CapitalistImperialistPig

There are about 30 countries in the world that have net wealth greater than the market valuations of the richest corporations. The net wealth of the UK, the fifth richest nation, is about 15 times the market valuation of Apple or Amazon. The richest nation, the US, has a multiple of about 100. India, number 45 Peru, #44, on the country list, has a net wealth somewhat less than Tencent, Facebook or Berkshire Hathaway (each recently #5 on the corporate list). Wikipedia lists India twice, once at #45 and once at #12 - I think the latter, at 6-7 multiples of the largest corporations, is more likely, In terms technical expertise, no national government is competitive with these corporations, and in terms of data and information - the oil and steel of the modern age - there might be something like parity between the very most powerful states and the great information corporations, except that the corporations surely have it better organized. I was pretty shocked by these facts, but it...

The great failure of capitalism is enormous inequality. Inequality has been rapidly growing in the US, and has recently reached levels never seen before. The richest man in the US has more than a million times the net worth of the median household. He had about 100,000 times as much as a 90th percentile household (top ten percent). He even has ten thousand times as much as as one of the top 1% households (99th percentile). The curve may steepen. A top 0.1% household (99.9 percentile) only has about 1/3000th of Richie Rich's wealth and even the 99.99th percenter has only 1/1000th as much. The 1% are very rich compared to me and almost everyone I know, but in the grand scheme of things, the poorest slave in ancient Greece was economically closer to its richest man than a 0.1 percenter is to the richest American.

No economic factor has been more important to the rise of modern civilization than fossil fuel energy, and this fact has concentrated enormous political and economic power in the hands of those who find, own, and control it. The available wealth attracted the bold, the brilliant and, frequently, the slightly crazy, but public spiritedness was not necessarily a major virtue or character trait among them. The enormously wealthy men, corporations, and countries that control this precious resource were not slow to recognize the threat that public concern over global warming posed to their particular fortunes - the money at stake was clearly in the trillions of dollars. From Dark Money, funding climate denial: The first peer-reviewed academic study on the topic added further detail. Robert Brulle, a Drexel University professor of sociology and environmental science, discovered that between 2003 and 2010 over half a billion dollars was spent on what he described as a massive “campaign to...

It took them a while, but the organized American plutocratic Right eventually realized that the Left's big advantage was control of prestigious American universities - Harvard, Princeton, Yale and a few others. It also realized that a frontal assault would not work. Perhaps mostly importantly, they chose their targets carefully. It's pretty obvious that much of the faculty at those schools are far to the left of the American public. Most of those faculty members are in departments with essentially zero influence on public affairs - humanities, liberal arts, ethnic and similar studies, much of social science and others. Scientists tend to be liberal rather than left, and engineers and doctors tend to be moderately right, so together they don't much affect the balance. Economics, law, government and history are exceptions, especially the first two. Dangled financial carrots persuaded top law schools that they needed Economics of Law faculty, and strategic funding pushe...

If there is one thing worshiped by the propertied rich, it is property. If property is their God, collectivism is their Satan. Ultimately though, property is a collective notion. For our hunter-gatherer forbears, property consisted only of stuff one could carry on one's person. Something like the modern notion of property only came into existence with agriculture, with land and domestic animals to defend. The thing is, an individual by himself is nearly as helpless to defend a patch of agricultural land as Charles Koch would be to defend his far flung empire without the collective apparatus of the state and it's appendages. The state originated and grew in response to that need. In the libertarian fantasy, the state exists for no other purpose. But the essence of a state is its collective nature - it can only exist as some kind of a bargain among its participants. In particular, a state is a concentration of power, and those who control the power wield it for their own...

From Alex Tabarrok : Angus Deaton of Princeton University wins the Nobel prize. Working with the World Bank, Deaton has played a huge role in expanding data in developing countries. When you read that world poverty has fallen below 10% for the first time ever and you want to know how we know— the answer is Deaton’s work on household surveys, data collection and welfare measurement. I see Deaton’s major contribution as understanding and measuring world poverty. - See more at: http://marginalrevolution.com/marginalrevolution/2015/10/deaton.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revolution%29#sthash.4GNQJ7ls.dpuf That's a small fragment of a much longer and excellent text. Here is another, a quote from Deaton: Here is Deaton on foreign aid: Unfortunately, the world’s rich countries currently are making things worse. Foreign aid – transfers from rich countries to poor countries – has much to its credit, partic...

Paul Krugman, writing in the NYT , points out that the recent market turbulence triggered by China is part of a pattern of instability. But why does the world economy keep stumbling? On the surface, we seem to have had a remarkable run of bad luck. First there was the housing bust, and the banking crisis it triggered. Then, just as the worst seemed to be over, Europe went into debt crisis and double-dip recession. Europe eventually achieved a precarious stability and began growing again — but now we’re seeing big problems in China and other emerging markets, which were previously pillars of strength. But these aren’t just a series of unrelated accidents. Instead, what we’re seeing is what happens when too much money is chasing too few investment opportunities. More than a decade ago, Ben Bernanke famously argued that a ballooning U.S. trade deficit was the result, not of domestic factors, but of a “global saving glut”: a huge excess of savings over investment in China and other de...

