The drop of oil prices contributed to the nation's final collapse.</blockquote>
Oil would continue to be relatively cheap throughout the 1980's and through the 1990's, once again making Neoliberalism seem the key perpetual prosperity. <i>"Between November 1985 and March 1986, the price of crude plunged by 67%. ..After the mid-1980s bust, it took nearly two decades for oil prices to rebound to pre-bust levels and remain there."</i> (<a href="http://www.wsj.com/articles/back-to-the-future-oil-replays-1980s-bust-1421196361">http://www.wsj.com/articles/back-to-the-future-oil-replays-1980s-bust-1421196361</a>).<br />
<br />
All that would change however. Certain organizations had predicted a global peak of oil sometime abound 2006...<br />
<br />Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-5813525365834911757.post-62453047611896040302015-09-16T19:02:00.001-05:002015-09-16T21:04:31.972-05:00The Secret History of Oil and Money - Part 4Last time we saw that a series of events had managed to move the power from the oil companies to the oil producing states via OPEC. They used that power first to get an increase in the price in 1970, and then increase it again and add an embargo in 1973. We also saw that in 1971, the amount of Eurodollars floating around caused the U.S. to sever the ties to gold and let currencies float. This meant that there was no limit on the money that could be printed to pay for the oil. The problem was that the money represented real claims against the West. With the increase in price, there was no way the West could sell anything to these essentially undeveloped countries to balance out the money they had to pay to get the oil.<br />
<br />
<i>The owners of the oil, everywhere in the world, were four times as rich after Tehran; soon they would be ten times as rich. </i><br />
<blockquote class="tr_bq">
The West Germans, the thrifty, hard-working
West Germans, had gone to the office and the factory, and hammered and
blowtorched and bolted, and they had infested the world with their
Beetle Volkswagens, their machinery, and their chemicals, and they had
earned, by 1975, a surplus of $40 billion. </blockquote>
<blockquote class="tr_bq">
And
the Japanese, with their beehive cooperation, had gone to the factory
early in the morning and sung "Hail to Thee, O Matsushita," the company
song, and done their group calisthenics, and hammered and buzzed around
and swamped the world in television sets and stereos and cameras and
little cars, and after years of work they were on their way to
multibillion-dollar surpluses. </blockquote>
<blockquote class="tr_bq">
The
United States and Britain and Italy didn't have any such surpluses at
all (though the United States did have the long-term investments from
its key-currency heyday). And now, suddenly, one country—one family—had
an exchange surplus of $60 billion! Without even working! </blockquote>
While sitting in a gas line, Smith ponders the question asked by the Hungarian banker - if the price of oil had quadrupled, where do we get the money to pay for the oil that we need?<br />
<blockquote>
First I thought, <b>This gas line is burning up a lot of gas just trying to get more. Then: How do we pay for the oil quadruple? That is, we, the United States?</b> Well, we could sell something to the Arabs. What are we good at growing or making and selling? Aircraft, wheat, soybeans, maybe some high-technology equipment. Now, what are they buying? Who's in OPEC? We can forget Gabon and Ecuador and Qatar—not significant. Who are we talking about? Iraq: cross off, no relations with them. Libya, Kuwait, Saudi Arabia, Iran. Libya: fewer than 2 million people. Kuwait: fewer than 300,000. Saudi Arabia: 6 million. Small countries. Don't have big airlines. Sell a couple of 727s, a 747 or two; that's about enough oil for ten minutes of gas lines. Wheat, soybeans—small countries don't eat much; <b>we have 120 million cars, each car is sitting in a gas line with its motor running; you could sell all the wheat and soybeans Libya, Kuwait, and Saudi Arabia could eat and only move the whole national gas line one block</b>. Less. Maybe thirty feet. Of course, Iran ... 33 million people. Shah—aircraft? A couple more airplanes, a little more wheat—aircraft, arms. We could sell arms to the Shah. </blockquote>
<blockquote>
But not enough to the other folks. No, what we will buy the oil with is dollars, because the world takes dollars, trades in dollars. And the oil folk will have the dollars, and then they can come and buy what they want. But nobody realizes the scale. Let's just say we pay the import price for half of the oil needs, at let's say, $10 a barrel, carry the 3, times 365 days in the year; my goodness, in one year OPEC could have $100 billion extra, maybe $200 billion soon, then they could come and buy half of the stocks on the New York Stock Exchange, almost half. And that's only one year. The next year the 120 million cars are back at the gas pump, and OPEC has another $100 billion, and they keep piling up those claim checks until they can buy the whole New York Stock Exchange. They keep the claim check, and we move the cars around. <b>We are going to sell America for a product that burns up in the atmosphere. We will be a colony...</b></blockquote>
<blockquote>
The triumph of the Club is something quite unparalleled in history. <b>When else was there such a transfer of wealth? When the Spaniards brought back the gold and silver of Peru? When the British raj (sic) ruled India?</b></blockquote>
Smith discusses a rumor that Nixon actually <i>wanted</i> the price of oil to go up. Why? To arm the Shah of Iran and keep the Middle East in balance.<br />
<blockquote>
Nixon and Kissinger stopped off in Iran on the way home from the Moscow summit in 1972. What they saw was a dangerous situation. The British had withdrawn from the Persian Gulf at the end of 1971; the United States was still involved in Vietnam. <b>There was a power vacuum in the strategic Middle East. The Shah could take it over and would get the arms to do so. </b></blockquote>
<blockquote>
<b>How would the Shah pay for the arms? By raising the price of oil. </b>No American Congress would have voted billions to arm Iran, it was thought, while troops were still in Vietnam. James Akins reported that the Saudis were worried both by the Iranian buildup and by the prospect of a high price for oil, which they thought would damage the stability of the West, on which their bank accounts and survival depended. </blockquote>
Smith ultimately discards the theory:<br />
<blockquote class="tr_bq">
If a quadrupled oil price was the cost of arming the Shah, it was one of the most expensive blunders in history. The scale of the transfer of wealth is hard to comprehend, and in this instance the arithmetic makes no sense. If $90 billion a year sounds silly divided into orange juice, it does not make much more sense divided into F-14s...<b>the West could transfer to OPEC one air force, one navy, and still owe $100 billion every year.</b><i> </i></blockquote>
The Western industrial economies now had the worst of both inflation and recession. Normally inflation is caused by an overheating economy, not one where people are worried about their jobs and how to pay for things.<br />
<blockquote class="tr_bq">
The higher oil prices acted as a fiscal drag, a tax. Higher prices for oil meant higher prices for fertilizer and plastics as well as gasoline and heat. If your gasoline bill and your heating bill and your food bill went up, you might defer buying a car; then the automobile manufacturer laid off some workers, who in turn cut back on their own purchases. <b>The recession of 1974-75 was the worst since the Depression of the 1930s. <br />And at that same time, inflation went up sharply.</b> In the United States direct and indirect energy costs amount to 10 percent of pretax household income. A 100-percent rise in energy costs meant 10-percent inflation, all by itself. Not all the energy was oil, and not all oil came from the Middle East; but the price of OPEC oil had just gone up 400 percent, and the OPEC price became the world price. </blockquote>
<span style="font-family: "Arial","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-theme-font: minor-bidi;">In those days, unions still had power. As gas
prices rose, unions demanded wage increases to compensate. Workers did not want
to take the hit to their disposable incomes just to get to work. Employers granted
the wage concessions, but raised prices to protect profits. This increase in
prices caused the unions to once again demand higher wages and so on. A
feedback loop was created, sometimes called a <i>wage-price spiral</i>. </span><br />
<br />
<span style="font-family: "Arial","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-theme-font: minor-bidi;">Unions were
unafraid to go on strike when their demands were not met, leading to disruption
of everyday life. The garbagemen went on strike in New York city causing garbage
to pile up and fester in '68, '74 and '81. Coal miners went on strike in England,
crippling the economy and leading to the introduction of rationing and a three-day workweek in 1974. This led to
the changing attitudes toward unions during this period. Unions, once seen as
stalwart defenders of the Middle Class, were seen as causing major
inconveniences to the public, and the public mood turned against them. Corporations saw this as an opportunity and unleashed a relentless barrage of
anti-union propaganda, playing up their ties to organized crime and depictingthem as corrupt anachronisms that defended
lazy workers. </span><br />
<br />
<span style="font-family: "Arial","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-theme-font: minor-bidi;">A series of radical energy conservation measures were adopted. Vehicle fuel economy standards were raised. Building efficiency standards were raised; insulation was mandatory. Travel went back to necessity only. The Strategic Petroleum Reserve was created, as was the International Energy Agency (IEA). Government studies looked at energy conservation measures and renewable energy. The speed limit was lowered to 55 MPH and Daylight Saving Time was introduced. For the first time ever, demand for oil fell. The oil usage in 1973 would not be seen again for a decade.</span><br />
<span style="font-family: "Arial","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-theme-font: minor-bidi;"><br /></span>Americans did their <span style="font-family: "Arial","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-theme-font: minor-bidi;">part too. Solar "cheese wedge" houses spring up and people turned to the Whole Earth Catalog. The first commercial photovoltaic sells were sold and people experimented with wind energy. American consumers bought small fuel-efficient Japanese cars instead of American gas-guzzlers (the Japanese had no oil reserves and thus had to be efficient). This began the decline of the American automobile industry.</span><br />
<br />
America was dealing with the energy crisis, but it was about to get a whole lot worse. In 1979, the Shah of Iran fell in a revolution led by the religious leader Ayatollah Khomeini. Iran became a theocracy hostile to the West. The American embassy staff was held hostage. Iranian oil production fell from 6 million barrels to 1.2 million barrels, a loss of 4.8 million barrels.<br />
<br />
But the loss of oil was not the major problem - the problem was the wave of speculation on the markets caused by the unexpected loss that drove up the price of oil. Normally, oil is traded in a complex series of futures contracts. But there is also something called the <i>spot market</i>. Prices are settle in cash on the spot based on current values as opposed to forward prices, and delivery is expected within a month (<a href="http://www.investopedia.com/terms/s/spotmarket.asp">Investopedia</a>). In other words, it is immediate oil for short term needs. And by 1979, there were no cusions anymore, so the spot market became the go-to source.<br />
<br />
As more and more countries went to the spot market to get oil, speculation drove the price up. The fear of further disruption spurred widespread speculative hoarding. Seeing the higher prices offered, oil sellers went to the spot market to sell in order to take advantage of the higher prices. To deal with this, OPEC raised the price of oil to the spot market price, causing another price shock.<br />
<blockquote class="tr_bq">
Until the Shah fell, there was a modest surplus of oil in the channels of the world. Higher prices had forced some cutback in demand, and there was additional oil from Alaska and the North Sea. OPEC watchers noted that the cartel was getting less real money, because the Western currencies were depreciating faster than the oil price was going up. </blockquote>
<blockquote class="tr_bq">
But Iran was among the large producers, at 6 million barrels a day, and when the Shah was deposed, production from Iran's oil fields dropped to a fraction of the previous totals. That missing 6 million barrels a day was enough to create a shortage again, and the scramble resumed. </blockquote>
<blockquote class="tr_bq">
In the oil trade the "spot" market is called "Rotterdam," because oil can be bought, on a daily basis, from the huge tankers anchored in the Rotterdam harbor. The "Rotterdam" market, though, is all over the world. It is really the Telex through which the trades are made...The Iranian shutdown had made supplies tight. The Israelis and the South Africans could no longer buy Iranian oil, and they were looking for oil wherever they could find it. The Italians had only two weeks' worth of supply in the tanks, and the Spaniards and the Swedes were also low. </blockquote>
<blockquote class="tr_bq">
<b>The new Iranian regime, with no loyalty to the old contracts with the Seven Sisters, began to sell to the "spot" market</b>. On Monday, May 14, 1979, the Iranians sold oil at $23 a barrel, above the posted OPEC price of $13.34. On Tuesday it was $28. On Thursday it was $34. Ironically, the Seven Sisters were among the bidders; a subsidiary of Texaco secretly made a deal for 2 million barrels at $32. At Kharg Island in the Persian Gulf, there was the usual long line of tankers waiting to take on Iranian oil. The tankers with long-term contracts were told to stay anchored. (They were paying, incidentally, $35,000 a day in parking fees.) The tankers with "spot" contracts went right to the head of the line. </blockquote>
<blockquote class="tr_bq">
Not surprisingly, the "spot" market began to attract the oil. <b>American oil companies with refined oil in the Caribbean began sending it to the "spot" market, seeking to maximize profits. The price in the "spot" market went as high as $42 a barrel. </b></blockquote>
<blockquote class="tr_bq">
<b>Other OPEC nations pulled some oil from long-term contracts and sold it in the "spot" market.</b> Some of the OPEC nations saw the dangers. OPEC was losing control! Libya and Algeria broke the $23.50-a-barrel ceiling set by the cartel. "Prices are out of control," warned Ali Khalifa al-Sabah, the oil minister of Kuwait. OPEC was breaking apart, but on the <i>up</i> side. No one had thought of that.<br />
<br />
At the Department of Energy in Washington, officials totted up supply and demand. There should have been an excess of a million barrels a day, so why were prices going up?" <b>The spot price reflects uncertainty, not shortage," said one analyst there.
</b><br />
<b><br /></b>
<b>The First Oil Crisis, in 1973-74, took oil from $2.69 to $11.65 a barrel, about a quadruple. The Second Oil Crisis, following the arrival of the Ayatollah Khomeini, produced roughly a double, to about $28 a barrel in 1979</b>. </blockquote>
<blockquote class="tr_bq">
The Club was keeping up the game that worked so well: Leapfrog. Cut back the production, and supplies will be tight. Cut back the deliveries, and the oil consumers who can't get oil will go to the "spot" market, which is relatively small compared to the volume of world oil. The price in the "spot" market pops up. Then you say, well, that's the true value of oil, and you call a meeting of the oil ministers and move the OPEC price of oil up toward the "spot" market price. But if the "spot" market moves down again, you don't move the official price back down, because now you have a new long-term OPEC price. And you have room to do this because, taking OPEC as a whole, you need only 22 million of your 30 million barrels a day to pay your bills. The other 8 million barrels are "discretionary," and you can mess around with them, shut in some of them if necessary. Yet Leapfrog was not designed by OPEC ministers; they merely followed political events and took advantage. </blockquote>
Instead of Eurodollars, the world now had to worry about <i>Petrodollars</i>, since oil was denominated in dollars. Where would all those dollars go? They went into Western banks, by-and-large. But with the world in recession due to high oil prices, to whom could banks lend all that money to? Finding uses for all that money was termed <i>Petrodollar recycling</i>.<br />
<blockquote class="tr_bq">
This problem is called Recycling the Petrodollars. The connection between the Sauds and the Rockefellers is that the Saud family puts its money in the Rockefeller family bank. Then the Rockefeller family bank lends the money around the world, sometimes to the people who need more money to pay the Saud family the new price of oil. Gertrude Stein said once that the money is always the money, only the pockets are different. <br />
If the oil consumers could sell enough to the oil producers, the trade would come out even. If the Kenyans could raise the price of their coffee enough to pay for the increased price of gasoline and fertilizer, and the Saudis would drink enough coffee at the higher price to match that, no problem. But there aren't enough Saudis to drink that much coffee at any price. As we've seen, the oil producers who are "low absorbers" can't buy enough to make up for all the petrodollars they've suddenly earned. </blockquote>
<blockquote class="tr_bq">
Ordinarily, oil should be a commodity like any other. But the current scale of the oil transfers, sent through the banks, creates more money. </blockquote>
<blockquote class="tr_bq">
A higher price for oil sucks money out of an oil-consuming country. That country then has less money to spend for cars and apples and gasoline. Less money, less activity. recession, unemployment. <i>Deflation</i>—the oil price increase acts like a tax. In the oil-consuming country there is less money; in the oil producer there is more. So far it balances. </blockquote>
<blockquote class="tr_bq">
Things being what they are, the tendency is for the oil consuming country to print a little more money to ease the pain of recession. That's politics, not economics or banking. Sending out real assets for the oil means very hard work. The central banker himself may want to tough it out, but the prime minister is already under attack by the labor unions and the parliament is restive. </blockquote>
<blockquote class="tr_bq">
The oil producer still has the money paid for the oil, though, and doesn't need it. Into the bank it goes. Now the bank has a deposit, let's say, just to reverse all that OPEC gigantism, of $100. The Federal Reserve says that bank has to keep 10 percent deposit as a reserve. You walk in and borrow $90. You put that money in your checking account; now it's a deposit there, and your cousin Charley can walk in and borrow $81, because that fractional reserve is set aside each time. Your cousin Charley deposits his loan in his checking account, and the bank lends $72.90 to the next borrower. That's the way the multiplier works, and it keeps on going. If the Federal Reserve wants more money in the banks, it lowers that fractional reserve, so that you can borrow and your cousin Charley can borrow $85.50 instead 1. If the Federal Reserve wants there to be less money, it raises that fractional reserve. </blockquote>
<blockquote class="tr_bq">
Question: What's the multiplier in Euroland? Theoretically, it's infinite. The Rockefeller bank of Euroland gets an OPEC deposit of $100, and it can lend the whole $100 to you; and when you deposit the $10U in the Deutsche Bank Luxembourg, that bank can lend the whole $100 to your cousin Charley, who puts it into the Banco d'Espagna of Euroland, and so on, so the original OPEC $100 gets quite a bit of mileage. <br />
243-247</blockquote>
It turns out that what they did with the money was loan it out to Third-World Countries for development. That's right - the Third World Debt crisis you heard so much about a few years ago from the likes of Bono <i>et alia</i> had its origins in the massive influx of petrodollars into Western banks at a time of stagnant economies and high inflation:<br />
<blockquote class="tr_bq">
Ironically, the struggle after 1979 to limit inflation by raising interest rates created a problem for the policy's instigators, the financial institutions, because it created a gulf between the amount money could earn if invested in a typical productive project and the rate of interest the entrepreneurs behind those projects were being asked to pay. Moreover, because the interest rate rise had produced a recession, very few of the institutions' domestic customers wanted to borrow anyway, except, as we have just seen, to pay their interest bills or to stave off collapse. The banks' problem of what to do with their funds was compounded because, as a result of the oil price rise, most OPEC countries had more money than they knew what to do with, having moved from having a small balance of payments deficit of $700 million in 1978 to a surplus of $100,000 million in 1980. Much of this money had been put in British and American banks on deposit.<br />
<br />
To find a home for the OPEC cash as well as their own, bankers literally packed their suitcases and flew to the Third World. During a meeting of the Inter-American Development Bank in Madrid in 1981 senior bank officers queued up to offer funds to the man in charge of Mexico's borrowing as he lounged in an armchair at his hotel. A year later Mexico had borrowed so much that no-one was prepared to lend it more to repay old debts as they became due. It threatened to default, alerting the world the crisis the banks had created.<br />
<br />
The bankers offered money to potential Third World borrowers at a price based on based on the London interbank offered rate (LIBOR) plus 1 per cent. This meant that, if world interest rates increased, the rate of interest payable by the borrowing country did as well. It was a lazy man s way ot doing business because it made it impossible for borrowers to calculate the return they had to get from the projects for which they wanted the loans and the risk they were running by taking the loans on. However, the bankers thought their interests would be secure whatever happened to their borrowers' projects and rarely investigated them thoroughly. What mattered was that their profits in the current year would be satisfactorily increased by the fixed margin they creamed off the top of the loan as a charge for agreeing to grant it. As for the future - well, as one banker, Walter Wriston, said at the time, countries don't go bankrupt, do they?<br />
<br />
A factor that added to the banks' dangerous complacency was that they had done some Third World lending to recycle Middle Eastern funds after the 1973 oil price shock. These had generally worked out well, largely because the prices of the commodities exported by the borrowers had increased at an annual rate which exceeded the rate of interest being charged. In other words, there was no overall change in the relative wealth of borrower and lender throughout the period. The debt/export ratio had stayed constant and there was a net inflow of funds to most developing countries.<br />
<br />
In the early 1980s, however, the deliberate contraction of demand in the United States and the EC caused commodity prices to plunge while the interest rates the producing countries had to pay were kept high, Consequently, rather than the wealth of both parties increasing in step, as had happened previously, money - or rather, claims on money - flowed from borrower to lender each year between 1981 and 1986 at a rate equivalent to interest at 20 per cent. As a debt doubles every 3.5 years at an interest rate of 20 per cent, the inevitable result was that these countries' ratio of debt to GNP tripled by 1987, although almost no new money was lent.<br />
<br />
After the debt crisis became public in 1982 the value of the banks' Third World loans was gradually written down, involving them in showing huge losses. At the time of writing (1993), however, debtor countries have still not been released from their obligation to pay the full amount due, although some have been able to buy up some of their debt at a big discount on the secondary market where it was sold by smaller banks anxious to get cash for a very doubtful asset.
<br />
<br />
Richard Douthwaite; <i>The Growth Illusion</i>, pp. 67-68
</blockquote>
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<span style="font-family: "Arial","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-theme-font: minor-bidi;">Oil prices went up by a factor of ten in a decade. Right now the price
of oil is about $45.00 a barrel, relatively cheap. Imagine looking at
$450.00 a barrel oil in less than ten years and ask yourself what that
would do. By 1981 unemployment was up over 10 percent and the economy was worse than at any time since the Great Depression. Unfortunately, it is here that Adam Smith's narrative stops. </span><br />
<span style="font-family: "Arial","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-theme-font: minor-bidi;"><br /></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10pt; mso-bidi-font-family: "Times New Roman"; mso-bidi-font-size: 11.0pt; mso-bidi-theme-font: minor-bidi;"><o:p></o:p></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5813525365834911757.post-89383232452830344482015-09-15T19:10:00.000-05:002015-09-16T08:06:42.625-05:00The Secret History of Oil and Money - Part 3<i>The Fall of Bretton Woods and the rise of Paper Money</i><br />
<br />
To understand the background of the situation, you have to remember that the United States went off the gold standard in 1971 leading to the age of “<i>Paper Money</i>,” the main topic of Smith’s book. Today we might say “<i>fiat currency</i>.” The 1971 oil price spike certainly played a role.<br />
<br />
When countries want to trade with each other, they need a common medium of exchange. If France and Britain trade, they can’t use French Francs or British Pounds because each would be worthless in the others’ country. What they use is precious metals. Gold, historically, but silver too. Neither of these is valuable in and of themselves, only that the other desires it. Historically, the country with the most gold can raise the biggest army.<br />
<br />
However trade in gold has rarely been by exchanging gold coins or bars. Gold is very dense, denser than lead in fact; a bar of gold is heavier than a bar of lead the same size. Hard to transport. Plus you need to guard it constantly against thieves. You want to keep it in a vault. Small-scale trade may have taken place by gold and silver coins changing hands, but it was mostly limited to face-to-face transactions.<br />
<br />
For example, consider the island of Yap in the South Pacific. The
islanders used stones with holes in them to trade. The bigger the stone,
the more valuable it was. Some stones were so big they were hard to
transport, so they just transferred ownership “virtually” without
actually moving the stones themselves. One stone even ended up on the
bottom of the ocean during transport. Since the stone still existed,
ownership of the stone on the sea floor circulated among the people as a
medium of exchange, even though no one would ever be able to access it
in real life. Gold and silver in Europe were much the same. <br />
<br />
So in reality,<i> trade in gold has always been virtual</i>. It’s done via pieces of paper, letters of credit, guarantees, bonds, and so forth. It's much easier to use a currency than actual gold, as long as both parties value it.<br />
<blockquote class="tr_bq">
The key currency is what the world uses as
its denominator. The world has been used to saying, "How much is that in
dollars?" When we talk about the dollar, we have an emotional
involvement that goes beyond the denominator of the System, because this
key currency is our currency, what we walk around with in our purses
and wallets. </blockquote>
<blockquote>
Let's start with an easy
example. The Saudis have sold a lot of oil. They want to build an
industrial plant at Jubail, so they ask for bids. The South Koreans come
in with the low bid. They send a whole army of workers to Saudi Arabia,
who live in dormitories and work like beavers. They bring steel and
valves and instruments and piping and plastics, and they put up the
plant. Japanese ships bring the goods. The Saudi currency is the riyal.
The Korean currency is the won. The Japanese currency is the yen. What
do the Koreans get paid in?<br />
<br />
The answer is none of the
above. The Koreans get paid in dollars. The world trades in dollars. The
dollar is the key currency. The deal may be between the Saudis and the
Koreans—and this happens to be a real example— and the transfer may take
place between the Saudi banks and the Korean banks—or it might go
through London or Tokyo—but it is denominated in dollars. Everybody
knows what a dollar is, though they argue about what it is going to be
worth. And because the transaction is in dollars, sooner or later it has
to end up on a ledger in New York. <br />
<br />
...there is a
whole world out there trading in dollars, banking dollars, investing
dollars; and those dollars could ultimately be a claim upon us. Not only
could they be used to whisk away the apples and computers and textiles
we are about to reach for ourselves, but they allow the holders of those
dollars to voice irritation about the state of the dollar. And not
just irritation. OPEC says, "You let the dollar go downhill, we have a
lot of dollars in our savings account, we're going to raise the price of
oil just to stay even." Then everybody who buys oil gets mad, not just
at OPEC, but at us. Because with the oil price up, we have a bit more
inflation as the cost is passed through, and the dollar goes down some
more, and the price of oil goes up again--a disagreeable cycle. (pp.
111-112)</blockquote>
What are the characteristics of a key currency?<br />
<br />
A key currency country has to have the same characteristics as a bank.
