Interest Rate History

February 4, 2020

The often interesting Visual Capitalist has published a graph of nominal interest rates from the 14th century through to today:

Select image for a larger look.

“Today’s graphic from Paul Schmelzing, visiting scholar at the Bank of England, shows how global real interest rates have experienced an average annual decline of -0.0196% (-1.96 basis points) throughout the past eight centuries.

Collecting data from across 78% of total advanced economy GDP over the time frame, Schmelzing shows that real rates* have witnessed a negative historical slope spanning back to the 1300s.  Displayed across the graph is a series of personal nominal loans made to sovereign establishments, along with their nominal loan rates. Some from the 14th century, for example, had nominal rates of 35%. By contrast, key nominal loan rates had fallen to 6% by the mid 1800s.

Centennial Averages of Real Long-Term “Safe-Asset”† Rates From 1311-2018

% 1300s 1400s 1500s 1600s 1700s 1800s 1900s 2000s
Nominal rate 7.3 11.2 7.8 5.4 4.1 3.5 5.0 3.5
Inflation 2.2 2.1 1.7 0.8 0.6 0.0 3.1 2.2
Real rate 5.1 9.1 6.1 4.6 3.5 3.4 2.0 1.3

*Real rates take inflation into account, and are calculated as follows: nominal rate – inflation = real rate.
†Safe assets are issued from global financial powers

Starting in 1311, data from the report shows how average real rates moved from 5.1% in the 1300s down to an average of 2% in the 1900s.

The average real rate between 2000-2018 stands at 1.3%.”

The current rash of negative interest rates that we see today is therefore in line with historical trends.


The State of Inequality

January 16, 2020

The Pew Research Centre has published interesting results from a survey on inequality — or rather, attitudes to inequality — in the United States.

 

Views on the importance (or lack thereof) of tackling economic inequality tend to be a function of the respondent’s current economic situation:

 

“Asked about what contributes to economic inequality in this country, Democrats are more likely than Republicans to point to structural factors, such as the tax system (56% of Democrats vs. 30% of Republicans say this contributes a great deal) and problems with the U.S. educational system (49% vs. 38%). In turn, Republicans are more likely than Democrats to say that the different life choices people make (60% of Republicans vs. 27% of Democrats) and some people working harder than others (48% vs. 22%) contribute a great deal to economic inequality.”

I guess I shouldn’t be surprised that no-one seems to have mentioned it, but capitalism is inherently unequal. The tax and education systems, the choices and the effort one puts into work are almost irrelevant to the systemic inequality that capitalism requires for it to function.


A Photo Essay on The Collapse of Malls

January 4, 2020

I have been writing about malls and their economic problems since the summer of 2008.  Further discussion, most of it 10 years old, can be found here, here, here, and here.

Philip Beuhler now gives us a photographic essay on the decline of one particular mall in Wayne, New Jersey.

Artworld, Philip Beuhler (2019)

There are some fascinating images here and, as the article states they are “neither a nostalgia fest nor disaster porn, but an unsparing documentation of the decay that marks time and cultural change.”


Turn Corporate Taxes Into Licences

December 16, 2019

A recent story in the Washington Post and republished in Greenwich Times shows that, once again, major profitable US corporations are playing the tax code to their own advantage and to the cost of the rest of US taxpayers.

  • 91 of the Fortune 500 paid NO taxes at all on earnings of $101 billion;
  • Amazon made a profit in excess of $10 billion but received a tax rebate of $129 million;
  • Video game maker Activision Blizzard had $447 million in profits but received a tax rebate of $243 million, resulting in an effective tax rate of -54.4%.

The new Trump tax code,

“lowered the U.S. corporate tax rate from 35% to 21%, but in practice large companies often pay far less than that because of deductions, tax breaks and other loopholes. In the first year of the law, the amount corporations paid in federal taxes on their incomes – their “effective rate” – was 11.3% on average, possibly its lowest level in more than three decades … [T]he new law introduced many new breaks and loopholes.”

Corporations around the world play the same tricks. Often they reside in tax havens and levy enough “corporate service charges” on their overseas subsidiaries to ensure that no taxes are paid.

