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The “Gig Economy”
« on: February 14, 2018, 04:47:38 AM »
https://www.globalresearch.ca/the-gig-economy-global-unemployment-low-wages-migration-and-the-future-workplace/5629025

The “Gig Economy”: Global Unemployment, Low Wages, Migration and the Future Workplace
By Prof. Anthony A. Gabb
Global Research, February 13, 2018
Region: USA
Theme: Global Economy, Poverty & Social Inequality

The author tracks key economic forces that have resulted in technological innovations which have given birth to the gig economy that is threatening job security, the gigzombie who is the alienated worker in the gig economy, and misguided anger directed at immigrants.

“A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. The trend toward a gig economy has begun. A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors.”

Introduction

This article explains sweeping changes that have resulted in the gig economy and migration patterns. The gig economy is the future workplace, once associated with less industrialized countries in the 1970s, where temporary, unstable employment is commonplace and companies tend toward hiring employees who are all but in name performing the work of permanent workers, but are denied permanent employee rights. It undermines the traditional economy and will aggravate unemployment, poverty and immigration. The gigzombie is the alienated gig employee, whose vitality has been sapped by rapid technological advancements that are changing the nature of work and increasingly threatening job security. Mr. Doug Scfifter, a New York City livery driver, wrote before he recently killed himself in front of New York’s City Hall, the gig economy “is the new slavery…I am not a slave and I refuse to be one.” 1

Since the end of the post WW II economic expansion in the 1970s2 capitalism has been struggling with slow growth and flat wages. The gig economy, which is driven by technological innovation, is a restructuring response to cut production costs and increase profits. It is not a solution for unemployment and forced migration, yet estimates show that the gig economy will soon account for more than one half of all jobs.3 Capitalism manufactures unemployment which is necessary for its existence. Immigrants are not the cause of unemployment and the gig economy is not the solution for unemployment; they are manifestations of the logic of this system.

Explaining the Underlying Economics Forces of the Sweeping Changes

To understand these sweeping changes in the U.S. and global economies and migration patterns, it is important to understand the economic forces that have brought us to this point. The best explanation of the economic forces that have brought us to this point is the Marxist theory of the accumulation of capital (wealth). The theory assumes that labor is the source of all wealth. The drive for profits gives rise to technological change. Labor and machines working together create more wealth.  However, in order to create more wealth, workers are displaced by machines, which tends to cause unemployment. When the number of displaced workers, plus the increase in population is greater than the number of jobs created, the result is the reserve army of the unemployed (mass unemployment), misery and impoverishment, which triggers migration to places where people think there are jobs. Immigration laws, which are anti-labor laws, are used to manage the ebb and flow of the global reserve army of unemployed, by opening or closing the immigration spigot to make cheap labor available.

To summarize, to cut labor costs and increase profits, capitalists replace workers with machines, thereby producing the reserve army of the unemployed (mass unemployment) which is necessary for its own existence. Capitalists control unemployed workers, who are forced to accept lower wages and poor working conditions. As they move into and out of the workforce, they are used as a lever to discipline the employed to do the same, thereby destroying unions and depressing wages, making it easy to lay off workers without notice and replacing them with gigzombies (temporary and part-time employees), destroying the safety net, and keeping production costs down. In this respect, unemployed workers are as necessary as employed workers for the existence of capitalism. In proportion as wealth increases, unemployment rises, and the levels of unemployment, torment, ignorance and poverty grow. Capitalism is unable to create enough jobs for everyone who wants to work; it manufactures and uses the army of the unemployed, a necessary outcome of the accumulation of wealth, as a tool to perpetuate its own existence, by pitting employed and unemployed workers and native and immigrant workers against one other, making them compete for a limited number of jobs.

The reserve army of the unemployed, the workers’ “graveyard of immiseration and impoverishment,” is evidence that capitalism is unable to deliver sufficient jobs. This system blames workers’ jobless predicaments on them and/or encourages them to blame others, like immigrants. Immigrants are not the cause of unemployment; they are one of the manifestations of the process of production whose natural outcome is unemployment.

In addition to mass unemployment and migration, capitalism creates obscene levels of inequality; the rich get richer and the poor get poorer. Even mainstream “economists are skeptical that the benefits of growth [from the]…albeit fragile recovery…will reach working people whose wages have stagnated even as jobless rates have plunged.” “The World Economic Forum… [recent] survey…warned of rising economic inequality… [and]…rising risks…adding that they threaten catastrophic consequences for humanity, and for the economy.”4

The Modern Workplace

There have been significant changes as the modern workplace transitions from the traditional forty-hour work week with benefits, to the gig economy, where there is a race to reduce labor cost, and immigrants are targeted and dehumanized. Immigrants remain another instrument of control for the capitalist due to the schism between them and the native workforce. The most important shifts in the workplace include those directly related to automation, and the state’s use of right-to-work laws to dismantle unions as well as restructuring the tax system.

Today, the gig workplace could be virtual, your home, a day-to-day temporary location, an Amazon or Walmart warehouse, driving your car as an UBER or Lyft independent contractor, and to a lesser extent the traditional office. It is characteristic of temporary and part-time, flexible jobs, without benefits. It undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.

Technological innovation gives employers the ability to identify, calculate, and monitor how much you produce whether your office is in your home or somewhere else. In this increasingly automated workplace, machines supplied and used by workers maintain their oppressive function by managing the workplace from a distance allowing employers complete control over workers; as has been said, the machine incorporate and absorb the worker who is the appendage within it and extracts labor power from it.  Already more than 34 percent of the workforce is employed as temporary part-time precarious employees and an additional 13 percent wish to join the gig economy.5 Expectations are the gig economy will soon make up half of all employees.