Essentially, the nation acts as sort of a bank for the rest of the
world. A bank with an army. What are these characteristics?<br />
<br />
The first is <i><b>safety</b></i>. That's first. If you think you won't get your money back, you'll keep it in a mattress instead. <i>"Safety
means the bank still has to be there. The country has to be politically
stable. A big bank account in Havana in 1958 doesn't mean a damn thing
in 1960. So the country has to have solid institutions, a respect for
law so that buyers of the key currency don't find the rules
changed...That's why American banks advertise, 'Accounts insured to
$100,000.'" (p. 113)</i><br />
<br />
The second is <b><i>liquidity</i></b>. This means the an ample supply of money and the ability to turn assets into cash. <i>"When
you put your money in the bank, you want to be able to get it back when
you want it. You don't want to be told 'Fill out this form and wait
sixty days.' In other words, you want the bank to have the resources on
hand so that you're not tied up...And the country has to protect the
value of its currency both at home and abroad. The money has to stay
worth what its worth. for that it needs a healthy economy, with economic
growth and price stability. This will give it liquidity."</i>(p 113-114)<br />
<br />
The third is <b><i>yield</i></b>. <i>"[T]he
use of money is worth something, so you want to interest, rent on the
money...the yield will be taken care of by the supply of, and demand
for, the currency. A higher rate of interest might make up for some
decline in the currency. Supply and demand in the contemporary world
come not only from the marketplace but from the government's bank, the
central bank, and that bank must inspire trust." </i>(p. 114)<br />
<blockquote>
Pegging a currency to a precious metal doesn't make it a key currency, but it helps to restrict the printing of paper money, because the amount of metal is finite, and thus it might be one sign that some faith in the currency will be kept. But the South African rand is partially backed by gold, and no one deals in it who dies not have to; it is too subject to controls or restrictions. The Swiss Franc and several other European currencies have some gold backing, and there is some devotion to keeping these currencies stable, but Switzerland is a small country, without military or political influence. The world is so hungry for something to denominate in, for something to be the key currency, that the Swiss, with a stable franc, have taken in money from all over the world and profited by handling it. But there simply aren't enough Swiss francs to finance the world's trade. (p.119)</blockquote>
Back in 1717 the British Master of the Mint, one Isaac Newton who also dabbled in science and mathematics, declared that English currency would be worth a specific amount of gold. This meant that British money became a key trading currency because it held its value. Because it could be exchanged for gold, it could be exchanged for what you actually wanted instead of gold because other people had faith in it. Thus trade in British currency took the place of precious metals.<br />
<blockquote class="tr_bq">
"As Master of the Mint, he said that one guinea, that is, 21 shillings, would be worth 129.4 grams of gold, and thereby he said, We intend this currency to hold its value, and thereby he created a key currency Almost....you need more than precious metals to have a key currency; you have to want to be the Bank, and history has to give you a place so that you can be the Bank. In the eighteenth century, traders around the world sent money to London, to be held in "sterling," which is what the British currency came to be called....For part of British financial history, sterling was fixed in terms of silver; 11 ounces, 2 dramweight of silver was 20 shillings thruppence." (p. 114)</blockquote>
There were two instances in that long history where the British suspended the convertibility of the dollar, one to fight Napoleon, and one to fight the Kaiser (World War One). The British needed to come up with a lot of money to fight those wars, so the convertibility was suspended. By the way, in order to not be in debt to banks, Napoleon financed his military exploits by selling the Louisiana Purchase to the United States.<br />
<blockquote class="tr_bq">
After Waterloo, sterling met every test of a key currency. The government was stable, the institutions honored and intact. The Royal Navy sailed the world; trade followed the flag. Britain was first into the industrial revolution, so its manufactured goods spread over the world. The battles were always at the fringes of the empire. </blockquote>
<blockquote>
Every time there was a small crisis about the pound, the monetary authorities would raise the interest rates sharply. That might depress the domestic economy, but the high interest rates would draw in foreign exchange, and the pound would retain its value. Britain bought the raw materials, the commodities, and sent back the manufactured goods; and since the price of raw materials gradually declined, the pound increased in value.<br />
<br />
The British government issued "consols," perpetual bonds. Fathers gave them to their sons, and those sons gave them to their sons, and the bonds actually <i>increased</i> in value as time went on. "Never sell consols," said Soames Forsyte, Galsworthy's man of property. <br />
<br />
The world brought its money to London and changed it into sterling. London banked it and insured it. Cartographers colored Britain pink on world maps, and the world was half pink, from the Cape to Cairo, from Suez to Australia. In 1897, at Victoria's Diamond Jubilee, the fleet formed five lines, each five miles long, and it took four hours for it to pass in review at Spithead. British capital went everywhere....(p. 116)</blockquote>
It was this currency that bound the world together in trade, particularly the North Atlantic, for a few hundred years. It was used instead of gold, which was a lot easier. It was the “denominator” used in world trade. Trade was denominated in the Pound Sterling. England would never be out of debt for the next two hundred years.<br />
<br />
Now, a word about “defending” currency - keeping its value (i.e. purchasing power) high. It all has to do with supply and demand.<br />
<br />
If you raise the interest rate attached to a currency, you increase the demand for that currency, as people will want a higher interest rate. People don’t buy currency, they buy bonds denominated in that currency,
so a higher interest rate will increase the yield, one of the big three
attributes of a key currency as we saw above. A higher interest rate (in let's say in the U.S.) compared to another country's rate will cause the dollar's value to appreciate against that second country's currency (let's say the Euro). <br />
<br />
An investor can borrow money in Euros at a
lower rate and then buy US dollars and invest in a higher return
investment. Since everyone is selling Euros and buying dollars,
there is a higher demand for dollars and consequently the price of the dollar goes
up. That's called a carry trade. Higher interest rates in the U.S. attract foreign direct investment,
which means that foreign investors have to buy dollars in
order to invest in the U.S. This also increases demand for the dollar and this
increases the spot rate relative to other currencies.<br />
<br />
Higher dollar value relative to other global currencies makes imports relatively cheaper but exports relatively more expensive to foreigners, hurting exports overall. Higher interest rates also decrease the amount of loans, slowing down the economy.<br />
<br />
Why would the Fed want to keep interest rates low and consequently the dollar lower? If the dollar is cheap, its products are cheaper and thus it can sell more exports which means American companies and by extension the economy, get more business. Low interest rates are typically used to stimulate and economy by enticing people to take out loans. But as we saw above, if the dollar's value went down, because oil is sold in dollars, the price of oil went up to compensate. More dollars means that each individual dollar is worth less. Increase the supply and the demand goes down. More dollars also means less inflation, as more dollars compete for goods and investment opportunities.<br />
<br />
So lower interest rates lower the relative value of a currency, but stimulates the domestic economy. More exports, cheaper loans. No inflation. So the theory goes.<br />
<br />
You can avoid this by “pegging” a currency, for example saying that one dollar gets you 40 rupees (or whatever) no matter what. Thus, the ratio always remain the same and fate of the two currencies are linked. The Chinese used to do this with the dollar, ensuring their exports would always be cheap no matter what the dollar did.<br />
<br />
That said, let’s move on.<br />
<br />
The sun would eventually set on the British Empire, as economic gravity shifted to Germany and the United States. The expense of the war doomed the British currency. Eventually, it could no longer defend it and had to let its value fluctuate, that is, "float."<br />
<blockquote class="tr_bq">
In 1931 the British let the pound "float"; they abolished its convertibility. It was not pegged to gold via a fixed exchange rate, and on any given day it would sell for whatever buyers and sellers agreed on. The international monetary system collapsed. There was no key currency. Trade died. In the United States a quarter of the work force was unemployed. For two hundred years it was the pound that was supreme. The Bank of England stood for riches and power. In the Depression the world broke up into blocs, and each bloc tried to gain an advantage by depreciating its currency so that it could increase its exports and put its people back to work. That game is called beggar thy-neighbor, and it was a disaster. (pp. 117-118)</blockquote>
This, coming in the wake of thee 1929 Wall Street crash, led to ten years of Depression.<br />
<br />
Now, the causes of the Depression are in dispute. I would argue that the oversupply of goods compared to what people could actually buy due to things like the <a href="http://marginalrevolution.com/marginalrevolution/2015/08/claims-about-electricity-adoption-and-technological-unemployment.html">electrification of the production line</a>, meant that you needed to dump goods somewhere else, that is, export them. But everyone was in oversupply, and everyone needed to dump their excess goods somewhere to keep the production lines moving and enough people employed. So you get every country simultaneously trying to weaken its currency and countries trying to restrict imports (e.g. the Smoot-Hawley tariff). This "trade war" brought down the currency regime, including confidence in the pound.<br />
<br />
After the war, it was decided that the world once again needed a medium of exchange to rebuild. Since the U.S. had loaned all the money out to the allies, and it’s industrial base was untouched, it collected its debt in gold and printed enough dollars to help the world rebuild.<br />
<blockquote class="tr_bq">
In 1944 the finance and treasury ministers of forty-four countries met at the mountain summer resort of Bretton Woods, New Hampshire. And all the currencies were set in a fixed relationship. If you were a central banker and you brought $35 to the United States, you could have an ounce of gold. (Americans could still not own gold.) All the other currencies were pegged to the dollar. </blockquote>
<blockquote class="tr_bq">
The dollar met all the criteria of a key currency. The United States honored its obligations. It had military and political power, its institutions were stable. It had every opportunity for economic growth and price stability. And there was an even more overwhelming criterion: there wasn't anything else. </blockquote>
<blockquote>
Pegging a currency to a precious metal doesn't make it a key currency, but it helps to restrict the printing of paper money, because the amount of metal is finite, and thus it might be one sign that some faith with the currency will be kept...The nations that met at Bretton woods wanted to avoid the currency wars of the 1930s and to have cooperation. Out of the agreements at Bretton Woods came the international institutions of the System: the International Monetary Fund, to govern international monetary relations; the International Bank for Reconstruction and Development, to rebuild the world; and the General Agreement on Tariffs and Trade. (pp. 118-119)<br />
<br />
By 1958 the System was so successful that trade was booming, all the major currencies were convertible into each other, and the dollar was better than gold. Better, because why bother with gold? If you really wanted it, you could turn dollars in for it; but gold is sterile, it earns no interest, you have to pay storage charges on it. It was dollars everyone wanted. Now it was the American Navy that prowled the world. American banks with all the flags in their foreign capitals, and American companies that owned, worldwide, the nickel mines and auto parts plants.<br />
<br />
...Economists worried about a "dollar gap"; how would the world get enough dollars to trade? It seems a very long time ago, but in the 1950s the United States was producing half of the world's oil, half of its automobiles, and 40 percent of its industrial output...(p. 120) </blockquote>
It turned out this wasn't a problem. The dollar’s status as a reserve currency led the demand for dollars, as did balance of trade deficits. The Marshall Plan sent millions of dollars to Europe after the war to rebuild. Americans traveled abroad and spent dollars. American companies opened subsidiaries abroad. People changed money into dollars, since every currency was pegged to each other. The proliferation of dollars meant that when people changed dollars into their local currencies, the foreign banks had to print enough to cover the difference – the U.S. was exporting a bit of inflation. The foreign banks would then use those excess dollars and buy U.S treasury bonds. The U.S. Treasury would take the dollars back, giving an lOU—a bond—and a promised date for repayment. That financed the deficit.<br />
<br />
If other countries needed dollars, they had to export enough to earn them. The U.S. just had to print them. Eventually, many of these dollars became <a href="https://en.wikipedia.org/wiki/Eurodollar" target="_blank">Eurodollars</a>.<br />
<br />
A Eurodollar is simply a dollar-denominated account at a bank outside the United States They apparently began when a Russian banker moved his money out of Rubles (which nobody wanted) into dollars in a Soviet-controlled bank with a British charter during the Hungarian uprising in 1956 for safe keeping. The dollars were later loaned out.<br />
<br />
As we saw, central banks and governments can regulate the amount of currency via interest rates, tax policy, etc. Because these dollars were located outside the United States, <i>they could not be regulated by the Federal Reserve board or the banks</i>, meaning that the Eurodollar market could operate on narrower margins than banks inside the United States.<br />
<br />
International bankers loved Eurodollars, and they began to proliferate. They tended to move offshore banks like the Bahamas and the Cayman Islands, where not only could they escape banking regulations, but also the taxing authorities. The Eurodollar market expanded as a way of avoiding the regulatory costs of dollar-denominated financial intermediation. (<a href="http://www.investopedia.com/terms/e/eurodollar.asp" target="_blank">Investopedia</a>) <br />
<br />
All these Eurodollars were a problem. <i>There simply wasn't enough gold in the United States, or maybe even the world, to cover them all!</i> Too much money had left the United States, the demand for dollars was just too great. Because of higher oil prices, more and more people were showing up at the "gold window." Heading them off that the pass was the safe option, and that's exactly what happened:<br />
<blockquote class="tr_bq">
In August 1971 the United States Treasury stopped selling gold for dollars altogether. The potential claims on the gold were too great. The claims, from overseas, were in the form of a curious currency called the Eurodollar, which was simply a dollar abroad. Brought to the United States, it was like any other dollar, except that in foreign hands it could be presented for gold...There were too many dollars for the gold; everyone could see that if the Euro holders all cashed in their dollars. Fort Knox would be bare in a day ...When the United States cut the tie between the dollar and gold, the key currency no longer had any kind of backing in a precious metal....The neat, classical world devised in 1944 at Bretton Woods had had the dollar as its centerpiece, gold at $35 an ounce backing the dollar, and all the other currencies fixed in their relationship to the dollar. Now that system was coming apart. (pp. 121; 129)</blockquote>
So what to do now? The major countries tried to patch up the system, to no avail.<br />
<blockquote class="tr_bq">
The ten leading industrial countries met at the Smithsonian Institution in Washington. They tried a replay of Bretton Woods: a higher price for gold, a devaluation of the dollar, and new fixed rates for all the currencies. But the fix did not even last for eighteen months. During the period of the fix, the world's money suply took another flip upward...More yen, more marks, more everything, in fact...One by one, the world's central banks peeled out of the fixed-rate relationships. The exchange rates floated everywhere. A dollar was worth, on any given day, what the buyers and sellers said it was worth.</blockquote>
<blockquote>
"When we left the pound, we could go to the dollar," said Jelle Zijlstra, then of the Bank of the Netherlands. "But where could we go from the dollar? To the moon?" (p. 129)</blockquote>
Such was the situation in 1971, when the oil prices started their upward climb. Going back on the gold standard presented several problems:<br />
<blockquote class="tr_bq">
Gold...was reality, a brake on printed money. Alas, in the 1970s ...the crises came; the markets went down and gold went up twenty times and can go anywhere that fear and paper money will take it. Keynes called gold "a barbaric relic"; he believed that rational men could conduct their affairs rationally. Western industrial governments have not been enamored of gold as a standard because it is too confining; it gets in the way of their programs and benefits the two major gold producers, South Africa and the Soviet Union. The industrial democracies do not want to depend on those two countries for the additional gold they would need to increase the reserves behind a currency. </blockquote>
<blockquote>
The Soviet Union, in fact, has the largest unmined gold reserves in the world: about 5 billion ounces in the ground. The total unmined gold reserves in the world are estimated at 7 billion ounces. Thus the Soviets have gold, at current prices, worth roughly $3 trillion. On a full gold standard, the Soviets could give up skirmishing with the West and buy it.<br />
<br />
If gold was a brake on the spending of governments, what else could be a brake? There is no automatic brake. The answer is a social consensus in a society that understands the effects of inflation and is willing to take the measures that end it. (pp. 141-142)</blockquote>
The "measures that end it" would be staggeringly high interest rates throughout the 1970s by Paul Volcker, chairman of the Federal Reserve, who vowed to "break" inflation. It worked, but at the price of a decade of painful stagnation. Inflation would not come down through the 1980's, in the aftermath of the 1978 oil crisis, 1981 was the most painful recession since the Great Depression. But eventually they did come down during the reign of the new U.S. president: Ronald Reagan.<br />
<br />
Next up - The Second Oil Crisis.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-5813525365834911757.post-35445372797335932132015-09-13T16:27:00.000-05:002015-09-13T16:39:44.755-05:00The Secret History of Oil and Money - Part 2<i>The Balance Tips</i><br />
<br />
Last time we saw how all during the 1950's and 1960's, there was a glut of oil, and it was very cheap. This profoundly affected American post-war society, which grew up around the idea of cars, highways, suburbs, and personal mobility. White flight caused the suburbs to metastasize, and air conditioning caused the Sunbelt to be settled. Wages were rising and inflation was nonexistent. The next major expansion of the welfare state was proceeding, and there was plenty of money for space exploration. Widespread prosperity brought a questioning of social authority.Oil surpassed coal as the predominant energy source.<br />
<br />
Oil stayed cheap through the 1960's , and everyone believed the glut would last forever. Then a series of events conspired to drive it off the rails. Even though OPEC was formed in 1960, it had little effect. There was too much oil out there, and always someone willing to sell it for what the oil companies wanted to pay.<br />
<br />
After the 1967 war between Egypt and Israel, the Suez Canal was closed and would remain closed until after the 1975 Yom Kippur War.<br />
<blockquote class="tr_bq">
On 5 June 1967, at the beginning of the Six Day War, Egypt closed the Suez Canal. The closure was sudden and unexpected – fifteen cargo ships known as "The Yellow Fleet"' were trapped inside during the closure. At the end of the war, the Egyptian and Israeli armies were stationed on either side of the canal and the prospects for reopening were very uncertain. The canal remained closed until the end of a second conflict – the Yom Kippur War – and subsequent peace negotiations, eight years later.</blockquote>
<a href="http://www.voxeu.org/article/1967-75-suez-canal-closure-lessons-trade">http://www.voxeu.org/article/1967-75-suez-canal-closure-lessons-trade</a><br />
<blockquote class="tr_bq">
The Suez Canal was closed, but there was a pipeline from the great Saudi fields to the Lebanese town of Sidon as well as the supertankers lifting oil in the Persian Gulf. And there was Libya, right across the Mediterranean from Europe—no canal necessary, no supertankers necessary. Libya was supplying a quarter of Europe's oil. (p. 164)</blockquote>
In 1970 came a Black Swan - the unexpected closure of a vital pipeline to the Mediterranean:<br />
<blockquote class="tr_bq">
In May 1970 a French bulldozer on a job in Syria accidentally broke the "Tapline," the Trans-Arabian Pipeline running to the Mediterranean. The Syrians refused to repair it until they got higher transmission fees. The Nigerians were in a civil war, with their own oil province of Biafra the chief battleground, and Nigerian production was off. <b>Suddenly—or what seemed suddenly—the cushion was gone. There was still no shortage of oil in the world, but political events had interrupted the delivery of oil. </b>(p. 165)</blockquote>
On September 1, 1969 Colonel Muammar el-Qaddafi seized power from King Idris in Libya. The dependence of Europe upon Libyan oil and the closures of the Suez canal and the Trans-arabian pipeline emboldened him to take on the oil companies to get a higher price. He demanded 40 cents more per barrel. The oil companies offered five.<br />
<br />
Most of the concessions in Libya were awarded to Occidental Petroleum, and most of that oil went to Europe. The Libyans decided to pursue a strategy of divide and conquer against the oil companies. In the name of "conservation," they cut back Occidental's oil production. Occidental went to Exxon and asked if they would supply the missing oil at cost so that they could could resist the Libyan demands. Exxon turned them down. With no other recourse, Occidental capitulated. It was a minor move that would have major implications. The floodgates were now open. <br />
<blockquote class="tr_bq">
"The Libyan success was an embarrassment to other OPEC countries," wrote Abdul Amir Kubbah. OPEC, said Kubbah, had been too moderate. "We wasted ten years not following what our Venezuelan friends had told us," said Kubbah. "Now Colonel Qaddafi had shocked us into action." (p. 166)</blockquote>
The Shah of Iran was not happy, either. Here he was, the King of Kings, and he had been shown up by some tin-pot military dictator from a minor Arab country. He could do better! He wanted the oil companies to negotiate with <i>him</i>. Countries like Iraq and Algeria were already trying to leapfrog Libya's demands.<br />
<blockquote class="tr_bq">
The Shah of Iran was miffed at the Libyan initiative. Among his own self-given titles were Shahanshah, King of Kings, Shadow of God on Earth; and here was an upstart colonel leading the Club. His power in the area, he said, was ten times, no, twenty times as great as that of the British had ever been. He warned the consuming countries not to get together behind their oil companies; he warned the oil companies not to get together to defeat the legitimate demands of the producers. The companies, he said, would now negotiate with the Persian Gulf states. That way he, the Shahanshah, could restrain the "wild men" of OPEC. The "wild men," Iraq and Algeria among them, were already leapfrogging their prices to match those of the Libyans. When OPEC met in Caracas in December, though, there was little difference between the "wild men" and the "moderates." A month later the oil companies met the Persian Gulf states in Tehran. <br />
<br />
The Shah could see that the British and American governments had left the oil companies without diplomatic support, and he was a grimly determined host. The Libyans had found the way to transfer the wealth of the world; they had used a temporary market condition to kick up the prices. Theoretically, the Tapline break was temporary, the Nigerian civil war was temporary, the Suez Canal closing was temporary, and even the European demand in the summer of 1970 seemed temporarily above normal. ...<b>The Libyans had also shown that a "negotiation" between strong producers and divided consumers scarcely had to be a negotiation at all; it was the exact reverse of the oil situation Perez Alfonso had found when he first got elected to Congress in Venezuela, when the oil cartel dictated the prices.</b> The Shah said that the proper price for oil was perhaps ten times the current price, which would bring it to the level of the price of alternative fuels. (pp. 166-167)</blockquote>
The oil companies started to worry. Rather than play this game of leapfrog with individual nations, it was the oil companies themselves who advised that the oil producing nations unite and fall in behind OPEC. They reasoned that negotiating with one entity would be a lot easier than with each country individually, and they could come out ahead. <i>"The text sent to OPEC by the oil companies had, considering the old history of the oil cartel, an ironic twist: it said that the oil consumers and producers both needed stability, and this business of Leapfrog was very unstable; OPEC should act together and bind its members! The companies did not want to have two sets of negotiations as the Shah suggested; they feared another round of Leapfrog."</i> (p168)<br />
<br />
The picture the oil companies had of OPEC was straight out of the scene in Lawrence of Arabia (released 1962) where the Arab tribes, having united behind Lawrence, have taken Damascus and are squabbling among themselves leading to chaos. Economists like Milton Friedman had advised that OPEC would break up after a year. As with so many things, he was wrong. Smith quotes a British observer:<i> "We were used to these chaps always quarreling among themselves, the Iraqui hotheads and the conservative Saudis. The Western countries were not prepared at all for economic blackmail. We know the Iranians were spending twenty percent more than their income, so they had to get a raise, but we were surprised at how very tough all of them had become."</i> (p169)<br />
<br />
Rather than quarrelsome towelheads, the people sitting across the negotiating table from the oil companies were highly educated PhD.'s, trained, by and large, at American universities such as Harvard, Stanford, Cornell, and the Universities of Texas and Wisconsin. Many had worked for Western oil companies at one time or another. They were no pushovers. This time the Arab nations were united while the oil companies were divided: <i>"The oil companies were not used to acting in concert, even though they had once been a powerful cartel. They had to obtain a Department of Justice antitrust waiver just to be able to talk to one another."</i> (p 168) After 33 days of tense negotiations in London, OPEC got a raise of 50 cents per barrel, higher than the demand they had gone in with. The agreement was signed on February 14, 1971, which Smith refers to as "the St. Valentine's Day Massacre."<br />
<blockquote class="tr_bq">
The price rise of the St. Valentine's Day Massacre did not dampen demand; indeed, that demand went up and up, all over the world. Behind the "invisible dike" the price of Texas oil was $3.45 a barrel, frozen by the price and wage controls imposed by the Nixon administration. The United States was now importing 23 percent of its oil, but most of that still came from Canada and Venezuela. The Middle Eastern oil was $2.20 a barrel at Ras Tanura in Saudi Arabia, still cheaper than the Texas oil. </blockquote>
<blockquote class="tr_bq">
All through the 1960s the oil companies had worried about the Endless Glut. <b>Michael Haider, chairman of Exxon, said at its annual meeting in Houston, in May 1967, "I wish I could say I will be around when there is a shortage of crude oil outside the United States." A memo from Standard of California in December of 1968 warned Arctic oil would keep the Glut going</b>...Richard Nixon was reelected by forty-nine of fifty states. <b>His energy task force, headed by George Schultz, had reported there was little danger of an Arab boycott and that import restrictions should be liberalized...A whole generation of oil men had grown up with the Glut. </b></blockquote>
<blockquote>
<b>By 1972 the Glut was gone. The Texas Railroad Commission did not have to worry about how many days a month the wells could pump; they were going flat out, every day. </b>The demand was right across the board: gasoline for automobiles, kerosene for jets, chemicals, weed sprays, fertilizers, plastics...James Akins, the career State Department official who had counseled the companies to make their peace with Libya, defended the State Department position...<b>World oil consumption, he said, in April 1973, would be as great in the next twelve years as world oil consumption through all of previous history.</b> The loss of production from any two Middle Eastern countries would cause a panic, and the price of oil could go to $5 a barrel.<br />
<br />
The "invisible dike" around the American oil began to shudder and shake. <b>It had been built to keep the cheap foreign oil from coming in. Now it blew away, not from the supply pressure outside, but from the demand inside.</b> <b>The import restrictions were lifted, and what went roaring out, of course, was dollars. </b>Those dollars went out and competed for oil supplies that were already tight. The administration in Washington did nothing to control the scramble. It had other problems on its mind. It was about to go on trial.<br />
<br />
<b>The demand for oil was running ahead of the most extreme predictions.</b> Independent oil companies tried to beat the seven great oil companies to the wellheads. Japanese trading companies tried to beat the independent oil companies. Only Aramco, in Saudi Arabia, had spare capacity, and it had little. By September 1973 the market price had for the first time overtaken the official "posted" price. OPEC could easily read what this meant politically. Its former secretary-general, Nadim al-Pachaci, told a conference, "The Arabs now hold the keys to the energy and monetary crisis. They will know how to use both as a political weapon." (pp. 171-173)</blockquote>
And they did use it as a political weapon. In October 1973, the Egyptians crossed the Bar-Lev line into Sinai intending to reopen the Suez Canal. The United States resupplied Israel despite threats of a boycott. The OPEC countries met, with no oil companies across the table (because they were not invited) and declared the price to be $5.12 a barrel <i>"By ukase, by fiat, by order of the high command. The press release was prepared only in Arabic." </i>(p. 174) The Arabs doubled the price again a few weeks later and added an oil embargo on top of it in addition to the cutbacks to nations which had resupplied Israel in the war (The United States and the Netherlands).<br />
<br />
The Arab countries expected bombs to start raining down on them any day for defying the almighty West. The bombs never came. The United States had been humiliated in Vietnam, withdrawing that same year: <i>"Vietnam," said my British friend later, "took the edge off, the great giant brought down by an army in sneakers."</i> (p175). OPEC met again in Tehran in December of 1973. The whole world, not just oil specialists and insiders, were watching. Emboldened by their success at cowing the West, there was debate as to how high the price should go. Too high, and you might cripple Western economies. Sidestepping the negotiations, the Shah called a press conference and unilaterally declared the new price to be $11.65 a barrel. <br />
<blockquote class="tr_bq">
The Shah, said Jamshid Amouzegar, had ordered a study of alternative fuels. "We were struck," said the eminent Cornell alumnus, "by the fact that in 1951 coal was fifty-one percent of the fuel in the United States, and now it is nineteen percent. <b>Because of cheap oil, alternative sources are being neglected. No one in the West is worrying about what happens when the oil runs out. </b>The embargo had showed the weakness of the West. OPEC's economic commission had determined that the price should be $17 a barrel. </blockquote>
<blockquote>
Sheikh Yamani was apprehensive at so large a boost. "I was afraid the effects would be even more harmful than they were, that they would create a major depression in the West. I knew that if you went down, we would go down," he said. Yamani tried to get in touch with King Faisal, but was unable to. If he kept the price down, it might break OPEC but leave the Saudis isolated. Yamani remained within OPEC, insisting on a smaller price increase, and was later reprimanded by Faisal. But Yamani was stunned when, while the OPEC ministers were still meeting, the Shah called a press conference.<br />
<br />
The price of oil, the Shah said, would be $11.65 a barrel. That was even more than Yamani had agreed to. The Shah's arrogance astounded the assembled diplomats and reporters. The new price of oil, he said, was very low and "was reached on the basis of generosity and kindness." As for the Western consumers, it would do them good to economize: "All those children of well-to-do families who have plenty to eat at every meal, who have their own cars, who act almost as terrorists and throw bombs here and there, will have to rethink all these privileges . . . they will have to work harder." </blockquote>
<blockquote>
pp.175-176</blockquote>
There were stunned reactions around the world. Smith relates the director of the National Bank of Hungary, Janos Fekete, finding that all his budgets were in deficit. The Hungarians bought oil from the Russians, but the Russians used the OPEC price. <i>"And then somebody—maybe the financial people, like Fekete—would say, 'But now we have to pay four times as much for the oil, and we have no oil. Where do we get the money?'"</i><br />
<br />
Where indeed? As we shall see, this price increase was, in the words of Smith, <i>"The greatest transfer of wealth in world history"</i> After the twin humiliations of Vietnam and Watergate, America was now slammed with a quadrupling of oil prices and an embargo overnight. Lines were forming at gas stations. Suddenly, Happy Motoring didn't look like such a good anymore. Why did we rip up all the streetcars, again?<br />
<br />
We'll see what the implications were for the global economy next time.<br />
<br />
UP NEXT: The FalloutUnknownnoreply@blogger.com3tag:blogger.com,1999:blog-5813525365834911757.post-41654717426264869042015-09-12T08:36:00.002-05:002015-09-27T16:44:06.684-05:00The Secret History of Oil and Money - Part 1<div class="separator" style="clear: both; text-align: center;">
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<br />
The mastermind behind OPEC was not an Arab sheikh, but an austere and fastidious Venezuelan lawyer named <a href="https://en.wikipedia.org/wiki/Juan_Pablo_P%C3%A9rez_Alfonso">Juan Pablo Perez Alfonso</a>. Oil had been discovered in Venezuela in 1922, and provided the bulk of the government's revenues. The problem was that it was so cheap that the country made very little money off it.<br />
<br />
Perez Alfonso was what we might call today "Peak Oil Aware." He knew that oil was a finite resource that would someday
run out, and that oil was a one-time gift that would help Venezuela
modernize and become a wealthy country. But the low prices of this
one-time gift were undercutting this ability. Furthermore, the low prices encouraged wastefulness instead of conservation.<br />
<br />
Instead, his idea was to find a way to preserve the resource, and raise the revenue gained from it at the same time.<br />
<br />
In 1948 the military dictatorship of Perez Jimenez took over in Venezuela and Perez Alfonso went into exile, first in the U.S. and then in Mexico. While in exile, he became acquainted with what would become the guiding inspiration for OPEC. But you won't find it in the writings of Karl Marx. No, the inspiration came straight out of good old red-white-and-blue American corporate socialism: <i>the Texas Railroad Commission</i>. <br />
<br />
The Texas Railroad Commission, as the name implies, was first set up to regulate the railroads. When oil drilling came along, instead of creating a new regulatory body, Texas gave the railroad commission the authority to regulate oil production.<br />
<br />
At the time, the problem was that because so <i>much</i> oil was being pumped, many of the smaller independent oil drillers had trouble making enough profit because they did not have access to distribution networks, refineries and gas stations like the Big Guys. Because the land rights above did not always line up with where the oil flowed underneath the earth's crust, the independent drillers felt they were being cheated. These independent drillers were still worth millions of dollars despite not making "enough" profit, so they did what rugged individualists in Texas always do - they went running to government and threw their money around to get special rules passed. The Railroad Commission introduced limits on oil drilling--how much oil could be produced. In order to keep oil from outside the United States from undercutting this price, they regulated the amount of oil let into the United States by constructing an "invisible dike:"<br />
<blockquote class="tr_bq">
</blockquote>
<blockquote class="tr_bq">
<b>The Texas Railroad Commission did not set a price for oil, but it determined what could be produced. </b>The early appointments to its board developed a reputation for fairness, from the point of view of the producers. <b>When the demand dropped, the Texas Railroad Commission gathered the industry and polled it as to what the real demand might be. It then set an allowable rate of production, so many days per month, that oil could be produced. Thus conservation produced a mechanism for stabilizing the market</b>.<br />
<br />
<b>If the price of oil started to sag, the Texas Railroad Commission would reduce the number of days per month that oil could be produced.</b> "It became the policy of the Commission," Fortune wrote in 1959, "to keep oil prices high enough for the 'little man'—the marginal Texas producer—to make money. This of course was a wonderful arrangement for the nonmarginal (i.e., the major) U.S. producers. It enabled them to clear as much as 50 per cent per annum. And it was even more wonderful for the major companies overseas."<br />
<br />
It was wonderful for the companies overseas because the Texas price was the American price...[a]nd the Texas price became the world price, so oil was leaving the other Gulf, the Persian Gulf, in the tankers of Exxon and Gulf, at $1.80 a barrel—the Texas price— when it cost only 10 cents a barrel.<br />
<br />
<b>The trouble was that so much oil was being found in the world that the "Gulf" price, out of Texas, wasn't always sticking.</b> Somebody was always trying to cut the price. The Texas Railroad Commission could keep the American price up by ordering a cutback in production, but oil could still land in the United States from abroad, and move cheaply. <b>The American oil companies then limited imports, by voluntary agreement, which later became mandatory by order of the U.S. government.</b> They constructed, said the British economist Paul Frankel, "an invisible dike against the outside world." </blockquote>
pp.148-149<br />
<br />
By 1959 the military junta had fled the country, the reformer Romulo Betancourt was president, and Perez Alfonso was named the oil minister.<br />
<br />
Perez Alfonso's idea was to use the Texas Railroad Commission model for the oil producing countries to cut back production, thus conserving the resource by increasing the price. The increases would send money into the coffers of the oil-producing nations and allow them to develop. He started talking to people in Austin.<br />
<blockquote class="tr_bq">
He had admired the Texas Railroad Commission, he said, for its conservation practices, and he wanted OPEC to be a club that would give oil its proper value and extend its life. It was intended to wrest the power from the great oil companies, and to show the industrial nations how they wasted resources. "The nations of OPEC," he said, "should be an example to the rest of the world in the way they live."</blockquote>
At the time, the price of oil was not controlled by the producers themselves, but by the oil companies, in particular the International Oil Cartel comprised of the "Seven Sisters:" <br />
<blockquote class="tr_bq">
The [International Oil Cartel] had been formed in September 1928, when Sir Henri Deterding, the chairman of Royal Dutch/Shell, invited the heads of Exxon (then Standard Oil of New Jersey) and British Petroleum to his estate in Achnacarry, Scotland, ostensibly for some grouse shooting. What the grouse shooters did, however, was to agree on an unsigned document that specified principles for eliminating "destructive competition." The three original members later admitted Texaco, Gulf, Mobil, and Socal—Standard of California—to make up what Enrico Mattei, the Italian oil man who could not break their grip, called the "Seven Sisters." </blockquote>
pp150-151<br />
<br />
Which just proves the original <a href="https://en.wikiquote.org/wiki/Adam_Smith#Book_I" target="_blank">Adam Smith's famous dictum</a>:<br />
<blockquote class="tr_bq">
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”<br />
Chapter X, Part II, p. 152.</blockquote>
The oil cartel set the amount of production, and hence the price, regardless of the needs of the country in which the oil was located. <i>"The oil companies took our oil at a dollar a barrel...BP and Gulf would come and say, 'You can pump a million barrels a day; that's all we will sell.'"</i> (p.226) The low prices decreased the revenues of the oil producing countries, keeping them poor while making the oil companies rich. Perez Alfonso passed a number of new laws in Venezuela based on conservation, but it was to little avail as long as the oil cartel controlled the international market. If Venezuela cut back production, the oil companies would just get it from somewhere else in their vast empire. And Venezuela only had 7 percent of the world's oil reserves, while the Middle East had 70 percent. "<i>Venezuela could cut back until it was blue in the face and it
wouldn't matter; it would be like Pennsylvania starting the Texas
Railroad Commission.</i>" p150; 152,153<br />
<br />
At a meeting of oil producing countries in Cairo in 1959, Juan Pablo Perez Alfonso met a Saudi oil minister named Abdullah Tariki. He explained his proposal:<br />
<blockquote class="tr_bq">
<b>It would be an international Texas Railroad Commission without the Texans! A Texas Railroad Commission for the whole world!</b> If the price of oil started to go down, all the members would hold back their production until the price went up again. And together, united, the producers of the oil--by which Perez Alfonso meant the countries in which the oil was located--together could stand up to the great industrial nations with their great oil companies. p152</blockquote>
Tariki had studied at the University of Texas and worked briefly for Texaco. He was the director of the Office of Petroleum Affairs for Saudi Arabia. At the time, Saudi Oil was controlled by Aramco - the partnership of Exxon, Mobil, Socal and Texaco. Rather than being dictated to by Western oil companies, Tariki wanted Saudi Arabia to have its own integrated oil company. Tariki, like Perez Alfonso, was not at all pleased with the status quo:<br />
<blockquote class="tr_bq">
Tariki was fuming because the oil companies had just reduced their prices. Saudi Arabia did not have very sophisticated management, to say the least. King Saud married at least 125 times, and each wife got a house and an allowance. When the king needed money, a courtier would call up Aramco and ask for an advance. Saudi Arabia was perilously close to being out of cash, and Tariki was getting the phone calls, and the oil companies were cutting their prices, which was going to cost Saudi Arabia $34 million. <br />
p. 153 </blockquote>
He listened intently to Juan Pablo Perez Alfonso's message and was sold. <i>"Conserve and cut back, unite and control. If you want more money, do not sell more oil; sell less."</i> Now with an ally in the Middle East, Perez Alfonso would spread the idea to whoever would listen:<br />
<blockquote class="tr_bq">
Tariki went through the Arab states, and Perez Alfonso went to Iran, where he held a press conference even before he got to see the Shah. Later he went even to Moscow. The Russians were as hostile as the major oil companies. Perez Alfonso had to explain that OPEC was not a front for the oil cartel.<br />
<br />
They were an odd couple, Perez Alfonso and Tariki, but they got along. Here was this precise, brilliant, balding Latin with his horn-rimmed glasses and his pencil mustache, intense, nervous, his bedside pad always ready to receive his thoughts when he could not sleep; and here was his Arab sidekick, somewhat swarthy—he had sometimes been taken for a Mexican in Texas restaurants— with thick hair and a generous nose. Tariki was as careless as Perez Alfonso was precise. He loved speaking to crowds, though he was personally shy; and when he was speaking, he would drum out, "Aramco—is—stealing, Aramco—is —stealing," and then would rattle off statistics. The statistics bore no particular relationship to reality. "They sound good, no?" he said. "So what? The oil is ours." Tariki lived alone in Jidda, in a house with a walled garden that contained gazelles, chickens, turkeys, and various lame animals which he nursed. His Saluki dogs had the run of the house, and the Salukis remained in their chairs even when visitors entered. Tariki was also a violent Arab nationalist. "I am an Arab, not a Saudi," he said... <br />
pp.157-158.</blockquote>
But what I found most fascinating was the fact that the problem with oil in the middle of the Twentieth century was that there was too <i>much</i> of it! No one needed all that oil, no one knew what to do with it, and the producers had a hard time making a profit because it was so abundant. So rather than scarce oil chasing the needs of consumption, we came up with entirely new ways of wasteful consumption to soak up all the oil being produced so that the oil companies could make a profit (<i>Carbon Democracy</i> makes this point as well). Rather than too little oil, there was too <i>much</i>. <br />
<br />
Oil companies did everything they could do to artificially increase the demand for oil, including buying up streetcar lines and having them demolished. The ostensible reason was that everyone was driving anyway, so the public transportation systems were losing money. Might as well just turn the roads over to cars and run gasoline-powered buses instead (which immediately suffered from neglect and budget cuts). Demand was driven by the cheap prices of a resource that would seemingly be cheap forever.<br />
<blockquote class="tr_bq">
The [Los Angeles Railway] system was sold in 1945 by [railroad tycoon Henry] Huntington's estate to National City Lines, a company that was purchasing transit systems across the country. National City Lines, along with its investors that included Firestone Tire, Standard Oil of California (now Chevron Corporation) and General Motors, were later convicted of conspiring to monopolize the sale of buses and related products to local transit companies controlled by National City Lines and other companies in what became known as the General Motors streetcar conspiracy. National City Lines purchased Key System, which operated streetcars systems in Northern California, the following year.<br />
<br />
The company was renamed as Los Angeles Transit Lines. The new company introduced 40 new ACF-Brill trolley buses which had originally been intended for the Key System streetcar system in Oakland which was being converted by National City Lines to buses in late 1948.<br />
<br />
Many lines were converted to buses in the late 1940s and early 1950s.