And this all comes at a cost to the rest of us.  As corporate taxes fall and government deficits grow, there is increasing pressure to reduce those deficits by reducing spending on welfare services, health, and education.

Centre-right politicians have suggested that lowering corporate tax rates will encourage more companies to stay in-house as it were.  That is just an excuse to make the rich richer as the new Trump tax code proves.  There is a simpler and much more efficient way.

I suggest that corporate income taxes be eliminated completely. They should be replaced by a “license to operate” fee equal to, say, 10% of revenues earned in the country no matter where the head office is based. Simple to understand, simple to manage, and, I suspect, very difficult to get around.

Country of ownership becomes immediately irrelevant, and transfers to an offshore HQ will be pointless for tax purposes. Indeed, they may well create a double taxation situation in which those transfers become taxable revenue in the home country. It also gives corporations the right to NOT operate in any particular country if they choose to forgo the revenues.

Finally, I would make this tax law bullet-proof by including a provision that, should some smart accountant or lawyer find a loophole, then that loophole is closed retroactively to the dater of the law’s passage.

We should give this a try. It is a commonsense approach, eliminates the need for accountants, lawyers, and an army of regulators. It will produce fairness across the board.


The Cannabis Stock Market

December 10, 2019

The legalization of marijuana in Canada and various US states has created a market for cannabis related stocks.  As the following graph from Visual Capitalist shows, it is an extremely volatile market.

 

Select image for a better view.


The Growth In Consumer Rentals

October 25, 2019

My wife and I are not part of the consumer rental economy. We have always rented our accommodation and since we gave up our car in 1991, we have rented cars and we recently joined Evo. But those don’t count as consumer rentals.  About fifty years ago in London, when I was first married, we rented our TV set, and I once rented a tuxedo for a weekend, but I can’t think of any other consumer goods that I have ever rented.

Not so the millennials, as a recent and highly informative infographic from Visual Capitalist shows.

 

“Although the current market for rentals is still in its early stages, the sheer momentum that the industry has gained in the last year is enough to threaten even the largest retailers—forcing them to reconsider their own business models … According to the research, very few millennials choose to rent consumer goods because it is better for the environment. However, Nielsen claim that 73% of millennials are willing to pay more money for sustainable offerings—impacting both retail and rental industries. As evidence of this, Ikea will test a range of subscription-based leasing offers in all 30 of its markets by 2020 in a bid to appeal to environmentally conscious consumers and boost its sustainability credentials.”

Other than tuxedos and, perhaps, wedding dresses, it never would have occurred to me to rent clothing. However:

“In the clothing rental space, brands like Rent the Runway pave the way, but there has also been an explosion of startups entering the market in the last year. One example is the monthly subscription service Nuuly. The company offers consumers access to over 100 third-party brands and vintage items. Consumers can borrow up to six items a month for $88. Similarly, American Eagle’s Style Drop program rents out the latest collections for a flat monthly fee of $49.95.”

It’s a brave new world out there.


Marijuana Has Gone To Pot

October 22, 2019

According to a fascinating feature in Forbes, the major legal marijuana companies are in terrible trouble — because they are growing more weed than anyone could smoke in several lifetimes.

“In just a year after Canada’s historic pot legalization, pot producers built up a massive surplus of pot. In fact, only 4% of pot produced in Canada in July has been sold!”

This has caused the business market to crash.  Aurora Cannabis is “Canada’s largest cannabis producer and one of the most popular pot stocks on earth. In fact, this stock has recently topped Apple as the favorite stock among American Millennials.” But that hasn’t saved the company stock price:

“If you look at Aurora Cannabis’s most recent financial report, you’ll see its revenue grew 52% in the last fiscal quarter, compared to the previous quarter. That sounds good… but it’s hiding a dirty secret.   Aurora Cannabis is actually dumping part of its harvest into “wholesale,” which means it is selling it for cheap… according to a line buried deep in the company’s Q4 financials.  Last fiscal quarter, the company dumped $20 million worth of pot, a 869% increase from the previous quarter. It is doing this because there’s not enough demand from consumers.”