The transition to the gig economy has been advanced by right-to-work laws. Under provisions of the Taft-Hartley Act that require unionized workplaces to become “open shops”, employees must be allowed to work whether or not they join the union or pay dues. This makes it more difficult for workers to form unions. In part, right-to-work laws have devastated organized labor. A study by Cornell University’s, International Labor Relations School, found that wages for union members are generally ten to thirty percent higher than the wages for non-union workers.6 In the absence of union representation, labor costs decrease at the expense of workers, by reducing wages and benefits. These anti-union attacks are also evident in other industrialized countries. While the U.K. government is demanding health care by demanding give backs from workers, in France unions are under attack from a government that wants to make it easier for businesses to fire employees.

The recent tax law passed by the U.S. Congress and signed by the President, an act of class-warfare that gives $1.5 trillion to corporations and the wealthy, has also contributed to the transition to the gig economy. Many find appealing the opportunity that it seemingly offers to cut taxes for small businesses, and are expected to continue to form independent contractor small businesses in order to take advantage of it. This, however, comes at a cost as employers shift the cost of wages and benefits, once hard-fought for by unions, onto employees.

In search of cheap labor, capitalists reconfigure and control global markets, by war, militarism, and persecution. The best evidence of this is in the Middle East where immigrants fleeing into Europe and elsewhere have become another instrument of control for the capitalist, because of the schism between the indigenous European and migrant workers. These migrants are greeted with physical and figurative walls, xenophobia, and other forms of misguided anger.

Composition of the Workforce

The composition and size of the workforce has dramatically changed due to cost-cutting technological innovations driving the transition to the gig economy. The most important changes include an increase in the reserve army of the unemployed; transitions from union to non-union employees, as well as full-time permanent status to temporary part-time independent contractors, consultants, and freelancers; increased migration; and the widening inequality gap.

The spectrum of the workforce (the proletariat) spans from active employed workers to the mass unemployed (reserve army of the unemployed) to those who have lost their class identity, people who are very poor and disenfranchised, “the lowest sediment of the relative-surplus population”, “vagabonds, criminals, prostitutes…”, (the lumpen proletariat). 7 The active employed are distributed among the primary, secondary, and tertiary sectors. The reserve army of the unemployed includes the floating, latent, and stagnant unemployed. While there has been a proportionate decrease in the active employed, there have also been significant increases in the reserve army of unemployed.

The labor market is divided into three sectors of the economy: The primary, secondary, and tertiary. The primary sector includes all non-manufacturing workers in the extractive industries like mining, farming, and fishing; the secondary sector includes all industrial/manufacturing workers; and the tertiary sector includes service workers in the public and private spheres.

The reserve army of the unemployed is also divided into three sectors: The floating, latent, and stagnant unemployed. The floating unemployed is the most mobile group and moves more easily into and out of manufacturing jobs, depending on whether the economy is expanding or contracting. The latent unemployed, generally less mobile, include primary sector workers who migrate to urban areas where they compete with unemployed manufacturing workers. The stagnant unemployed, the least mobile and fluid sector, includes those who are able to work, those who cannot work, like the elderly, the disabled, the sickly, and the single parent households, and “orphans and [poor] children”. As the deindustrialization of the economy becomes more acute, the floating and latent sectors and misery grow.

Technological innovation has displaced a significant number of workers who have migrated from farming and manufacturing into the service sector, the fastest growing sector both in the U.S. and globally. As this trend continues it will result in an increase in the floating unemployed, especially where jobs are more easily automated, like machine operators and fast food service workers.  Since 1970, the workforce in the manufacturing decreased from 17.4 percent to about 10 of the workforce In the U.S. The supply of independent freelancers, contractors, consultants, and precarious and informal workers will expand.

Over the past fifty years, the number of workers displaced by automation plus the increase in population has far outpaced the number of jobs created, in the U.S. and global economies. The size of the global industrial reserve army of the unemployed is over 1.5 billion. By 2030, not accounting for population growth, an additional 400 to 8oo million will be displaced by automation.8 In the U.S. the reserve army of the unemployed increased by over 70 million or 114 percent and globally, the number of unemployed increased by 780 million, or 111 percent. The U.S. population increased by 74 million and the global population increased by over 4 billion.9 These numbers are much bigger than the 47.5 million full time and part time jobs created in the U.S. and 920 million jobs created globally. These changes will all create downward pressure on wages and exacerbate unemployment, migration and inequality.

As the reserve army increases, the level of poverty increases, proportionately. According to UNICEF, over 22,000 children die every day due to poverty and 1.3 billion live on less than $1.25 per day in extreme poverty. The U.S. accounts for 5 percent of the world’s population and over 20 percent of the incarcerated; over 2 million people, many of them due to the criminalization of poverty, are incarcerated in the prison industrial complex of the U.S, and counting.10 Fifty percent of the labor force earns less than $27,000 per year and the bottom half of the population has less wealth than the top one percent. Eighty percent is struggling, living from pay check to pay check and the student debt has reached $1.3 trillion dollars.