<br />
<br />
The last remaining lines were taken over by the Los Angeles Metropolitan Transit Authority (a predecessor to the current agency, The Los Angeles County Metropolitan Transportation Authority (Metro)) along with the remains of the Pacific Electric Railway in 1958. The agency removed the remaining five streetcar lines (J, P, R, S and V) and two trolley bus lines (2 and 3), replacing electric service with diesel buses on March 31, 1963. (<a href="https://en.wikipedia.org/wiki/Los_Angeles_Railway#Decline" target="_blank">Wikipedia</a>)</blockquote>
There was endless glut as far as the eye could see. So we invented a happy motoring utopia, building the interstate highway system and repaved local roads, the distant suburbs driven by white flight away from minorities moving north for factory jobs, and ripped up railway and streetcar lines so that people would become utterly dependent upon the motorcar. People bought a new Cadillac every year and headed to the drive-in. James Dean and Marlon Brando rebelled against authority and Americans got their kicks on Route 66. It was the drive-in future covered in chrome with a hood ornament on top; the Golden Age we Americans still pine for today. It was all part of the plan to increase the use of oil because of oversupply, which would seemingly last forever (forever being a decade hence):<br />
<blockquote class="tr_bq">
In August 1959 <i>Fortune</i> magazine noticed the itinerant preachings of the Odd Couple. Its tone was one of amusement and skepticism, its point of view, as usual, that of big business. To read it is to enter an astonishing time warp.<br />
<br />
<b>The problem, <i>Fortune</i> said, is the Glut. Too much oil. Furthermore, said Fortune, "the glut is certain to last a long time."</b> The reason: "too much oil underground too easy to get at, ready to flow at very little additional expense." The ratio of reserves to consumption had formerly been twenty to one; that is, for every barrel shipped there were twenty barrels underground. Now it was forty to one; in the Middle East it was one hundred to one. <b>Even if nobody ever drilled another well, there was so much oil that the ratio of reserves to consumption wouldn't go back to twenty to one for another decade. </b><br />
<br />
"The international oil companies do not propose to take a beating lying down," said Fortune. "They are redoubling their efforts to increase the use of petroleum products." <b>General Motors and Socal had already bought the Los Angeles mass transit rail system and shut it down. Exxon promised a tiger in a tank. Everywhere there were campaigns to increase driving and heating. "Glut without end?" read the <i>Fortune</i> subhead.</b> "Today, for the first time in years, the companies are cracking down on salaries, expense accounts and office overhead." <b>The Highway Trust Fund helped by building the interstate highway system. Farther out, suburbs were springing up, requiring more driving. </b><br />
<br />
pp. 145-155</blockquote>
In 1960 there was a epic oil glut and the price of oil collapsed: <i>"...that summer of 1960 was the glut. The Russians were selling oil; the Italians were selling oil; odd tankers everywhere were dumping the stuff for whatever it would bring."</i> (p. 158). Exxon cut the price of oil without any consultation with the major oil producing nations, whose budgets were dependent on that price. There was widespread anger and fury, not so much from the cut itself as from the fact that the oil companies did not so much as consult any of the oil producing nations before doing it. The Shah of Iran was furious, as were others. <i>"The budgets of Middle eastern countries went out the windows, with a clamor from those countries. ...The price cut was serious for Iran, with its growing population, and for Saudi Arabia, which was planning a major program of social services....The Odd Couple's preachings were recalled. Tariki called a meeting in Baghdad for September 9, 1960." (</i>p.158)<br />
<br />
It turned out to be the straw that broke the metaphorical camel's back. At that meeting OPEC was formed, an "exclusive club" of oil-producing nations with "similar interests." How did one become a member of that club? Canada and the Soviet Union were not admitted, but Gabon and the sheikdom of Qatar were, despite not being substantial net exporters. <i>"OPEC's rules were that an applicant had to be accepted by three-quarters of the Full Members, but a blackball by any Founding Member would keep him out." (p.161). Three of the five Founding Members--those with the charter privilege of blackball--were Arab states,as were, eventually, seven of the twelve full members."</i> Thus it really developed as a club of "third-world" oil producers, chiefly Arab states, that is, countries not explicitly aligned with the United States or the Soviet Union. And what did "fundamentally similar interests" mean? In reality, it meant countries that would not sell to Israel.<br />
<br />
It turns out, though, that it didn't work. Oil was just so damn cheap, and we had other things on our mind, so we continued Happy Motoring all throughout the 1960's:<br />
<blockquote class="tr_bq">
<b>But the price of oil did not go up; in fact, it declined, all through the 1960s</b>. The "posted price" of $1.80 a barrel in the Persian Gulf was for tax purposes; sometimes the oil was discounted to as low as $1 a barrel. Behind the "invisible dike," in Texas, oil sold, at the end of the decade, for $3.45 a barrel.<br />
<br />
A contributing factor to the declining price of Middle Eastern oil was the improved ways of carrying it. The tankers in the middle 1950s had been perhaps 20,000 tons. Japanese shipyards then developed the jumbo tanker, and then the VLCC supertanker, 250,000 tons, which sharply reduced the cost of oil as it landed at the refineries.<br />
<br />
<b>All during the 1960s, OPEC and the seven great oil companies squabbled over a few cents a barrel</b>. The Shah developed a major spending program and needed more revenue to support it. The Saudis eyed his program nervously. During the Six Day War, in 1967, the Arabs set up a boycott, and the Suez Canal was closed. The boycott was relatively ineffective. <b>The end of the Six Day War left OPEC standing, but in tatters; the Iranians and the Venezuelans had increased their exports at the expense of the Arabs. </b><br />
<br />
<b>In the United States, in the early 1960s, the rate of inflation was about 1 percent a year. </b><br />
<br />
p.163-164</blockquote>
So OPEC had formed, but it didn't matter. There was still plenty of oil everywhere, and always people willing to sell it for less to get the money. Oil producing nations were divided. The balance of power was with they buyers, not the sellers--they needed us more than we needed them.<br />
<br />
Cheap oil would drive the major social events of the sixties - the <a href="https://en.wikipedia.org/wiki/Second_Great_Migration_%28African_American%29">Great Migration</a> of Blacks to the North, <a href="https://en.wikipedia.org/wiki/White_flight">White Flight</a> to the suburbs, busing, the rise of suburbs and the movement of the population out of the Industrial Heartland to the Sunbelt (aided by air conditioning - a rarity before the War).<br />
<br />
This expansion made a lot of people fabulously rich. Not just the automobile companies, but all the ancillary industries, which included everything from muffler shops, to auto parts stores, to drive-in movie theaters and hamburger joints, to the boys who filled tanks at gas stations (back when they did that), to ambulance-chasing lawyers and insurance companies dealing with all the injuries and accidents. Automobile dealers became the richest and most prominent "big wheels" in small communities across the nation, funding all sorts of advertising and charity events.<br />
<br />
The buildout of suburbs for the "nuclear family" generated wealth for the homebuilders and the road builders. It also generated a lot of wealth for the banks. Between the auto loans and the home mortgages, finance became a part of everyday life for everyone thanks to cheap oil. Cities like Phoenix and Los Angeles ripped out streetcars and elevated bike paths and built sprawling metropolises centered totally around the car. Phoenix, with the population of Manhattan, spread out over 200 square miles of parched desert.<br />
<blockquote class="tr_bq">
The critical environmental damage done by cars is not caused by the fuel that they themselves consume, although they do plenty of that. (Direct fuel use by cars accounts for roughly a third of U.S. fossil-fuel use and carbon output.) The critical damage is caused by all the other consumption that driving fosters—consumption that would not occur on the same scale if drivers couldn't move around as easily as they do. Before cars, most people had to live close to other people and to the places where they worked and shopped, even if their homes were in small, isolated towns, far from other communities. Cars permanently changed that, by transforming the way their owners arrange themselves in relation to one another. </blockquote>
<blockquote class="tr_bq">
The major carbon-spewing energy drain in a sprawling American suburb isn't the car in the driveway; it's the driveway. That is, it's everything the car makes both possible and necessary: the oversized house, the three bay garage, the manicured yard, the unused swimming pool, the miles of connecting asphalt, the redundant utilities, the schools, the hospitals, the shopping malls, and all the other accoutrements of inefficient suburban living—none of which would exist on anything like the same scale if residents were less able to move around at will. Cars are consumption amplifiers; driving is the pump that enlarges the sprawl balloon. And countries with rapidly modernizing economies, like China and India, are now following the American mobility example at extraordinary speed, by acquiring new cars and building new roads at a pace seldom matched even in the United States. It will be a while before those countries overtake Americans in impact per capita, but in absolute numbers they nave already begun to make us look demure. And, as with us, the main driving-related environmental impacts will always be the indirect ones. </blockquote>
<blockquote class="tr_bq">
David Owen; <i>The Conundrum</i>, pp. 65-67</blockquote>
We don't realize it now, but until this time oil had been a relatively minor energy source, even though Henry Ford's assembly line started up in 1914. The age of oil began in 1859, but it took one hundred years for oil to become the world's predominant energy source. One hundred years from the <a href="https://en.wikipedia.org/wiki/Drake_Well">Drake Well</a> in 1859 was 1959, coincidentally the year that Perez Alfonso met Abdullah Tariki in Cairo.<br />
<blockquote class="tr_bq">
The change in energy habits was from coal to oil, and no wonder. Coal was bulky, hard to transport, and left irritants in the atmosphere when burned. Mining it was an unpleasant and hazardous task, whether in Pennsylvania or Wales or Lorraine, and there was always trouble with the miners. The automobile population of the world was increasing geometrically, as if the idea of bigger families had also spread to vehicles.<br />
<br />
<b>In 1940 coal accounted for two-thirds of the world's energy. In 1970 it provided less than a third.</b> In the United States coal as a percentage of total energy consumption dropped from 47.2 percent to 18.6 percent in the same period.<br />
<br />
p. 163</blockquote>
The good times were rolling during the "<a href="https://en.wikipedia.org/wiki/Post%E2%80%93World_War_II_economic_expansion">Golden Age of Capitalism</a>." But it was not to last. As we approached 1970, all that was about to change in a big, big way. <i>"It took two wars, a gradual change in energy habits, and a French bulldozer to bring about the control first envisioned by Perez Alfonzo."</i> (p. ) That's what we'll cover next time.<br />
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UP NEXT: The balance tips.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-5813525365834911757.post-18832844194492636482015-07-11T13:00:00.002-05:002015-07-24T12:33:40.206-05:00Modern Work Patterns Make No Sense<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgQVcDQ5ms6rXwsUQmcAUPoJMMMQRzVyqfJPIa6ZCqHmJuA8kLsU_3suDz_5d7R0tN41xTwmCO4IsD1M-PUnragFg9RpwUF34uyfEXgNCpDPefCpdx-ogJUEh2h3_Za0HNCRwvlAiZacY/s1600/i107.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="243" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgQVcDQ5ms6rXwsUQmcAUPoJMMMQRzVyqfJPIa6ZCqHmJuA8kLsU_3suDz_5d7R0tN41xTwmCO4IsD1M-PUnragFg9RpwUF34uyfEXgNCpDPefCpdx-ogJUEh2h3_Za0HNCRwvlAiZacY/s320/i107.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">From <a href="http://www.gutenberg.org/files/40584/40584-h/40584-h.htm" target="_blank">"Lancashire"</a> by Leo Hartley Grindon. </td></tr>
</tbody></table>
The BBC’s In Our Time <a href="http://www.bbc.co.uk/programmes/b05tly3f" target="_blank">did a show recently about the Lancashire cotton famine</a> – basically when the British textile mills were cut off from their main sources of cotton in the American South due to the Civil War. The British had outlawed slavery, but were all too happy to take advantage of the slavery practiced by their trading partners. How convenient, and a nice way to claim the moral high ground. Slaves aren’t useful for value-added work anyway, and that was the key to Britain’s prosperity, but, hey, we’ll gladly make use of the cheap cotton produced by <i>your</i> slaves and pat ourselves on the back for our morality!<br />
<br />
In any case, <a href="http://pseudoerasmus.com/2014/11/10/slavery_and_industrialism/" target="_blank">some have claimed</a> slavery was no big deal anyway for capital formation because Britain just pivoted to getting cotton from Egypt and, especially, India. But Indian cotton, although not grown by slaves, was grown by subsistence farmers who were dragooned by the British authorities of the Raj into producing cotton in sufficient quantities for export. How did they pay for the transition? Loans, of course. You can’t eat cotton, and it’s very vulnerable to variations in the monsoon rains.<br />
<br />
Fast forward today, and what are all those small farmers committing suicide at a staggering rate growing? <a href="http://news.bbc.co.uk/2/hi/south_asia/5179540.stm" target="_blank">You guessed it, cotton</a> (now woven in Bangladeshi sweatshops instead of Lancashire mills). <a href="http://news.bbc.co.uk/2/hi/business/1897049.stm" target="_blank">And now it’s genetically modified cotton</a>, which is produced by Western corporations and bought via debt upfront, with all the risk laid at the feet of the small farmers. This means the farmers also need to buy the pesticides, the upside being that they can always drink it if the rains fail to show and the debts come due, which is exactly what many of them are doing. <br />
<br />
So, one again, an attempt to wash the blood off the hands of the creation of capitalism falls short.. But what I want to highlight this part which put it in a historical context:<br />
<blockquote class="tr_bq">
<b>[5:30] Melvyn Bragg (host):</b> Who are the people working in the cotton industry?<br />
<br />
<b>Emma Griffin: </b>Well, in Lancashire everybody’s working in the mills; some of these mill towns have the vast majority of the populations working in these mills,. And whole families will be employed. They offer a lot of employment for children. Children can start working from the age of nine. Now they’re not going to be doing very skilled work or operating the machines, but they’ll be doing menial work around the factory. And as they enter their teens they’ll start to become machine operators, and as Lawrence has already mentioned, and quite unusually, there’s a lot of employment for women, and in many mills women will actually outnumber the men. But all of the tasks within a factory are usually divided up according to gender, and of course it will be no great surprise to hear that women tended to have the lower paid jobs whilst men had the most senior positions – the overlookers, the engineering, and the heaviest work. That always came with the greatest pay, and of course with the greatest status.<br />
<br />
I think one point that is important to emphasize is that we tend to think of factory work as low skill and low pay, but for nineteenth century Britain, that simply isn’t true at all. In the context of the time and given that these are relatively uneducated workers, these workers are able to command a real premium for working in the factories. It is regarded as skilled work, that these are valuable workers, and this is particularly true for the women. The other alternatives for them are things like domestic service, or cleaning, or laundry work. By contrast, the money they can earn in the factories is very significantly better than the alternatives there.<br />
<br />
<b>MB: </b>And the background to this is at this the end of village industry, really. Village cottage industry where everyone was at the loom if they weren’t in the fields.<br />
<br />
<b>EG: </b>It is. There’s been a very significant switch in the way that things are made. So traditionally people are paid for making things according to how much is made. So a shoemaker gets paid for his shoes when he’s made his shoes and is not really paid for his time--he’s paid for what he actually accomplishes. In the factories that logic doesn’t really work because the employers have spent money invested in very expensive machinery, and that means they’ve got to keep the machines running all through the week, as long as possible. So they’ve got to get workers to the factory early in the morning, they’ve got to get them working intensively throughout the day, staying until late into the evening. And that’s a very different kind of working pattern that’s being introduced. So instead of people dovetailing working at home with managing a cotton garden or something, now they’re going into the factories. And it’s the beginning of modern working patterns that we’re familiar with, where we’re effectively paid for our time rather than what we manage to get done.<br />
<br />
<b>MB: </b>But there was a preference for people to work in the factories rather than to stay in the countryside in these not idyllic village in these lousy conditions.<br />
<br />
<b>EG: </b>There’s a real draw. I mean it’s clear that population is moving into Lancashire so workers are very clearly…there are some push factors from the rural sector as well, but there are clearly attractions to the factories. And one of the attractions is that there’s a lot of employment for children. So if you imagine a family in rural Norfolk of five or six children, many of those children won’t be at work because there is no work for them to do. You make the move to somewhere like Manchester or one of the mill towns all round about, and suddenly all of your family is at work. So you go from having one breadwinner to having four or five wage earners in your family, which makes a very significant difference to living standards indeed. So, yes we’ve got basically, since the end of the eighteenth century, we’ve got rural migration into the towns, whole families are moving and taking up these new opportunities.</blockquote>
<i>Getting paid for what you actually accomplish.</i> What a concept! Instead, most of us are chained to our desks for forty hours a week <i>regardless of what we actually accomplish</i>. What sense does this make? In fact, all we do is “fiddle around on computers all day” (as David Graeber puts it) and actually accomplish very little. Yet we must sit there and put in our forty hours regardless of whether there is four hours of work to do or forty. Not to mention the odd idea of selling a concept as ephemeral as time – how bizarre that is. One’s time on this earth is so limited; something feels wrong about selling it to the lowest bidder. Indeed, before the invention of precise timekeeping that wasn’t even possible. The clocks that were designed to help monks time their prayers evolved into shackles for the working class.<br />
<br />
Of course people take the modern work situation for granted because the authorities do their best to induce historical amnesia and make us think that the way things are is the way they have always been. This is what George Orwell meant when he said that whoever controls the past controls the present (and by extension, the future). That is why Americans are kept as ignorant of history as those in power can make them.<br />
<br />
As Emma Griffin points out, those work patterns make sense when you work in a factory where every second the machine isn’t running it’s a loss of profit. This is also why agricultural societies have always been more leisurely than industrial ones--working harder won’t make the plants grow any faster, after all – once the land you’ve got is seeded and watered, it’s several months minimum before you harvest your crop with little to do but pull weeds and wait. By contrast, a machine never gets tired, and you will give out before it does, hence the <a href="https://en.wiktionary.org/wiki/Stakhanovite" target="_blank">Stakhanovite</a> working hours of the early Industrial Revolution (only ameliorated by brutal strikes where workers often sacrificed their lives in a hail of government-sponsored gunfire).<br />
<br />
But in case you haven’t noticed, <i>not a lot of people are working in factories anymore</i>. Yet, bizarrely, the entire structure of society is designed as if we do! We all get into our cars and head to work at the exact same time every day (causing epic traffic jams), and file home at the exact same time (causing yet another traffic jam). We all work Monday-Friday (with a few exceptions). During that time we’re chained to a desk for eight hours regardless of what we actually accomplish. It doesn’t matter if there’s four hours of work to do or forty – we’re parked there whether we like it or not. But there is no spinning machine, no power loom, no drill press, no drop forger. No machine at all except sometimes a computer which can go anywhere and work anytime. We’re not producing any goods at all! <a href="http://www.strikemag.org/bullshit-jobs/" target="_blank">Graeber again</a>:<br />
<blockquote class="tr_bq">
...through some strange alchemy no one can quite explain, the number of salaried paper-pushers ultimately seems to expand, and more and more employees find themselves...working 40 or even 50 hour weeks on paper, but effectively working 15 hours just as Keynes predicted, since the rest of their time is spent organizing or attending motivational seminars, updating their [F]acebook profiles or downloading TV box-sets.</blockquote>
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<tr><td class="tr-caption" style="text-align: center;">The "efficiency" of factory working patterns in a post-factory age.</td></tr>
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I think the crux of the problem is that we've built our society around the expectation of a steady income. In fact we <i>need</i> to have a steady income, otherwise we are homeless. Every single month we have to write that rent or mortgage check to keep a roof over our head. So getting paid intermittently is difficult unless we own the home, and even then we have to pay utility bills. We simply aren’t structured for a world of intermittent work. This is because the entire market is predicated on people getting a steady paycheck. In other words, everything is still predicated on the industrial/Fordist model in a post-Fordist world. And we have no real clear idea of how to move beyond it.<br />
<br />
What we have is a very serious mismatch between the design of the post-industrial world and the requirements of its economy. We all know this selling of time makes no sense anymore, yet we cannot move beyond it. We’re accustomed to it. Making it worse is the fact that (in America, especially) so many things are tied to our jobs like health care and retirement.<br />
<br />
Being in modern industrial society practically <i>requires</i> us to be in debt. That means being yoked to a steady repayment schedule. This is a major barrier to the kind of society we need where we get paid by what we produce. Even that is tricky, because most of us don’t produce a damn thing; we do “interpersonal/ administrative” work, i.e. <a href="http://hipcrime.blogspot.com/2011/11/useless-paper-pushers.html" target="_blank">push paper</a>. Compare this to back when people lived on the land for generations making a living, and almost nobody outside of entrepreneurs and monarchs/governments had to worry about debt.<br />
<br />
Of course, now there are less and less places interested in buying your time anyway. Getting paid for what you produce is a nice idea, but it's harder than ever. In the Middle Ages you had carpenters, coopers, cobblers, wheelwrights, blacksmiths, thatchers, brewers, butchers, tailors, etc. Today, our stuff is produced by factories filled with robots, often on the other side of the world. You can't hand-produce an automobile or microwave or refrigerator in your basement workshop, and even if you did, there is no way you could sell it for less than GE or Toshiba. Even food is produced by vast factory farms undercutting anyone without enough land. Our notions of "self reliance" are completely at odds with this reality.<br />
<br />
And the kind of stuff you <i>can</i> produce is almost impossible to sell nowadays. Musicians, writers and other artists are seeing their livelihoods disappear because everyone expects free stuff, and it's hard to make a living crocheting for Etsy, despite all the pronouncements of techno-utopians. See this: <a href="http://www.theguardian.com/books/2014/mar/02/bestseller-novel-to-bust-author-life" target="_blank">From bestseller to bust: is this the end of an author's life?</a> (Guardian)<br />
<blockquote class="tr_bq">
Rupert Thomson is the author of nine novels, including The Insult (1996), which David Bowie chose for one of his 100 must-read books of all time, and Death of a Murderer, shortlisted for the Costa Novel of the Year awards in 2007. His most recent novel, Secrecy, was hailed as "chillingly brilliant" (Financial Times) and "bewitching" (Daily Mail). According to the Independent, "No one else writes quite like this in Britain today." Thomson has also been compared to JG Ballard, Elmore Leonard, Mervyn Peake and even Kafka. In short, he's an established and successful writer with an impressive body of work to his name.<br />
<br />
After working seven days a week without holidays, and now approaching 60, Thomson, you might think, must be looking forward to a measure of comfort and security as the shadows of old age crowd in. But no. For some years he has rented an office in Black Prince Road, on London's South Bank, and commuted to work. Now this studio life, so essential to his work, is under threat. Lately, having done his sums and calculated his likely earnings for the coming year, he has commissioned a builder to create a tiny office (4ft 9in x 9ft 11in) at home in his attic, what he calls "my garret".<br />
<br />
The space is so cramped that Thomson, who is just over 6ft, will only be able to stand upright in the doorway, but he seems to derive a certain grim satisfaction from confronting his predicament. "All I want is enough money to carry on writing full time. And it's not a huge amount of money. I suppose you could say that I've been lucky to survive as long as I have, to develop a certain way of working. Sadly, longevity is no longer a sign of staying power."<br />
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Thomson is not yet broke, but he's up against it. The story of his garret is a parable of literary life in Britain today. Ever since the credit crunch of 2008 writers have been tightening belts, cutting back and, in extreme cases, staring into an abyss of penury. "Last year," said novelist Paul Bailey, speaking to the Observer in 2010, "was sheer hell". Off the record, other writers will freely confide their fears for the future, wondering aloud about how they will make ends meet. Hanif Kureishi, for instance, recently swindled out of his life savings, told me how difficult his life had become. Never mind the money, the very business of authorship is now at stake.</blockquote>
We’re actually going the <i>opposite</i> direction as it gets harder and harder to get paid for producing something. So the modern working pattern we’re familiar with simply don’t work anymore! We’ve moved on, but we can’t escape from them. And this make no sense.<br />
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What we should be doing is moving to a society where we do not have to rely on the steady paycheck and get paid for what we actually produce. That means severing the ties between a job and social benefits. Yes, that means universal healthcare and retirement pension. Housing is a stickier issue, but an important one. When Classical economists like Ricardo talked about “rent,” what they meant was the crops (or money from the selling of crops) paid to the landlord who was distinct from the farmer in order to use the land. What do you do when the land produces no revenue? Classical economics doesn’t really address the issue (<a href="http://www.economist.com/blogs/freeexchange/2015/04/land-value-tax" target="_blank">Georgist economics does</a>).<br />
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The other point I wanted to make based on that snippet has to do with employment. One sneer often hurled at “luddites” by economists and other Cornucopians is how we all left food growing and cotton spinning and dirty factories and all that behind and yet we still have plenty of jobs. Case closed--jobs will always self-create in sufficient numbers without any sort of planning; to claim otherwise is the “Lump of Labor Fallacy,” and all that. <u>But note that it’s an apples-to-oranges comparison.</u> In the early Industrial Revolution, as noted above, <i>everyone worked</i>--men, women and children, young and old included.<br />
<br />
<u>That’s a huge amount of the population that is just not in the job market anymore.</u> That is actually forced out of the job market by law – it’s illegal to hire anyone below sixteen with a few exceptions. <i>That is, we artificially keep children out of the job market.</i> That a huge portion of the population – actually the majority of the population in some countries (less so in the West – which is not coincidental). Again, we just think of this as the normal state of affairs, but as the above points out, it is anything but. In fact, like selling our time instead of anything useful, it is the aberration for most of human existence. We just take modern working patterns for granted thanks to <a href="https://en.wikipedia.org/wiki/Shifting_baseline" target="_blank">Shifting Baseline Syndrome</a>. In the movie of human existence, the industrial model would be the last few frames, yet we tend to assume it was the entire movie.<br />
<br />
We also used to keep women out of the workforce too, as any viewer of <i>Mad Men</i> knows. Women were expected to get married and keep house – and yes, that had a lot to do with making sure there were enough jobs for the men. I’m sure my readers know that the women who worked on the assembly lines during World War Two were politely asked to step aside when the men came home. The generation who lived through the Great Depression would have never accepted the nonsense spewing from today’s economists about the "Lump of Labor" fallacy – they lived through unemployment rates as high as 25 percent and a decade of people being tossed out into the street.<br />
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Women tentatively slipped their toes back in the water in part-time jobs as long as they were not taking jobs from male breadwinners (e.g ‘Kelly girls’). Eventually that changed as feminism (encouraged by business) “liberated” women to enter the workforce regardless of the effect on men’s jobs and wages (because jobs are always unlimited, declared economists, “Lump of Labor,” and all that - see <a href="http://opinionator.blogs.nytimes.com/2013/01/26/the-rise-of-the-permanent-temp-economy/" target="_blank">The Rise of the Permanent Temp Economy</a>). <a href="http://metro.co.uk/2013/11/13/the-glass-ceiling-illustrated-in-one-meet-the-staff-web-page-4186032/" target="_blank">Now women actually dominate the workforce</a>. Women have essentially won the gender wars. Note also that the wheels came off the economy in the late 1970’s opening the door for Neoliberalism and ending thirty years of rising fortunes for the middle class in America. Coincidence?<br />
<br />
We are also keeping people out of the workforce ever longer thanks to increasing education requirements (<a href="http://www.nakedcapitalism.com/2012/11/70-of-jobs-created-dont-require-a-college-education.html" target="_blank">even though for most jobs it’s useless</a>). In other words, a degree is nothing more than a job-hunting license.<br />
<br />
Now you may scoff at this, but consider the reason <i>why</i> we take children out of the workforce and stick them in the warehouses/gulags we call schools for over a decade. Ostensibly, it’s to train them in the necessary skills they need to do the kinds of jobs that modern post-industrial society demands. Except their skills are now useless – we now all take it for granted (thanks again to the economics priesthood) that a high-school diploma is worthless and not worth the paper it is printed on and enables you to do nothing but work the deep fryer, stock shelves, or, if you’re lucky –swing a hammer or hang drywall - <a href="http://jezebel.com/5985584/youre-a-lazy-loser-if-you-dont-have-a-college-degree" target="_blank">A College Degree Is Now Required of Basically Everyone</a> (Jezebel). And we assume that such people deserve to have no healthcare or vacation or a decent, reliable income because they have no “skills.” “Skilled” labor, by which economists mean a piece of paper from a degree-granting member of the education cartel, allows one to actually make a living at less than poverty wages. Yet now even that is not enough! Anyone who can’t remain out of the job market until age thirty, well, to hell with you, I guess. And I’m not even going to get started about how it’s entirely on our backs to make ourselves amenable for the few jobs that are on offer.<br />
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We also count people over sixty as “retired,” whether they are retired or not. As the progress harpies constantly point out, we’re living longer today. So that’s not properly counted either.<br />
<br />
All this is to say that we’re now holding an awful lot of people out of the job “market” for ever-longer periods of time, skewing the job-abundant present situation constantly proclaimed by economists ever further from an apples-to-apples comparison with the past, even the fairly recent past (and even then <a href="http://www.slate.com/blogs/moneybox/2015/07/02/june_jobs_report_cloudy_with_a_chance_of_labor_market_slack.html" target="_blank">the workforce participation rate keeps dropping</a>). Economists like to claim that employment has not vanished at all in the two hundred years of productivity gains since we left the farms and factories behind, but they keep moving the goalposts. <u>An apples-to-apples comparison keeping all things equal would consider anyone over the age of nine until death not working as unemployed.</u><br />
<br />
What would that look like?<br />
<br />
Our gains in efficiency have eliminated a massive of jobs, we’ve just dodged the bullet by redefining who needs a job. Children (and formerly spouses) were able to be supported by one breadwinner. Not anymore. It’s almost as if school (and retirement) were a design to camouflage the amount of jobs lost over the last few hundred years. And now the creeping normalcy of endless requirements for “more school” is yet another attempt to camouflage this fact. And we’re not even discussing <a href="http://hipcrime.blogspot.com/2013/08/our-jobs-are-mostly-bullshit.html" target="_blank">bullshit jobs</a>, or guard labor (which I’ve discussed before) All part of the plan, with economists fulfilling their roles as normalizers and chief propagandists, of course.<br />
<br />
Another thing to point out is how much the economy has changed since back then even though today's economic priesthood declares that working less is pie-in-the-sky and unrealistic. We went from men, women and children working in factories and sweatshops, to single male breadwinners to two-income families in the last few hundred years. We went from sixty-hour, six-day workweeks to forty-hour five day workweeks (all while the economy grew). We went from unionized jobs to temp work. Yet now, if you even dare suggest shorter workweeks or less working hours, you are met with stories abut how the economy will fall to pieces and everyone will be thrown into poverty. Another case of historical amnesia. <br />
<br />
Stupid Luddites (sneer).<br />
<br />
Finally, it’s worth noting that shifting children from economic boons into economic burdens, and sending women into the workforce in droves is the secret mechanism that industrialism is gambling on to halt worldwide population increase. One can't help but wonder about the limits to that approach.Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-5813525365834911757.post-18380709831285660582015-06-07T19:35:00.001-05:002023-05-21T19:18:20.218-05:00Movie Review: Tomorrowland and Mad Max: Fury RoadI'm sure others have noticed the supreme irony that these two movies happen to be out at the same time. If Tomorrowland is a product of 1960's optimism, Mad Max is a product of 1970's pessimism. Mad Max came out of the oil shortages of the 1970's and the birth of Neoliberalism; Tomorrowland out of the early 1960's oil glut and managerial capitalism. The 1964 Worlds Fair is an example of better living through technology brought to you by Monsanto and GM, the 1970's of oil embargoes brought to you by Arab sheiks and garbage piling up courtesy of striking garbagemen. Tomorrowland is quintessential American techno-optimism, Mad Max a shorthand for the worst possible dystopia.<br />
So here we go.<br />
<br />
TRIGGER WARNING: MAJOR SPOILERS AHEAD - I pretty much give away the entire plots of these movies, so if you care, you'll not want to read further. Still here? Okay, then, on we go:<br />
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf4hhUQiOrR3fZbG6xNnQR2qQVE-RGSGxEeIBD80rwBiYXgVp5i-ou8bQyETKX2B9w1awMcrR66PkUz_rkACIheZjG3zGJlUvEY_Xyq0CuolLQNZmLHUWNgmur2HEaDVOfePHqBZOsS3A/s1600/wide-tomorrowland-movie-2015-wallpaper.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" height="250" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf4hhUQiOrR3fZbG6xNnQR2qQVE-RGSGxEeIBD80rwBiYXgVp5i-ou8bQyETKX2B9w1awMcrR66PkUz_rkACIheZjG3zGJlUvEY_Xyq0CuolLQNZmLHUWNgmur2HEaDVOfePHqBZOsS3A/s400/wide-tomorrowland-movie-2015-wallpaper.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">That skyscraper looks an awful lot like <a href="https://media.peakprosperity.com/images/A-brief-history-oi-humans.jpg" target="_blank">Hubbert's Peak</a>, doesn't it?</td></tr>
</tbody></table>
<b>Tomorrowland</b><br />
<br />
Tomorrowland is direced by Brad Bird from a script by Bird, Gene Roddenberry, Neil DeGrasse Tyson and R. Buckminster Fuller. Oops, sorry, I mean <i>Lost's</i> Damon Lindelof.<br />
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The "where's my jetpack"? theme of Tomorrowland is delivered with all the subtlety of a sledgehammer, because the entire opening sequence literally centers around a jetpack! The year is 1964, and young George Clooney, er--I mean, "Frank Walker," is taking the bus alone (where are his parents?) to the 1964 World's Fair in New York City to enter the young inventor contest. He presents his chrome plated Rocketeer-style jetpack to dour sourpuss Hugh Laurie, TV's <i>House</i>. House grimaces and scowls and diagnoses the boy's rare kidney disease - okay, he doesn't do that, but rejects his invention because it doesn't work. In flashback we see young George on the farm trying on the jetpack and it behaving like you would expect, it just drives him horizontally through a cornfield in a fun romp that would easily kill anyone if they actually tried it in real life. "Besides, what use is it?" harrumphs House frowning like the Grinch. "Can't it just be for fun?" smiles, young, puckish optimist George Clooney with a twinkle in his eye.<br />
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Just behind House is a young girl named Athena (goddess of wisdom, get it?) who we perceive to be his daughter. She takes a liking to young George's optimistic can-do attitude and hunts him down inside the park, handing him a special Tomorrowland pin. She tells him to follow her and her dad House into the "It's a Small World'" ride, which he does. Mercifully, we are spared the song. Inside the ride, a trapdoor opens, and he's catapulted into a marvelous world of high-tech futurism only accessible to the ultra-elite few: Dubai.<br />
<br />
Okay, it's not Dubai, it's the real Tomorrowland, a Grade-A, genetically modified, shiny high-tech Jetsons future on steroids and nootropics. It's filled with every sci-fi trope you can imagine - jetpacks, flying cars, monorails, robots, spaceships, <a href="http://www.archdaily.com/346374/can-we-please-stop-drawing-trees-on-top-of-skyscrapers/" target="_blank">skyscrapers with trees</a>, although geodesic domes are conspicuously absent. Presumably it's all powered by nuclear power, or cold fusion, or zero-point energy, or algae, or Tinkerbell's tears, or something. A robot shows up and miraculously fixes young George's jetpack. With the jetpack now fixed by intelligent robots without him having to understand a thing, he straps it on and zips away to find Athena.<br />
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George, er, Frank, is accepted to be one of the elite scientists inside this - whatever it is - hidden compound, alternate dimension, space colony, theme park, drug trip. Considering his only qualification is a jetpack that didn't function, it seems like the recruiting criteria is rather biased. Whatever happens to his parents we're never told - is this where the missing children end up? Is Tomorrowland also using my missing socks? How Tomorrowland is funded we'll never know - is it funded by the military industrial complex? There's plenty to eat given that the entire city is surrounded by wheat fields out to the horizon - the future is apparently not gluten-free. The residents probably just all drink Soylent shakes anyway.<br />