 

The Forbes article likens this to the situation in American agriculture in the 1930s when an overabundance of product caused crops to be burned just to maintain prices at a floor level. They also suggest that the situation is likely to get worse as most large marijuana producers have invested heavily to increase production in the future.

No wonder then that in Canada, street (illegal) prices have fallen while legal dispensaries have to charge much more to meet regulatory stipulations, and thus the number of legal stores has not grown as expected and government revenues are not as they had hoped.


Democracy In Chains

October 8, 2019

There are plenty more libertarian role models available in our culture than there are anarchistic ones; and given the apparent similarities between the two concepts of individual liberty, I occasionally have to remind myself why I am an anarchist and not a libertarian. It’s the economy, stupid, and everything that flows from that.

  • Libertarians believe in the exploitation of the capitalist system (stripped of State-imposed rules and regulations) and the supreme sanctity of private property no matter how acquired; many have a tendency toward exclusionary -isms (racism, sexism, nationalism, fascism); they believe in no government other than that which protects their interests and assets (police, army, judiciary; jails);
  • Anarchists conceive of a non-exploitative production/consumption system and have a strong tendency toward inclusive community building; they believe in autonomous self-government by individuals and consensual groupings only.

We are currently living through an experiment in which the Libertarian fringe has taken control of the central government.  Earlier this year, I was read an article about how the GOP in Missouri were working to overturn a state constitutional amendment improving ethical governance that passed overwhelmingly by popular vote just a month ago. They noted:

“the Republican Party’s newfound disdain for democracy. Republican leaders across the country have tried to make voting more difficult; to keep some Americans from voting; to interrupt vote counts before they are complete; to gerrymander in the extreme; and now, in Missouri, to repudiate a constitutional amendment approved by 62 percent of the state’s voters.”

Everything in that paragraph is true, except that the Republican’s dislike for genuine democracy is hardly “newfound.” I have been reminded of this most recently through reading Nancy MacLean‘s vital Democracy In Chains: The Deep History of the Radical Right;s Stealth Plan For America. which is a book that every resister needs to read to understand what it is we are facing.  The thesis of the book is that current libertarian bent of the far rights financiers (a la Koch brothers and too many others) is fuelled and driven by the political-economic theories propounded by James M. Buchanan who was awarded the Nobel Prize for economics in 1986.  Buchanan developed his theories in the 1950s and 1960s when the current wave of capitalist barons were being educated.  [Page number references are to this volume).

“Buchanan believed that “majority rule, under modern conditions, had created … a risk to capitalism … The goal of the cause, Buchanan announced … must shift from who rules to changing the rules … the cause must figure out how to put [constitutional] shackles on public officials.”  [pages xxv-xxvi]  “A government based in the naked principle that the majority ought to govern, Calhoun [had] warned, was sure to filch other men’s property and violate their liberty.”  “The power to tax is the power to destroy,” wrote F.A. Harper. Democratic government was increasing “the power of certain persons to destroy other persons.” [6, 132]  Buchanan said modern rules fail to establish ironclad rules for “curbing the appetites of majority coalitions … There are relatively few effective limits on the fiscal exploitation of minorities through orderly democratic procedures.”  [150]  “The project must aim toward the practical ‘removal of the sacrosanct status assigned to majority rule’.”  [184]

Buchanan first made his name opposing taxes to pay for schools.  If a constitution enabled what Buchanan would call socialism — “which in Virginia’s case meant requiring a system of public schools — it would be nearly impossible [to achieve] his vision of radical transformation, without changing the constitution.” [72]  An important supporter, Oliver Hill, NAACP lawyer opposed to tax-paid vouchers for private schools, opined that: “No one in a democratic society has a right to have his private prejudices financed at public expense.” [69]  This group of thinkers were often opposed to educating the masses at all. As Gordon Tullock put it: “we may be producing a positively dangerous class situation” by raising their sights. [106]