The evidence shows that the active employed segment of the workforce in the gig economy is increasingly subjected to less than subsistence wages. The U.S. military is the biggest employer in the world with 2.2 million employees, Walmart is the third biggest employer in the world with 2.1 million employees, and MacDonald’s is fourth with 1.9 million employees. Many of these workers live pay check to pay check on sub-standard wages; many of them qualify for food stamps, a subsidy to employers’ profit margins. To add insult to injury, Walmart’s response, in part, is to sell online 13 square foot domiciles for $4,000. Just when you think it could not get any worse, recently Walmart closed sixty stores and 10,000 people lost their jobs; they found out they were fired when they showed up for work and the entrances to the stores were locked, that was the only notice they received.11  Mr. Doug Schifter, the New York City livery driver, wrote before committing suicide “I worked 100-120 consecutive hours almost every week for the past fourteen plus years [only to end up deeper in debt].”12

The role of labor unions is to serve as a voice for employees and act as their representative during collective bargaining negotiations. After peaking at 35 percent (21 million members) in 1979, today union membership in the U.S. is at an all time low, about 10 percent. About 28 states in the U.S. enforce “right-to-work laws” which makes it difficult to form or join a union. As union membership decline, migration, inequality, outsourcing, globalization, and unemployment increase, and wages and benefits decrease. In desperation many workers join the gig economy, while others have been forced into retirement, or slip into poverty.

The rise in the global reserve army of unemployed which has worsened economic plight, as well as natural and human made disasters (like wars) and persecution, have contributed to increased migration patterns. These migration patterns have impacted economic, social and cultural dimensions in the U.S. and globally. On the one hand, what often drives the public discourse on immigration are issues relating to the threat immigrants pose to host countries’ values and customs and that the government should manage immigration against such threats.  On the other hand, a circumspect review of immigration data dispels these myths about immigrants and their impact on the economy and cultural and social values. The truth is that immigrants inject new energy into academia, arts and sciences, and technological innovation.

Contrary to popular belief,

    “While some policymakers have blamed immigration for slowing U.S. wage growth since the 1970s, most academic research finds little long run effect on Americans’ wages. The available evidence suggests that immigration leads to more innovation, a better educated workforce, greater occupational specialization, better matching of skills with jobs, and higher overall economic activity. Immigration also has a net positive effect on combined federal, state, and local budgets.”13

Furthermore, immigrants have lower rates of crime than the native-born because they don’t want to risk deportation. Most immigrants do not compete with low wage American workers because they occupy different niches and immigrants often lack English language skills. In addition, while the number of immigrants has increased, the number of murders has decreased in the U.S. Suggesting that contrary to popular belief, at the same time that the number of immigrants increased, there has been a dramatic fall in the number of murders in the U.S. 14

Today, over 60 million people have been displaced by wars and natural disasters and there are over 160 million others living outside their countries of origin.15 In 1999, 4 million U.S. citizens chose to live in other countries and in 2016 that number more than doubled to 9 million. Many immigrants no longer see the U.S. as their first destination. In 1978, the U.S. was the first country people chose to move to, but by 2017, it was number sixteen. However, due to heightened economic plight in the less developed world, immigration has continued to shape the U.S. workforce. In 1970, there were 9.6 million immigrants in the U.S., or 4.7 percent of the population. In 2016, there were 43.7 million, or 13.5 percent of the population. The majority of immigrants in the U.S. are from India, China, Mexico, the Philippines, and Canada. Over fifty five percent had private health care coverage compared to 69 percent of U.S. born. Twenty nine percent use the public health care system compared to 36 percent of native born.

Meanwhile, as attacks on immigrants continue, wealth has become more concentrated in the hands of a few billionaire oligarchs. The number of billionaires in the U.S. increased from one in 1970 to 425 today; globally, the number of billionaires increased from two in 1970 to 2,043 today. The richest 42 people on the planet control more wealth than the poorest fifty percent of the world’s population. Over 65 percent of Americans have less than $1,000 is savings; 44 percent of them have less than $400. These repulsive levels of inequality rival the time of the Pharaohs. More and more “Free time…both leisure and time for higher activities,” is saved for the privileged few who engage in creative, fulfilling activities, while the majority of people engage in “alienated labor” just to stay afloat.

Conclusion: “Workers of the World Unite”

The data regarding unemployment, immigration, inequality, and poverty are staggering. Last year in New York City there were over 50,000 homeless children, 1.9 million children living in poverty, and 77,000 people in New York City were homeless. In the U.S. there were over 2.5 million homeless children and between 13.4 million and 16.5 million children living in poverty.16 The U.S. population has outpaced job creation by over 50 million. About 55 million workers in the U.S. are employed in the gig economy, most of them in temporary, part-time, low paid jobs, without any job security or benefits.

The global economy has followed similar trends. The world’s population increased by 3.4 billion and there has been a shift toward the service sector, which is already under pressure from automation. The availability of cheap labor as well as high levels of unemployment and the lack of unions in the less industrialized world have maintained and intensified temporary part-time employment that is now trending in more industrialized economies. More than 3 billion people live on less than $2.50 per day.

Migrant serfs, otherwise known as mostly retired elderly white people, who gave the best years of their lives, now live nomadic lives, in make-shift refugee trailer camps, which they set up serendipitously in the parking lots of big box warehouses where they work; they are constantly chased away by the police. Because their social security checks are generally less than $1,000 a month, they supplement it by working at Amazon and Walmart warehouses, many of them making sub-standard wages in exchange for robotic ten hour workdays. They can be fired without notice and don’t get paid extra if they take longer than the prescribed time to complete their assigned work.

Many of them have said that they work sometimes under horrible workplace conditions without any air conditioning or heating and are made to endure remarks from their superiors (such as “we appreciate you because of your mature work ethic and the example you set for younger gigzombies”). At the same time they are complemented for their work ethic, they are discouraged from talking to union organizers. It has been reported that Amazon warehouses have set up “Li’lMed” stations and Urine Color Charts outside bathroom walls for workers to check the color of their urine to monitor dehydration and to convey the feeling that the company cares about them.17 Recently, Amazon announced that it plans to universalize its “Li’lMed” health care approach. It wants to lower healthcare cost for workers and has plans to revert back to the days of the “company store” when employees depended on employers for everything. It plans to set up its own health care system, at first, to service its employees.  If it is successful, it could metastasize throughout the whole economy, allowing Amazon to privatize and provide universal health care for all of us.