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Unfortunately young George is in for a few grim surprises. His girlfriend is actually an android, a clear advance from Vicki the robot from the late 1980's sitcom <a href="https://www.youtube.com/watch?v=ukSvjqwJixw" target="_blank">Small Wonder</a>, and unlike George Clooney, she stays 12 years old forever. This puts a crimp in their relationship, and not wanting to become a pederast, and with adult sex robots apparently outside the thinking of the squeaky-clean 1960's scientists of Tomorrowland, he is heartbroken (George apparently never gets a real wife or girlfriend and lives alone in his fifties- scientists are creepy).<br />
<br />
Even worse, he invents a machine that uses tachyons - particles that travel faster than light <a href="http://en.memory-alpha.wikia.com/wiki/Tachyon" target="_blank">so familiar to regular viewers of Star Trek the Next Generation</a> - to build a machine that can see into the past. But more importantly, it can see into the future, and George sees the utter destruction of all life on earth - TEOTWAWKI in his machine. His requisite idealism shattered, George is banished from Tomorrowland for being Captain Bringdown (the effect on everyone else is unclear and pretty much ignored). <br />
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Apparently, when you leave Tomorrowland you draw a full pension, and George is able to live like a hermit and an old rickety, decrepit house in the middle of nowhere with no visible means of support, which is filled with high-tech booby traps including lasers, explosives, and a holographic guard dog. Evidently he can invent interdimensional portals but not better housing technology. There he spends his days alone in a room filled with video monitors doing nothing but watching the grim dystopia he predicted unfold before his eyes- hurricanes, tornadoes, volcanoes, melting glaciers, droughts, political turmoil, Duck Dynasty, FOX News, the Kardashians, etc. Geez, man, get a hobby. If I knew when the end of the world was coming I'd be living it up.<br />
<br />
Enter our plucky young heroine Casey, played by Brittany Robertson (who manages to outshine Clooney - no mean feat). She lives in Cape Canaveral and is the daughter of NASA engineer Tim McGraw, who is busily designing the latest Martian rover with Randy Travis, Garth Brooks, and Kenny Chesney. Every once and awhile Clint Black stops in to consult on interplanetary physics. Okay, that doesn't happen, but Casey is very upset that they are dismantling the launch platform because, in McGraw's words, "Dreaming is hard and giving up is easy," or something like that which sounds like the title to one of his songs. I think I have that on a T-shirt somehwere. No mention of Republican budget cuts or Ted Cruz.<br />
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At school, her gloomy teachers drone on endlessly in Ben-Stein mode about how the world is going to sh*t and how we're all living in the political dystopias of Brave New World and 1984 (I'm guessing Florida school teachers are also the victims of budget cuts). Through every speech we see our heroine with her arm raised insistently waiting to be called upon and being stubbornly ignored. Finally, when a teacher does call on her, she issues this show-stopping mic-drop: "what is anyone doing about it?" This causes the teacher to hand her a copy of <i>Overshoot</i> by William Catton and <i>The End of Growth</i> by Richard Heinberg. No, that doesn't happen, instead her teacher stands there dumbfounded like a deer in healights, mouth agape like a fish pulled out of the water, apparently having never even thought of that! Take that, pessimists!!!<br />
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Young Casey attempts to sabotage the platform demolition with drones, and while doing that in real life would earn you a felony and at least ten years in a dark hole courtesy of Homeland Security, she is released the next day with a mysterious Tomorrowland pin among her belongings. Touching the pin takes her into Tomorrowland, but she is still spatially wherever she is, leading to some uncomfortable mishaps like slamming into walls and falling down stairs. Eventually she heads to a big open field and teleports herself to the great big, shiny, beautiful future. <br />
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<tr><td class="tr-caption" style="text-align: center;">Artist's rendering of Google's new headquarters.</td></tr>
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There is a bravura sequence where people are flying around with jet packs (when they crash an inflatable suit saves them - really) and taking off into space as graduation presents. Everyone is fit and healthy, and the massive buildings are probably not filled with sick people trying to stay alive like ours are, and no one is running around in those scooters like in Wall-E (a much more realistic Disney depiction of the future). Curiously, there are no television screens either, and people aren't waking around mesmerized by their cell phones. Then again, they probably get everything through brain implants, anyway. This Tomorrowland is filled with people, which makes no sense given events later in the film (see below). <br />
<br />
Finding another identical Tomorrowland pin for sale on eBay, Casey hops on the next bus to Houston (telling her dad she's "going camping"), where the collectable store advertising the pin is manned by killer robots, including one looking like a female hipster with cats-eye glasses and another who looks like a Reggae dude. They threaten Casey with powerful energy weapons, proving that the people of Tomorrowland weren't just working on peaceful projects all this time (and ignored Asimov's rules of robotics to boot). Small Wonder girl from George Clooney's past shows up and rescues her and they race off in a pickup truck to George's remote fortress of solitude. <br />
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We are informed that Athena was built especially to recruit people for Tomorrowland, based on some sort of test score that we are never told the criteria for, but assumed to be a mix of raw intelligence, creativity and optimism, much like the recruitment for Google. In fact, I can imagine Google taking notes about this idea, since they seem to be intent on <a href="http://www.bloomberg.com/news/features/2015-05-07/google-s-new-campus-architects-ingels-heatherwick-s-moon-shot" target="_blank">building an actual Tomorrowland here on earth whose geniuses will also be hermetically sealed off from reality</a>. I'm sure someone is already pitching holographic pins and recruitment androids to Larry Page in Mountain View right now.<br />
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Grumpy George wants nothing to do with them and tells them to go away - he's busy watching FOX News and the Kardashians. Then some more evil androids who are dressed like the villains from the Matrix show up, and our threesome escape in a rocket-ship bathtub (don't ask). Now on the run, they somehow end up in <a href="http://www.atlasobscura.com/places/gustav-eiffel-s-secret-apartment" target="_blank">Gustauve Eiffel's secret apartment inside the Eiffel Tower</a>, where it is revealed that the Eiffel Tower was not an architectural marvel built for the 1889 World's Fair at all, but a radio transmitter for Nikola Tesla to contact other planets (WTF? Seriously!!!) Eiffel, Jules Verne, and mortal enemies Tesla and Edison were part of some ultra-secret society/cult (called "Plus Ultra," not to be confused with MKUltra) which met in the Eiffel Tower who founded Tomorowland and were in contact with aliens/being from another dimension or something??? Apparently Einstein and H.G Wells were insufficiently practical or too socialistic to join the club. Screw you James Clerk Maxwell, James Prescott Joule, Lord Kelvin, Marie Curie, and all you other science-people the general public has never heard of! <a href="http://io9.com/we-think-weve-finally-figured-out-tomorrowlands-insane-1699591587" target="_blank">In some online info</a>, we are informed that Uncle Walt was recruited as the chief propagandist for the movement, and built the 1964 Tomorrowland to prepare people for the big public reveal which never happened (is this also the source of UFO's?). After all, Walt Disney was already amenable to the idea of elite Aryan supermen changing the world for the better.<br />
<br />
To top that, underneath the Eiffel Tower is a giant steampunk rocketship that takes off into outer space with our threesome while the people of Paris look on in amazement (did the French government know that was there?). Even though Tomorrowland is in another dimension, or on earth, or something, they somehow need to go into space for some reason ("This part gets weird," suggests Clooney helpfully). Somehow (?) the rocket takes them to Tomorrowland, <a href="http://www.legendarytrips.com/2015/05/tomorrowland-real-life-location-valencia-city-of-arts-and-sciences/" target="_blank">designed by Santiago Calatrava(!!)</a>, now empty and abandoned, <a href="http://www.nytimes.com/2013/09/25/arts/design/santiago-calatrava-collects-critics-as-well-as-fans.html" target="_blank">much like Calatrava's actual buildings here on earth</a>. So what was Casey looking at before? Was it a time warp too?<br />
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Evil Hugh Laurie struts around in a sash, boots and leather jodhpurs, seemingly the only guy left in Tomorrowland besides the evil Matrix androids (has everyone else been banished too?). His name is actually Nix as in "let's nix that idea." Again, subtle as a sledgehammer. He's also the same age as in George's youth because he drinks anti-aging shakes which now come in chocolate flavor (*sigh*, I am not making that up). Casey takes the globular reins of George's tachyon machine and watches a 3D movie of whatever ends the world - climate change, nuclear war, the energy cliff, the California drought, ISIS, another Bush presidency, or whatever, and then watches Matthew McConaughey flying off into space to save us. Okay, that doesn't happen. We are informed by House that TEOTWAWKI is only 58 days hence!<br />
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<tr><td class="tr-caption" style="text-align: center;">Seriously, what's up with all the wheat?</td></tr>
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Then House reveals his nefarious plot - apparently he's been using George's tachyon machine to beam images of the dystopian future into the heads of everyone on earth starting, oh, I'm guessing about the time of the 1973 Arab Oil Embargo, to warn people and get them to roll up their sleeves and fix it, darnit. So know we know the REAL reason behind Jimmy Carter's Malaise Speech of 1979. "You have starvation and obesity at the same time, what's up with that?" cries House, practically pleading, <i>"Why doesn't somebody do something to fix all the problems???"</i><br />
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But rather than treat it as the warning it was, the people of earth collectively decided they actually <i>liked</i> the apocalypse and started making movies like like <i>Escape from New York</i>, <i>Rollerball</i> and <i>The Hunger Games</i> instead of fixing all the problems. The nerve of them! At least they managed to elect Reagan. But, you see, the negative images are actually causing people to think negatively, and here comes THE MESSAGE - it's a self-fulfilling prophecy because everybody's so gloomy. Everything's getting worse because we think everything's getting worse, and no one does anything about it because we all think that there is nothing anyone can do anything about it. See? The future's totally up to us!!!<br />
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Earlier, young Casey's irrepressible optimism and can-do spirit causes George's apocalypto-meter to drop from 100% chance to 99.9999 percent chance, giving him hope. Unable to convince House, however, they resort to fisticuffs. George manages to destroy the tachyon gloom-machine by using his jetpack to drop his fatally wounded childhood crush into the machine below where she blows it up and sends it crashing down onto House and all the other Doomers.<br />
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Clooney and company set to work rebuilding Tomorrowland and open a magic portal to the real world where they can bring in elite people to help them put the place back in business. Casey brings her NASA engineer dad Tim McGraw through as the first recruit, along with molecular biologists Brooks and Dunn and nuclear scientists Madison County. Clooney builds a new set of recruiting androids who for some unexplained reason must all look like multicultural children aged 10-14. They will go forth and find "special" people who make a difference (and whose test scores are high enough) and recruit them for the elite otherworldly priesthood of Tomorrowland free from politics and budget cuts forever. <br />
<br />
So, Tomrrowland is basically the <a href="http://www.vox.com/2015/6/10/8760199/gates-foundation-criticism" target="_blank">Gates Foundation?</a> Let's hope Microsoft isn't working on a tachyon machine or we're all doomed!<br />
<br />
As the movie ends, in a montage scene we see our young recruiting androids dropping Tomorrowland pins into the instrument cases of musicians, giving it to people protecting endangered wildlife, planting trees in Africa, designing something-or-other in modernist brick lofts, gazing into microscopes, or <a href="https://www.youtube.com/watch?v=2YBtspm8j8M" target="_blank">whatever other visual shorthand for smart people solving problems</a>. It seems to me it would be a whole lot easier just to pony up the $5000.00 or whatever it costs to attend the TED Conference and hand out Tomorrowland pins to all the presenters. In fact, this whole movie might have been called TED the Movie if the name TED weren't already taken for a different movie and <a href="https://www.youtube.com/watch?v=eDgUgY8lKlk" target="_blank">the sequel were coming out later this year</a>. <br />
<br />
Finally, at the very end of the movie, the national debt is paid off, poverty is eliminated, climate change is reversed, oil is phased out, GMO foods, aquapaonics and and artificial meat eliminate starvation, the hyperloop gets built along with the moon colony, space tourism takes off, cancer is cured, the Amazon rain forest is replanted, the ice caps are refrozen, the aquifers refilled, intelligent robots eliminate work and unemployment, we all get cybernetic implants and finally make it to Mars. Okay, that part isn't shown, but you get the idea. That part you have to imagine when you leave the theater and log onto <a href="http://www.wired.com/" target="_blank">WIRED</a> or the <a href="http://singularityhub.com/" target="_blank">Singularity Hub</a>, assuming you still have Internet service.<br />
<br />
I left Tomorowland optimistic about the future as got in my 14-year old rusty car that doesn't start half the time into the dimly-lit parking lot and and drove home over the potholded streets avoiding all the speed traps set by cops who are trying to fill budget cuts. I'm told Tomorrowland <a href="http://www.theguardian.com/film/2015/may/26/worrying-future-tomorrowland-tops-us-box-office-weak" target="_blank">missed expectations at the box office</a>, meaning some people might not get THE MESSAGE. Since almost half of Americans don't have $400.00 in case of emergency, a lot of them probably couldn't scape together the 15 bucks required to see Disney's message of can-do optimism, or perhaps they were busy having their cars repossessed. I wonder how Tomorrowland played in Detroit, where in 1964 it was one of the richest middle-class cities on the planet? Or how about New York City, where, unlike in 1964, inequality levels are at the same as Rwanda's? I don't know if it will be a hit in the European market, but China is where all the action is anyway. Oh, and speaking of Disney: - <a href="http://www.refinery29.com/2015/06/88669/disney-magic-kingdom-fires-employees-train-replacements" target="_blank">Disney Fires Workers, Then Makes Them Train Their Replacements</a> (refinery)<br />
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In October of last year, about 250 Disney employees, white collar workers who did data management at Disney Parks, were gathered in conference rooms and told their last day on the job would be Jan. 30, 2015. But, it got worse: They also learned they'd be expected to spend their last few months training the workers who'd replace them — immigrant workers brought in on temporary visas from an outsourcing company in India, according to a New York Times report. </blockquote>
<blockquote class="tr_bq">
“It was so humiliating to train somebody else to take over your job,” one former employee, an American man in his 40s, told the Times. “I still can’t grasp it.” </blockquote>
<blockquote class="tr_bq">
Americans are used to jobs disappearing overseas, but this is a newer phenomena: white collar workers coming to the States on a temporary visa called H-1B, to replace American employees inside the States — mostly, so the company can cut costs. </blockquote>
<blockquote class="tr_bq">
According to the law, that type of visa should only be given to foreigners with advanced skills when Americans can't be found to fill the positions. In other words, they shouldn't come at the expense of American jobs. In this instance, that appears not to be the case.</blockquote>
Down and out in the Magic Kingdom, indeed. Why doesn't somebody do something about all the PROBLEMS???<br />
<br />
<b>Comments:</b><br />
<br />
I was reminded of <a href="http://www.nakedcapitalism.com/2015/05/open-thread-on-water.html#comment-2450543" target="_blank">this comment</a> I saw on <i>Naked Capitalism</i>:<br />
<blockquote class="tr_bq">
You are viewing science in a mystical/religious sense rather than as a tool for investigating nature. It’s an absolute fundamental concept of science that science can not prove anything, and getting that wrong is not a minor mistake. It’s the difference between someone who knows what science is and can use the word “science” in a conversation with intellectual honesty, and someone who can’t.</blockquote>
Tomorrowland is the epitome of seeing science in a mystical/religious sense rather than a tool for investigating nature, or as a way of thinking. Rather, it's depicted as a a cornucopia where all our dreams come true. Even more frustrating, it depicts scientists as some sort of ethereal priesthood removed from ordinary humanity, rather than regular people like anyone else with all the weaknesses, blindspots, biases, limitations and foibles as the rest of us. the depiction of scientists and other creative people as "special" anointed ones with the ability to solve any problem with enough grit and determination is not the solution - it's part of the problem!<br />
<br />
I'm sure most people leaving the theaters were cheerily thinking "well, those smart people will think of something - they always do!" Tomorrowland seems almost designed to encourage this mindset. This kind of thinking is incredibly toxic. Disney calls itself the Magic Kingdom, <i>but science is not magic</i>. It also promotes the idea that when you wish upon a star, all your dreams will come true.that's not what science tells us. I'm also thinking of the wheatfields depicted around Tomorrowland and George's jetpack. The idea of a young farmboy tinkering in
his garage and inventing a new miracle technology that changes the world has become a
founding myth like George Washington and the cherry tree. You see it today with our appeals to 'entrepreneurship" to solve all our problems.<br />
<br />
Somehow, I don;t think the causes of our problems is some all-pervasive pessimism or not enough people thinking of solutions. Lots of people are paid to do that full-time. They have apparently not heard of <a href="https://murphyslawandmore.wordpress.com/2010/07/19/sevareids-law/" target="_blank">Sevareid's law</a> - the major cause of problems is solutions. <br />
<br />
Many people have written about how techno-optimism seems to be a quasi-religion in America. The original Tomorrowland was built at the end of an extraordinary period of invention which transformed an agricultural society of farmers into an urban-dwelling society of office workers enjoying all sorts of conveniences--cars, radios, televisions, refrigerators, washing machines, telephones, air travel, etc. It seemed like anything was possible. The descendant of Tomorrowland is Disney's EPCOT center (Experimental Prototype Community of Tomorrow), located in Florida. Ironically, both EPCOT center and Cape Canaveral are expected to be underwater at the end of this century, along with the entire Florida peninsula. Maybe EPCOT will be transformed into a floating community. Tomorrowland is the Vatican in the church of Progress.<br />
<br />
The reaction of <a href="http://theconcourse.deadspin.com/tomorrowland-is-hopeful-uplifting-and-absolutely-into-1706261948" target="_blank">a lot of reviewers</a> to Tomorrowland is about the same as that of <a href="https://www.youtube.com/watch?v=PtBy_ppG4hY" target="_blank">Gil Scott-Heron in Whitey on the Moon</a>. They condemn the trite simplicity of the message that if we just click our heels together and wish hard enough we can solve our problems. I guess the negative tachyons haven't entirely subsided yet. A better explanation might be that the Uberization of movie reviews mean that reviewers can't get paid anything or make a living, that is, if computers aren't writing the reviews for them, hence the eye-rolling.<br />
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<tr><td class="tr-caption" style="text-align: center;">In the future, hood ornaments are people. Job creation!</td></tr>
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<b>Mad Max: Fury Road</b><br />
<br />
Which brings us to the inevitable sequel to <i>Mildly Annoyed Max</i> and <i>Increasingly Perturbed Max</i>: Mad Max:Fury Road, or as I like to call it, Burning Man gone feral, or the logical endgame for ISIS. It's post-apocalypse done right.<br />
<br />
Unlike the ridiculous, inconsistent plot of Tomorrowland (a <a href="https://www.youtube.com/watch?v=q7R5B77iYXo" target="_blank">Damon Lindelof specialty</a>) Mad Max's plot is simplicity itself. It's basically one long car chase sequence, where in the last act of the movie, they turn around and head back the other direction. That simplicity is a virtue as, unlike Tomorrowland, we are actually able to follow the plot (it probably helped out at the box office too, since nobody could understand what the hell Tomorrowland was about).<br />
<br />
Max Rockatansky is now played by Tom Hardy of <i>Star Trek: Nemesis</i> fame replacing Mel Gibson. I'm guessing the producers wanted to avoid the all the political baggage associated with Gibson, although in my opinion <a href="http://gawker.com/5582644/all-the-terrible-things-mel-gibson-has-said-on-the-record" target="_blank">the sad, explosive disintegration of Mel Gibson's personal and professional life </a>would have made him ideal for the role now in 2015, as opposed to the the young, fresh-faced actor at the beginning of his career. A grizzled, bedraggled, bitter man ranting about Jesus, women getting raped by packs of n*ggers and Jews controlling the world would be perfect for a post-apocalyptic hellhole, but old Mel may have objected to the anti-patriarchal tone of the movie (about which more below). Hardy has maybe ten lines of dialogue, and his main role is to grunt and look beaten down, which is harder than it seems.<br />
<br />
Max, who is haunted in visions by the people he could not save including a little girl we take to be his daughter, is captured at the outset of the film and taken to an oasis citadel in the middle of the desert ruled by a dictator/cult leader named Immortan Joe sporting an unkempt plume of white hair and a breathing mask that makes him look like an alpha-displaying baboon, which I'm guessing is not an accident. I assume he is called "Immortan" because he has lived long past his prime because of these devices, outliving most people who probably die at, like, thirty, giving him Stalin-like cult status due to his longevity. Max is kept alive as a prisoner and used as a blood donor since a tattoo declares him to be a universal donor (type O).<br />
<br />
What i love about Mad Max movies is how well they depict primal human social relationships when the formal institutions of society break down: clans and warlordism. We revert to tribal societies and the "big man" system where leaders are defined by 1.) Their ability to control resources and divert them to their followers - note that "lord" means "giver of loaves," early temples were grain distribution storehouses and temple priests were the first accountants. Feudalism, remember, is "government by personal relationship," and it's the most ancient and durable form of government for small-group social savannah apes such as ourselves. Typically elites were able to command more and more surplus for themselves and make everyone else dependent upon them, institutionalizing their power, as depicted here. 2.) The ability to control the thoughts and feelings of their followers and legitimate their power with religion and ideology. Early priest-kings depicted themselves as rainmakers with a special hotline to the gods. They used religious ideas centered around their own charismatic authority to motivate their followers and provide for social cooperation, and 3.) the ability to make war and deploy force- iron weapons, horses, tanks, etc. Early state making was defined by warfare, and the need to fight led to command-and-control hierarchical social structures.<br />
<br />
We see this depicted viscerally early on. From a platform atop his mountain, Joe addresses the mass of desperate rabble below holding bowls and jerry-cans. He than declares that it is only though his largesse that people are able to survive. He then gives the signal and a gusher of water flows through two giant pipes sticking out of the mountain crashing down onto the parched masses below. It's the original trickle-down economics - literally!<br />
<br />
It's interesting to note that that water is depicted as even more rare and necessary than oil to the desert dwellers - a concession to our new drought filled future perhaps? Joe then begins reading to the masses from the only book preserved in the post-apocalypse: <strike><a href="http://en.wikipedia.org/wiki/The_Book_of_Eli">The Bible</a></strike>, Atlas Shrugged. Okay, that doesn't happen, but it just as well might have, since its the logical conclusion to Ayn Rand's philosophy.I can imagine a lot of scenes like this taking place in Mesopotamia 6,000 years ago, only with chariots instead of cars. "Forward to the past," as George Miller says.<br />
<br />
So, really, Joes' source of power isn't really all that different from to today's' elites - just substitute "jobs" for "water," and "economics" for the religious cult.<br />
<br />
Inside the mountain we see the source of Joe's power - a massive Steampunk-style pump-works powered by humans inside of giant treadwheels. He gives the signal and they start walking, pumping water from deep below the earth. He also seems to have hydroponic gardens inside the mountain, meaning he's probably the only one able to grow a lot of food, not to mention brew <i>Fosters</i>. Because only he controls the pumps, he is a virtual God. Actually, more like a literal god - hes is the center of his own cult of personality, surrounded by "war boys" - nuclear mutated albinos. Joe's war boys believe that dying in battle will get them to Valhalla. A simple glance from Joe causes them to go ecstatic ("He looked straight at me!!").<br />
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<br />
In the real world, these kinds of male-dominated warrior cultures often tend to reward death and place a low value on human life. Its not mentioned, but I wouldn't be surprised if these guys also get seventy-two virgins in the afterlife, since there are no women for them (why in a minute). Again, one is reminded of today's ISIS fighters. Historically, highly unequal polygynous patriarchal societies with lots of males who don't have access to women or opportunities to start families are hotbeds of war, poverty and violence, and the poverty and violence is then justified post-hoc by various religious philosophies.<br />
<br />
In other words, the social order of Joe's citadel is depressingly realistic given what we know about human behavior and social relations. It's like Mad Max was written by historians and anthropologists, while Tomorrowland was written by engineers who have never set foot outside the lab.<br />
<br />
Some people have criticized the use of cars and trucks in Mad Max when oil is scarce, but to me this makes perfect sense- oil is liquified modernity, and whoever controls it is sure to have power (as we already see today with nation-states instead of individuals). The ancient world's elites <a href="http://www.slate.com/articles/health_and_science/science/2012/07/horse_owners_are_the_one_percent_how_social_inequality_was_born_.html" target="_blank">were defined by their ability to command and provision horses</a> and chariots for battle (Mesopotamian kings, Indo-European chiefs, Roman <i>equites</i>, medieval knights, etc.), so the control and command of oil- powered vehicles would be the symbol of a future elite it seems to me - commanding horsepower instead of horses. Internal combustion engines are an incredibly useful and powerful technology that are hard to replace or substitute, so it makes sense that as they get rarer they would be treated with almost mystical awe - heck the car is already a fetish object in the United States right now. There is certainly no logical reason for our car culture. Immortan Joe's war boys carry steering wheels as totems, smear grease on their face, make the sign of the V-8, and even ritually spray chrome on their teeth before going into battle for that shiny smile. "Machines are more permanent that human life," as director George Miller puts it.<br />
<br />
IJ is sending Charlize Theron, aka Imperator Furiosa (Seriously, the best part of post-apocalypse is the cool names you get to have) to bring back a new shipment of fuel from wherever it is produced (fracking wells?). Despite the lack of technology, somehow Furiosa has a cybernetic left arm (?). Unbeknownst to him, Furiosa is instead making a break for it, and stowed away on board her truck is Joe's harem of wives. See, Joe has apparently monopolized all the nubile young females in the entire citadel for himself and stashed them away in a harem (everyone else being sterile and mutated from radiation or something - I don't know). Just like the real world, elite males restrict reproductive access of females to themselves to pass along their genes exclusively which probably happened in antiquity as well. We know that with the rise of agriculture around 8,000 BC <a href="http://www.psmag.com/nature-and-technology/17-to-1-reproductive-success" target="_blank">only one man passed his genes along for every 17 women</a>, and this was probably why. Access to female was partitioned by wealth, with most men ending up as slaves, servants, serfs, eunuchs, flunkies, roadkill, cannon fodder, nomads and hermits. Shades of our own future with <a href="http://fabiusmaximus.com/2015/05/30/men-the-weaker-sex-85146/" target="_blank">most men having no jobs, wives or prospects in the new economy</a>, and only a small amount of alpha males able to afford the costs to reproduce.<br />
<br />
Furiosa and her fellow wives in Immortan Joes' harem are sick to death of being sex slaves and milking cows in the patriarchal society (he's got some sort of breast milk spigot going?). When Joe discovers the double-cross, he calls on his allies in Gas Town and Bullet Farm and sends out an army to get them back, <i>a la</i> Helen of Troy. His massive flotilla (drivetilla?) of cars is played off by the guy who steals the entire movie from Hardy and Theron despite having hardly any screen time -<a href="http://www.theguardian.com/film/shortcuts/2015/may/18/mad-max-fury-road-crazy-guitar-guy-doof-warrior-turning-it-up-to-11" target="_blank"> the Doof Warrior</a>, a guitar-rocking heavy metal guy in a gas mask and red onesie, tied to a bungee cord and perched atop a massive truck filled with speakers with taiko drummers on the back. Did I mention that his guitar is also a friggin' FLAMETHROWER!!! The Internet has gone nuts for the Doof Warrior, and collectively agrees that he alone is cooler than all 120+ minutes of Tomorrowland, as the still below proves:<br />
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<tr><td class="tr-caption" style="text-align: center;">This still is more awesome than all of Tomorrowland.</td></tr>
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Geez, no WONDER people loved the post-apocalyptic future in Tomorrowland! Note to Hugh Laurie: if you want to talk people out of embracing the apocalypse, for Gods sakes, DO NOT SHOW THEM THE DOOF WARRIOR!!!<br />
<br />
Anyway, Max spends pretty much half the early part of the movie shackled in an iron mask as a human hood ornament/portable blood bag for the war boy called Nux (not to be confused with Nix, above, or the <a href="https://www.youtube.com/watch?v=zIV4poUZAQo" target="_blank">Knights Who Say Ni.</a> I know it's confusing). The chase scenes are marvelously done, and even though I wasn't planning on seeing this in 3D I'm glad I did - trust me, spring for the extra cost, in this case it's worth it. Interestingly, one of the reason that the movie's chase scenes are easy to watch and follow is because of George Miller's directing technique. <a href="http://www.slate.com/blogs/browbeat/2015/06/01/mad_max_fury_road_center_framing_vashi_nedomansky_and_john_seale_on_why.html" target="_blank">He keeps the the center of your attention in the center of the frame at all times</a>, so that when it's cut together, the action is seamless and easy to follow because your eyes aren't wandering all over the screen. This is the difference between a good action director and a lousy one. Somebody please inform the talentless hack Michael Bay that CGI shit spinning around the screen with no frame of reference and no concession to the laws of physics induces confusion and nausea rather than awe. <br />
<br />
<iframe allowfullscreen="" frameborder="0" height="281" mozallowfullscreen="" src="https://player.vimeo.com/video/129314425?color=ff9933&portrait=0" webkitallowfullscreen="" width="500"></iframe> <br />
<a href="https://vimeo.com/129314425">Mad Max: Center Framed</a> from <a href="https://vimeo.com/vashi">Vashi Nedomansky</a> on <a href="https://vimeo.com/">Vimeo</a>.<br />
<br />
In his zeal to get to Valhalla Nux ends up destroying his ride, and he and his hood ornament Max end up in a standoff with Furiosa and her maidens. After freeing himself from his mask, Max says to Furiosa, "w<a href="http://www.telegraph.co.uk/culture/film/10922240/Mel-Gibson-does-Gary.html" target="_blank">hat do you think you’re looking at, sugar-tits</a>,” <a href="http://www.tmz.com/2006/07/28/gibsons-anti-semitic-tirade-alleged-cover-up/" target="_blank">rants about the Jews</a>, and tells several of the wives, <a href="http://gawker.com/5577713/report-mel-gibson-uses-n-word-threatens-rape-of-wife" target="_blank">"you look like a fucking pig in heat, and if you get raped by a pack of niggers, it will be your fault,"</a> and orders them to <a href="http://radaronline.com/videos/exclusive-audio-out-control-mel-gibson-says-hell-burn-down-house-after-demanding/" target="_blank">"blow me!!!"</a> Oh, sorry, that's the Mel Gibson version playing in my head. Back to the real movie. <br />
<br />
In gratitude for getting his mask off, and with nothing else better to do, Max decides to help Furiosa and the wives get to the "green place" where Furiosa grew up, with Nux tagging along. So I guess everyone really is moving to Portland.<br />
<br />
After more harrowing experiences, Furiosa is united with her all-girl desert-dwelling clan. When asked where the green place is, they assume it's where Furiosa came from. <i>D'oh, we were there all along!</i> The sisters have been saving seeds and are ready to plant a new civilization, all they need is water. Hey, they happen to know a guy who has lots of the stuff. Rather than strike out across an impassable desert in search of someplace better, Max, Furiosa, Nux, the wives, and the Ya-Ya Sisterhood decide to return and confront Immortan Joe and his minions to get back to the water supply and plant their seeds.<br />
<br />
You can pretty much take it from here. In the chase the other direction, Nux gives his life to save the others, Joe is killed (by having his mask ripped off - eww) along with his son Rictus (shouldn't he be called Immortan Ted or something?), The Bullet Farmer, the People Eater, the Organic Mechanic, and even the Doof Warrior (NO!!!). Returning to the citadel, they inform the confused residents that IJ is dead and the caravan is not coming back.<br />
<br />
The film ends on a surprisingly optimistic note, with the mountain being opened up and the resources withheld for so long are turned over to the people. Joe's minions and toadies, sick of his bullying, accept the new regime without question and Furiosa and the wives become the new rulers. Max, his work done here, wanders back into the desert to continue his search for someone to help with his anger management issues, at least until the inevitable sequel: Mad Max 2: Rise of the Doof Warrior.<br />
<br />
There's supposedly some sort feminist message here that's gotten a disproportionate amount of press coverage (they love controversy!). If there is - I'm all for it. Patriarchies suck for everyone. Rule by women is much better than sociopathic alpha males. I don't know why anyone would object to this. Yes, the men are mostly assholes, and the women decent, but this reflects real life in my experience. Kick-ass women are okay in my book. And don't forget, men are heroes too (Max and Nux). <br />
<br />
Unlike Tomrrowland, Mad Max feels visceral and real. People behave like actual people, and the relationships have much more heft despite the breakneck action sequences and minimal dialogue. I felt much more emotionally invested in these characters and what happened to them than anything in Tomorrowland. It felt like there was actually something at stake here unlike the other movie. <br />
<br />
In Mad Max's world, the laws of physics apply, scarcity is real, you have to make and do things yourself, and you have to know how they work. Trucks break down, require fuel, and have kill switches. Doors jam, metal rusts and bolt cutters are needed to get your metal mask off. Perhaps part of the reason it feels so visceral and real is that <a href="http://sploid.gizmodo.com/mad-max-fury-road-without-the-special-effects-is-still-1709358729" target="_blank">a lot of the visual effects and stunts were real</a>:<br />
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<b>Final Thoughts</b><br />
<br />
Watching just how well Tomorrowland simulated the future that we thought we would actually be living in by now on the screen, I kept thinking of this memorable quote from David Graeber's article in <i>The Baffler</i>:<br />
<blockquote class="tr_bq">
"...as I watched one of the recent Star Wars movies...I couldn’t help but feel impressed by the quality of the special effects. Recalling the clumsy special effects typical of fifties sci-fi films, I kept thinking how impressed a fifties audience would have been if they’d known what we could do by now—only to realize, <b>“Actually, no. They wouldn’t be impressed at all, would they? They thought we’d be doing this kind of thing by now. Not just figuring out more sophisticated ways to simulate it.” </b></blockquote>
<blockquote class="tr_bq">
"Where, in short, are the flying cars? Where are the force fields, tractor beams, teleportation pods, antigravity sleds, tricorders, immortality drugs, colonies on Mars, and all the other technological wonders any child growing up in the mid-to-late twentieth century assumed would exist by now? Even those inventions that seemed ready to emerge—like cloning or cryogenics—ended up betraying their lofty promises. What happened to them?" </blockquote>
<blockquote class="tr_bq">
"Why did the projected explosion of technological growth everyone was expecting—the moon bases, the robot factories—fail to happen? <b>There are two possibilities. Either our expectations about the pace of technological change were unrealistic (in which case, we need to know why so many intelligent people believed they were not) or our expectations were not unrealistic (in which case, we need to know what happened to derail so many credible ideas and prospects)."</b></blockquote>
Graeber argues that elites prefer to trade off a more technologically-constrained future for increased power and control.<br />
<blockquote class="tr_bq">
End of work arguments were popular in the late seventies and early eighties as social thinkers pondered what would happen to the traditional working-class-led popular struggle once the working class no longer existed...From the perspective of those living in Europe, North America, and Japan, the results did seem to be much as predicted. Smokestack industries did disappear; jobs came to be divided between a lower stratum of service workers and an upper stratum sitting in antiseptic bubbles playing with computers. <b>But below it all lay an uneasy awareness that the postwork civilization was a giant fraud. Our carefully engineered high-tech sneakers were not being produced by intelligent cyborgs or self-replicating molecular nanotechnology; they were being made on the equivalent of old-fashioned Singer sewing machines, by the daughters of Mexican and Indonesian farmers who, as the result of WTO or NAFTA–sponsored trade deals, had been ousted from their ancestral lands.</b> It was a guilty awareness that lay beneath the postmodern sensibility and its celebration of the endless play of images and surfaces. </blockquote>
<blockquote class="tr_bq">
[...] </blockquote>
<blockquote class="tr_bq">