Greeks gave an empathetic "No" to EU demands. It looks like various Greek haters got their wish, but so did some with opposite views. Here is one of the latter, Paul Krugman in the NYT: Of course, that’s not the way the creditors would have you see it. Their story, echoed by many in the business press, is that the failure of their attempt to bully Greece into acquiescence was a triumph of irrationality and irresponsibility over sound technocratic advice. But the campaign of bullying — the attempt to terrify Greeks by cutting off bank financing and threatening general chaos, all with the almost open goal of pushing the current leftist government out of office — was a shameful moment in a Europe that claims to believe in democratic principles. It would have set a terrible precedent if that campaign had succeeded, even if the creditors were making sense. What’s more, they weren’t. The truth is that Europe’s self-styled technocrats are like medieval doctors who insisted on b...

...has been remarkably successful in portraying the Greeks as the villains of the current debt fiasco, and Europe has bought into it, big time. The US has been slightly less gullible, probably because we were less of a target, but also because several of our top economists have repeatedly called "bullshit" on this particular pile of crap. Of course it helps the propaganda machine that the Greeks, both citizen and government, have screwed up badly, especially before the financial crisis of 2007. Most bankruptcies involve either really bad luck or stupidity on the part of both borrower and lender. The Greek disaster initially involved all three: reckless borrowing by an irresponsible Greek government, reckless lending by (mainly German) banks, and the bad fortune to get caught up in a global financial meltdown. The blame for this really bad situation becoming a disaster lies almost entirely with the Troika (EU and IMF) who imposed a brutal austerity which crushed the Gre...

After a long sojourn in the shadows, inequality has reared its head in the public discourse again, especially in the recent statements of Obama and the Pope. The exact sources of inequality in today's world are a bit hard to trace, but some threads are known. In the first place, greater inequality in the US is partly driven by outsourcing and the rapid economic progress of Asia and parts of the old Communist empire. In that sense, some of American inequality is driven by decreasing inequality between Chinese (say) and Americans. Almost everywhere, though, the disparity between the rich and the rest has increased dramatically. A lot of this can be traced to the triumph of neo-liberal economic thought - which is pretty much is called paleo-conservative economics in the US. The massive failures of socialist economics led to gigantic opportunities for those who could pick up failing government businesses for a song - usually with the help of political connections and gross skulldu...

Not a comeback but a return . For those benighted souls not fans of Sunset Boulevard, Krugman on macro economists waking up in a world looking very Keynesian. Specifically, when Brad lists five key propositions of New Keynesian macro and declares that prominent Keynesians in the 60s and early 70s by and large didn’t agree with these propositions, he should now note that prominent Keynesians — by which I mean people like Oliver Blanchard, Larry Summers, and Janet Yellen — in late 2013 don’t agree with these propositions either. In important ways our understanding of macro has altered in ways that amount to a counter-counter-counterrevolution (I think I have the right number of counters), giving new legitimacy to what we might call Paleo-Keynesian concerns. Or to put it another way, James Tobin is looking pretty good right now. (Incidentally, this was the point made by Bloomberg almost five years ago, inducing John Cochrane to demonstrate his ignorance of what had been going on macroeco...

Josh Marshall sees our current constitutional crisis as the public manifestation of John Boehner's weakness - the weakness of his situation and the weakness of his character. This weakness has made him unable to control the forces Ted Cruz and the Tea Party (AKA, the Koch Machine), have loosed. Such men are dangerous, especially in times of chaos and incipient catastrophe. The key though, again, is that Boehner is personally weak and situationally weak. He's afraid of what House Tea Partiers will do to him if he relents. So he's hoping that if he plays for time and takes the country right up to the brink of catastrophe some other option might become available. And yet Boehner is weak. The Tea Party's ability to push him further and further in their direction is testament to that. So at the last moment, does he really assert his power? I think it's very questionable that he has it in him. The forces he's trying to ride are much bigger than he is. There's go...

Kevin Drum notes the Administration's surprisingly lackadasical approach to warning of the hazards of default. Jack Lew was on MTP yesterday and could hardly be bothered to look worried about default. It's true that Lew took a pretty low-key approach, despite host Savannah Guthrie's best efforts. "Are you talking catastrophe?" she asked. Lew wouldn't bite, so then she gave him another chance. "It would be calamitous for the economy?" Still no bite! "It would be very bad," was the worst Lew could summon up. That's pretty soporific, all right. The problem, I assume, is that Lew is in an impossible situation. Breaching the debt ceiling would be pretty calamitous, but Treasury secretaries have an obligation not to panic markets with loose talk. Backbench congressmen, by contrast, can say anything they think might get them a few minutes on the evening news. Maybe it is time to try to panic the markets a bit. Something is needed to get B...