Sadly, these elderly workers, who are made to compete with younger workers who are in their prime working age, have been known to say that they are happy with what they can get, the opportunity to subject themselves to such humiliation. Exhausted, even though they need the money, termination comes as a blessing in disguise, since it gives them recovery time to heal physically and emotionally. Evidently, capitalism not only produces misery and impoverishment, but it has no desire to help those in need. In this respect, the working conditions of the gig economy is reminiscent of the horrible working conditions experienced almost a hundred years ago, in the 1930s, by San Francisco longshoremen; there is a well known example of a reported incident after a 700 pound load accidently dropped on the foot of a longshoreman and broke several bones. Employers placed the worker on the no hire blacklist because they said he had weak bones.18

As economic crises become more frequent and deeper and unemployment, migration and inequality reach dizzying heights, and militarism and war persists, critics have called for a greater role for government. But these trends are systemic and ubiquitous and, as such, a greater role for government and the gig economy that is automated and stocked with gigzombies, are not solutions to these problems. Mass unemployment is a necessary outcome of the capitalist production process. Immigration, globalization, outsourcing, and the transition to the gig economy are all manifestations of capitalism’s need to re-invent itself. The reserve army of unemployed is, indeed, the “graveyard of immiseration and impoverishment,” and is the necessary outcome of the logic of this system; as such, capitalism continues to produce its own “grave diggers.”

In this respect, there are important lessons to learn from the revolutionary tradition in the U.S. This tradition has a long history that has inspired subsequent generations to demand a world free of misery, impoverishment, exploitation, oppression, and class distinctions. They understood that radical change is not just a thing of the past, but that it requires international solidarity, since the alternative is a life of abject poverty.

Capitalism is an economy driven by profits, which retards the development of humanity; when profit investment ventures dry up, the system shuts down. A collectivized system where the fruits of human labor are available to all, will set free the forces of labor for the benefit of everyone, not just a few. The solution to misery and poverty is international solidarity. The workers, the creators of wealth, want dignified and creative work, with a shorter work week and a livable wage with benefits. While the words of Marx were resounding for the nineteenth century working class, they still ring true today: “A study of the struggle waged by the English working class reveals that, in order to oppose their workers, the employers either bring in workers from abroad or else transfer manufacture to countries where there is a cheap labor force. Given this state of affairs, if the working class wishes to continue its struggle with some chance of success, the national organisations must become international.” 19

*

Anthony Gabb, Ph.D. is Associate Professor of economics at St. John’s University, New York. He has delivered and published dozens of papers, a book chapter and a book review. His most recent work, Financial Oligarchy Feudal Aristocracy, was published by The World Financial Review.  He work has appeared in The New York Times, Corriere della Sera, and he has appeared on Chanel 1 New York.

Notes

1. https://www.facebook.com/permalink.php?story_fbid=1888367364808997&id=100009072541151

2.  Robert Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War, The Princeton Economic Series of the Western World, 2016

3.https://www.mckinsey.com/~/media/McKinsey/Global%20Themes/Future%20of%20Organizations/What%20the%20future%20of%20work%20will%20mean%20for%20jobs%20skills%20and%20wages/MGI-Jobs-Lost-Jobs-Gained-Report-December-6-2017.ashx

4.  https://www.nytimes.com/2018/01/27/business/its-not-a-roar-but-the-global-economy-is-finally-making-noise.html

5.https://www.mckinsey.com/~/media/McKinsey/Global%20Themes/Future%20of%20Organizations/What%20the%20future%20of%20work%20will%20mean%20for%20jobs%20skills%20and%20wages/MGI-Jobs-Lost-Jobs-Gained-Report-December-6-2017.ashx

6.https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1176&context=key_workplace

7. Karl Marx, vol. 1, Capital (Moscow: Progress Publishers), pp. 600-604                         

8.  https://www.bls.gov/opub/mlr/2017/home.htm

9.  https://www.bls.gov/opub/mlr/2017/home.htm

10. Survival of the Richest w/ Donald Jeffries – YouTube

11. https://www.truthdig.com/videos/companies-like-amazon-exploit-itinerant-elderly-workers-lost-great-recession-video/

12. https://www.facebook.com/permalink.php?story_fbid=1888367364808997&id=100009072541151

13. http://budgetmodel.wharton.upenn.edu/issues/2016/1/27/the-effects-of-immigration-on-the-united-states-economy

 14. https://www.truthdig.com/articles/fascist-underpinnings-trumps-state-union/

15. https://www.ukessays.com/essays/cultural-studies/migration-in-the-era-of-globalization-cultural-studies-essay.php

 16. https://www.unicef.org/publications/files/UNICEF_SOWC_2016.pdf

 17.https://www.truthdig.com/videos/companies-like-amazon-exploit-itinerant-elderly-workers-lost-great-recession-video/

18. WBAI Letters and Politics, 1/10/18, Peter Afrasiabi https://www.wbai.org/archive.php   

19. Karl Marx, International Workingmen’s Association 1867, meeting on June 4, 1867 the General Council, On The Lausanne Congress
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💵 Economic System Reform: Saving the Planet; Salvaging the Human Prospect
« Reply #1 on: February 15, 2018, 02:09:19 AM »
https://www.globalresearch.ca/economic-system-reform-saving-the-planet-salvaging-the-human-prospect/5628951

Economic System Reform: Saving the Planet; Salvaging the Human Prospect
By Robert Snefjella
Global Research, February 12, 2018
Theme: Environment, Law and Justice

Economic systems include elements of design. Economic systems are not the progeny of happenstance, nor are they beyond our powers, like the sun and moon and stars above. And based on how things have worked out, nor are they the fruit of unimpeachable wisdom. In any case, they are influential. If a successful human presence on earth – which includes wise stewardship of the biosphere – were deemed to be a worthwhile goal, the intention of excellence in the design of economic systems is indispensable.