By the sixties, conservative political forces were growing skittish about the socially disruptive effects of technological progress, and employers were beginning to worry about the economic impact of mechanization. <b>The fading Soviet threat allowed for a reallocation of resources in directions seen as less challenging to social and economic arrangements, or indeed directions that could support a campaign of reversing the gains of progressive social movements and achieving a decisive victory in what U.S. elites saw as a global class war. </b>The change of priorities was introduced as a withdrawal of big-government projects and a return to the market, but in fact the change shifted government-directed research away from programs like NASA or alternative energy sources and toward military, information, and medical technologies.</blockquote>
<a href="http://www.thebaffler.com/salvos/of-flying-cars-and-the-declining-rate-of-profit" target="_blank">Of Flying Cars and the Declining Rate of Profit</a> (The Baffler)<br />
<br />
It strikes me that in America today we have people with devices straight out of Tomorrowland walking around looking they just stepped straight out of Mad Max. I thought of this during a recent trip to Target. Much of the American public, especially in economically depressed areas, look like extras from Max Max as James Howard Kunstler often likes to point out. Giant bloated and distended bodies, shaved heads, outlandish hairstyles, long scraggly beards, elaborate tattoos covering much of the body, piercings in every orifice, and garish ill-fitting clothing including leather biker-wear are all <i>de rigeur</i> everywhere in modern-day Middle America, as any trip to Wal-mart will prove. Yet these same people have computers straight out of Tomrrowland in their pockets, swipe credit cars to pay for merchandise from the other side the world, have artificial pacemakers and titanium hips implanted inside them, and find their way around with satellite navigation.<br />
<br />
And again I'm thinking of Dubai. Nowhere on earth looks more like the actual Tomorrowland than Dubai, except surrounded by the parched deserts of Mad Max rather than amber waves of grain. But most of us will never set foot in Dubai. It's for an international jet-set elite. Just like the interdimensional Tomorrowland, it is inaccessible to most of us.<br />
<br />
And that's the problem.We don't see tent cities surrounding Tomorrowland; in Tomorroland there are no <a href="http://www.theguardian.com/artanddesign/2014/jun/13/anti-homeless-spikes-hostile-architecture" target="_blank">homeless spikes</a>. Its tall buildings are not <a href="http://www.treehugger.com/urban-design/jargon-watch-pikkety-line-full-pikketyscrapers.html" target="_blank">reed-like Pikettyscrapers</a> designed to optimize sales for footloose absentee owners which lie darkened and empty half the time. But Tomorrowland does depict scientists and elites living in a world separate from the rest of us, and that's looking uncomfortably like the real world. From gated houses in the Hollywood hills, to"enterprise zones" like <a href="http://marginalrevolution.com/marginalrevolution/2011/06/indias-voluntary-city.html" target="_blank">Guragon in India</a>, to Google's human terrarium in California, to Bangkok where <a href="http://qz.com/376125/bangkoks-lavish-malls-consume-as-much-power-as-entire-provinces/" target="_blank">a few malls use more energy than entire provinces</a>, to plans to set up <a href="http://www.salon.com/2015/03/16/welcome_to_libertarian_island_how_silicon_valley_billionaires_are_creating_a_capitalist_nightmare/" target="_blank">seasteading "tech-incubators" outside of international laws and labor regulations</a>, the rich are seceding from society, and in place of technologies to benefit us all, they see us as just another resource to be extracted, used, and thrown away if inconvenient. Anyone outside of Tomorrowland had better fend for themselves is the new reality; and most of us are on outside. Rather than technocrats with a conscience, the tech elite are behaving more like Immortan Joe. It's Tommorrowland's technology coupled with Mad Max's social relations. It's like a movie where Tomorrowland is surrounded by the oil-guzzling hot-rod barbarians of Mad Max.<br />
<br />
In the same part of the world as the futuristic city of Dubai with its indoor ski slopes, artificial islands, medical rejuvenation facilities, and kilometer-high skyscrapers, is the Islamic State, a self-described Caliphate ruled by Sharia Law straight out of the thirteenth century, which is currently charging across the Middle East, beheading people, and torching oil refineries. This seems to be the bellwether of our future. And therein lies the contradiction. Which one is spreading and which is receding? It's not Tomorrowland <i>versus</i> Mad Max, they seem to be both occupy exactly the same space like the imaginary Tomorrowland depicted in the movie and our world. I know which one I live in. One thing's for sure - it probably won't have a happy ending.<br />
<br />
Mad Max reminds us that its is still possible us to find hope and redemption in a world gone mad. To me, that's going to be a far more important lesson for most of us than Tomorrowland's simplistic bromides about wishing for a shiny jetpack future. <br />
<br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbf-W068bVVNz6MR4XGkTfZWhC066OBsASvGnnQZFVofeB-f6hlQmpd5xWcnamWPFgC0MI8efQHIwGpOLqpREDHH26gpxbr_iF5VBDJVN5GgtjVS83fruG91j9xIZr0rZenHSrnBFKRsw/s1600/2015.png" style="margin-left: auto; margin-right: auto;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbf-W068bVVNz6MR4XGkTfZWhC066OBsASvGnnQZFVofeB-f6hlQmpd5xWcnamWPFgC0MI8efQHIwGpOLqpREDHH26gpxbr_iF5VBDJVN5GgtjVS83fruG91j9xIZr0rZenHSrnBFKRsw/s400/2015.png" width="311" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Your world in 2015.</td></tr>
</tbody></table>
Unknownnoreply@blogger.com11tag:blogger.com,1999:blog-5813525365834911757.post-40996910226142565932015-05-18T18:40:00.003-05:002015-05-18T19:14:14.389-05:00A Reflection on MortalityA while back I mentioned the fact that one of my coworkers was ill with cancer. She died last week Friday, about a month shy of her sixtieth birthday. She told me once that she put away the maximum amount possible in her 401K. Unfortunately, she will never see it. It makes one question the entire “be miserable until retirement and then start living when you’re 60,” mindset we’re supposed to have under capitalism. Sometimes 60 never comes.<br />
<br />
But at least she was not miserable. She genuinely loved her job. She told me she looked forward every day to coming into work. This wasn’t bullshit either; this was genuine. Every day, even with cancer she was there desk at 6:00 AM in the morning. She worked continually through the day, never an idle moment. She worked at the same firm for 25 years. And unlike a lot of the other ultra-boring people here, at least she was interested in a variety of things, from medieval history to travel to geography (it was nice occasionally to have an intelligent conversation once and a while.)<br />
<br />
What strikes me is that she was genuinely happier battling terminal cancer than I am in my normal state. Often times she had to cheer <b>me</b> up. It’s pretty awkward complaining about how much you hate your life when the person sitting next to you is literally dying.<br />
<br />
Her story was typical of her generation. She grew up on Milwaukee’s South Side and went to our South Division High School where she as the only female in mechanical drafting class. She was reluctantly convinced by some mentors to pursue a career in architecture, which she did, eventually being grandfathered in and allowed to sit for the exam mid-career and without a degree.<br />
<br />
But really, in the end, the profession sort of left her behind. The office became much more corporate and she did not have the pedigree that today's corporations are after. AutoCAD replaced her hand drafting and lettering (which I’m told was exquisite). She struggled a bit with Revit and BIM, which we now use for production. But she hung on through it all, through all the changes in the profession, even as she stagnated in the corporate hierarchy and was left unappreciated except for her dedication and personality. Yet despite this, she was still able to supervise contract document work on large hospitals around the country.<br />
<br />
She grew up in a much less cruel time. It was a time when “ordinary” people could have a real career in a place like Milwaukee without family money and connections.<br />
<br />
Not any more. Such a person could never become an architect today. Today, such people are being displaced by the footloose upper-class who move around the country (and even around the world) to occupy the slim top tier of professional/technical jobs. Our summer interns this year are all full-time graduate students from Clemson University in South Carolina. Clemson is not cheap:<br />
<blockquote class="tr_bq">
Founded in 1889, Clemson University consists of Six colleges: Agriculture, Forestry and Life Sciences; Architecture, Arts and Humanities; Business and Behavioral Sciences; Engineering and Science; Health and Human Development, and Education. As of 2014, Clemson University enrolled a total of 17,260 undergraduate students for the fall semester and 4,597 graduate students and the student/faculty ratio is 16:1.The cost of in-state tuition is about $13,054 and out-of-state tuition is $30,488.US News and World Report ranks Clemson University 20th among all national public universities. (Wikipedia)</blockquote>
The intern who sits in my area is from Rochester, Minnesota, so the latter figure is the accurate one. I can’t even imagine being able to afford that even if I could not work, not that they would admit me in any case. Here is another biography another newly hired intern (name omitted of course):<br />
<blockquote class="tr_bq">
XXX is a M.Arch and M.LA dual degree student at Washington University in St. Louis expected to graduate in the winter of 2015. He earned his bachelor degree in Material Physics before studying architecture. His professional training in aesthetics and engineering have been honed through several internships. At PTW Architects Shanghai office, he applied his knowledge in physics and successfully developed a building facade system that could produce a cloud of vapor to help the cooling of the building. At Gensler’s Chicago Office, he worked with various clients ranging from motor centers, national franchise supermarkets to national banks. Last summer XXX worked for Adrian Smith + Gordon Gill Architecture, where he focused on the EXPO 2017 project (DD and pre-CD). While in school he manages the 3D Printing Lab, supervising students in 3D modeling and providing 3D printing technical support. He is a proficient user of Revit, has construction documentation and LEED project experience.</blockquote>
And it seems the “ordinary” salt-of the earth local I have worked with over the years are slowly being displaced with the shiny new globalized hyperachieving models. And this is happening across the board in every profession. Average <i>is</i> over, apparently. The old timers I worked with by-and-large were always the most knowledgeable and the most down-to-earth. Usually they had no degree and came from humble origins, like my co-worker. Times have changed. Whenever I go to one of these funerals, it feels like I am witnessing
the slow dying off the white working class. They are not reproducing themselves. Their kids are struggling. As much as I hate to say
it, I see an utter cluelessness on the part of the lower classes
themselves about this fact. The look of their eyes is that of the cows
in the feedlot – happily chewing their cud totally oblivious to the
fate in store for them and their children. Call it the burden of knowing. I feel bad for them.<br />
<br />
Chris Ryan recently talked a little bit in his past two episodes about his decision to not have children. Given that such a mode of life is essentially nonexistent here in the Midwest, I was interested to hear his reasons. I might reflect on my own reasons besides the practical (i.e. as a male I don’t have the equipment).<br />
<br />
I could clearly see even from a young age that the lower classes were being liquidated. I could also clearly see that entry to the middle class has been totally shut down. Everything I have seen since has convinced me that this trend is not changing but accelerating (as I’ve written about over the years). That’s the “new” economy and the “new” America. You’re either in the upper class or you’re done for. And my family was definitely <b>not</b> in the upper class. Everyone else will have little to look forward to besides demeaning jobs, patching together enough gigs to survive another day, pinching pennies, debt serfdom, uncertain retirement, etc. Not much of a life, in other words. Since I don’t like cubicle life, and that is the only life there will be in the future, why would I even think about creating new life even if I had the chance? Nonexistence seems preferable to being a wage-slave. <br />
<br />
The one saving grace to my family being a complete and utter horror show is the lack of any desire to propagate it into the future. In fact, my only desire is to bring this family to a well-deserved conclusion. I myself should never have been born, but I was, and I’m here, and that’s OK. There’s nothing I can do about that besides self-termination, and I’m going to die anyway, as are we all. But I see no reason to continue that forward, and feel no obligation to do so given the miserable circumstances and lack of opportunity I grew up in. I don’t see anything “noble” in life for its own sake. I always believed in my heart of hearts that my parents should never
have had me. Not because there is anything particularly bad about me,
but because my parents were simply not the kind of people who had the
circumstances and emotional maturity to do so. I never had much of a
chance, really.<br />
<br />
I also realized I was profoundly ordinary. I’m not particularly good at anything, I’m not a genius, I’m not particularly attractive, I wasn’t the head of my class, I wasn’t a super-athlete, I’m not a musician, I’m a middling artist at best. I’m not a doctor, a physicist, an engineer, a math-whiz or anything like that. There is nothing special about me, and in an age where average is over, it’s helpful to realize that being average, you have nothing to offer the brave new world we’re building. Since I haven’t really enjoyed my life at all to this point, I certainly don’t want to pass along that “gift.” I see it as more of a burden. I wish my parents had offered me the same courtesy. I think there can be no more selfish act than having children and not thinking about what kind of future those children will have. Yet sadly we see it all the time.<br />
<br />
I also don’t tell anyone else what to do, nor to I begrudge anyone else's situation. My circumstances are unique. In fact, sometimes I wish that more people who had their shit together would have children, rather than the most fucked-up people imaginable. People tend to bring another soul into the world with no more concern than buying rims for their car, or bringing home puppies. <br />
<br />
I’ve had a lot of difficulties in my life, and a lot of misery, and I would never want to subject another living being to what I have gone through. Now on the other side of forty, things are better now, and I’ve figured out a lot of things, but that doesn’t erase the pain of all those years, and the realization of how messed up and antithetical to human happiness and well-being our society is. So many people I see going through life on auto-pilot following the script, operating on instinct and social cues – now the job, now the degree, now the house, now the wife, now the kids, now the minivan. And I look around and think that it doesn’t look so appealing to me. Just another repeat of the same. <br />
<br />
I wish I could understand the motivation. I wish I could join the party, be a happy cubicle worker, bright and bushy-tailed at my desk at 7:30 AM commuting in from white-picket fence-ville, anesthetizing myself in a fog of reality TV and spectator sports. It seems so much easier.<br />
<br />
Tomorrow is my annual employee review with the suburban Midwest ultra-breadwinners.(with their “dad bods,” lol) I don’t even know what to say anymore. Now, even people like me with insufficient degrees are being forced out of the profession. It’s clear that I have no future at this firm or in the profession in general anymore. I’m sick of what I do. Should I say that? It’s clear that you need to have a certain type of personality to make in corporate America (and the Midwest “culture”on top of it). I call them <i>"homo corpratus."</i> The rest of us are just wasting our time. They actually wrote <i>“Where does Chad see himself in five years?”</i> on my review. Where indeed? Unemployed? In debt (again)? Homeless? Deceased? It just keeps getting harder and harder to give a fuck.<br />
<br />
Life is short indeed. Some people just aren’t cut out for the way the world is now. The least we can do is recognize it and not propagate the suffering. RIP Audrey, you belong in this world a lot more than I do.<br />
<br />
P.S. Agree or disagree - here is some food for thought:<br />
<br />
<a href="http://www.reddit.com/r/childfree/comments/32cq5s/anybody_else_childfree_for_a_morbid_reason/" target="_blank">Anybody else childfree for a morbid reason?</a> (Reddit) I very much disagree with his characterization of reasons as "morbid." <br />
<br />
<a href="http://www.examiner.com/article/abortions-are-moral-when-compared-to-bringing-a-child-into-existence" target="_blank">Abortions are moral when compared to bringing a child into existence</a> (Examiner.com)Unknownnoreply@blogger.com15tag:blogger.com,1999:blog-5813525365834911757.post-4038967378826839282015-04-20T19:08:00.005-05:002015-04-21T09:11:03.462-05:00The Cost of FearAt the Hipcrime Vocab I don't often write about personal stuff, but I hope you'll allow me a brief indulgence. I suppose whether you find this a welcome or break or not will depends on you, but personal stuff seems to popular on blogs for some reason.<br />
<br />
Anyway, If you've been following this blog for a while, you may have gotten the impression over the past year that I am becoming increasingly dissatisfied with where I am, both geographically and in life in general. One of the things I realized during my trip(ping) in California was that my failures have a great deal to do with where I am. Every day my heart and my gut tell me that I just don't belong here. The cold and gray skies and endless winter envelop me in a gloom that is palpable. I know that everyplace has its downsides, but increasingly I feel <i>that there is nothing here for me anymore</i>. I feel it every day. Listening to <a href="http://chrisryanphd.com/tangentially-speaking/" target="_blank">Chris Ryan's podcast</a> among others has also altered my perspective.<br />
<br />
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<br />
Yet I'm afraid. I've only ever lived here, and I have no real friends or connections anywhere else.<br />
<br />
On the C-realm last week, KMO read a comment from the Friends of the C-Realm on Facebook, and I was struck by this in particular: <i>"I'm reminded of an interview with Scott Adams, the cartoonist who does Dilbert. He was asked why the two smartest people in the strip, the paperboy and the garbageman, aren't engineers. He said something to the effect that really smart people don't allow themselves to be used by others like Dilbert is by the pointy-haired boss, Catbert, etc. Instead they live their own lives, according to their own rules."</i><br />
<br />
Notice how those professions are considered "low status." But I can see that being a high-status "professional" isn't all its cracked up to be, from the endless stress, to the boring meetings to the the nonstop personality politics. Without a litter to put through college like me cow-workers (sic), I can't help but wonder why I'm putting myself through this.<br />
<br />
Intrigued, I decided to look for the interview. I didn't find it, but I did find <a href="http://interviewly.com/i/scott-adams-oct-2013-reddit" target="_blank">another interview with him</a>. I picked up <a href="http://time.com/34081/how-to-fail-at-almost-everything-and-still-win-big/rt" target="_blank">his book</a> from the library.<br />
<br />
The first thing that struck me was the fact that Adams had gotten on plane and moved out to California from New England with no job, due to an incident where he nearly froze to death in his car. I can relate, especially since it's been 10-30 degrees colder than the average year round for the last four years (and we are already the second coldest metropolitan area in the country after Minneapolis).<br />
<br />
Adams also realized that his small New England town didn't have much to offer in the way of opportunities. On the plane to California, a businessman sitting next to him told him that the thing to do when you get a job is immediately to look for a better one, that is, your job is not what you do; your real job is to look for other jobs.<br />
<br />
Adams' philosophy is basically that success is a matter of luck, but you can make the odds much better by following system where your odds of succeeding are higher than they otherwise would be, much like a hunter going to a bird blind in a marsh to hunt ducks rather than sit in his backyard. <br />
<br />
Adams famously held a series of corporate cubicle jobs that later formed the basis of his work, but his real goal was to be a CEO or entrepreneur. He pursued a never-ending series of harebrained business ideas and get-rich-quick schemes to free himself from cubicle serfdom. We all know what happened of course - one particular harebrained scheme to be a cartoonist took off. Adams self-effacingly points out that this is despite neither his writing or humor skills being particularly terrific, and he points out all the coincidences that made Dilbert work when there were such long odds against it. Believe it or not, Dilbert did not start as a cartoon about office life. Because he was one of the first cartoonists to make his email public (email being new back then), people unanimously told him that the office strips were their favorite, and the format changed to what we know today. And the timing was perfect - Dilbert came along right as neoliberalism was turning workplaces into downsized dystopias, and it quickly became <i>the</i> symbol of the absurdity of corporate life that we know today.<br />
<br />
Even after the comic took off, Adams continued to invest in one scheme after another, often failing (including a TV show, a series of restaurants in California, and the "Dilburrito."). This is in keeping with his philosophy that the key to success is not being afraid to fail often. Other ventures, such as writing and speaking were more successful, but also due to serendipity. There's lots more, of course, but I'll save that for another time.<br />
<br />
Last week, a woman at work decided to pursue her lifelong dream to move to New York City, "while I'm still young," (she's probably like 20-21). (Seriously, what is it with young women and NYC, I just don't get it). Anyway, she already had a job lined up. When I asked her how she did it, she said connections and networking. Not much help for me there, I'm afraid.<br />
<br />
In a weird note from above, the firm I left to come to my current one, where I was treated very poorly and left under not the best terms because of it, is relocating from the far northwest side to literally a block away, just down the street. Every day <a href="http://wuwm.com/post/developable-land-grows-scarce-milwaukee-riverwalk-building-boom-continues" target="_blank">Mordor is moving closer to completion</a>, and I have to walk by it every day on my way to work. You can imagine how that makes me feel. Those people are going to be in my neighborhood very soon, and I do not want to see them.<br />
<br />
Like Adams, I've grown increasingly disenchanted with my cubicle-bound existence. It seems that architecture is just another desk job full of drudgery, overwork and stress for all but a lucky few. I increasingly feel like my architecture career is over. I just don't enjoy it anymore. The reasons could fill a post in and of itself, and someday I may do that. But with only a four-year degree, it seems like I'm pretty much unhireable. I just don't feel like spending two more years of my life on expensive and useless education jumping through more arbitrary hoops when I already know what the "reward" will be. As the saying goes, "if you liked school, you're going to love work." I'm also reminded of the old adage about law school - "a pie-eating contest where the first prize is more pie."<br />
<br />
That means the thing I've done for the past twenty years I can no longer do. I'm scared of having to start over at my age. It seems that the economy "naturally" wants people unemployed rather than employed, and places all the burden on you to rectify that situation.<br />
<br />
Clearly I'm not going to succeed in the office environment. It takes a "special" type of person that I'm just never going to be. It's also the most homogeneous place you can imagine. Bland, boring, upper-class professionals with the suburban house and the minivan and the 2.5 kids discussing spectator sports and golf all day long (seriously, the guys who sit near me spend their weekends watching professional golf on TV). I feel so alienated, and trading in one cubicle for another doesn't seem like a good plan. There are just so few architecture jobs here to begin with, and they're much worse than even the status quo.<br />
<br />
Given Adams' advice, it seems like being around people more like me will give me a better change at friendship, romance, and carer advancement in whatever career I end up doing.<br />
<br />
As a sidenote, the past few weeks I unexpectedly encountered a couple of people who to my great surprise, are actually from here. I've been watching the brilliant <a href="http://www.pbs.org/wgbh/masterpiece/watch-online/full-episodes/wolf-hall-episode-3/" target="_blank">Wolf Hall on PBS</a>. Mark Rylance, the lead, is considered to be one of the best classical actors today. <a href="http://afternoontea.mpt.org/tea-time-tidbits/041315/" target="_blank">He also grew up in Milwaukee</a> (his parents were teachers who moved here from England to teach). And I listened to t<a href="http://www.thejourneypodcast.com/portfolio/wanderlusting/" target="_blank">his interview with Ginger Kern</a> before discovering at the end that she is also from Milwaukee. Ginger's dream was to live abroad, and now <a href="https://www.youtube.com/watch?v=-KmFGlUQCQA" target="_blank">she coaches other people on it too</a>.<br />
<br />
Anyhow, to cap this off, I've been thinking about signing up again at my local Crossfit gym. With the weather warming up and my health issues seemingly behind me, it seemed like a good time. I used to go there a few years back. The thing is, when our 6-month winter hits, I am literally CRUSHED. I'm a physical and emotional wreck. It takes everything I have just to get out bed and make it through the day for at least six months out of the year. Everything hurts, I have cold and flu symptoms nonstop, lethargy, no energy, fevers, headaches etc. continuously for months on end. Working out is totally out of the question. However, during our brief 3-4 month summer, I'm extremely active and outside or in the gym as much as possible.<br />
<br />
Anyway, it look like the box is closing down, and here's why: <a href="https://www.facebook.com/Cream.City.CrossFit/posts/869761483062510:0" target="_blank">https://www.facebook.com/Cream.City.CrossFit/posts/869761483062510:0</a><br />
<br />
Hmmm.<br />
<br />
The nice, sweet older woman architect who I've sat next to has been battling cancer for years. She still showed up every day whenever was physically able. She loved to travel. We regularly talked about foreign places, the Middle Ages (she used to be in the SCA) and all sorts of other topics. She was our longest-serving employee, there from the very inception of the office - over 20 years. She had not been in for several months. Last week her cubicle was totally cleared out in a day. She would not be returning to work. Another architect was moved in immediately. Life is short indeed.<br />
<br />
Anyway, I've rambled long enough. It's been an odd few months. I still don't know what to do. But it appears I keep getting hit over the head with messages. I just wish I had some sort of guidance.<br />
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Unknownnoreply@blogger.com39tag:blogger.com,1999:blog-5813525365834911757.post-48686377846958229522014-12-27T13:40:00.002-06:002014-12-29T12:11:53.994-06:00Hobbes, Rousseau, and the Spirit of Christmas<div class="separator" style="clear: both; text-align: center;">
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<br />
<i>a bit late, but I think still relevant </i>:)<br />
<b>Hobbes, Rousseau, and the Spirit of Christmas</b><br />
<br />
<i>Are we inherently bad? Or is it dysfunctional institutions run by elites for their benefit that make us so?</i><br />
<br />
There have been a number of stories about an event that happened one hundred years ago this month and has taken on an almost mythic significance in the intervening years. I'm referring to the "Christmas Truce" of 1914 during World War One.<br />
<br />
I'm sure my readers know the story, but to review- World War One commenced in Europe in August, 1914 - "the guns of August" - and people who had known a century of relative peace from large-scale military conflict suddenly found themselves almost inexorably marching to war all over the continent for rather incomprehensible reasons. Making matters worse was that military technology had changed more in the past century due to mechanization than ever before in all of human history. Across the Atlantic, the Americans had fought arguably the first highly mechanized war in their Civil War, and European military leaders had studied that conflict, but studying was far different than planning and strategizing. The planners were used to wars fought on horseback with cannons and bayonets and were unprepared for the new weapons and tactics, and the soldiers and officers on the ground were unprepared for poison gas, brutal trench warfare, artillery shells and machine gun fire. Both sides dug in their trenches and were unable to budge, and thousands were frequently slaughtered just to gain a few feet of bare, muddy ground.<br />
<br />
The first Christmas came around five months later, and the tired and weary German, French, Belgian and English soldiers didn't particularly feel like killing one another in the cold and the mud, especially since the average person had little idea about what they were fighting about, and certainly had no personal beefs with the soldiers in the opposing trenches. During the century of peace, many had even traveled widely in each others' countries. They had all seen the wonders of new technologies, and there was a sense that the world had been brought closer together. Ideas about the "brotherhood of man" competed alongside ideas of national glory on the battlefield. The average enlisted man had more in common with the enemy in the opposing trench than generals and politicians back home for whom the muck and blood and cold and death were just abstractions, and the territories and the trenches were just meaningless lines on a map.<br />
<br />
So, in a famous incident during Christmas in that first year of the conflict, <i>peace broke out in the midst of war</i>. German and English soldiers, particularly, decided to forget about what they were "supposed" to do, and decided to behave like human beings, singing carols, playing soccer, bartering goods, even getting each others' contact info to keep in touch after the war.<br />
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<blockquote class="tr_bq">
It was only the fifth month of what was then known simply as the Great War. Both sides longed for home. The men felt death looming in the trenches where they watched their friends die. The soldiers wielded monstrous weapons: flamethrowers, chlorine and mustard gas, machine guns that could shoot 500 rounds a minute. More than one million lay dead already. </blockquote>
<blockquote class="tr_bq">
But on Christmas Eve in 1914, an incredible scene began to unfold. The faint sounds of carols drifted from the muddy, half frozen and blood-splattered trenches British and German soldiers had been occupying that night. “All is calm, all is bright,” was sung in both English and German. The soldiers hugged the chopped-off tops of pine trees, which were ornamented with candles and paper lanterns. Paper lights festooned heavy artillery, ammo boxes, crates of food rations, and the wooden beams that kept the trench walls in place. </blockquote>
<blockquote class="tr_bq">
“Merry Christmas” was yelled out in a German accent. <i>“Frohe Weihnachten”</i> followed in a Scottish accent. The opposing trenches were so close that the words could be heard easily. Lighted trees began to rise over the lip of the German furrows. British soldiers watched through their periscopes.</blockquote>
<a href="https://www.jacobinmag.com/2014/12/the-christmas-truce/" target="_blank">The Christmas Truce</a> (Jacobin)<br />
<blockquote class="tr_bq">
The relaxation of hostilities spread, and what has come to be called the “Christmas truce” took hold. Soon, soldiers were holding joint burial services for the dead. They began trading goods. British soldiers had been given holiday tins of plum pudding from the king; German soldiers had received pipes with a picture of the crown prince on them; and before long the men were bartering these holiday gee-gaws that celebrated the enemy’s royals. Eventually, soldiers prayed and caroled together, shared dinner, exchanged gifts. Most famously, there were soccer matches at various locations, played with improvised balls. </blockquote>
<blockquote class="tr_bq">
The truce mostly held through Christmas and, in some cases, even to the New Year. It took senior officers’ threats for fighting to resume, and such comprehensive battlefront peacemaking never happened again during the Great War. Courts-martial were brought against those involved later in even brief Christmas truces to retrieve the dead. </blockquote>
<blockquote class="tr_bq">
The Christmas truce was an extraordinary event, not just in World War I but in the history of warfare. But its familiarity and fame—just last month, a short film dramatizing the episode, produced by the Sainsbury’s supermarket chain, created a sensation in the U.K.—should not lead us to ignore less dramatic instances of cooperation and trust-building across battle lines during World War I. Indeed, these more modest episodes may be the key to understanding how, in our own day, we might work to lessen political violence and hostility, even among the most bitter enemies.</blockquote>
<a href="http://www.wsj.com/articles/the-spirit-of-the-1914-christmas-truce-1419006906" target="_blank">The Spirit of the 1914 Christmas Truce</a> (Robert Sapolsky, <i>The Wall Street Journal</i>)<br />
<blockquote class="tr_bq">
As might be expected with any story passed down through generations, new narrative threads emerge, much like the recently discovered letter written by General Walter Congreve, who described the act as “one of the most extraordinary sights anyone has ever seen.” </blockquote>
<blockquote class="tr_bq">
When British and German soldiers met in No Man’s Land, it “was swarming with men and officers of both sides, shaking hands and wishing each other a happy Christmas.”<br />
The most enduring image out of the cease-fire is the impromptu game of soccer that apparently occurred between enemies. And although historians continue to debate whether a soccer match ever took place — Congreve’s letter doesn’t actually mention a game of soccer — the public has embraced the symbolic possibility that tired soldiers sought a respite from hellish war with something as leveling as soccer.</blockquote>
<a href="http://www.pbs.org/newshour/rundown/ww1-soccer-photos/" target="_blank">Did German and British troops really stop fighting and play soccer 100 years ago?</a> (PBS)<br />
<blockquote class="tr_bq">
1914-1918 was more than just a date written in my school exercise book. It provided the backdrop to my childhood.I later realised that this war was the most important event of the 20th Century. It carried the seeds of the next war while heralding the Soviet era and American hegemony since Europe had pressed the self-destruct button.</blockquote>
<blockquote>
In 1992, I learned from Yves Buffetaut's book, Battles of Flanders and Artois, that enemy soldiers on opposing sides fraternised with each other over the Christmas period of 1914. I read that some French soldiers applauded a Bavarian tenor, their enemy a German, on Christmas Eve while others played football with the Germans the next day. <br />
<br />
Joint burials also took place in no man's land with Masses read in Latin. Soldiers visited each others' trenches to compare working conditions. Some evenings when the Scotch whisky had been flowing, soldiers fell asleep in the opposite trench and left the following day, apologising to those who "lived" there. <br />
<br />
I neither wanted nor was able to believe any of that. This was so contrary to the war I had learnt about at school, full of suffering, selflessness, and courage in the face of the enemy.</blockquote>
<a href="http://www.bbc.com/news/magazine-30433729" target="_blank">How France has forgotten the Christmas truce soldiers</a> (Christian Carion, BBC)<br />
<br />
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<br />
But what interests me is that the Christmas truce is an ideal example of the idea that people don't <i>naturally</i> want to kill another. It was an ideal example that war was not inherent in human nature. Those soldiers did not want to be there - they were compelled to do so by the hierarchical, authoritarian structures of the time - the government, the army, etc. Plus, they had been indoctrinated in the romantic glory idea of war -that sacrificing for ones country was good and glorious - <i>dulce et decorum est</i>, and all that. And the media in the respective countries constantly whipped up hatred.<br />
<br />
There was nothing "natural" about the war at all. People didn't want to fight - they wanted peace.<br />
<br />
In fact, when they got there, the soldiers did everything they could to <i>avoid</i> killing one another. When the "adults" weren't looking, both sides cooperatively worked out ways in which they could appear to be fighting without actually risking their lives. They shot over one anothers' heads. They overshot with artillery. This infuriated the commanders. It was only when the higher-ups came around that they had to really fight, but they warned one another in a myriad of clever ways.<br />
<blockquote class="tr_bq">
I remember a note written by German soldiers which reached the French trench and was reported by a Second Bureau officer.This message, written in rudimentary French, warned French soldiers that a colonel was due to visit their trench and they would have to open fire at about 2pm. So it would be a good idea to duck at about that time. However, it would definitely not prevent them from having a drink as planned at 5pm. It was signed: "Your fond German comrades." </blockquote>
<a href="http://www.bbc.com/news/magazine-30433729" target="_blank">How France has forgotten the Christmas truce soldiers</a> (BBC)<br />
<blockquote class="tr_bq">
There tended to be a lull in the fighting during meals. Those pauses existed for the simple reason that no one, on either side, wanted to interrupt dinner to kill or be killed. But these lulls began to be used as ways to send signals to the other side. As the British historian Tony Ashworth writes in his book “Trench Warfare 1914-18,” ritualizing these pauses made it possible to communicate through contrasting behavior. So the soldiers would make a point not just of shooting less frequently during dinner: They would let the guns thunder until the stroke of 6 p.m. and then go utterly silent until 7 p.m., every day. And if the other side started doing the same, they had essentially negotiated a narrow truce: no fighting during dinner. Similar truces evolved from lulls in fighting during horrible weather, when everyone’s priority became avoiding hypothermia. </blockquote>
<blockquote class="tr_bq">
[...] The system of “live and let live” would spread further. One side might get their best sniper to put a bullet into the wall of an abandoned house near enemy lines. Then he would do it repeatedly, hitting the same spot. What was being communicated? “Look how good our guy is. He could have aimed at you, but chose not to. What do you say to that?” And the other side would reciprocate with their best sniper. What had just started? An agreement to shoot over each other’s heads.</blockquote>
<a href="http://www.wsj.com/articles/the-spirit-of-the-1914-christmas-truce-1419006906" target="_blank">The Spirit of the 1914 Christmas Truce</a> (Wall Street Journal)<br />
<br />
Without the constraints - the officers in charge who must enforce discipline, the generals and military commanders who were charged with "winning" the war, and most of all the politicians back in their respective countries' national capitals playing geopolitics over territories and making pointless alliances - none of those solders would have any personal stake or interest in being in a muddy, lice-ridden trench and killing people whom they were told were "the enemy." In fact, the authoritarian power structures had to take extraordinary measures to keep soldiers fighting on both sides and hating one another enough to kill:<br />
<blockquote class="tr_bq">
These "overspills" took the top brass by surprise. They attempted to restore order by moving "contaminated" units, as one senior officer described them at the time. Some Scottish volunteers were sent home after two weeks of drinking tea and playing football with the Germans.</blockquote>
<blockquote>
No-one faced the firing squad for fraternisation as too many men had been involved.<br />
<br />
However, fraternisation and particularly its memory, from a French perspective, had to be broken. Had an entire population not been raised to surrender its young to the "field of honour" when the time came? All this work had been undone in the space of an evening by singing from the opposite trench, the sound of a harmonica or bagpipes, or a candle lit to guide those walking unarmed through no man's land.<br />
<br />
[...]<br />
The newspapers in Great Britain and Germany gave accounts of the phenomenon of fraternisation. Photographs were posted by the press on the banks of the Thames.</blockquote>
<blockquote>
<br />