MoDo takes a dystopian look at a 2084 where Koch brothers drones patrol the skies of a ruined Capital. She blames that Canadian/Cuban terrorist: “Well, son, they knew there was something creepy about the ringleader, Ted Cruz,” the man replies. “His face looked pinched, like a puzzle that had not been put together quite right. He was always launching into orations with a weird cadence and self-consciously throwing folksy phrases into his speeches, like ‘Let me tell ya,’ to make himself seem Texan, when he was really a Canadian.” The boy looks alarmed. “A Canadian destroyed the world, Papa?” “Once the government shut down, a plague came, because they had closed the Center for Disease Control,” the man says. “Storms, floods and wildfires raged after FEMA was closed down and the National Guard got decimated.

The ancient civilizations of India and China dominated much of the world for a couple of thousand years. They continue to have about a third of the world's population between them. After a bad couple of centuries, they are once again asserting themselves on the world scene. In today's New York times, Nobellist Amartya Sen laments that India is lagging behind China economically, and offers a diagnosis. This lag is something of a rebuke to democracy, since India is democratic and China authoritarian, but Sen says that's not the problem. The hope that India might overtake China one day in economic growth now seems a distant one. But that comparison is not what should worry Indians most. The far greater gap between India and China is in the provision of essential public services — a failing that depresses living standards and is a persistent drag on growth. Inequality is high in both countries, but China has done far more than India to raise life expectancy, expand genera...

"Behind every great fortune is a great crime" is a memorable line, but it would be more accurate to to say that behind every great fortune is a great rent. Exclusive control of some valuable resource - land, another means of production, a patent or copyright. One of the oldest and most fundamental businesses of government has always been the guarantee and enforcement of these exclusive controls. Paul Krugman blogs today that one of the biggest changes in the global economy of recent decades has been ...the much larger role of rents on intangible assets. He explains: What do I mean by the role of rents? Consider the changing identity of the most valuable company in America. For a long time, it was GM, then Exxon, then IBM. These were companies with huge visible production activities: GM had more than 400,000 employees, which was amazing when you consider that the overall national work force was much smaller than the one we have today, Exxon had oil refineries. IBM w...

Paul Krugman worries about the new Luddites - the masses of highly skilled workers about to be put out, or already being put out of jobs by machines. In 1786, the cloth workers of Leeds, a wool-industry center in northern England, issued a protest against the growing use of “scribbling” machines, which were taking over a task formerly performed by skilled labor. “How are those men, thus thrown out of employ to provide for their families?” asked the petitioners. “And what are they to put their children apprentice to?” Those weren’t foolish questions. Mechanization eventually — that is, after a couple of generations — led to a broad rise in British living standards. But it’s far from clear whether typical workers reaped any benefits during the early stages of the Industrial Revolution; many workers were clearly hurt. And often the workers hurt most were those who had, with effort, acquired valuable skills — only to find those skills suddenly devalued. So are we living in another such e...

Ron Unz, writing in the American Conservative (of all places) has a long article on IQ and national wealth ( via Arun Gupta ). The take away: the overwhelming evidence indicates that wealth differences cause national IQ differences rather than vice-versa.  This is consistent with the notion that economic and cultural differences dominate doucmented group vs. group IQ differences.

Pretty much everybody has weighed in on Michael Kinsley's offensive and spectacularly ignorant column on austerity - see Krugman and DeLong for some of the detailed follies, but I like Jason Linkins exposure of its contemptible immorality: Kinsley: "The problem is the great, deluded middle class -- subsidized by government and coddled by politicians. In other words, they are you and me. If you make less than $250,000 a year, Obama has assured us, you are officially entitled to feel put-upon and resentful. And to be immune from further imposition." Linkins points out that it is exactly this group that has paid, not for their own sins, but those of the megacapitalists and bankers who created the great recession. Linkins:"The group of people who Kinsley refers to as the "great, deluded middle class" happen to be the people who have already paid a huge price for the profilgacy of those who personally took actions that specifically tipped the economy into a dow...

I've noticed that many of my commenters are reluctant to consider economics to be a "science" whatever that may mean. Of course one posssible theory is that that means that they just prefer to clinging to whatever prejudices they've accumulated rather than study the results of economics. In any case, I decided to subject myself to a conventional course in Macroeconomics , taught by Nilss Olekalns of the University of Melbourne, on Coursera. I have a few other irons in the fire, so I'm not sure how far I will get, but so far so good. I would say that he has a reasonable defense of the science and its importance.