More broadly, Buchanan criticised modern economics and its value system

“because the very idea that inequality was a bad thing led to looking for remedies, which in turn led the discipline toward an applied ‘mathematics of social engineering’.” [96-97].  He  “wanted not just to rein in taxation and regulation, but also to dethrone the dominant paradigm of Keynsian econonics that was the core of the mid-century social contract.”  [136]  A later disciple, Paul Ryan said “public provision for popular needs not only violates the liberty of the taxpayers whose earnings are transferred to others, but also violates the recipients’ spiritual need to earn their own sustenance.” [213]  Liberty Fund economist Gary M. Anderson alleges that public health is nothing more than “a device use by organized interest groups to redistribute wealth to themselves.”  [214]

And Buchanan’s theories began to enter the realm of social conservatism.  A Virginia petition of the early 1960s was very clear about its position:  “Individual liberty is a higher good than racial equality.”  [94]  The Goldwater campaign of 1964 openly attacked the Civil Rights Act on Buchananite-libertarian grounds, complaining

“that it used coercive means to make all conform to the values of the majority, in violation of the liberty of the white minority that opposed it.” [84]

Buchanan eventually came to believe that

despotism may be the only organizational alternative ... There was no glossing over it anymore: democracy was inimical to economic freedom” [151-152]  Charles Koch called Greenspan and others “sellouts”  because they sought “to make government work more efficiently when the true libertarian should be tearing it out at the root.” [135]  Buchanan “valued economic liberty so much more than political freedom that he simply did not care about the invitation to abuse inherent [as in Chile] in giving nearly unchecked power to an alliance of capital and the armed forces.”  [165]  He wrote in 2005 that those who fail to save for their future needs “are to be treated as subordinate members of the species, akin to … animals who are dependent’.”  [214]

Given the static two-party system in the US, it came as no surprise that Buchananite disciples discovered the Republican Party as a ready-made vehicle for political advancement.

“But while these radicals of the right operate within the Republican Party … the cadre’s loyalty is not to the Grand Old Party … Their loyalty is to their revolutionary cause … The Republican Party is now in the control of a group of true believers for whom compromise is a dirty word”  [xxvii-xxvii]

Political theorist S.M. Amadae says Buchanan “was mapping a social contract based on ‘unremitting coercive bargaining’ in which individuals treated one another as instruments towards their own ends, not fellow beings of intrinsic value.”  [151]

*****

This is a significant addition to our knowledge of how the elites run our lives and what they have in store for us.  Well worth the read.

 


Reforming Corporate Governance

September 14, 2019

This is the third in a series of discussions about changes that need to be made to modern capitalism to protect the mass of humanity in advance of a full and revolutionary change to mutual aid and co-operativism. In the first, I proposed new taxation rules for corporations and in the second, I suggested changes in structure for banks; here I discuss corporate governance in more general terms.   I note once again that these are just notes, eager for debate and adjustment.

The key to the improvements required for corporate governance is a constitutional amendment (or similar, depending on each national situation) stating specifically that corporations do not have the same rights as human beings; they have only the specific and particular rights granted to them by legislative or executive action.

More specific changes would include a ban on quarterly reporting and forecasting; possibly the half-yearly reports, too.  This will enable a new cadre of senior executives to concentrate on managing their companies for the long-term rather than for short-term stock market speculation. The CEO of the world’s largest investment management firm, Larry Fink of BlackRock agrees that CEOs should “focus on creating long-term value instead of emphasizing quarterly targets.”  This is such a fundamental and important priority that I would impose severe penalties (including mandatory jail time) on CEOs for any breach.

Loans from the taxpayer would be permissible (see the recent Bombardier requests) but indulgence of this kind in state socialism would trigger a specific set of rules of governance. Until the loan has been completely repaid:

  • no dividends or similar may be paid to shareholders;
  • no share buy-backs or similar schemes are permitted;
  • no increase in executive emoluments (of any and all kinds);
  • no executive bonuses of any form.

Lay-offs totalling 5% or more of company personnel in any two-year period trigger the same rules as loans for a period of two years; this sanction shall not be concurrent with the loans’ rules. The two-year sanction for any breach of maximum lay-offs will be imposed at the end of any loan repayment.

Corporations may pay unlimited salaries and bonuses to executives, subject to sanctions not being in place. However, the portion of any emolument exceeding thirty (30) times the average non-executive wage or salary shall not be a deductible expense for purposes of determining the corporation’s taxes (in a corporation income tax situation), or shall be added to aggregate revenues (in the license scheme proposed earlier). This will assist the system to return to the Eisenhower days (for example) when profits from increased productivity were shared more equitably among all workers. Currently, CEO pay and benefits are on average more than 300+ times that of the average employee.