In France, not a word was written on the subject. The newspapers had become tools enabling the army and authorities to spread propaganda.In the country that had given the world human rights, the press was no longer free.There was no question of fraternisation being covered in newspapers which were in the pay of a government run by Raymond Poincare whose home town was acquired by Germany in 1870.</blockquote>
<a href="http://www.bbc.com/news/magazine-30433729">http://www.bbc.com/news/magazine-30433729</a><br />
<blockquote class="tr_bq">
Such truces emerged repeatedly during World War I, and just as often, the brass in the rear would intervene by rotating troops, threatening courts-martial and ordering savage raids requiring hand-to-hand combat—all to shatter any sense of shared interests between enemies. And still the truces would start up again. </blockquote>
<blockquote class="tr_bq">
Mr. Ashworth describes various steps in these soldiers’ development of a psychological portrait of each other. First, once mutual restraint emerged, they could conclude that their enemy was rational and responded to incentives to hold fire. This prompted a sense of responsibility in dealing with them. Initially, this was a purely instrumental impulse, self-serving cooperation to prevent retaliation. </blockquote>
<blockquote class="tr_bq">
With time, however, this sense of responsibility developed a moral tinge, tapping into the soldiers’ resistance to betraying those who dealt honorably with them. It occurred to them that: The other side didn’t want dinner disturbed any more than we do; they also don’t want to fight in rainstorms; they also have to deal with brass from headquarters who screw up everything. A creeping sense of camaraderie emerged. </blockquote>
<blockquote class="tr_bq">
This produced something striking. The war machines in Britain and Germany spewed typical propaganda about the enemy’s subhuman nature. But in studying diaries and letters, Mr. Ashworth observed surprisingly little hostility toward the enemy expressed by trench soldiers; the further from the front, the more hostility. In the words of one front-line soldier, “At home one abuses the enemy, and draws insulting caricatures. How tired I am of grotesque Kaisers. Out here, one can respect a brave, skillful, and resourceful enemy. They have people they love at home, they too have to endure mud, rain and steel.” </blockquote>
<blockquote class="tr_bq">
Feelings of “us” and “them” were always in flux. If someone was shooting at you, they were certainly Them. But otherwise, soldiers on both sides were likely to think that the more formidable Them was the rats and lice, the mold in the food, the cold or the comfortable officer at headquarters who seemed, in the words of one soldier, an “abstract tactician who from far away disposes of us.” </blockquote>
<a href="http://www.wsj.com/articles/the-spirit-of-the-1914-christmas-truce-1419006906">http://www.wsj.com/articles/the-spirit-of-the-1914-christmas-truce-1419006906</a><br />
<blockquote class="tr_bq">
The sun set and the officers, with Gen. Smith-Dorrien’s words echoing in their minds, gave the order to return to the trenches. They couldn’t let the men gain the confidence to openly question the chain of command. The brass couldn’t let the lower ranks see that they were stronger than the higher ranks — the minority. </blockquote>
<blockquote class="tr_bq">
The next day was Boxing Day. The calm lingered, but more than 100 soldiers were dead by end of the day. The officer-directed fighting commenced. Troops from both sides were ordered to fire on the people they played soccer with, exchanged presents with, showed photos to, only hours before.</blockquote>
<blockquote class="tr_bq">
These soldiers killed people with whom they had far more in common than those who were ordering them to fight. They were mostly poor and working class. The generals in the rear had titles like “sir” and “lord.” They owned large estates. They were collaborators with robber barons, kings, and other heads of state. They lived in worlds the fighting men only read about.</blockquote>
<a href="https://www.jacobinmag.com/2014/12/the-christmas-truce/">https://www.jacobinmag.com/2014/12/the-christmas-truce/</a><br />
<br />
The Christmas Truce is one of the major events used by those who argue that it is institutions that drive people to war, not human nature. Without all of these institutions - the military, the officers, the government, the press; the rigid hierarchical structures that trap us all in their web, people are naturally kind and benevolent. The Christmas Truce revealed that, when those things were stripped away, human nature was peaceful, not violent. And people did everything they could to assert their true, nonviolent and cooperative natures in the face of the force of those malignant, authoritarian structures in charge. In turn, those structures did everything they could to assert their authority and keep people killing one another. Those structures had to compel people from the top down, because people didn't want to fight since they were the ones dying and only the sociopathic elites were the real beneficiaries:<br />
<blockquote class="tr_bq">
These men were fighting in a war that served none of them. It was an imperialist war, a war among the world’s most powerful nations to re-divide the world, a war to ensure the collection of bank debt. They knew it was only a matter of time before they, too, would meet the same fate as the so many others who had already lost their lives. </blockquote>
<blockquote class="tr_bq">
What was it all for? So the rich could stay rich? In their mind’s eye, the soldiers could see their significant others, their parents, their children, their brothers and sisters, tucked away in warm homes, next to their own Christmas trees. The enlisted ranks couldn’t fight in these conditions. So they didn’t.</blockquote>
<a href="https://www.jacobinmag.com/2014/12/the-christmas-truce/" target="_blank">The Christmas Truce</a> (Jacobin)<br />
<br />
It is those political, economic and social structures that were responsible for the slaughter of millions of innocents who did not have to die.<br />
<br />
This is essentially the modern version of the Rousseau ideal. That it is the human society and institutions, not human nature itself, that is at the root of the misery, violence and poverty that we see everywhere today. The economic institutions that play us against one another for money and jobs. The scarcity and poverty mentality in which some have more than they can spend in a hundred lifetimes, while others must labor their entire lives for nothing, while still others go without even the basics like food and shelter. Or nationalism (aka 'patriotism' in the US) which teaches us that our country is better and other countries are the enemy and must be fought for whatever reason (e.g. 'freedom'). Or religions that teach us that we have the one true religion and unbelievers must be slaughtered to please our god (e.g. the Islamic State). There are innumerable examples of these tribal beliefs.<i> </i><br />
<br />
<i>"Man is born free but is everywhere in chains" </i>asserted Rousseau; chains of tradition, of custom, of nationalism, of religion. Stripped of those illusions and compulsions, we would be much better off, he argued. The "<a href="http://en.wikipedia.org/wiki/State_of_nature" target="_blank">state of nature</a>" was peaceful, and violence was a social product. Rousseau looked at tribal cultures in North America without sophisticated governments like those in Europe and found natural man meek and mild and not driven to murder; it was only nation-states that made people violent with their wars and competing ideologies. <br />
<br />
These institutions only benefit the elites of society - kings, emperors, politicians, capitalists. They want them to continue. The common man is not served by them at all. We are all constrained for their benefit, throwing our lives away to build their fortunes, and dying to enforce their territorial ambitions. We must constantly be convinced that this is all good and necessary by indoctrination from above, and if we can't be convinced, we will be coerced at the point of a gun or by some other means such as starvation and necessity. All of these sociopolitical structures are backed by violence. If you are drafted, you must go or face prison. If you do not pay taxes, you go to jail and your assets will be seized. If you protest, the police will douse you with tear gas and beat you with billy clubs. If you refuse to work for the capitalist's profit, you will starve. And so on.<br />
<br />
Theoretically, according to the Rousseauian optimists, these malignant institutions can be changed or, ideally, eliminated. Furthermore, if we got rid of these institutions and the power they have over us, we would have a more peaceful and just world. People are naturally good and cooperative, and once we consign all these artificial thought viruses to the trash heap, the thinking goes, we will be able to go back to true human nature like those troops in 1914 who wanted brotherhood, not violence and mayhem. Furthermore, such people promote and emphasize human peacefulness, empathy, playfulness, and cooperation, and downplay human aggression and violence. They believe that we are forever being pushed away from our natural inclinations by hidebound social, religious and economic institutions. <br />
<br />
This school has a number of proponents. They study anthropology and see few examples of naturally occurring war, particularly among hunter gathers who have little in the way of possessions and are "fiercely" egalitarian. They consistently point out that we are descended from peaceful, promiscuous bonobos as much as violent, misogynist chimpanzees. And they emphasize human cooperation and empathy rather than violence and greed. They tend to lean toward weak-state or stateless political ideals like libertarianism and anarchism, or cooperative economic systems like socialism/communism. They tend to favor economic structures that emphasize cooperation instead of violence or coercion. <br />
<br />
<b>II.</b><br />
<br />
The opposite idea has been aggressively promoted in recent years. According to this view, humans are naturally aggressive and violent, and in the absence of human institutions will naturally kill one another. They argue that violence will naturally increase without some sort of power over us keeping things under control, adjudicating disputes peacefully, and maintaining basic social order.<br />
<br />
Furthermore, they argue that these power structures have, in fact, <i>not</i> made the world more violent, but rather have caused the world to become more <i>peaceful</i> over the intervening centuries. They argue that in the natural state of hunter-gatherers, small groups are in a permanent state of conflict with other hostile tribes over resources and territory. Furthermore, jealously and violence are rife, and with no one to keep the peace or punish violators, anyone can do whatever they want to anyone else. Might makes right and the strong rule. Tit-for-tat is the order of the day keeping cycles of violence snowballing until bodies litter the ground. No private property also means no technological improvement.<br />
<br />
They point to the numerous raids, conflicts, captives and slaves taken by "primitive" peoples. Rather than the noble savages of Rousseau, hunter-gathers are portrayed as even more violent than most industrial societies today. They point to people like the Aché, who have a higher homicide rate than modern urban ghettos, and the Yanomami, where men who kill the most people are the most reproductively successful, and wives and children are chattel who are beaten mercilessly. <br />They point to ancient skeletons riddled with signs of damage from weapons like cut marks and blows to the skull. They point out that the homicide rate in Medieval Europe was orders of magnitude higher than today. They point out all the wars and conflicts in recorded history, as well as the arbitrary justice meted out by despotic rulers as a mater of course. They point out that torture was once commonplace, as were brutal methods of execution like crucifixion and being burned alive. They point out that ancient texts like the Bible and the Iliad are chock full of slaughter on a scale that we would find unimaginable today, including of women and infants. <br />
<br />
For example, when presented with the story of the Christmas truce, a proponent of this view could also point out this story which also appeared on the BBC the same week as the Christmas Truce article and told the following stories which took place during Victorian times:<br />
<blockquote class="tr_bq">
Unlike his brothers-in-arms, [James King] didn't die in the killing fields of the Crimea. No, Pte King fell in Hampshire, in the long-forgotten Battle of Christmas Dinner.<br />
<br />
You'd be forgiven for never having heard of it. It wasn't the bloodiest. It wasn't the lengthiest. It wasn't the most significant. But it was certainly the weirdest. One side, stood the British Army. On the other… Actually, that was the British Army too. </blockquote>
<blockquote class="tr_bq">
Hostilities broke out Christmas Day in 1859. The 24th Regiment of Foot and the Tower Hamlets Militia had been sharing a barracks in Aldershot. They'd eaten their Christmas dinner, served, as was the custom, by the officers, who had then left the troops to their own devices. </blockquote>
<blockquote class="tr_bq">
When the soldiers mingled afterwards, replete and content, talk turned to the meal they'd just scoffed. The Tower Hamlets Militia had dined on beef and pudding, washed down with a pint of beer each. Ours was better, sniffed the men of the 24th, who'd eaten goose.</blockquote>
<blockquote class="tr_bq">
The row began harmlessly enough, but, in the way of these things, it soon escalated. Voices were raised. Words were exchanged. There was a push. Then a shove. Mops and brooms were commandeered as weapons. Somebody lobbed a few rounds of coal. </blockquote>
<blockquote class="tr_bq">
Someone lobbed a few back. Salvos of coal were exchanged. There was a great crash of glass. Then, with the mood darkening, some of the 24th went to fetch their rifles, and began loading them. </blockquote>
<blockquote class="tr_bq">
Pte King had been singing <i>Auld Lang Syne</i> with his pals when a volley of fire erupted from across the parade ground. "I am shot," he cried, then collapsed. </blockquote>
<blockquote class="tr_bq">
"I felt for the wound, but could not find it," Pte George Sawyer told the inquest into King's death, "and told him he was only larking, but a comrade pulled up his shirt, which was bloody, and then we saw a little hole, bleeding slowly." </blockquote>
<blockquote class="tr_bq">
The guns blazed for up to 10 minutes, and when they fell silent, almost every window in the block was smashed, and the walls, doors and windows were peppered with bullet holes.</blockquote>
Or, another example of human nature:<br />
<blockquote class="tr_bq">
For quite some time, there had been bad blood between the Poles and Austrians of Hazleton. That regrettable state of affairs wasn't helped by the decision of some dastardly Austrians to pack dynamite into the house where the happy couple would return as husband and wife. </blockquote>
<blockquote class="tr_bq">
The fuse was about to be lit when one of the Austrians felt a sudden pang of conscience and let slip that the best man's speech wasn't going to be the most charged part of the afternoon. </blockquote>
<blockquote class="tr_bq">
As the guests scarpered, the house exploded. When the smoke cleared, the furious reprisals began in a frenzied fire-fight. </blockquote>
<blockquote class="tr_bq">
A dozen were shot, and many more injured by lunging knives and thwacking clubs. Somewhere amid the melee, the groom was killed. </blockquote>
<blockquote class="tr_bq">
So all things considered, maybe the headline in the Middlesbrough Daily Gazette didn't really convey the jaw-dropping turmoil of the day: Lively Conflict at a Wedding. </blockquote>
<a href="http://www.bbc.com/news/magazine-30514644" target="_blank">Victorian Strangeness: Four Christmas incidents</a> (BBC)<br />
<br />
It's a bit harder to blame these on human institutions. In these stories, people are naturally aggressive and quarrelsome even over trivialities, form into warring tribes (different regiments of the same army or different families and ethnic groups), and bodies end up on the ground without any political coercion whatsoever.<br />
<br />
This was the view articulated by Thomas Hobbes, who used it to justify the hegemonic powers of the state over the common people. In Hobbes' formulation, the natural state of society was conflict - over women, property, resources, etc. In Hobbes words, it was <i>"a warre of all against all,"</i> and people agreed to submit to a central authority to keep things under control. That is, they voluntarily surrendered a bit of their liberty, and invested a ruling authority with coercive power (to jail, to tax, etc.) in order to prevent this natural state of permanent conflict and allow people to cooperate enough to have an advanced society with private property. This led to less, not more interpersonal conflict. Hobbes called this authority the <i>Leviathan</i>, after a monster from the Old Testament.<br />
<br />
The ruling authorities naturally do not want conflicts among the people they rule. Conflicts would cause the society to become less wealthy. So, when there is a unitary ruler and resources flow to the top, paradoxically that authority is highly motivated to keep the peace and does so, unlike where there are no rulers. The authority imposes peace through a justice system, laws, courts, police, army, militia, etc. This leads to advanced and fairly stable societies, from ancient kingdoms to empires like Rome and the Islamic caliphates, to the emergence of nation-states like China, France or England. These governments allowed more people to do more things peacefully than ever before and thus humans were able to achieve their potential. <br />
<br />
Proponents of "Leviathan Theory" say that we have gained a great deal in return. It has led to vast trading networks and complex economies that have led to an unprecedented rise in living standards, plentiful food, and longer life spans for most of humanity. They point out that the average person has less of a chance of dying from violence than ever before in our species' history, and point to nation states and centralized institutions as the fundamental cause. Coercion is a necessary precondition for civil order and private property, and private property is a precondition for prosperity. Otherwise, they say, we would be still living in the stone age.<br />
<br />
And they argue that even though World War One led to slaughter on an unprecedented scale, when you look at percentage of casualties compared to the number of people alive at the time, the trend toward dying from violence is still down from previous centuries despite the power of mechanized warfare and militaries made up of millions of recruits. Even more optimistically, they point out that our attitudes toward violence have become even more mild in recent years. Ideas of dying gloriously on the battlefield are no longer fashionable, and people are less likely to see wars as noble thanks to depictions in the media. Indeed, anti-war protests commonly greet marches toward war by politicians today in capitals around the world. As we get richer, we have more to lose from fighting and more to gain from cooperation, they argue. We are moving away from zero-sum games and toward positive sum games thanks to these institutions.<br />
<br />
Furthermore, they argue that, paradoxically, it is our very prowess at war that has made war recede into the background. Since we have become so good at killing one another, the thinking goes, we no longer do it as often since it would destroy both sides - a sort of Christmas Truce on the level of entire nations. A nuclear war would wipe out humanity, so large nation states are now in permanent standoff mode leading to unprecedented peace.<br />
<br />
And they come armed with a massive array of statistics to bolster their cause. Throw in whatever you want including World War Two and the Holocaust; as a percentage your odds of personally dying of violence are still less than during the Age of Exploration, the Renaissance, the Middle Ages, Late Antiquity, the Classical World, or Biblical times. And they say that this means we are becoming much more peaceful through trade, literacy, economic cooperation, travel, communication, and so forth. <br />
<br />
Yes, there is some coercion, but it is a necessary evil for all the good things gained by political stability; and besides, with the democracy and human rights revolutions, coercion is less arbitrary and unjust than ever before, and barbarities like torture are on the wane. Human rights have been extended to more and more people, and ethnic hatred, while still there, is less common in a globalized world. We're making continual progress along this path, they argue, and things like the world wars, holocausts, genocides, crime, and today's low-level conflicts are just bumps on the road to a more just and peaceful world. The trend is clear, they say. Get rid of institutions, and we are back to conflict and chaos.<br />
<blockquote class="tr_bq">
It’s a good time to be a pessimist. ISIS, Crimea, Donetsk, Gaza, Burma, Ebola, school shootings, campus rapes, wife-beating athletes, lethal cops—who can avoid the feeling that things fall apart, the center cannot hold? Last year Martin Dempsey, chairman of the Joint Chiefs of Staff, testified before a Senate committee that the world is “more dangerous than it has ever been.” This past fall, Michael Ignatieff wrote of “the tectonic plates of a world order that are being pushed apart by the volcanic upward pressure of violence and hatred.” Two months ago, the New York Times columnist Roger Cohen lamented, “Many people I talk to, and not only over dinner, have never previously felt so uneasy about the state of the world. … The search is on for someone to dispel foreboding and embody, again, the hope of the world.”<br />
<br />
As troubling as the recent headlines have been, these lamentations need a second look. It’s hard to believe we are in greater danger today than we were during the two world wars, or during other perils such as the periodic nuclear confrontations during the Cold War, the numerous conflicts in Africa and Asia that each claimed millions of lives, or the eight-year war between Iran and Iraq that threatened to choke the flow of oil through the Persian Gulf and cripple the world’s economy.<br />
<br />
How can we get a less hyperbolic assessment of the state of the world? Certainly not from daily journalism. News is about things that happen, not things that don’t happen. We never see a reporter saying to the camera, “Here we are, live from a country where a war has not broken out”—or a city that has not been bombed, or a school that has not been shot up. As long as violence has not vanished from the world, there will always be enough incidents to fill the evening news. And since the human mind estimates probability by the ease with which it can recall examples, newsreaders will always perceive that they live in dangerous times. All the more so when billions of smartphones turn a fifth of the world’s population into crime reporters and war correspondents.<br />
<br />
We also have to avoid being fooled by randomness. Cohen laments the “annexations, beheadings, [and] pestilence” of the past year, but surely this collection of calamities is a mere coincidence. Entropy, pathogens, and human folly are a backdrop to life, and it is statistically certain that the lurking disasters will not space themselves evenly in time but will frequently overlap. To read significance into these clusters is to succumb to primitive thinking, a world of evil eyes and cosmic conspiracies.<br />
<br />
Finally, we need to be mindful of orders of magnitude. Some categories of violence, like rampage shootings and terrorist attacks, are riveting dramas but (outside war zones) kill relatively small numbers of people. Every day ordinary homicides claim one and a half times as many Americans as the number who died in the Sandy Hook massacre. And as the political scientist John Mueller points out, in most years bee stings, deer collisions, ignition of nightwear, and other mundane accidents kill more Americans than terrorist attacks.<br />
<br />
The only sound way to appraise the state of the world is to count. How many violent acts has the world seen compared with the number of opportunities? And is that number going up or down? As Bill Clinton likes to say, “Follow the trend lines, not the headlines.” We will see that the trend lines are more encouraging than a news junkie would guess.<br />
<br />
To be sure, adding up corpses and comparing the tallies across different times and places can seem callous, as if it minimized the tragedy of the victims in less violent decades and regions. But a quantitative mindset is in fact the morally enlightened one. It treats every human life as having equal value, rather than privileging the people who are closest to us or most photogenic. And it holds out the hope that we might identify the causes of violence and thereby implement the measures that are most likely to reduce it. Let’s examine the major categories in turn.<br />
<br />
[...]<br />
<br />
An evidence-based mindset on the state of the world would bring many benefits. It would calibrate our national and international responses to the magnitude of the dangers that face us. It would limit the influence of terrorists, school shooters, decapitation cinematographers, and other violence impresarios. It might even dispel foreboding and embody, again, the hope of the world.</blockquote>
<a href="http://www.slate.com/articles/news_and_politics/foreigners/2014/12/the_world_is_not_falling_apart_the_trend_lines_reveal_an_increasingly_peaceful.single.html" target="_blank">The World Is Not Falling Apart</a> (Steven Pinker, Slate) <i>Never mind the headlines. We’ve never lived in such peaceful times.</i><br />
<br />
Such people tend to be apologists for the current power structure. They tend to be believers in progress, in all its forms - technical, social, economic, etc. They tend to excuse manipulative and exploitative power structures that keep us doing things we don't want to do and play us against one another because in their calculus it's still a net gain for most people. <br />
<br />
They also have their favorite anthropologists like <a href="http://edge.org/conversation/napoleon-chagnon-blood-is-their-argument" target="_blank">Napoloeon Chagnon</a>, and Jared Diamond who claimed that primitive peoples are "<a href="http://www.theguardian.com/books/2013/feb/03/jared-diamond-clash-tribal-peoples" target="_blank">in a constant state of war</a>." They like historians like <a href="http://www.theatlantic.com/international/archive/2014/04/the-slaughter-bench-of-history/360534/" target="_blank">Ian Morris</a> and <a href="http://www.ted.com/talks/niall_ferguson_the_6_killer_apps_of_prosperity?language=en" target="_blank">Niall Ferguson</a>, political scientists like Francis Fukuyama, and economic historians like Douglass North and Daron Acemoglu, who argue that powerful modern western institutions are the root cause of prosperity, and thus a net good for all. They point to books like <i>War before Civilization</i> by Lawrence Keeley and <i>War in Human History</i> by Azar Gat to make their case that people are naturally violent, and that the past was much poorer and much more violent before the rise of coercive power structures and nation states. They also point to the work of primatologists like Richard Wrangham, author of <i>Demonic Males</i> about how chimpanzees are naturally violent, aggressive and territorial and will attack and kill any chimp in their territory if they outnumber him by a factor of 4-1.<br />
<br />
<b>III.</b><br />
<br />
So what fascinates me is how this centuries old fundamental battle over human nature continues to be fought even today, hundreds of years later. There are two sides, each with their own view, and each side has their own preferred books, papers, academics and scholars, research, and other pieces of evidence to bolster their side, and it seems as though they are constantly taking past one another. It's worth noting that neither Hobbes nor Rousseau ever left Europe or had direct contact with any people outside it. Despite a century of research from numerous anthropologists, archaeologists, historians, forensic scientists, economists, political philosophers,and so forth, we are still no closer to a resolution than those two men who wrote centuries ago.<br />
<br />
For example, on team Bonobo is is<i> Sex at Dawn</i> author <a href="http://www.psychologytoday.com/blog/sex-dawn/201103/steven-pinkers-stinker-the-origins-war" target="_blank">Christopher Ryan</a>, who points to the works of Frans de Waal, Robert Sapolsy and others. He is very critical of modern institutions and how they make us go against what he believes is human nature, making us frustrated, sick, and mentally damaged. Such people tend to have a benevolent view of human nature emphasizing people's natural cooperative instincts and contend that while total and complete nonviolence is unrealistic, there is nothing "natural" about violence and conflict. People do not naturally want to fight and kill one another, they argue. Conflicts are caused by elites for their own aggrandizement, or over scarce resources due to overpopulation, overexploitation and inequality. World War One is a prime example of elites slaughtering their own people for essentially meaningless reasons, and the Christmas Truce is a prime example what people would do in the absence of those institutions. They prefer the philosophy of Hobbes the stuffed tiger to that of Hobbes the English philosopher.<br />
<br />
<a href="http://www.huffingtonpost.com/johann-hari/the-myth-of-the-panicking_b_837440.html" target="_blank">The Myth of the Panicking Disaster Victim -- and Why We Should Be Inspired This Week</a> (Johann Hari, <i>The Huffington Post</i>)<br />
<br />
<a href="http://www.slate.com/articles/health_and_science/new_scientist/2014/12/anthropology_in_pacific_islands_friendliness_rather_than_savagery_in_new.html" target="_blank">A Friendly Species</a> (Slate) <i>An anthropologist finds cooperation, not savagery, throughout the Pacific Islands.</i><br />
<br />
<a href="http://chrisryanphd.com/tangentially-speaking/2014/12/3/101-doug-fry-anthropologist-of-peace" target="_blank">101 - Doug Fry (Anthropologist of Peace)</a> (Tangentially Speaking)<br />
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<a href="http://kevishere.wordpress.com/2010/12/23/christmas-truce-of-1914/" target="_blank">Lessons from the Christmas Truce of 1914</a> (Patrick F. Clarkin) <br />
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<a href="http://discovermagazine.com/2012/jun/02-no-war-is-not-inevitable" target="_blank">No, War Is Not Inevitable</a> (Discover)<br />
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They point out things like this letter from Christopher Columbus about so-called "primitive savages":<br />
<blockquote class="tr_bq">
All the people on this island and all the others I have found or have learned of go naked, men and women alike, just as their mothers bear them, although some women cover themselves in one place with a leaf from a plant or a cotton garment which they make for the purpose.</blockquote>
<blockquote>
They have no iron or steel or weapons, nor are they that way inclined, not because they are not well built and of fine bearing, but because they are amazingly timid. They have no other weapons than those made from canes cut when they are in seed, to the ends of which they fix a sharp stick; and they dare not use them, for many times I have happened to send two or three men ashore to some town to speak to them and a great number of them have come out, and as soon as they see the men coming they run off, parents not even waiting for children, and not because any harm has been done to any of them; on the contrary, everywhere I have been and have been able to speak to them I have given them some of everything I had, cloth and many other things, without receiving anything in exchange; but they are simply incurably timid.<br />
<br />
The truth is that, once they gain confidence and lose this fear, they are so lacking in guile and so generous with what they have that no-one would believe it unless they saw it. They never refuse to give whatever they have, whenever they are asked; rather, they offer it willingly and with such love that they would give their hearts, and whether it is something of value or of little worth, they are happy with whatever they are given in return, however it is given.</blockquote>
<a href="http://www.ems.kcl.ac.uk/content/etext/e022.html" target="_blank">http://www.ems.kcl.ac.uk/content/etext/e022.html</a><br />
<br />
By far the most famous member of team Chimpanzee has been <a href="http://edge.org/3rd_culture/pinker07/pinker07_index.html" target="_blank">Steven Pinker</a>. Pinker has been at the center of defending institutions as beneficial despite their obvious flaws and downsides. Conservative authors tend to support Pinker's views. Yes, we had two world wars and the holocaust and so forth, they argue, but if you put yourself in the shoes of the average person, we've never had it so good. Institutions are a big part of that, they contend. To make their case, they emphasize how violent the past was in contrast to the present, and argue that absent these power structures we would be more violent. They emphasize modern scientific thought and economic development, and the resulting increase in living standards for much of the developed world. They have their own favorite anthropologists and historians. They would point out this, also from Columbus' same letter:<br />
<blockquote class="tr_bq">
"So I have found no monsters, nor heard of any except on an island here which is the second one as you approach the Indies and which is inhabited by people who are held in all the islands to be very ferocious and who eat human flesh.35 These people have many canoes in which they sail around all the islands of India robbing and stealing whatever they want; they are no more malformed than the others except that they wear their hair long like women and they carry bows and arrows made from the same cane stems with a small stick at the end for want of iron which they do not have. They are ferocious with these other people who are excessively cowardly, but I take no more account of them than of the rest."</blockquote>
<blockquote>
"These are the people who have relations with the women of Matinino, which is the first island on the way from Spain to the Indies, and on which there are no men.36 These women do not behave like women but carry bows and cane arrows like those I have already described, and they arm and protect themselves with plates of copper, of which they have a great deal." </blockquote>
<a href="http://www.pieria.co.uk/articles/hobbes_was_right__anarchy_sucks" target="_blank">Hobbes Was Right: Anarchy Sucks </a>(Pieria)<br />
<br />
<a href="http://socialevolutionforum.com/2014/08/12/the-war-over-war/" target="_blank">The War over War</a> (Social Evolution Forum)<br />
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<a href="http://socialevolutionforum.com/2014/02/12/the-pipe-dream-of-anarcho-populism/" target="_blank">The Pipe Dream of Anarcho-Populism</a> (Social Evolution Forum)<br />
<br />
<a href="http://www.bostonglobe.com/news/science/2014/09/17/war-innate-chimpanzees-lethal-attacks-may-provide-advantage-eliminating-rivals/V3lwx38s1RId3ZACQmnuiJ/story.html" target="_blank">Study suggests violence is an evolutionary adaptation</a> (Boston Globe)<br />
<br />
<a href="http://www.livescience.com/47885-chimpanzee-aggression-evolution.html" target="_blank">Chimps Are Naturally Violent, Study Suggests</a> (Live Science) <br />
<br />
And even in modern times, both sides have plenty of incidents to points to. When the Egyptian state broke down, violent gangs took over the streets. In lawless areas of Mexico, violent drug gangs rule slaughtering indiscriminately. Street gangs rule by violence and kill their enemies in failed states all over the world, and rough tribal justice rules in places like Iraq and Afghanistan. Sometimes looting and rioting breaks out even in Western democracies. They look inside prisons and ghettos and see violence divorced from any institutional coercion (except, their opponents would argue, poverty).<br />
<br />
Not so fast, says the other side. They point out how people tend to cooperate in the aftermath of a tornado or hurricane such as the aftermath of hurricane Sandy. They point out how the media enforces dark views of human nature that plays into the hands of elites. They point out that the rioting after hurricane Katrina <a href="http://www.nytimes.com/2005/09/29/national/nationalspecial/29crime.html?pagewanted=all" target="_blank">was greatly exaggerated for political purposes</a>. They point out how people pull together in conflict zones. As Ryan points out, no one ever got PTSD from helping someone.<br />
<br />
It reminds me of economic conflicts as well. People are naturally greedy, claim capitalist boosters, taking almost perverse pleasure in pointing out incidents where people go to great lengths to benefit themselves and their families even when it is discouraged or they are told to profess altruistic ideals like the brotherhood of man. People's natural impulse is to look for personal profit, say capitalists and free marketeers. By allowing that sort of behavior without any constraints, we will all be made better off through the invisible hand, they argue.<br />
<br />
But others argue that every day people do things to help one another without any expectation of reward. They return lost wallets. They donate food and volunteer at food banks. They babysit for their neighbors. They run into burning buildings to rescue pets. Nobody asks their kids to reimburse them for the cost of raising them, after all. We are not just self-interested rational calculating machines like we are assumed to be by economists. They point to gift economies, communes, and hunter-gatherer cultures. We want meaningful work and good relationships as much as riches and profit, they say, but our system forces people and institutions to behave in certain destructive ways. <br />
<br />
<a href="http://ed.ted.com/featured/LT8oQQTo" target="_blank">The surprising truth about what motivates us</a> (Daniel Pink, TED)<br />
<br />
In short, your view of the government and politics tend to follow from your view of human nature. This will inform a lot of what we will need to do in the next century.<br />
<br />
So these are two fundamental ideas of human nature. Are they irreconcilable? How can humans be both angels and devils simultaneously? I don't have a dog in this fight. I know what I <i>want</i> to believe, but I like to keep an open mind. Instead, I prefer to grab a handful of popcorn and watch the fight from the sidelines. I do point out evidence that seemingly supports both sides, and like most things, I'm sure the truth lies somewhere in between the two extremes. Each side makes valid points that need to be considered and taken seriously.<br />
<br />
Obviously I am not going to resolve it here. I'm just as conflicted as everyone else. As usual, I think the truth is somewhere in the middle. It is obvious that we harbor violent tendencies. And it is equally true that people are often friendly and cooperative without any coercion involved. But what does that mean? Do we need political institutions? I think we do need some of them, but I think others we would be better off without. Scale matters too. I'm not sure we will ever have a definitive view of human nature that will answer all our questions and solve the above conflicts. So it seems like the descendants of Hobbes and Rousseau will continue quarreling for quite some time.<br />
<br />
Lets just hope it doesn't turn violent.<br />
<br />
BONUS: For further reading, see this free e-book <a href="http://dreamflesh.com/projects/war-noble-savage/" target="_blank">War and the Noble Savage</a> by Gyrus.<br />
<blockquote class="tr_bq">
Over the past decade or so, works such as Steven Pinker’s The Blank Slate and Lawrence H. Keeley’s War Before Civilization have attacked the idea that indigenous and prehistoric societies were more peaceable than modern states. This brief study surveys this recent literature, digging beneath polarized surfaces using less publicized anthropological scholarship. The debate’s age-old frame, emerging from an opposition between Jean-Jacques Rousseau’s “Noble Savage” and Thomas Hobbes’ vision of primitive life as “nasty, brutish and short,” is analyzed afresh, and related fields, such as studies of chimpanzee violence, are reviewed. Also included is a look at the closely entwined recent controversy over whether tribal cultures have an ecological record as spotless as that often attributed to them.<br />
<br />
Always at stake is the inevitable drama of Progress: has the modern world degraded human freedom and the environment, or does it represent an emancipation from millennia of conflict and ignorance?</blockquote>
Unknownnoreply@blogger.com9tag:blogger.com,1999:blog-5813525365834911757.post-81553820770916680882014-07-17T17:59:00.002-05:002023-05-21T15:52:45.114-05:00Techno-Fixes Are Counterproductive and MadThis article is about all of the high-tech ideas that are tossed out every so often to clean up the ocean and deal with things like the giant plastic garbage patches floating out there (larger than the state of Texas by now!). You’ve probably seen these in TED talks, the pages of <i>Wired</i> Magazine or promoted by the Long Now people and other “bright green” environmentalist types. You know the story – brave, earnest, high-achieving high school student invents magic super-machine that will solve (_insert problem here_). Now we can all relax and forget about all the problems, because “they” have solved them. It's a sign of our easy quick, cargo-cult, techno-fix culture that refuses to ever question the secular religion of growth, innovation and technological progress:<br />
<blockquote class="tr_bq">
Every so often, somebody comes up with a plan for finding and removing the particles of plastic that litter our oceans and accumulate in "garbage patch" gyres. These plans meet with great acclaim ... from everybody except the people who know the most about garbage patches and plastic pollution.<br />
<br />