How are contemporary societies doing, while employing, or being deployed by, current economic systems?

Things are not working out so well for billions of people and many other species on earth. In an age of unprecedented technology and knowledge and productive capacity, we observe increasing environmental degradation, countless species lost or diminished, and many hundreds of millions of humans living in more or less squalor, and in great financial difficulty.

Countless jurisdictions also face financial difficulty, including debilitating levels of debt. Even in so-called wealthy countries, there is widespread social breakdown and high, even unprecedented, levels of public and private debt, and high real levels of unemployment. Perversely, what is financed includes ongoing development of vast capacity to destroy, highlighted by the continuing pathology of wars of aggression.

Meanwhile, in many countries, a small percentage of the population gains a very disproportionate portion of the wealth, and a tinier percentage have gained extreme concentrations of wealth, with a smaller number yet claiming ownership of much of the planet’s wealth and property..

The confluence of environmental and social breakdown, wars, widespread financial difficulty, and extreme concentration of wealth is not accidental. It is an outcome of the very design of our economic systems. Current money systems are designed to privilege selfish or narrow group interests; elite interests. And narrow – oligarchic – interests having been given primacy, broad human betterment and environmental stewardship are secondary considerations, at best.

That is, many national systems and the international money system are by design such that we can never achieve broad human success and good stewardship of the earth.

But that has not been the story told. The intrinsic financial elite serving bias of economic systems has been misrepresented to the public – as say, among obscure matters too complex for mere commoners, or as sensible obedience to immutable economic laws – and sometimes the system is just pushed down the people’s throat – with ongoing attempts made to camouflage the economic systems’ inherent elite-privileging characteristics.

Financial-elite domination of mass communications has hitherto ensured that broadly-beneficent economic models receive insufficient public attention to create a strong and knowledgeable economic-reform consensus; and academia has overwhelmingly taught conventional financial-elite-friendly economic theory. And politics manifests economic dogma and ignorance, while too often serving not the public interest but elite agendas.

The elite privileging and dysfunctional designs of current economic systems were developed in an extinct cultural context – especially pertaining to technology. That is, besides being dysfunctional, they are outmoded.

Given that current financial systems are catastrophically flawed, proposals have been made for economic system reform that is intended to provide broad, not narrow, benefit, and to eliminate harmful features. And what person of goodwill would not prefer economic system designs that work well – intrinsically – on behalf of broad, not narrow, human benefit, while encouraging harmony with the biosphere, and including a decisive concern for the future?

But selfishness will never retire gracefully. Those dominating the established financial paradigm are also busy, stealthily or brazenly, intending to maintain or strengthen the elite-privileging characteristics of existing financial system arrangements. This includes the attempt to reduce the role of physical currency and to expand the role of elite-controlled and manipulation-enabling ephemeral means of exchange and stores of value.

Current financial system reform proposals are offered within the context of rapidly evolving and widely available new technology and tools, and changing societal and cultural circumstances. These include unprecedented and rapid massive creation, compilation and outpouring of knowledge; and an internet-based massive increase in less fettered or unfettered public discourse, in conjunction with broad access to same.

Following is a look at, and comparison of, and some comment upon, two recent efforts via books to present a program of broadly beneficent economic reform. Both writers happen to be fellow Canadians, but they come from different backgrounds, and their formulae have some important differences. But there are also many points of agreement in their respective theses.

Because the Future Matters: Let's Stop Letting Modern Economics and Our Energy Addiction Ruin Almost Everything! by [Braden, John]

One of the authors, John M. Braden, could hardly be more obscure. The title of Braden’s book is Because the Future Matters: Let’s Stop Letting Modern Economics and Our Energy Addiction Ruin Almost Everything! The book was published in 2015 and Braden passed away in 2017.

The other author, Paul T. Hellyer, is a well known long time public figure in Canada, having authored over a dozen books, a majority of which have dealt, in whole or part, with economic matters, and having held senior cabinet positions in the Canadian federal government, including Minister of Defense and Acting Prime Minister. His book is called THE MONEY MAFIA and subtitled A World in Crisis. Published in 2014, Hellyer wrote this book early in his ninth decade

In both books there are many matters I am not commenting on, but leave to the readers of these books to discover. Presented are some of the key ideas in the books that pertain to reform of the economic/financial system. I knew Braden personally, and read and made suggestions on an earlier version of his manuscript.

Both authors evince genuine concern about not just our current and future human predicament but about the very fate of the earth. Both authors make use of the word transitional to describe their proposals.

As if to underline the extreme absurdity of our situation, both Hellyer and Braden resort to the summary word “insanity” to describe aspects of the current financial system and conventional economics.

Hellyer, in his outspoken style, describes the folly of giving “private corporations a monopoly to create money as total insanity.” Further, “to let them create all that money as debt that has to be repaid with interest goes beyond total insanity….”

Braden in his understated style almost apologizes for his use of such “strong words” as insane and insanity in reference to the “energy extravagances” of modern society. His basic thesis, stated “more gently” is: “conventional economics virtually compels sane people to engage in insane economic activity.”

Both authors are adamant that the financial system as currently designed has basic characteristics doing great harm and leading to more catastrophic consequences, and that we can, and ought to, and must, make basic improvements.

A closer look at Braden’s proposals

Braden calls his proposed economic program Intelligent National Frugality (INF). It is offered as a corrective to current economic systems that in effect mandate environmental degradation, increasing resource scarcity, and social breakdown and dysfunctions.