Bankruptcy rules for corporations must be changed to ensure that non-executive wages, salaries, and pensions are first in line for payment. Labour should not be a risk proposition. If you work, you must be paid. I believe trade suppliers should be paid next. Banks, other lenders, and investors have to bear the risks that their rewards and “free enterprise” suggests.

Finally, no corporation should be allowed to make political donations (in cash, in kind, through third-parties, etc. without limitation) without the express consent in advance of sixty percent (60%) of all shareholders both as to amount to be contributed, and to whom donated. This rule will stay in place until we rid ourselves of political donations altogether.

If we put these rules in place, then we will mitigate some of the worst excesses of modern capitalism. If they stay in place long enough, these changes will tend to lean us in the direction of mutual aid and co-operativism, which should be the ultimate aim.


Wise Words on Immigration

June 9, 2019


Capitalism = Inequality

April 9, 2019

 

“This is a truly staggering fact: Wall Street bonuses totaled $27.5 billion last year, which is 3 times more than the combined annual earnings of *all* American workers employed full-time at the federal minimum wage.” — Robert Reich.

That is a sentence that needs to be read over several times, really slowly, to let the meaning sink in.

I have written how I would deal with banks.

 

 


Voluntary Taxation

April 3, 2019

It is tax time again.  And yet again I make my pitch for an all-voluntary tax system.

Way back in June 2002, I proposed doing away with all non-voluntary taxation by replacing income and all other taxes with a consumption tax. This is what I wrote in 2002, and I still see little need to change the basic structure proposed:

The basic principles for a new tax scheme are that it should be essentially voluntary, and concerned with ensuring equal opportunities for all. Therefore, I would propose the elimination of all personal and corporate income taxes as they violate by their very nature the voluntary aspect of taxation. I propose to replace the revenue with an all-inclusive sales tax on goods and services with a few, well-defined exceptions (the figures below represent Vancouver costs of living and could be adjusted as required):

• all foods
• shelter (to $24,000/year rent or the first $700,000 of purchase)
• all non-cosmetic medical, dental and optical-health services
• all educational services
• financial services (bank charges etc) to $500/year
• legal services to $2,500/year

The sales tax should be a single percentage across all categories of goods and services in order to reduce accounting and bureaucratic requirements.

The use of the sales tax for the bulk of government revenues brings a great deal of volunteerism to the matter. The exceptions provide an important and necessary break for those goods and services which can be described as the necessities of life; above that, the more I choose to buy, the more taxes I choose to pay.  Rampant consumerism therefore becomes a tax liability.

On the other side of the ledger, also to the good, the simplicity of the scheme allows for huge bureaucratic savings in administration and zero non-compliance. The tax would also be levied on all capital transfers outside the jurisdiction. It will oblige tens of thousands of “tax lawyers” to find genuine productive employment.

All government activity should be categorized into line items that can be shown to have a direct bearing on the level of the sales tax. In this way, the people are enabled to make decisions about what sections of government can be further cut to reduce the level of taxation. Conversely, any additional work to be performed by the government can be readily calculated as an addition to the sales tax.

In other words, the cost of a government service will be immediately and directly calculable — and the people can make their judgments on whether to go ahead with it on that basis. It is one thing to say that a government program costs $600 million — an abstraction at best; it is quite another to say that program x will cause a rise in the sales tax by 1%.

In a capitalist system where the government bureaucracy acts as a nanny on so many issues, taxation of some sort is inevitable, as will be resistance to such taxation. The sales tax that I propose will allow the taxation system to operate on a voluntary basis, thus achieving considerably greater support and compliance.

It might be claimed that rich folks will simply remove their money from Canada to avoid the sales tax.  Possibly true, but in my scheme, the sales tax would apply to all such financial transfers from the moment the scheme is announced.