Why do marine scientists and non-profits like The Ocean Conservancy speak out against ideas like 19-year-old Boyan Slat's ocean cleanup technology? <b>Primarily, it's because plans like Slat's tend to be based on a really simplistic understanding of both the problem and ocean systems and, as a result, wouldn't actually work in the real world.</b><br />
<br />
But there's a bigger issue here as well. This isn't a matter of mean old scientists talking dirt on the big ideas of a brave, smart kid.<b> Great-sounding-but-not-actually-effective ocean cleanup plans have real consequences. They divert limited money and time away from the actually useful work. Worse, they inadvertently help prop up an unsustainable system where it's totally okay for us to keep letting plastic get into the oceans ... because we can just come back later and clean it up. </b>But that's simply not true, writes Stiv Wilson, policy director of the ocean conservation nonprofit 5Gyres.org.<br />
<br />
<i> "I find debating with gyre cleanup advocates akin to trying to reason with someone who will argue with a signpost and take the wrong way home. Gyre cleanup is a false prophet hailing from La-La land that won’t work – and it’s dangerous and counter productive to a movement trying in earnest stop the flow of plastic into the oceans. Gyre cleanup plays into the hand of industry, but worse, it diverts attention and resources from viable, but unsexy, multi-pronged and critically vetted solutions...</i>"<br />
<br />
There are real solutions to the problem of plastic pollution, but they don't come in the form of feel-good gadgets that will sift the particles out of the water. And if we convince ourselves otherwise, then we're going to ignore the stuff we should really be doing</blockquote>
<a href="http://boingboing.net/2014/06/13/plastic-pollution-in-oceans-ca.html" target="_blank">Plastic pollution in oceans can't be solved with a gadget</a> (BoingBoing)<br />
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<a href="http://www.treehugger.com/clean-technology/teen-invents-device-clean-ocean-garbage-patches.html" target="_blank">Teen invents device to clean giant ocean garbage patches</a> (Treehugger)<br />
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This is a point I've tried to make too - these techno-fixes divert time, money and resources from real, honest solutions that will have less blowback and achieve a more permanent resolution. But they wont preserve the wealth and power of the elites, and so they are ignored in favor of the latest wonder gadget, will will just cause more (profitable) problems down the road. <br />
<br />
<b>Not only do these techno-fixes not actually deal with the underlying problem, they are actually <i>counterproductive</i>.</b> What they do is give people the false idea that there is a quick fix with some sort of gee-whiz technology and that the status quo is sustainable. This allows the people who benefit from the status quo to keep it going, to deflect criticism, to head off any uncomfortable questions, and to prevent any significant, meaningful change that will tip their apple cart. Instead, they assure us that there is a techno-fix for every imaginable problem. You name it, air pollution, resource scarcity, peak oil, climate change, topsoil erosion, droughts and falling aquifers, etc.; for example, electric cars, carbon sequestration, geoengineering, carbon trading, putting prices on “ecosystem services,” genetic modification , desalinization, and so on. Even social problems like inequality and unemployment will magically disappear with technological progress (Vote online! Computers will magically create jobs! Online courses!).<br />
<br />
My favorite recent example is colony collapse disorder. This seems like a parody straight out of <i>The Onion</i>, but as we know, there is no way to make the culture we live in any more ridiculous and insane than it actually is. People are now proposing to build millions of tiny flying robots to pollinate the crops to replace all the bees we’ve killed off with (most likely) <a href="http://www.monbiot.com/2014/07/15/another-silent-spring/l" target="_blank">neonicotinoid pesticides</a> (which also, by the way, <a href="http://www.treehugger.com/sustainable-agriculture/bee-killing-pesticides-kill-birds-too.html" target="_blank">are killing birds</a>). I swear I am not making this up!:<br />
<blockquote class="tr_bq">
Honeybees, which pollinate nearly one-third of the food we eat, have been dying at unprecedented rates because of a mysterious phenomenon known as colony collapse disorder (CCD). The situation is so dire that in late June the White House gave a new task force just 180 days to devise a coping strategy to protect bees and other pollinators. The crisis is generally attributed to a mixture of disease, parasites, and pesticides. <br />
<br />
Other scientists are pursuing a different tack: replacing bees. While there's no perfect solution, modern technology offers hope.<br />
<br />
Last year, Harvard University researchers led by engineering professor Robert Wood introduced the first RoboBees, bee-size robots with the ability to lift off the ground and hover midair when tethered to a power supply. The details were published in the journal Science. A coauthor of that report, Harvard graduate student and mechanical engineer Kevin Ma, tells Business Insider that the team is "on the eve of the next big development." Says Ma: "The robot can now carry more weight."<br />
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The researchers believe that as soon as 10 years from now these RoboBees could artificially pollinate a field of crops, a critical development if the commercial pollination industry cannot recover from severe yearly losses over the past decade.</blockquote>
<a href="http://www.businessinsider.com/harvard-robobees-closer-to-pollinating-crops-2014-6" target="_blank">Tiny Flying Robots Are Being Built To Pollinate Crops Instead Of Real Bees</a> (Business Insider)<br />
<br />
So we’re going to spend millions of dollars to develop robotic bees which still aren’t even viable (<i>“But RoboBees are not yet a viable technological solution. First, the tiny bots have to be able to fly on their own and "talk" to one another to carry out tasks like a real honeybee hive”</i>) instead of, you know,<i> trying not to kill actual bees that have co-evolved with plants over millions of years.</i> That might impact profits, after all. Because one good technofix (synthetic pesticides) deserves another (robot bees!). I’m sure our artificial solution will be even better and cheaper than the original, right? I can’t think of a better example of what I’ve been saying on this blog over the years –<u> most innovations today are just trying to solve the problems caused by earlier innovations.</u><br />
<br />
In fairness, they do note, “<i>Although Wood wrote that CCD and the threat it poses to agriculture were part of the original inspiration for creating a robotic bee, the devices aren't meant to replace natural pollinators forever. We still need to focus on efforts to save these vital creatures. RoboBees would serve as "stopgap measure while a solution to CCD is implemented," the project's website says.</i>” Sure. But somehow stopgap measures have a way of becoming permanent solutions in our modern industrial global civilization. I wonder how many resources will go into building millions of these robot bees. But those resources will spur economic growth! More profits for robotics companies! After all, that’s the main purpose of human society, isn’t it? Surely that will be the new “green” solution.<br />
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I also love how the execrable business tabloid <i>Business Insider</i> (have those ads crashed your browser, too?) calls this a “game changer” and lumps it in with all the other high-tech intensification “game changers” being touted by global mega-corporations and Silicon Valley – Frankenmeat, insect ranching, and “<a href="http://www.businessinsider.com/scientists-and-startups-changing-how-we-eat-2014-7" target="_blank">Future Food: How Scientists And Startups Are Changing The Way We Eat.</a>” <i>Future food, eh?</i> Somehow, I don’t think "future food" is going to be as good as "past food" and I don’t think "changing the way we eat" is going to end up well for us. It hasn’t historically – obesity sits side-by-side with starvation. Will we even get a choice in the matter? Somehow, I’m guessing that the rich and powerful will get to stick with the old way of eating the past foods that the rest of us won’t be able to afford anymore. They probably won’t suffer from the same diseases and die prematurely either. But the corporate media won’t tell you that, or course, they’re busy flogging the newest techno-fix (water from clouds!, Robot farmers!, artificial leafs!)<br />
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What’s the alternative? Less growth, less profit, less technology, and more sanity that takes into account the quality of human life and the realities of our planetary ecosystem.. But you won’t read about that in “<i>Business Insider</i>” or see it at TED anytime soon.<br />
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Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-5813525365834911757.post-38281831038076905162014-06-25T19:46:00.001-05:002014-06-25T20:23:04.487-05:00Let Them Eat Beans!<b>Let Them Eat Beans: Tyler Cowen’s Neofeudal Dystopia – coming to a shantytown near you</b>.<br />
<br />
I’ve mentioned the Book <i>Average Is Over</i> many times before, and here, finally, is my review. The author of the book, Tyler Cowen, is an economics professor at George Mason University, and is affiliated with the <a href="http://en.wikipedia.org/wiki/Mercatus_Center" target="_blank">Mercatus Center</a>, a neoliberal/market oriented think tank (and yes, there is Koch brothers money involved here). He is also maintains the excellent Web Site <a href="http://marginalrevolution.com/" target="_blank">Marginal Revolution </a>(with Alex Tabarrok), one of the few libertarian blogs worth reading, and considers himself a “small-L” libertarian.<br />
<br />
Despite these dubious affiliations, he is an idiosyncratic thinker, and not afraid to wander off the libertarian reservation, which makes him worth reading, unlike many of his peers who are simply courtiers and propagandists. He is best known before this book <i>The Great Stagnation</i>, which argued (against the libertarian party line*) that slower American economic growth results from harvesting the low-hanging fruits of innovation, and new inventions are useful, but don’t add up to as much GDP growth as past innovations**. However, he has the obligatory silver lining, arguing that this is only a temporary rough patch and things will get better in the future (a standard in his work; he will make the same argument in <i>Average</i>, as we shall see). He is usually mentioned in the context of stagnationist arguments, although economists like Robert Gordon have stolen much of his thunder, following such conclusions much further, and being much more pessimistic about future growth.<br />
<br />
About that title. It comes from a column by "the pope of globalism," Thomas Friedman (which ought to tell you something right there). I can’t do better than this wry commentary on <a href="http://ourfuture.org/20130724/tom-friedman-a-new-ayn-rand-for-a-dark-digital-future" target="_blank">Thomas Friedman: Tom Friedman: A New Ayn Rand for A Dark Digital Future</a><br />
<blockquote class="tr_bq">
Consider this passage from Friedman’s column: </blockquote>
<blockquote class="tr_bq">
“In a world where, as I’ve argued, average is over — the skills required for any good job keep rising — a lot of people who might not be able to acquire those skills can still earn a good living now by building their own branded reputations, whether it is to rent their kids’ rooms, their cars or their power tools.”<br />
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This paragraph reads like a Zen koan pieced together from cast-away fragments of motivational sales speeches. We’re left to infer the meaning of its more obscure phrases from their context, the same way World War II code breakers cracked particularly difficult passages in enemy telexes. So let’s try to tease out its meaning, phrase by phrase:<br />
<br />
“In a world where, as I’ve argued, <i>average is over</i> …” (Emphasis from the original.)<br />
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“Average is over”? Averaging is a mathematical function, inextricably woven into the fabric of reality as we understand it. How can it be over? It’s like saying that subtraction is over, or means and medians are null and void. (Watch yourself, standard deviation. Thomas Friedman has his eye on you.)<br />
<br />
What’s he really saying here? The “as I’ve argued” offers one clue to motivation, if not meaning: Anything self-referential from this author – and that’s a lot – is a signal that he’s floating another potential “The World Is Flat” book title.<br />
<br />
But what’s he saying? Our context-driven code-breaking takes us to the next phrase:<br />
<br />
“… the skills required for any good job keep rising …”<br />
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Ah, I see. “Average is over” is connected to job skills. Friedman apparently means that you can’t get a good job anymore if your skill level is only average.<br />
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Why didn’t he just say so?</blockquote>
Well, Tyler Cowen used the book title, not Tom Friedman, and that is<i> exactly </i>what he's saying. Since most of us, by definition are average (I know I am), we are “over.” What he means is that anyone who is not “above average” can kiss any kind of stable, prosperous existence goodbye in the new world of corporate libertarian capitalism. That is the core message of the book. I found this comment <a href="http://marginalrevolution.com/marginalrevolution/2014/06/the-great-reset-sentences-to-ponder.html" target="_blank">to a recent MR post</a> a good summary:<br />
<blockquote class="tr_bq">
Consider
the bell curve distribution of IQ in the general population. Now
consider a curtain being drawn across that graph from stage left. As
that curtain, which represents technological advance, blankets a
population segment, it renders them useless in terms of economic
competitiveness. </blockquote>
<blockquote class="tr_bq">
We didn’t
much care when this impacted those with an IQ < the mean, but the
curtain's leading edge is now at 1 σ above the mean, and accelerating to
the right. How long till you and your family are also rendered useless?
You will mistakenly overestimate that value.</blockquote>
Basically in addition to Friedman, it rides on the back of the work of MIT economists Brynolfsson and McAfee (and to a lesser extent David Autor), arguing that automation will disrupt much of the workforce through robots and smart machines (the self-driving car gets particular mention). The book dismisses starry-eyed notions of a singularity or post-scarcity, and instead makes the case that people laboring complementarily with machines is the wave of the future, using something called “freestyle chess” as an example*** where teams are allowed to make use of computers in tournaments, yet still make the executive decisions themselves****. Computers will also lead to a lot of low-cost or free services like education. The book claims that people who are conscientious, disciplined, and highly social will prosper due to these developments, while those who are not will experience falling living standards and precariousness. The book provocatively argues that women, who generally rate higher on conscientiousness (I would say docility and malleability) and are generally more sociable will be the big winners and men the big losers (also indicated by falling rates of men graduating from college). In other words, the way he sees it, the benefits of digital technology will <u>not</u> be broadly shared among the American people, as some optimists claim, but instead accrue to a tiny elite that owns the machines, in line with the more pessimistic vision.<br />
<blockquote class="tr_bq">
<span style="background-color: white;">"It's clear: The world is demanding more in the way of credentials, more in the way of ability, and it is passing along most of the higher rewards to a relatively small cognitive elite. After all, the first two categories of earnings winners--namely those with advanced degrees--account for only about 3 percent of the US population"</span> </blockquote>
What this means is that a small slice of the American workforce will be wildly successful, living “like today’s millionaires” – Cowen puts this number as 10-15 percent of the American workforce. As for the rest of us, well, the outlook is not so good. While he never uses the new portmanteau term “precariat” this is exactly what he’s describing. The vast majority will be marginally attached to the workforce with intermittent and temporary employment, enjoy few or no benefits, no upward mobility, little chance to accumulate wealth or savings, or even gain a modicum of stability or job security. Shared prosperity will be a distant memory. Some workers will even be "zero marginal product" workers - unable to be hired at any price. Cowen speculates the arrival of vast shantytowns and slums outside American cities, including “off the grid” living in tents and mobile homes for many. The middle classes will be hollowed out leading to a society of spectacularly rich and oceans of desperate poor, very similar to Latin America or Southeast Asia. In other words, Inequality, already at Great Depression levels, <i>is just getting warmed up</i>, says Cowen.<br />
<blockquote class="tr_bq">
<span style="background-color: white;">"We will move from a society based on the pretense that everybody is given an okay standard of living to a society in which people are expected to fend for themselves much more than they do now. I imagine a world where, say 10 to 15 percent of the citizenry is extremely wealthy and has fantastically comfortable and stimulating lives, the equivalent of current-day millionaires albeit with better health care."</span><br />
<span style="background-color: white;"><br /></span>
<span style="background-color: white;">"Much of the rest of the country will have stagnant or maybe even falling wages in dollar terms, but a lot more opportunities for cheap fun and also cheap education. Many of these people will live quite well, and those will be the people who have the discipline to benefit from all the free or near-free services modern technology has made available. Others will fall by the wayside."</span><br />
<span style="background-color: white;"><br />
</span><span style="background-color: #d9ead3;"><span style="background-color: white;">"It will become increasingly common to invoke "meritocracy" as a response to income inequality, and whether you call it an explanation, a justification, or an excuse is up to you. Since the self-motivated will find it easier to succeed than ever before, a new tier of people from poor or underprivileged backgrounds will claw their way to the top. The Horatio Alger story will be resurrected, but only for those segment of the population with the appropriate skills and values, namely self-motivation and the ability to compliment the new technologies...This framing of income inequality in terms of meritocracy terms will prove self-reinforcing. Worthy individuals will in fact rise from poverty on a regular basis, and that will make it easier to ignore those who are left behind....what does that mix of values mean for actual social choices? We'll pay for as much of a welfare state as we can afford to, and then no more."</span> </span></blockquote>
There are a few things computers can’t do, he says, and one is come up with good marketing ideas to sell to the new rich class. Because only a small slice of America will have a job or reliable income, everyone will want a piece of them, so Cowen sees marketing to this new elite as a major job of the future. Due to vast disparities in power and wealth, people will be aggressively clamoring for any moment of time or spare dollar from the wallet of the elites – he uses the analogy of a billionaire rolling in a limousine through the streets of Calcutta, and anyone who has stepped off the plane in a poor country and been immediately inundated with salesmen and con artists can relate (except those people will now be us).<br />
<blockquote class="tr_bq">
<span style="background-color: white;">"Despite all the talk about STEM fields, I see <i>marketing</i> as the seminal sector for our future economy...If you imagine two wealthy billionaire peers sitting down for lunch, their demands for the attention of the other tend to be roughly equal. After all, each has a billion dollars (or more) to spend and they don't need to court each others for favors so much...Compare it to one of those same billionaires riding in a limousine, with open windows, through the streets of Calcutta. A lot of beggars will be competing for the attention of that billionaire, and yet probably the billionaire won't much need the attention of the beggars. The billionaire may feel overwhelmed by all of these demands, and yet each of these beggars will be trying to find some way to break through and capture but a moment of the billionaire's attention."</span><br />
<span style="background-color: white;"><br /></span>
<span style="background-color: white;">"This is in short what the contemporary world is like, except the billionaire is the broader class of high earners and the beggars are wealthier than in India. Instead of begging, there is a large class of people trying to command our attention using modern technologies such as email, spam, AI-targeted advertisements, coupons, Groupons, direct mail, advertising supplements in your credit card bill, and flashing ads on the Internet, among hundreds of other techniques...getting attention will continue to be a critical function in the new world of work and is likely to require ever-greater effort and sophistication."</span></blockquote>
Billionaires and beggars? Nice analogy for the new economy. Millions clamoring for their attention and table droppings. Doesn't sound like a very "efficient" economy now does it? Does that seem like a good use of natural resources or human capital? Are you ready for even more intense advertising (is that even possible?)<br />
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The other thing digital technologies aren’t very good at is human interaction and motivation. Thus he sees the rise of a new servile class of motivators and coaches to motivate the one percent to “achieve” even more, along with educational tutors, personal chefs, personal trainers, event planners, and other assorted toadies to the new aristocracy as a major job growth field for the new underclass - just like Downton Abbey, except you live alone and have to pay for everything yourself.<br />
<blockquote class="tr_bq">
<span style="background-color: white;">"High-skilled performers, including business executives, will have some kind of coach. There will be too much value at stake to let high performers operate without a steady stream of external advice, even if that advice has to be applied rather subtly. Top doctors will have a coach, just as today's top tennis players (and some of the mediocre ones) all have coaches. Today the coach of a CEO is very often the spouse, the personal assistant, or even a subordinate, or sometimes a member of the board of directors. Coaching is already remarkably important in our economy, and the high productivity of top earners will cause it to become essential."</span></blockquote>
Pervasive automation will have other knock-on effects. Everyone will be continually monitored and tested by digital overlords, from birth to death. Your productivity will be ruthlessly monitored 24-7 and regularly tested, so that even a slight trip up will cast you down into the underclass if you can’t keep up. If you have visions of a fluorescent-lit digital cubicle sweatshop where employees labor away under a tireless all-seeing eye watching every move for the benefit of the owner class in the executive suites, well, so do I. Since this affects his class, Cowen manages to muster a bit of sympathy for these workers, unlike the rest of us. Even the “winners” will be losers in this new system. I imagine much higher rates of drugs to keep up and ameliorate the psychic effects of this digital tyranny (Adderall, Provigil, Paxil, etc.). This measurement and sorting of the economic sheep and goats will begin frightfully early, so your economic destiny will probably be determined by age 7-8 or so, if not earlier, so if you aren’t a genius by age 7 or don’t fit well into the school system from an early age, well, get ready to stack shelves or work the deep fryer. While obscure prodigies will rise to the top thanks to this (Cowen relies on a sole example of an obscure Mongolian math genius), for most of us, Cowen warns ominously, there will be “far less second chances.” Our “permanent record” will follow us from birth to death, determine everything about our lives, and be uneraseable and inescapable.<br />
<blockquote class="tr_bq">
<span style="background-color: #d9ead3;"><span style="background-color: white;">"Another development is this: The better the world is at measuring value, the more demanding a lot of career paths will become. That is why I say 'Welcome to the hyper-meritocracy' with a touch of irony. Firms and employers and monitors will be able to measure economic value with sometimes oppressive precision."</span> </span></blockquote>
But there’s a silver lining here, Cowen assures us. Digital technology means lots of opportunities for “cheap fun and cheap entertainment” for a new class of digital bohemians and vagabonds. Couchsurfing, AirBnb, Uber, Reddit, Wikipedia, Khan Academy, Netflix, Hulu, blogs and podcasts, - there’s plenty to do inside your tarpaper shack or parents’ basement, thanks to the Internet, provided by free municipal wireless. It could even be culturally vibrant, just like Latin America. After all, America’s cultural hub, New York City, has the same income inequality as sub-Saharan Africa. It’s rather bizarre to see a libertarian economist suddenly do a 180 and invoke the “experiences are worth more than money” argument, since libertarian capitalism has depended upon the fact that it provides mountains of inexpensive food and consumer crud for people to buy as its main justification for a century or so. One is reminded of the eighteenth-century English aristocrats who rode through starving villages in their carriages with a perfumed kerchief over their noses, remarking on the jollity of peasant life with their harvest festivals, drinking and merrymaking, ignoring the fact that the peasants also lived in hovels, slept in straw, ate nothing but gruel, and died prematurely.<br />
<br />
Extensive in-migration to the Sunbelt leads Cowen to conclude that Texas is the future of America – cheap automobile-dependent suburban sprawl, dilapidated infrastructure, lousy schools, threadbare public services, high user fees, and low, low taxes. Because people are “voting with their feet” by moving to Texas, he concludes that people prefer “more money in their pockets” thanks to low-cost suburban sprawl and low taxes, rather than good government services (or even honest, competent government). I would interject that the increasing “Dixiefication” of America means people have less choice in this matter than ever before. The “race to the bottom” means that states with this philosophy have a comparative advantage, and people will move where the jobs are, regardless of what they may really want, especially if the weather is good. The explosive growth of San Antonio/Ciudad Juarez is touted as an example of how economically vibrant cities attached to impoverished shantytowns can lead to the successful cities of the future.<br />
<blockquote class="tr_bq">
<span style="background-color: white;">"Since there is considerable net in-migration to Texas, I conclude that a lot of Americans would rather have some more cash than better public services...Many Americans will end up living in areas with cheaper housing and lower-quality public services, if only to give themselves more cash in their pocket. Some of those areas might be a bit ugly to the eyes, again as a trade-off for lower costs. As a cross-country moving proceeds, and changes what we are, the United States as a whole will end up looking more like Texas." </span></blockquote>
<blockquote class="tr_bq">
<span style="background-color: white;">"When I visit Latin America, I am struck by how many people there live cheaply. In Mexico, for instance, I have met large numbers of people who live on less than $10,000 a year, or maybe even less than $5000 a year. They hardly quality as well-off but they do have access to cheap food and very cheap housing. They cannot buy too many other things. They don't always have the money to bring the kid to the doctor or to buy new clothes. Their lodging is satisfactory, if not spectacular, and of course the warmer weather helps." </span></blockquote>
<blockquote class="tr_bq">
<span style="background-color: white;">"What if someone proposed that in a few parts of the United States, in the warmer states, some city neighborhoods would be set aside for cheap living? We would build some "tiny homes" there; tiny homes that might be about 400 square feet and cost in the range of $20,000 to $40,000. We would build some very modest dwellings there, as we used to build in the 1920s. We would also build some makeshift structures there, similar to the better dwellings you might find in a Rio de Janeiro <i>favela</i>. the quality of the water and electrical infrastructure might be low by American standards, though we could supplement the neighborhood with free municipal wireless (the future version of Marie Antoinette's famous alleged phrase will be "Let them watch Internet!"). Hulu and other web-based TV services would replace more expensive cable connections for those residents. Then we would allow people to move there if they desired. In essence, we would be recreating a Mexico-like or Brazil-like environment in part of the United States....Many people will be horrified at this thought. How dare you propose we stuff our elderly into shantytowns? Maybe they are right to be upset, although recall that no one is being <i>forced</i> to live in these places. Some people might prefer to live there... </span></blockquote>
<blockquote class="tr_bq">
<span style="background-color: white;">"The most extreme low-rent move is to go 'off the grid.' For all the technological progress we have seen, a growing number of Americans are disconnecting from traditional water and electricity backups and making their own way, often in owner-built homes, micro-homes, trailer parks, floating boats, or less elegantly in tent cities, as we find scattered around the United States, including in Portland, Seattle, and Los Angeles. Some of these options are gruesome, but many people are doing it by choice. New technologies, such as powerful local generators and solar power, are making it easier to strike out on one's own." </span></blockquote>
<blockquote class="tr_bq">
<span style="background-color: white;">"There is one final way we will adjust to uneven wage patterns and that is with our tastes. Many of society's low earners will reshape their tastes--will have to reshape their tastes--toward cheaper desires. Caviar is an expensive desire and Goya canned beans is a relatively cheap desire. Don't scoff at the beans: With an income above the national average, I receive more pleasure from the beans, which I cook with freshly ground cumin and rehydrated, pureed chiles, Good tacos and quesadillas and tamales are cheap too, and that is one reason they are eaten so frequently in low income countries." </span></blockquote>
<blockquote class="tr_bq">
<span style="background-color: white;">"Just as some poorer people will do without fancy infrastructure, so will others do without advanced health care. Since we won't be willing to pay for full-benefit Medicare and Medicaid for everyone who will need it, some people will see cut benefits or rationed access to doctors. Our political system will try to construct that rationing so that voters blame the doctors rather than the politicians, but one way or another rationing will increase. Imagine many more millions of people wishing to see a doctor and having to wait weeks or months to do so."</span></blockquote>
So slums, sprawl and shantytowns with decaying infrastructure will be where people "prefer" to live. Funny how very few Americans "preferred" to live in dilapidated shantytowns and favelas from 1950-1979. Well, I guess tastes change. Remember, nobody's <i>forcing </i>you to sell your plasma to pay the rent.<br />
<br />
As the rich get richer they will become even more influential. The political class will increasingly cater to their needs while turning a blind eye to the exploding poverty of most Americans, pretty much as they do now. The realities of automation and robots causes Cowen to be much less hostile to redistribution than most of his libertarian brethren, but he nonetheless doesn’t think it will happen due to the influence of the rich on politicians. Throughout the book, he makes reference to this <i>realpolitik</i> dynamic, saying that, even though it may not lead to the best outcomes, the needs and desires of the elderly and wealthy elites will rule the day to the detriment of everybody else.<br />
<br />
Throughout the book, the right-wing belief in ‘Meritocracy” is constantly invoked. This is a standard article of right-wing libertarian belief, arguing that the winners at the top of society deserve their wealth and position through superior talent or merit, and the losers (the vast majority), are less talented, conscientious, motivated, etc.. Thus, it is a just world where people earn exactly what their talents give them, no more and no less, with the most talented benefiting most of all, Interestingly, on his blog, Cowen has been waging a one-man crusade against Thomas Piketty’s new book, <i>Capital in the Twenty-First Century</i>. This may seem bizarre, since they both paint a picture of the future that is very similar – a tiny fantastically wealthy elite lording over a precarious and immiserated working class, with ever-increasing disparities in wealth. The crucial difference is that Cowen depends on his elite being “deserving” of their elevated status by being smarter, more talented, harder working, etc., while Piketty claims that inherited wealth will be the prime determinant of the new overclass. Cowen’s inequality is caused by <i>income</i>, not wealth as in Piketty, and income is earned by their awesome marginal productivity, and not because of inherited wealth or systemic advantages. Thus, Cowen is not overly bothered by the new social order, since it is a true "hyper-meritocracy."<br />
<br />
Two points should be made here. One, Cowen is an academic who, as far as I can tell, has been in academia his entire life. The academic world he has lived his entire life in, and has played so well, is much closer to this meritocratic ideal then most of society (outside of the military), so I think Cowen has a major blind spot here. For example, see this: <a href="http://www.bloomberg.com/news/2013-12-23/secret-handshakes-greet-frat-brothers-on-wall-street.html" target="_blank">Secret Handshakes Greet Frat Brothers on Wall Street</a>. American society is based on realities of class and wealth, and the biggest determinant for most people will not be talent (which will play some role, certainly), but who your parents are, leading to a much more sclerotic society with low social mobility, in line with Piketty’s predictions. After all, without jobs, what ladder rungs will there be to raise your status? Somehow I doubt “online classes” will fix this. And, as Thomas Frank has pointed out, colleges, which were designed to ameliorate class distinctions, are now the chief enforcer of class distinctions in America. The stratospheric cost of higher education will make sure that the jobs of the future will only be available to the already wealthy, and a few rare exceptions will be thrown in our face to “prove” this is not the case.<br />
<br />
Second, even if we are headed to the meritocracy that Cowen claims, Christopher Hayes' <a href="http://www.rollingstone.com/politics/blogs/national-affairs/chris-hayes-on-the-twilight-of-the-elites-and-the-end-of-meritocracy-20120711" target="_blank"><i>Twilight of the Elites: America After Meritocrac</i>y</a> points out that this will probably lead to more incompetence, inferior leadership and corruption, just as it has for the past few decades. The “best and the brightest” have presided over an unprecedented erosion of society, institutions and social trust, along with increasing chaos, wars, dissolution and poverty around the world. Because they are insular, these meritocrats feel that what’s good for them is good for everybody. And because they have been told that they are “superior” their entire lives, they believe they are infallible and entitled to everything. Plus, as Hayes points out, elites will rig the system to keep themselves and their friends and family on top - in other words, to "pull the ladder up after them." We can see that this is already happening.<br />
<br />
And won’t the newly impoverished formerly middle classes rise up and revolt in their <i>favelas</i>? Nope, says Cowen, and although I find his arguments incredibly depressing, I also find them convincing. First, the baby bust means that the population is getting older, and older people don’t fight the system. Since America gives benefits disproportionately to the elderly (free health care, social security, etc.), they will have more invested in the status quo. Second, the crime rate has been going down, not up, even as income and wealth inequality has skyrocketed over the past thirty years. Finally, people don’t envy the rich, according to Cowen, they envy their immediate friends and neighbors. Facebook has caused more consternation over inequality than anything else, he claims. The poorest areas of the country are becoming more conservative, he points out, seemingly oblivious to the millions of dollars spent every year to maintain this result.<br />
<blockquote class="tr_bq">
<span style="background-color: white;">"For all the prognostications about the American future, the most important single fact, and the easiest to predict, is simply that we will be a lot older. That will make us more conservative, in this case referring to the literal rather than political sense of that term. Revolutions and protests are the endeavors of young hotheads, not sage (or tired) sixty-four year olds. The societies with lots of unmarried young men are the most vulnerable to sudden revolutions and major political changes...Societies have a strong staus-quo bias, particularly if they have high status relative to other parts of the world...If you're trying to measure the scope or potential for social disorder, look at the rate of crime. In the United States crime rates have been falling for decades and in recent times they have surprised researchers by falling even faster than expected. Yet over those same decades income and wealth inequality have been rising significantly in the United States....It's again worth seeing what is happening, politically speaking, in the parts of the United States with relatively stagnant incomes. Political conservatism is strongest in the least well-off, least educated, and most economically hard-hit states...As Richard Florida puts it, 'Conservatism, more and more, is the ideology of the economically left behind.'...If you think about it, we really shouldn't expect rising wealth inequality to lead to revolution and revolt. That is for a very simple psychological reason: Most envy is local...Most of us don't compare ourselves to billionaires."</span> </blockquote>
Obviously, the U.S. government does not share Cowen’s placidity. Since 2001, we’ve witnessed the construction of a vast and unprecedented police/surveillance state in the U.S. and around the world. Many have made the obvious point that governments seem to be preparing to face their own people as adversaries much more than any foreign invasion, and they have pointed to the extreme inequality that Cowen is describing as the chief culprit. For example: <a href="http://www.theguardian.com/environment/earth-insight/2014/jun/13/uk-defence-fight-poor-activists-minorities-marxists-commies" target="_blank">Defence officials prepare to fight the poor, activists and minorities (and commies).</a> (The Guardian) And see <a href="http://www.newsoftheweird.com/archive/nw140622.html" target="_blank">this</a>:<br />
<blockquote class="tr_bq">
After the U.S. Postal Service finalizes its purchase of "small-arms ammunition," it will become only the most recent federal agency to make a large purchase of bullets for its armed agents (who are perhaps more numerous than the public realizes). In the last year or so, reports have surfaced that the Social Security Administration ordered 174,000 hollow-point bullets, the Department of Agriculture 320,000 rounds, Homeland Security 450 million rounds (for its 135,000 armed agents), the FBI 100 million hollow-points, and even the National Oceanic and Atmospheric Administration 46,000 rounds. (In May, the Department of Agriculture added an order of submachine guns and body armor.) [Newsmax, 4-14-2014] [Washington Times, 5-16-2014] </blockquote>
Cowen has been accused by many of “moral indifference” due to his clinical and calloused description of America's future. Cowen argues that a prognostication of the future based on what’s actually happening is best served just by an unemotional interpretation of the facts without trying to interject one’s personal opinions. <a href="http://www.econtalk.org/archives/2013/09/tyler_cowen_on.html" target="_blank">In this interview</a>, for example, he says:<br />
<blockquote class="tr_bq">
...I think 'pessimistic' and 'optimistic'--they are words everyone in this debate is applying too quickly. I think in this debate the radical thing to do is to write a book which isn't trying to be too normative; just try to think through what will things be like. And by keeping the evaluation at much more of a distance I think we'll actually get further with the analysis. ... I've had people confront me in outraged fashion: How can you accept all of this? But look: as a writer the point is to try to figure it out as best you can, and at the end of the book if one wants to say, let's not go that route, well that's worth a discussion. But the notion that at every intermediate point you have to inject your emotional outrage I think has become one of the worst features of this whole debate.</blockquote>