He proposes an alternative taxation and pricing and financing strategy that will inherently encourage environmental stewardship, more careful resource use, and greater social health, and discourage resource foolishness and energy gluttony: Thus Intelligent.

The term Frugality explicitly rejects the ideology of perpetual economic growth, and the culture of ‘more and more stuff is better and better’, of material and energy extravagance. But it allows for a wealth of cultural expression and unlimited qualitative progress within the context of a much more careful and sensible human presence on earth.

The term National identifies the nation state as the scale at which INF economics should apply, and also that a country is the appropriate political vehicle for establishing INF economics. Implied is that in order for any country to be able to carry out such a reformed economic system, it must have sufficient independence and sovereignty.

One basic principle found at the heart of Braden’s thesis is that a taxation and pricing system should as far as possible encourage the beneficial and discourage the harmful – encourage the good and discourage the bad. Stated thus, it’s a principle hard to argue with, but it begs the ongoing question as to what constitutes good and bad.

Braden’s core answer is that INF economics would heavily tax those types of energy classified as non-renewable – so-called fossil fuels and nuclear – on the basis of their actual energy content, and at the primary stage of their movement into use. This would mean that all processes and products coming later, using either the energy or matter of the energy source, would in cost and price reflect that original taxation.

All direct and indirect subsidies would be removed from these forms of energy. And the tax would be introduced gradually, intending a not-seriously-disruptive process of increase over a period of years.

As a result, there would be a growing disincentive to use fossil fuels in a cavalier fashion, and a growing incentive to use such energy more carefully. More benign and renewable competing forms of energy, and processes that use these, would gain comparative price advantage; thus be encouraged.

Nuclear energy, in Braden’s vision, if taxed appropriately and not subsidized, will simply become completely untenable. Indeed, one of the highlights of the book for me is Braden’s elegant and succinct yet devastating refutation of nuclear energy, on the basis of its financial, ethical and safety shortcomings.

Which leads to another key principle of INF economics: that human energy, mental or physical, is not taxed at all. Human energy thus becomes the financially most advantageous energy of choice in many instances. Under INF economics, sales taxes and value added taxes would also be eliminated.

There is no inherent ‘right’ or ‘left’ ideological basis for Braden’s proposals. But in order to implement his ideas, it is as noted necessary that a country be able to make independent national economic policies. This includes not being bound by restrictive bi-national or multinational economic agreements that preclude independent national initiatives in economic policy.

Braden repudiates so-called ‘free trade’, which in practice elevates international financial and corporate power over indigenous national economic policy, and he endorses less reliance on distant trade and long transport of goods. INF economics inherently encourages a more decentralized and self-reliant society; and a tendency towards many more and smaller internally competitive industrial enterprises and businesses. And many more small farms, and villages and towns, would primarily serve their locality. INF economics would also intrinsically encourage production of products featuring ease of repair, durability, recycling, and so on.

Braden, like Hellyer, considers full employment to be a basic goal and one which INF economics would facilitate. Again, this follows from the elevation of human energy in many instances into the most financially attractive choice.

Another foundational proposal by Braden is for adoption of a new banking system, one which is not debt-based. Here Braden and Hellyer join conceptual forces with advocacy of “Hundred Percent Money” as Braden calls it or Government Created Money (GCM) in Hellyer’s words. Braden notes the taboo-like near absence of contemporary discussion by conventional economics of GCM.

Braden’s basic proposal regarding GCM is that governments create an appropriate amount of legal-tender currency, and introduce the money into the economy by spending the money for worthwhile purposes. In the case of changed circumstances, say population or economic growth, where more such money would be helpful, more money can added in order to continue to “… facilitate normal commercial transactions in everyday life.” This money is permanent, not ephemeral like much of the ‘money’ in our debt-based system. GCM does not obligate or earn interest in its creation.

This GCM “does not constitute newly created wealth” but will facilitate economic activity which can create new wealth. Braden stresses that GCM “is able to function quite satisfactorily regardless of whether economic growth does or does not take place.” This is in sharp contrast to debt-based money, which requires a growing economy in order for the debt treadmill to continue functioning.

Braden then turns to fractional reserve banking, which in a nutshell gives lenders the privilege of lending money that does not exist, and then asking for repayment in real dollars plus interest, or the collateral if the repayment is not made. At the strokes of a banker’s computer keys, the issuance of “impermanent” credit creates an increase in the country’s ‘money’ supply, and when the loan is paid off, the money supply of a country is reduced. Through the process, interest is collected. This is now the dominant means by which ‘money’ is ‘created’.

Braden asserts that he can find “no theoretical arguments at all in favour of the fractional reserve system.” And he lists several reasons for condemning it, including that the fractional reserve system is “unworkable [without] ongoing economic growth.” Braden rejects as folly the dogma that perpetual economic growth, per se, is desirable.

As an example of the harmful absurdities built into the current fractional-reserve, credit-creation privileges that some financial institutions have been granted, a young family in Canada typically ends up paying more or less twice for the home they purchase, unless they lose the home due to not being able to pay for it twice: it’s called a mortgage.

Braden believes that governments can act sensibly regarding money creation and management of associated policies, which is not a storyline that private financiers have endorsed. One might note here that elite financial domination has been served by a lot of hand wringing angst in media over the specter of democratic processes and governments having final authority over money creation and policy, but there seems to be much less concern over obscure financiers controlling both money and politics. We might also note that any dearth of competent politicians and bureaucrats when it comes to money matters is to some significant extent the fruit of financial and corporate influence over the political selection process, and elite achievement of attenuated public discourse about basic financial issues.