Finally, I believe that many political types concern themselves far too much with how much money people make. If we concentrate on the input (salaries, bonuses etc) there will always be those who can play fast and loose with the rules.  However, if you apply taxation to outputs (purchases, transfers etc), the returns will always be progressive: the more they spend, the more they’ll pay.


And The Rich Get Richer….

March 15, 2019

Back in January, I reported on an Author’s Guild report that showed the average income for a full time writer in the US in 2017 was just $20,300.  Of course, averages are a function of the highest and the lowest figures available.

Literary Hub has compiled a list of the high numbers over the last ten years. These are the estimated incomes of the top writers since 2008:

1. James Patterson : $836 million
2. J. K. Rowling : $546 million
3. Stephen King : $259 million
4. Danielle Steel : $231 million
5. John Grisham : $192 million
6. Jeff Kinney : $165 million
7. E. L. James (Tie) : $153 million
7. Janet Evanovich (Tie) : $153 million
9. Nora Roberts : $128 million
10. Suzanne Collins : $114 million
11. Dan Brown : $111 million
12. Dean Koontz : $101 million
13. Rick Riordan : $91.5 million
14. Stephenie Meyer : $75 million
15. Ken Follett : $68 million
16. George R. R. Martin : $60.5 million
17. Veronica Roth (Tie) : $52 million
18. Bill O’Reilly (Tie) : $52 million
19. Nicholas Sparks : $46 million
20. John Green : $45 million
21. Tom Clancy : $35 million
22. David Baldacci : $26 million
23. Paula Hawkins : $23 million
24. Gillian Flynn : $22 million
25. Michael Wolff : $13 million

Extraordinary numbers, I think. They prove the power of TV and movies to vastly expand the earning capacity of the novels, especially those in series.

And they show, as if we needed more evidence, that the inequality of rewards inherent in capitalism are just as prevalent in cultural industries as in any other.


Setting Up A Workplace Co-op

January 11, 2019

As an anarchist, I am always interested in finding alternative (i.e. non-capitalist) ways of organising production and society.  The idea of worker co-operatives has always appealed to me as a step toward both an economy and a decision-making process based on mutual aid rather than exploitation.

I came across this really interesting video that covers a lot of ground about setting up a co-op and thought it worth sharing:

 

It has to be remembered that all of the organization discussed here is setting up within a capitalist economy; establishing it within a mutual aid model would need some tweaks.

However, variations of the basic model works at any scale, as I have discussed previously in regard to the banking industry.


How Trickle Down Economics Works

October 12, 2018


Getting Around The Corporate Tax Dodge

October 11, 2018

Until we manage to mature into a society that can depend on mutual aid and cooperatives, we have to mitigate the abysmal effects of today’s market capitalism and the supra-national power of corporations.  Google, Amazon and many other international companies make billions of dollars in revenue from, say, sales in the UK, but manage to pay virtually no tax in the UK.  They do this through foreign ownership — sometimes through multiple countries — and so-called management fees that the UK operation has to pay to the home corporation. It has become a regular scandal in the UK and threatens to do the same elsewhere.

Centre-right politicians have suggested that lowering corporate tax rates will encourage more companies to stay in- house as it were.  That is just an excuse to make the rich richer.  There is a simpler and much more efficient way.

I suggest that corporate income taxes be eliminated completely. They should be replaced by a “license to operate” fee equal to, say, 10% of revenues earned in the country no matter where the head office is based. Simple to understand, simple to manage, and, I suspect, very difficult to get around.

Country of ownership becomes immediately irrelevant, and transfers to an offshore HQ will be pointless for tax purposes. Indeed, they may well create a double taxation situation in which those transfers become taxable revenue in the home country. It also gives corporations the right to NOT operate in any particular country if they choose to forgo the revenues.

Finally, I would make this tax law bullet-proof by including a provision that, should some smart accountant or lawyer find a loophole, then that loophole is closed retroactively.


Keeping Banks Safe For Our Money

September 17, 2018

As anyone who has read the papers or seen the news in the last few years knows, banks around the world have broken numerous serious laws, have had to be bailed out with taxpayers money, and yet still pay millions of dollars to inept executives and billions more to stockholders. Many of their problems involve their connection to complex financial transactions that do nothing but make money for already-rich individuals. There has to be a better way, and there is.