I’m sympathetic to this view. I write about a dark future all the time, and it’s not things I want to happen. In fact, it’s mostly things I <i>don’t</i> want to happen. To be fair, Cowen never states that this new world he’s describing is ideal or desirable, just that it’s the scenario that he sees as most likely if current trends continue. I agree, which is why I’m reviewing the book. It is, however, difficult to escape the conclusion that Cowen’s lack of agitation at this future is due to his class position. This new digital future will be great for him and his family. I imagine the target audience for this book are right-leaning pro-market libertarians who will see themselves as the big winners in the new economy, and naively believe that they and their families will escape falling into the underclass by staying ahead of the curve by following Cowen's sage advice.<br />
<br />
But in the end, it will all turn out okay, he assures us, once we've finished sorting ourselves out into our new permanent caste system and fully integrated the new technologies into our social order. The <i>nouveau-poor</i> will learn to live with less and enjoy all the new digital distractions, while the rich, well, they'll be the new benevolent ruling class.<br />
<blockquote class="tr_bq">
<span style="background-color: white;">"The American polity is unlikely to collapse, but we'll look back on the immediate postwar era as a very special time. Our future will bring more wealthy people than ever before, but also more poor people, including people who do not always have access to basic public services. Rather than balancing our budget with higher taxes or lower benefits, we will allow the real wages of many workers to fall and thus we will allow the creation of a new underclass. We won't really see how we will stop that. Yet it will be an oddly peaceful time, with the general aging of American society and the proliferation of many sources of cheap fun. We might even look ahead to a time when the cheap or free fun is so plentiful that it will feel a bit like Karl Marx's communist utopia, albeit brought on by capitalism. That is the real light at the end of the tunnel. Such a development, however, will take longer than I am considering in the time frame of this book...One day soon we will look back and see that we produced two nations, a fantastically successful nation, working in the technologically dynamic sectors, and everyone else. Average is over."</span></blockquote>
Reactions have been predictably hostile from both the left and the right. The left's reaction is obvious. After giving his description of future America <a href="http://onpoint.wbur.org/2013/09/16/economist-tyler-cowen-on-the-end-of-average" target="_blank">on NPR's On Point</a>, the host incredulously asks whether his vision is exactly what European Americans' ancestors came across the ocean to <i>escape</i>. It's a valid question, especially since social mobility and middle class living standards are now higher in "socialist" Europe then in America.<br />
<br />
The reaction on the right has been more complicated. A standard tenet of libertarian belief is that 1.)Inequality is not happening, and/or 2.) Capitalism <i>always</i> makes the average person better off, and if it fails to do so, it is always and everywhere due to some sort of government interference in the infallible market (taxes, regulations, subsidies, etc.). In the interview cited above with another libertarian economist from George Mason University (<i>Econtalk</i> is also part of the Koch Brother's empire), the host says early on, <i>"So, I think you know I'm somewhat of a skeptic about the inequality
data--that I think it's distorted by changes in family structure,
immigration, and other factors...." </i>One wonders how sheltered a life this man leads. It proves Upton Sinclair's adage that "It is difficult to get a man to understand something when is salary depends on him not understanding it." But the biggest challenge is that Cowen's book makes the case that the <i>natural workings of the capitalist economy</i>, without major government interference, will make most people far poorer and worse off, rather than some big-government bogeyman. It's a direct challenge to the standard right-wing tenet that allowing the rich to accumulate without bound will lead to better lives for all. Hence the hostility.<br />
<br />
One of the most hostile reviews came from, or all places, <i>The Wall Street Journal</i>. <a href="http://online.wsj.com/news/articles/SB10001424052702303918804579107754099736882" target="_blank">The reviewer writes</a>:<br />
<blockquote class="tr_bq">
If this were Swiftian satire, Mr. Cowen could retire the Best Deadpan Award. But it isn't. It's a prediction coupled with the injunction that resistance is futile. There's nothing we can do, says Mr. Cowen, to avert a future in which 10% to 15% of Americans enjoy fantastically wealthy and interesting lives while the rest slog along without hope of a better life, tranquilized by free Internet and canned beans.<br />
<br />
Bread and circuses is not the policy of a republic, but rather of an empire entering moral senescence. Nonetheless, Mr. Cowen seems untroubled by his hyperpolarized vision....Whether by accident or design, Mr. Cowen's book represents a fundamental challenge. To government-hating, market-worshiping conservatives, it poses a question: If this is the consequence of your creed, are you prepared to endorse it? To liberals and progressives: What are you going to do about it? And to all of us: Is this a country you would want to live in? I know I wouldn't. </blockquote>
Finally, I have been struck by certain similarities between Cowen’s vision of the future and Ran Prieur’s latest thoughts on the future of America. It’s hard to think of two more different prognosticators, yet their visions seem to be converging, although to be sure Ran places much more emphasis on Peak Oil and resource scarcity, while Cowen <a href="http://oilprice.com/Interviews/The-Shale-Boom-Just-Getting-Started-Interview-with-Tyler-Cowen.html" target="_blank">has apparently bought into the shale-gas and fracking revolution hype.</a><br />
<br />
Both predict continual improvement in digital technology and automation, with most people getting poorer and poorer, as the middle class vanishes. Both predict a future in which downtrodden Americans will live on a few thousand dollars a year in Latin-American style poverty in slums and shantytowns at the margins of society, yet have access digital gadgets straight out of Star Trek. Both predict a future of mass unemployment where people work outside the money system to survive via barter, tent cities, and dumpster diving. Both predict that the system is locked down tightly, and mass uprising is unlikely, if not impossible. Both predict a future where working a “conventional” job gets more and more oppressive as digital technologies monitor workers like feedlot cattle. Both predict that people will be desperate to somehow sell stuff to, get the attention of, or become some sort of servant, to the upper class, because they will be the only ones with money. Both predict that accumulating "stuff" will fall by the wayside compared to experiences, and that digital technology will lead to a new class of bohemian/hippie types who will live on the fringes of society using the Web to entertain themselves and seek out low/cost free stuff. Both predict that people will anesthetize themselves from their poor and meaningless lives by retreating into an increasingly virtual reality while turning their back on the real one which offers them so little. No word on Ran's position on canned beans, however:<br />
<blockquote class="tr_bq">
I expect artificial intelligence and biotech to spice up a decades-long economic depression as the global system muddles through climate change and the end of nonrenewable resources. Low quality manufactured items and industrial food will remain affordable, but good food, transportation, and services from actual humans will be more expensive. I think the best place to live is in a small house with a big yard in a city with a seaport or railroad hub. You want to be close to the supply lines, but have enough land to grow luxury foods like blueberries and good tomatoes. As you move farther into the country, the money you save by growing more of your own food will be less than the money you spend on transportation and shipping. Total self-sufficiency would be a good thing to write a novel about.<br />
<br />
My generation was the first in American history to be poorer than our parents. Now the Millennials are poorer than us, and this trend will continue until the global infrastructure adapts to feed from a growing base of renewable resources, maybe around 2060. Meanwhile, if you can stay out of debt and find a low-stress job to build up savings, you'll be relatively well off. "Debt" is exactly as real as we believe it is. Mostly it's a trick to make people feel ashamed that they have no political power. Not that it would work any better if we felt angry. The system is totally locked down, and the most revolutionary political change of the 21st century, the unconditional basic income, will be necessary to keep the system stable, to turn the unemployed majority from hungry militants back into consumers.<br />
<br />
Technology will promise revolution, but in practice ninety percent of the new powers will be used to keep the remaining ten percent from doing anything dangerous. By the year 2200 there will be no poverty, no disease, and no opportunity for anyone to make a difference, except by more quickly closing off the opportunity for anyone to make a difference. Reasonable people will know that they're better off than we were, but still fantasize about living in our time. Suicide will be the leading cause of death, and by 2300, any death not from suicide will be global news. By 3000 we will either be extinct or moved to another level of reality through some technology of consciousness that would seem completely loony if you described it today. </blockquote>
<a href="http://www.ranprieur.com/archives/044.html#2014predictions">http://www.ranprieur.com/archives/044.html#2014predictions</a><br />
<blockquote class="tr_bq">
Ten years ago, when I imagined "collapse", it was interesting: industrial collapse means there are no factories and everything new is made by hand. Infrastructure collapse means there are no electric grids and we're riding horses on the ruined freeways. Economic collapse means the banks are just gone, cash is worthless, and economies are gift and barter. Political collapse means you don't have to pay taxes, kids don't have to go to school, and there are no police. Now it's increasingly clear that none of these things are going to happen, even slowly over 100 years...<br />
<br />
Now, there are possible technologies that are truly revolutionary. But my fear is that they will all be stopped, that the increasing power of the tech system will be used to keep the world stable and predictable, and to make us happy in the shallowest and least satisfying way. To avoid this dreadful fate, we need a cultural shift in which we gain a deeper understanding of quality of life, and we need to apply this understanding to technology, and start using it to increase danger and pain. I know, people in Africa would love to have the problem of not enough danger and pain. Don't worry -- in a hundred years, they will, and we'll have it worse than we do now. </blockquote>
<blockquote class="tr_bq">
If the tech system can adapt to resource exhaustion, we might emerge into a high-tech utopia/dystopia, in which it's easy to be comfortable but difficult to be happy. Social class will no longer be about power or even standard of living, but valuable activity. The upper class will hold the few important jobs that still require humans. The middle class will be hobbyists, practicing difficult skills that are not necessary for society. And the lower class will be content to consume entertainment. </blockquote>
<blockquote class="tr_bq">
I no longer expect any kind of tech crash, except that resource-intensive benefits like driving and eating meat will become more expensive and less available to poor people. Economies will collapse as they adjust to decades of zero or negative growth, weaker nations and businesses will fail, but computers will continue to get stronger, and automation will adapt to resource decline by becoming more efficient and better able to compete with human workers. At the same time, no government that can possibly avoid it will allow its citizens to starve, so there will be even more subsidies for industrially produced human dog food. </blockquote>
<blockquote class="tr_bq">
Over the next few decades I see the global system passing through a bottleneck as it shifts from nonrenewable to renewable resources...I imagine an airtight sci-fi utopia/dystopia, where almost everything will be automated, nobody will have to do any work, everyone will be comfortable and safe, and we will have amazing powers to entertain ourselves. Other than that, we will have less power than any people in history or prehistory. The world will be lifeless and meaningless, a human museum, a suicide machine.</blockquote>
<a href="http://www.ranprieur.com/archives/041.html" target="_blank">http://www.ranprieur.com/archives/041.html</a><br />
<blockquote class="tr_bq">
I expect global economic collapse and decades of poverty while we switch from fossil fuels to renewable energy. Extreme poverty will cause political upheavals, but not such a deep political collapse that you won't have to pay taxes. And I expect little or no technological collapse. Even energy-intensive technologies like cars will not disappear, just shrink to serve the elite. And I think information technology will continue its present course, so people with gadgets out of Star Trek will be digging up cattail roots for food.</blockquote>
<blockquote class="tr_bq">
I'm going to say that liquid fuels continue to decline, renewable energy cannot replace them nearly fast enough, and everything that now depends on liquid fuels gets much more expensive. This contributes to decades of zero or negative economic growth. Another contributor is the de-monetization of labor: a lot of the economic growth of the 20th century came from taking labor that used be outside the money economy, like child care and food preparation, and bringing it into the money economy. This is going to reverse as people lose their jobs, do stuff at home for free instead of paying other people to do it, those people lose their jobs, and so on.<br />
<br />
New money-making opportunities will be snatched by whoever is in the best position: mostly the already rich. So wealth inequality will increase, and the cost of good food and human labor will continue to rise, until only the rich can afford to buy much of either. Meanwhile manufactured items and low-quality industrial food will remain cheap. <br />
<br />
So you won't be in danger of starving, but you're likely to find yourself deep in unpayable debt, squeaking by on government assistance, and struggling to find something to sell to the rich so you can afford to buy small luxuries to make your life tolerable. </blockquote>
<a href="http://www.ranprieur.com/archives/043.html">http://www.ranprieur.com/archives/043.html</a> <br />
<br />
In summation, what fascinates me about the book is that it is so–far the best and most thought-out description of the future we have termed <i><b>Neofeudalism</b></i>. If you want to give someone a description of what the Neofuedal society looks like, hand them this book. Barring change in course, this is where I believe we’re headed as a society. In short:<br />
<ul>
<li>10-15% fabulously wealthy, vast majority living an ephemeral, precarious existence.</li>
<li>Most people desperately fighting over table scraps and crumbs dropped from the tables of the wealthy.</li>
<li>A vast servant class dedicated to catering to the needs of the wealthy in some form and dependent upon their largess. (servants, coaches, tutors, gardeners, consultants, baristas, musicians, etc.). These will not be live-in servants, but wage earners in businesses that depend on the enormous incomes of a small class of privileged people - think service industries in San Francisco.</li>
<li>All of society’s wealth is funneled to a small wealthy stockholding elite. Little to no savings or wealth accumulation for most people. Low social mobility enforced by stringent educational requirements, credentialism, low economic growth and saturated markets.</li>
<li>No health care or retirement for most people.</li>
<li>An ineffective and incompetent government that provides very little for the common general welfare, but exists mainly to uphold elite interests (armies, police, intelligence, contract enforcement, corporate subsidies, banks, patents, bare-bones infrastructure, etc.)</li>
<li>The poor left mainly to fend for themselves. Slums, shantytowns, favelas, tent cities, trailer parks and hovels abound. Suburbia will become “Slumburbia”</li>
<li>Urban areas either decay (Detroit, Gary, Flint) or become 'elite citadels' (San Francisco, L.A, Manhattan). Urban income inequality at sub-Saharan African levels or worse.</li>
<li>Elites outside cities in gated exurban communities protected by heavily armed police.</li>
<li>Weak nation states depleted of funds. Corporations will rule. Most wealth will be offshore and untaxable.</li>
<li>Everything owned by wealthy elites and appropriated though the market rather than common goods. Public libraries, transportation, museums, parks etc. abolished. Most people will pay through the nose to rent these services from the 10-15% wealthy elites. Those who can’t afford them will go without.</li>
<li>More social dysfunction due to lack of opportunities.</li>
<li>Municipal services curtailed or abolished except in wealthy areas.</li>
<li>Employees will get their needs (health care, dental transportation, etc.) by contract through their employer (e.g. Google campus and buses). Those without employers will have nothing.</li>
</ul>
Notable differences from feudalism:<br />
<ul>
<li>Warring corporations rather than warring states. Combat will be done in the boardroom, not the battlefield. Battles will be for market share rather than territory. Wealth will be stocks and bonds rather than land.</li>
<li>Elites will be transnational and have more common interests than in the past. It will be their own fellow citizens they will need to violently contend with.</li>
<li>Living standards for the poor will be higher than the middle ages. In wealthy countries, few will starve. Most will still have some sort of shelter, although less and less people will own their property.</li>
<li>People will not be tied to the land, as with serfdom. They may end up tied to their jobs, however, to keep their benefits, especially since there will be few options to change jobs thanks to oligopolies, cartels, non-compete clauses, and extreme specialization. Less job mobility outside of the 10-15% due to fear of unemployment.</li>
<li>Lower family formation and decreased birthrates.</li>
<li>People will be watched and continually monitored (drones, cell phones, etc.) far beyond the wildest imagination of the most absolutist czar, monarch or emperor.</li>
<li>Most people will be economically “redundant” i.e. they will not be needed to produce food and fodder for the elites.</li>
<li>Vast prisons, which were unfeasible in medieval times, but less outright torture and general lawlessness.</li>
<li>People will live longer than their medieval counterparts, but with more chronic diseases.</li>
<li>Obviously, much more entertainment, activities, geographical mobility, and so on. As long as you don’t threaten elite power or control, you will be mostly left alone.</li>
<li>Relations between people mediated by money and the market rather than webs of reciprocity.</li>
<li>People will not live off the land – land will be owned by the wealthy.</li>
</ul>
It's not so far-fetched. Cowen himself says on pp.253-54, "There are many other historical periods, including medieval times, where inequality is high, upward mobility is fairly low, and the social order is fairly stable, even if we as moderns find some aspects of that order objectionable."<br />
<br />
Serf's up!<br />
<br />
NOTES<br />
<br />
* Libertarians use as their justification for the low taxes and unlimited accumulation by the wealthy elite the fact that this leads to “growth' and that if the wealthy pay taxes like the rest of us, growth will be diminished and we all be hurled into poverty. In addition, making the pie bigger is used to avoid any question of redistribution. The richer the rich get, the better off even the poorest will be, the argument goes. Thus to question growth goes against the standard libertarian party line.<br />
<br />
** To make his point, he initially published the book only in eBook format.
eBooks are very useful – cheap to download, easy to carry around with a
Kindle or Nook, but don’t really add much more to GDP than a
“conventional” book. <br />
<br />
*** This is off-topic, but Cowen picks this example because he was a youth chess prodigy. Many prominent economists are chess players. It’s easy to see why chess as the ultimate training for economic thinking. Human beings are treated simply as abstractions who behave according to predictable laws (pawns, knights, bishops, queens, etc.), and whose actions follow predicable rules. A chess game, like an economy, although it exhibits a degree of uncertainty, can be regularly determined by mathematical laws, hence chess-playing computers. Thus the kind abstract mathematical reasoning that leads people to be good at chess also motivates them to become economists, where they see the economy as one giant chess board, with all of us as mere interchangeable pieces making predictable moves that can be abstracted through sufficient mathematical equations.<br />
<br />
**** A superior example would be from my own field of architecture. We used to draw on paper by hand. Then we drew digital lines on computers. Now, small teams can visualize and model entire buildings in 3D and build off of that. The shift is to less people with higher levels of building/construction knowledge. Consequently, there is much less need for "drafters," entry-level jobs are harder to come by, and the well-connected can do more work with less labor than ever before.<br />
<div>
<br /></div>
Unknownnoreply@blogger.com9tag:blogger.com,1999:blog-5813525365834911757.post-43191686708522069422014-05-26T08:17:00.000-05:002014-05-26T08:17:59.648-05:00Trapped (short fiction)<i>Some short fiction for the holiday. I wrote this some years ago while reading Jared Diamond's 'The Third Chimpanzee' and a lot of Vonnegut. Hope you enjoy.</i><br />
<br />
How I came to be in possession of a human body is a matter of some conjecture. Originally, I could transfer my consciousness from place to place as all the inhabitants of my planet can do, then, suddenly, and without my consent, I became confined by time and space, trapped in this form on a planet the inhabitants call earth, a small blue rock of water and gasses teeming with large, aggressive, talking apes.<br />
<br />
They think they are quite clever, these apes. They walk on two legs and have opposable thumbs. They’ve discovered written language, can count objects, and can use a few tools.<br />
<br />
I’ve been assigned some sort of symbol-manipulation task. I sit in a temperature controlled room gazing at a bunch of colored dots that form pictures—symbols representing numbers, images, sounds, ideas and concepts. I manipulate these by means of several devices, including one which lets me select and move the pictures on the screen as if they were real, and one which has dozens of printed symbols on it which look like this: ‘A’, ‘W’, ‘p’, ‘@’, ‘7’, ‘*’, ‘<’, ‘?’ and ‘$’. The last one is especially interesting to these apes. They punch that one over and over and over.<br />
<br />
<br />
<a name='more'></a><br />
<br />
One of the apes is standing near me now making the ugly grunting noises with his voice box and larynx that these creatures use to communicate. I decipher its meaning.<br />
<br />
<i> “Phil, dammit, we need those figures by 4 P.M. today. Don’t forget this time. The boss is already pissed at you!”</i><br />
<br />
“Phil” is the noise they make to identify me. They’re still into naming things, these apes, as though that tells them anything. How sad. They have yet to move beyond pathetic grunting and noisemaking to true understanding. I hear a sound. It is my electronic remote communication device. It translates sounds to pulses to waves, and back to sounds again. The apes need them because they have not progressed beyond simple vocal communication. At the other end of the line is the ape that I’ve mated with. She says to me:<br />
<br />
<i> “Don’t forget we’re going out with the Andersons tonight.”</i><br />
<br />
And I tell her I haven’t forgotten. <br />
<br />
****<br />
<br />
I rode in my encased rolling platform over the vast flat surfaces which had been built all across the planet to my dwelling-place. My habitat was a small shelter made from felled trees and heated by natural gas. I lived there with my mate. This particular ape whose body I now possessed had already propagated his genetic code forward by having two offspring, one male and one female. The male was four of their years old, the female six.<br />
<br />
They came in an astounding variety of shapes and sizes, these apes. Some were much taller than others, some were much heavier than others. Some had lots of hair, others had very little. They had different amounts of pigmentation in their skin depending on their original habitats. This was used for in-group selection. The one whom I’ve mated with is of just below average stature, little pigmentation, and several deposits of fatty tissue which I’m told were a result of giving birth. For some reason, the mention of these fatty deposits seems to arouse intense feelings of anger in my mate, even though she keeps mentioning them.<br />
<br />
“How was work?”<br />
“Fine.”<br />
“Did you finish what you needed to get done today?”<br />
“Yes.”<br />
<br />
She’s concerned about how I am handling the task the other apes have assigned to me. She is often preoccupied about something called money, which are slips of paper these apes trade among themselves for things. It is how they cooperate, or, in many cases, avoid cooperation. She is concerned that we don’t have enough to be suitably comfortable, or have accumulated enough for our offspring and their future. I tell her not to worry, that everything will work out.<br />
<br />
The apes managed to devise machines made of silicon which could store and count really big numbers very quickly, like the symbol manipulator I sat in front of all day. This was how they kept track of who had what. So now the apes have dispensed with the paper and organized their social hierarchy around these numbers. Some started out with huge numbers, some with small numbers, and some even began with negative numbers, which don’t really exist. From that point on, they played a game to see which of them could get the highest numbers. Each one tried to add to their total score, sometimes by subtracting from other people’s amounts. Most of the apes had to trade their time for numbers, which is what I was forced to do. Others had the numbers stacked such that their amounts would always rise by means of various numerical tricks involving time, percentages, etc. Most of the subordinate apes never caught on to this. They thought the numbers were real, so they accepted them without question.<br />
<br />
They also constructed mechanical devices that rotated at regular intervals and used them to mark off time. Some of the apes used this device to regulate the others’ lives, telling where and when to be at every moment. My task was like this. I was called an “accountant” and I manipulated numbers and symbols all day long. I had to it for at least 28,800 of those intervals every day because the others told me to. If I refused to do it, my numbers wouldn’t be high enough and the other apes would withhold the things my body needed to live and I would die. Unlike the inhabitants of my planet, hierarchy was stitched into the very fabric of their existence. They did what their superiors told them to do. They went where they told them to go. They fought when they were told to. Many of them even died so that others could have more and more and more.<br />
<br />
More exists but better is a fiction. The apes thought that more was better, but they didn’t know why. They had been duped. They weren’t responsible for their actions. They were controlled by a tiny tight spiral, a molecule of four distinct chemicals buried inside each one of them that was calling the shots, manipulating them like a puppet on a string.<br />
<br />
That small spiral of four chemicals has but one single overriding purpose: to replicate itself, and it has at its disposal a couple hundred pounds of water to do it. It’s really just a complicated virus. That’s all I am here, now—about 24 gallons of warm water held together with carbon and other trace minerals. It’s the same stuff that makes up the plants and trees and stars and asteroids and comets and space dust and other planets. The apes had figured that out too, but apparently it hadn’t really sunk in.<br />
<br />
Here are the names they gave to those elements, and their relative weights: <br />
<br />
Oxygen 65%<br />
Carbon 18%<br />
Hydrogen 10%<br />
Nitrogen 3%<br />
Calcium 1.5%<br />
Phosphorous 1.0%<br />
Potassium 0.35%<br />
Sulfur 0.25%<br />
Sodium 0.15%<br />
Chlorine 0.15%<br />
Magnesium 0.05%<br />
Iron 0.0004%<br />
Iodine 0.00004%<br />
<br />
As if that told them anything.<br />
<br />
****<br />
<br />
My mate headed to another room to groom herself and apply various paints and cosmetics and scented lotions to herself to make her socially presentable to our peer group. I slumped down in a chair and took in my surroundings. I’m tied to time now, and this body is getting old and heavy and worn down. These apes can’t seem to live with that, and take all sorts of drastic and futile measures to prolong their bodies. To them, the natural order is somehow unnatural. On my planet, the natural order is regarded with a sense of, well, the word doesn’t exist in your language because you have <br />
no good sense of this concept. I guess worship or reverence would be the closest sound I could make to describe it to you. After a short while a chime sounded signaling someone wishing to gain entry.<br />
<br />
<i>“That’s probably the Andersons. Could you get the door? I’ll be right out.”</i><br />
<br />
The Andersons were another mated couple. We were going out with them to socialize, something we did infrequently. These apes are very social when they want to be. As you might imagine, I find it difficult to relate to the primitive mannerisms of these creatures. I do the best I can, but I have the impression my mate is unhappy with my efforts. They all act strangely around me too. It is as if they are afraid of something, or somehow uncomfortable around me. Do they suspect something?<br />
<br />
We went to the movie. A movie, or motion picture, is a series of still images projected onto a large white wall, giving the illusion of reality. It was their method of telling stories. They were really into stories, these apes. They made up all sorts of stories, stories about their past, stories about their origins and where they came from. Some of them even believed the stories were true. Eventually, they had trouble distinguishing stories from reality. They would even fight over them, over which ones were true or not. They were so caught up in their abstractions, so intoxicated with their cleverness that I didn’t have the heart to tell them how ridiculous they actually were.<br />
<br />
I furtively glanced at my mate and the people sitting next to me. Their faces were blank, staring ahead. All of their metal power was focused on processing the story in their heads. They used this to obliterate their sense of time. Well, they had to do something, after all, they seemed completely unable to cope with changes. They clung to false constancies and gave the consistencies names to make them real, names like “I,” “me,” “mine,” “past,” and “future.” Furthermore, they all thought that they were alone in the universe. No wonder they behaved so strangely.<br />
<br />
After the movie we engaged in a communal meal, a common social act. The others ingest animal proteins, but I refuse to eat the carcasses of formerly living sentient creatures. I reluctantly only intake plant-based materials to keep my body going. My mate explained it the others:<br />
<br />
<i> “Phil is a vegetarian now.” </i><br />
<br />
We converse in platitudes. I’m not sure what to say. I would tell them about the tiny temperature envelope needed to sustain life on various planets, but I don’t think they’d want to hear it. They ask me about me feelings. <i>“I feel fine,” I say, “just fine,”</i> I say. I look expectantly about my mate. She looks displeased. What does she want from me, I wonder? I take another spoonful of food and put it into my mouth.<br />
<br />
Emotions, feelings. I’ve never gotten used to having them. It’s all just a trick, I tell myself. It’s all the baggage of circuits and hormones and neurochemicals and nucleopeptides sloshing around in my head. It’s abominable. It’s an impulse, a nerve ending playing tricks, the wet circuitry playing it’s game on a meat robot. It isn’t real. This body isn’t mine. I don’t need emotions. I am are more than this.<br />
<br />
We finished our meal with fermented grain liquids. The other apes take all sorts of chemical compounds to get away from their feelings. Very often they didn’t like what they were feeling up there in their heads. They couldn’t understand what was going on, they could only cope with what they could see and touch despite all their intelligence. They took drugs to make them excited when they were calm and calm when they were excited. They obliterated their consciousness with chemical compounds found in plants. They had discovered all sorts of them. They were constantly trying to adjust their perceptions to suit them, requiring constant stimulation, as though equilibrium meant death. I felt sorry for them. Evolution had played a cruel trick on them. They hadn’t yet evolved the mental tools to deal with the ramifications of their intelligence.<br />
<br />
We parted company with the Andersons and returned to our domicile. Upon arrival, my mate expressed her desire to communicate.<br />
<br />
<i> “What is wrong with you? Why do you always act so strange?”</i><br />
<br />
I remained silent, contemplating an appropriate response.<br />
<br />
<i> “You know, I’ve had to put up with a lot since you came back. I’ve stood by you. I know things are tough at work. I know your boss is mad at you. I know things aren’t easy. I just wish you’d open up to me.”</i><br />
<br />
She started heaving and gasping for breath. Water began flowing from her eyes, which is what happened to these apes when they became upset. How can I tell her the truth? How can I let her know that she’s just a very complex water-borne virus?<br />
<br />
****<br />
<br />
Occasionally several tribes of apes would come into conflict with one another. It was during one of these tribal conflicts that I first became trapped here on earth. The first thing I saw with these eyes was a person with his insides on the outside of his body. I was awash in the nutrient-rich liquid rust that was formerly inside a male directly in front of me. The apes were warring by projecting metal nails at high velocities by means of small explosions. They had discovered all sorts of exploding materials and were constantly working on new ones that would make bigger and bigger explosions. Several of the opposing apes were apparently trying to stop my body from functioning. At first I couldn’t understand what I was doing here. I was frozen. I couldn’t move, not to a different time or location. I couldn’t control my sensory experiences. I was overwhelmed. I shut down. I was trapped, projectiles flying past me, blinding flashes like stars exploding all around me.<br />
<br />
I still hadn’t become used to time, so I don’t know how long I was there. I hovered for a while between my home and here, a shimmering thread binding me to home planet, to its far away beauty and lavender skies, its subtle vibrations and harmony. I felt the force of cosmic birth inside me, universal light penetrating the void, radiation endlessly propagating, mutating, changing from one form to the next in endless cycles of rebirth. <br />
<br />
After a while some of the other members of my tribe came to rescue me. They discovered me laying there among the corpses, speechless, shaking, covered in my former compatriots’ non-nuclear cells. They repaired my body as best they knew how.<br />
<br />
Eventually, I became used to this new primitive form and my sensory overload decreased to a point where I was able to function adequately. I became used to seeing and hearing with my sense organs rather than direct experience of reality. I reluctantly resigned myself to communicate only through sounds rather than thoughts. I wouldn’t participate in any of these violent tribal conflicts, of course, but fortunately I wouldn’t have to. After that battle, I was removed from the conflict, and other apes came to take my place.<br />
<br />
They gave my behavior all sorts of names to explain it, as if that told them anything. They said I had “amnesia,” and that I had “Post-Traumatic Stress Disorder.” That was why I was acting the way I was, they said. That was why I could not move very well. That was why I didn’t like to talk or use words. That was why I couldn’t remember any events that happened to me before the battle. I knew they would never believe it if I told them the truth. How could they possibly understand? How could anyone?<br />
<br />
I came back to my home, to my particular tribe. I began the process of acclimation. I was assigned a communal task to do. I gradually learned about the sorry life this particular ape whose body I now inhabited had lead. He was a low-ranking male. Apparently he had done whatever that twisted little molecule told him to do. He ate, drank, fornicated, reproduced, amassed material resources and hated other tribes. He did everything it wanted, and what did he get in return? Fortunately I know so much more now, more than I ever imagined possible. Now I gave it all up. Now I don’t do any of it anymore.<br />
<br />
My mate is feeling better now. She had put on new coverings and is preparing for her daily sleep cycle. She is affectionate now, tender. She says, <i>“Phil, honey, please come to bed” </i>presses a switch, and deactivates the room’s artificial lights.<br />
<br />
Tonight my mate wants to exchange bodily fluids for some reason. It doesn’t make any sense. There’s no purpose. Apparently we can’t reproduce any more due to exposure to some kind of radiation I suffered in the conflict. She wants to mate anyway. It’s so strange how these apes continue to engage in sex even when reproduction is impossible. I suppose I should try, if only so she won’t suspect anything, if only to make her happy… <br />
<br />
****<br />
<br />
I’ve been here for a while now. It’s really my own fault, of course. I was told this could happen. I was told not to wander too far or I might not be able to get back. I had a hard time believing it was true. My peripatetic existence was over. I might just as well get used to it. I would hate to think that I will have to wait until this body runs down and quits functioning before I am free and can see my home planet again. Time passes so slowly inside this body. Of course, it will only last about a billionth of a billionth of the ultimate age of the universe, but it seems like forever sometimes.<br />
<br />
Shortly after I arrived I bought a telescope, which is a device with lenses for augmenting vision, so that I might look out from the planet and see my home, a tiny speck among the vast blackness. I set it up on a tripod on the patio outside my wooden shelter. I spent many hours gazing up at the stars. The other apes had a name for it. They called it astronomy. Of course, it was really homesickness. <br />
<br />
Sometimes I hope that my people will show up and rescue me. They’ll send a craft. They’ll come here and assume physical form and take these foolish apes by the hand and tell them the error of their ways, the futility of what they are doing to each other and to their natural habitat. They will open their eyes and end all the needless pain and suffering and death. At times I think I see them among the stars, but it’s never them. Are they out there? Are they trying to find me?<br />
<br />
*****<br />
<br />
I awoke from my fitful sleep sometime in the early hours of the morning, just before the arrival of the sun. I looked over at my mate. She was still fast asleep. I walked outside onto the patio and looked at the stars through the telescope. I became startled when one of my offspring, the female, silently walked up behind me and said, <i>“Daddy, what are you doing?”</i><br />
<br />
“What are you doing up?” I asked her.<br />
<br />
“I couldn’t sleep. What are you doing?”<br />
<br />
I said to her, “Daddy’s looking for his home, sweetie.”<br />
<br />
“But this is your home.”<br />
<br />
“This is my temporary home, yes. But my real home is up there,” I said, pointing at the starry night sky.<br />
<br />
She followed my finger and gazed upward, wide-eyed.<br />
<br />
“Do you miss your home?”<br />
<br />
“Very much, yes. I hope to go back someday.”<br />
<br />
She looked at me plaintively and said, “But I don’t want you to leave.”<br />
<br />
“Daddy’s body may not always be around, but he will always be here with you,” I said. I told her all about my home planet and my adventures before my time on earth, about the galaxies and nebulae and supernovas and comets and all the wonders and crystalline beauty of the universe that she was a part of. She listened attentively to every word, without a trace of doubt or skepticism. We talked until the clouds began reflecting the new sun’s rays all across the horizon. Finally, she said:<br />
<br />
<i>“I love you, daddy,” </i>and wrapped her small arms around me.<br />
<br />
Perhaps being trapped here for a while won’t be so bad after all.Unknownnoreply@blogger.com1