Braden presents his ideas using commonplace, clear language. His is a broad yet limited vision. Some pertinent practical challenges that we face are either absent or hardly discussed.

These challenges include the massive inertia of and massive dependence upon the existing system; the trillions of dollars per day volume; the power of those willing and able to deploy tactical disinformation and extreme violence to maintain control over existing financial arrangements; the control of mass communications by those avoiding full and effective discussion of critical economic and finance-related issues. Also absent is discussion of the large role played by international financial institutions like the BIS or the IMF, key institutions of the global-financial cabal.

What Braden does provide, however is a basic outline of an economic and financial system that is designed to encourage sensible human behaviour, both in respect to human interaction, and in relationship to the earth. His ideas deserve careful consideration.

A closer look at Hellyer’s ideas

In contrast to Braden’s low key and circumspect approach to the subject of financial reform, Hellyer presents in swashbuckling style his financial reform proposals. He grapples with a different field of practical considerations than does Braden, including identifying extreme criminality in the prevailing international financial system. But he is kindred with Braden in many basic goals and concerns, and in many ideas, including being an ardent advocate of debt-free government-created money. And Paul Hellyer (image right) like Braden evinces great concern over environmental degradation, including the over-reliance on problematic fossil fuels.

Hellyer begins his book with a well known 19th century Lincoln quote in which the green-back president admits to great concern that the money power in the United States will use its cunning influence to concentrate wealth “in a few hands … and the Republic [will be] destroyed.”

And lo and behold, and that’s now just about where the US is at, along with many other countries in more or less the same boat: the danger that concerned Lincoln has now gone global: Hellyer writes that “a small group” … “using the cover of globalization” have “the ultimate goal of creating an unelected World government under their control.” He sees in such an outcome an extremely wealthy oligarchic global tyranny, presiding over an enslaved public, in which serf-like austerity for the many is enforced. Bad idea, asserts Hellyer, for “we have the capability of providing ‘the good life’ for all humankind.”

How do we do that? For Hellyer one key requirement for human success is “… to establish the kind of democracy we dream of and deserve – government … for all of the people, and not just the rich elite.”

He describes his book as including “an integrated blueprint for action” to “replace war with peace, injustice with justice, immoral inequality with improved equality of opportunity and, topping the list an end [to destroying earth, and mobilizing] to preserve it for the benefit of generations yet unborn.”

Whereas Braden repudiates so-called ‘free-trade’ as inherently a bad idea, Hellyer admits to a residual fondness for the idea, but has great reservations about its actual manifestation, which he suggests might be called “unrestricted investment”: Under so-called free trade, corporate privilege and influence dominate, while the public interest and influence atrophy: Hellyer asserts that for national politicians to implement ‘free trade’, it is already in effect treason, but then goes further, describing eliminating by treaty a country’s inherent right to issue currency as “high treason.” By such a default the corporations and especially the bankers win control over the people and their sovereign powers. Even food safety standards and public health are fodder for the corporate greedy-grindstone.

Turning to “the International Banking and Financial System”, Hellyer finds “… grand larceny on a scale almost beyond belief.” He notes that fractional reserve banking is now running amuck, with no real limit to the amount of interest-accumulating credit that can be created out of thin air, no matter how little actual money is ‘in reserve’. But in the end, unwilling to give government complete control over issuance of currency, Hellyer settles on a formula by which commercial banks can create loans on the basis of having in reserve just over one third of the credit issued.

Hellyer devotes a chapter each to the Bank of International Settlements (BIS, the elite and dominant private central bank of the global network of private central banks), the International Monetary Fund, and the private banking cartel known as The Federal Reserve, nominally of the United States. He finds each of these to be inherently pernicious, and urges their elimination.

Hellyer asserts that private corporations’ domination of issuance of currency and credit must end, and be replaced with government created money. “The right to create money belongs to federal governments….Banks … have only privileges granted by legislatures,” but through cunning have usurped government’s proper financial role and power, to great elite advantage and societal disadvantage.

Faced with countless needed or beneficial projects left undone, and much harm being done, including much unemployment, due to “an acute shortage of money” deployed for proper purposes, Hellyer asserts that “what the world desperately needs is a massive infusion of government-created debt-free money (GCM) ….” He tentatively suggests 10 trillion dollars as a start. And as does Braden, Hellyer notes the “profound difference” between GCM and Bank Created Money (BCM). “All [ephemeral] BCM has to be repaid with interest whereas GCM [is] debt-free and remains in the money supply permanently.”

As an example of a successful use of GCM, Hellyer describes Canada’s experience during the period from 1939 to 1974. In contrast to its inadequate response to the extreme poverty and financial difficulties of the 1930s, the Canadian government, with the advent of WW2, got a brain and printed money and spent it into circulation. In effect, the government and commercial banks shared the money creation function, and this enabled a previously seriously impoverished largely agricultural country to quickly undertake ambitious national projects, including much industrial development, without getting ensnared in ‘the web of debt,’ and without an inflation problem.

This beneficent policy was mysteriously ended in 1974, leading to an unnecessary cost over the following decades of hundreds of billions of dollars to Canadian taxpayers; and many worthwhile projects were made more financially difficult, expensive, or stillborn.

Hellyer describes a recent proposal made by a group of banking system reformers to have the Canadian government use its constitutional power to create 150 billion dollars of GCM, with half going to the federal government and half to the provinces and territories and municipalities. The Canadian charter banks, over several years, would be required to increase their cash reserves up to 34%. The proposal includes giving the democratically elected Finance Minister the final say over Bank of Canada policy.