I would oblige all banks to become credit unions and I would strictly limit their functionality.

Credit unions are not-for-profit institutions cooperatively owned by their members. They operate solely for the benefit of their members rather than for outside shareholders, of whom there would be none.  Their senior management is elected by the members and their policies are offered up for approval at regular meetings of the membership. Senior management remuneration would require members’ approval. The billions of dollars that are currently paid out in dividends to outsiders would be used to increase services and lower costs for the members. Any surplus could be re-paid to the members or added to the credit union’s capital.

I would limit their functionality to the taking, managing and disbursement of members’ deposits, and to the issuance of personal loans (including credit cards) and personal mortgages.  Any member or corporation that required business loans, corporate mortgages, investments or insurance would turn to investment companies, mortgage brokers and insurance companies designed specifically for that function.

No one would be limited in their desire to engage in stock market or other investments.  But these would be handled entirely by companies separate from banks.   No longer would bank depositors’ cash be at risk in the marketplace for derivatives, for example.

Competition between credit unions, if such were needed, would become a function of service and accessibility.  I believe this would get us more branches on the streets and a more personalized service between member and bank.  It would bring banking back to the people, to a smaller scale that we can understand and control — after all, it is our money they are using.

 


Competition Is Evil

September 4, 2018

There are a lot of things wrong — evilly wrong — with modern consumer capitalism, and so many of them start with the idea that life and every part of it is a competition.

From the very beginning, as tiny tots, we are taught, trained, indoctrinated to compare ourselves with everyone around us.  School tests, school sports, school grades are all based on comparing one child to another.  “Jimmy trues hard and does his best” is apparently not good enough; there is always a “but he doesn’t keep up with the others” even if not said. Baby shows and kids’ talent shows are nothing more than expanded public versions of the same affect.

Keeping up with the Jones’s, keeping up with the Kardashians, and white supremacy are adult versions. Conspicuous consumption is a vital part of keeping score. My whole train of thought was started this afternoon by seeing a clickbait headline; “Fifteen wedding dresses that are better than Kate Middleton’s”.

On the other hand, we are all (except preening CEOs and entertainment stars) very cagey and secretive about our own pay cheques because we don’t want to be compared unfavourably with those around us.  We all want more, sometimes for need, but more often it is because we want more than or at least the same as John Doe; and that is because we have been indoctrinated to think that way.

Capitalism breeds inequality which breeds envy which drives competition, most of it unproductive and wasteful. There has to be a better way.


I’ve Always Boycotted Starbucks!

April 14, 2018


The Hypocrisy of Cheap Labour

January 6, 2018

I was interested to read this morning the complaints from Solly’s Bagels that they were having difficulty with the bureaucratic red tape involved in bringing foreign workers to BC.  If it was up to me they wouldn’t ever have the option.

The Temporary Foreign Worker (TFW) program is a perfect example of the kind of unnecessary government intervention that distorts free markets and underpins the capitalist economy.  With the negligible exception of a few highly skilled specialists, TFW exists ONLY to lower the costs of production for corporations below what the rational free market says they should be, and for no other reason.

It is both ridiculous and immoral to bring in foreign workers to perform low-wage low-skill work (flipping burgers, serving coffee or bagels, etc) that can be handled by any Canadian with a brain. Some of these employers claim that the unemployment rate is so low they cannot find local workers. Nonsense. Pay enough and workers will be there; maybe they will leave other employers to join them, but isn’t competition (for labour as well as anything else) a heavily promoted benefit of capitalism?

The Temporary Foreign Worker program exists for the sole purpose of lowering costs to corporations in order to increase profits for the few.

The hypocrisy comes because many of these same employers are far-right evangelists insistent in their demands for removing government regulation of industry — unless, of course, those regulations benefit their wallets.

I propose that the government announce a final end date for all TFW approvals, say two years, and oblige industry to work out whatever readjustments are required.  Current temporary foreign workers should be given an easy path to formal immigration if that is what they want; the rest should be sent home.

 

[Note: I write this as we live in a world of nation states. My personal preference would be to see completely free movement of people in a world without borders and, of course, without corporations. Until that glorious day … ]