Hellyer identifies the “most formidable’ obstacle to monetary reform as the ignorance of the public when it comes to money matters. But whatever specific variation on the theme is implemented, “…any worthwhile reform must [provide] a fast, smooth transition to full employment and the transfer of the ultimate power over interest rates and … the money supply from unelected, unaccountable bankers to the elected representatives of the people who, in theory at least, should operate the system in the interests of their electors.”

Hellyer draws other important considerations into his vision of social and financial reform, for example calling for the end of suppression of energy breakthroughs and beneficial patents. And with Braden, he stresses the need for a strong ethical or spiritual foundation for society: Who was it who said, for any system to work well, no matter how brilliantly conceived, good people are indispensable?

While Braden and Hellyer both introduce their own noteworthy innovations on the theme of economic reform, their basic position on the central issue of money creation is one that is shared by many. For example, Ellen Brown in her brilliant book THE WEB OF DEBT advocates GCM, and elimination of personal income taxes. And in his 1992 book DEBT VIRUS, Jacques Jaikaran writes: “The solution is a system that would provide adequate [GCM] funds for government without borrowing; a system that would effectively eliminate income taxes….”

It is easy to take a cynical attitude towards attempts by ‘naïve’ people to concoct ‘grandiose’ blueprints for basic economic reform. But more appropriate targets for criticism are those whose active commitment is to the egregiously and grievously dysfunctional financial path we are on.

As noted, this is not just about us. Previously I mentioned environmental degradation: more particularly, to cite just a few examples, many species of insects over wide areas of the earth have disappeared or are in trouble; historically prolific flora and fauna of the oceans and in the tidal pools are missing or in trouble, from mammals to fish to crustaceans to phytoplankton; the oceans now have vast areas of garbage and vast dead zones; the earth’s atmosphere has had incomprehensible millions of tonnes of aluminum oxide added to it via supremely-arrogant experimentation; a large part of the protective ozone layer is thinned or missing, human created unstable pernicious radioactive atoms proliferate in the environment, and glyphosate and other harmful chemicals become near ubiquitous in the environment. This list is the mere tip of the total situation.

Braden and Hellyer, instead of losing heart in the face of seemingly overwhelmingly difficult and portentous human-driven earthly dynamics, have identified a basic problem – a deeply defective money system – and both have sketched for us largely kindred ideas towards a more sensible economics.

While nearly everyone has financial concerns, most people lack even rudimentary understanding of current financial systems, or proposed alternatives. Indicated then as helpful would be the development of a more effective, broadly-based, unfettered, basic-financial-reform study-teaching-and-advocacy movement.

*

Robert Snefjella is a retired Canadian organic farmer and contractor.

Featured image is from Bart/flickr/cc.
The original source of this article is Global Research
Copyright © Robert Snefjella, Global Research, 2018
« Last Edit: February 15, 2018, 03:00:31 AM by RE »
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🧛‍♂️ Making America Great Through Exploitation, Servitude and Abuse
« Reply #2 on: February 15, 2018, 02:43:36 AM »
https://www.globalresearch.ca/making-america-great-through-exploitation-servitude-and-abuse/5628697

Making America Great Through Exploitation, Servitude and Abuse
By Prof. James Petras
Global Research, February 09, 2018
Region: USA
Theme: Law and Justice, Police State & Civil Rights, Poverty & Social Inequality


The public denunciation by thousands of women and a few men that they had been victims of sexual abuse by their economic bosses raises fundamental issues about the social relations of American capitalism.

The moral offenses are in essence economic and social crimes. Sexual abuse is only one aspect of the social dynamics facilitating the increase in inequality and concentration of wealth, which define the practices and values of the American political and economic system.

Billionaires and mega-millionaires are themselves the products of intense exploitation of tens of millions of isolated and unorganized wage and salaried workers. Capitalist exploitation is based on a rigid hierarchy with its private prerogatives, which enables the oligarchs to demand their feudal privileges, their seigniorial sexual predations.

US capitalism thrives on and requires unlimited power and the capacity to have the public treasury pay for its untrammeled pillage of land, labor, transport systems and technological development. Capitalist power, in the United States , has no counterpart; there are few if any countervailing forces to provide any balance.

Today, 93% of US private sector workers have no organized representation. Moreover, many of the 7% who are in unions are controlled and exploited by their corrupt union officials – in league with the bosses.

This concentration of power produces the ever deepening inequalities between the world of the billionaires and the millions of low-wage workers.

The much-celebrated technological innovations have been subsidized by the state and its educational and research institutions. Although these are financed by the tax-payers, the citizen-workers are marginalized by the technological changes, like robotics, that they originally funded. High tech innovations flourish because they concentrate power, profits and private privilege.

The hierarchical matrix of power and exploitation has led to the polarization of mortality rates and moral codes. For the working poor, the absence of competent health care has led to the massive use and abuse of prescription opioids and other addictive drugs. For the upper class, it has led to the flagrant physical and psychological abuse of vulnerable employees, especially, but not exclusively young working women. The prestigious bourgeois media blur the class polarization by constant reference to what they term ‘our shared traditional democratic values.’

The pervasive and growing vulnerability of workers of both sexes coincides with the incorporation of the latest technological innovations in production, distribution and promotion. This includes electronic and digital advances, artificial intelligence, robotics and extensive surveillance on workers, which incorporate high profits for the investors and long hours of demeaning monotonous work for those who manufacture and transport the ‘products’.

The proliferation of new technology has grown in direct relation with the abject debasement of labor and the marginalization and trivialization of workers. Amazon and Walmart approach trillions of dollars in revenue from mass consumption, even as the Chaplinesque speed-up of robotized humans race to fill the overnight delivery orders. The entertainment industry amuses the population across class lines with increasingly vulgar and violent offerings, while the moguls of film entertain themselves with their young workers – who are depersonalized and even raped.

The more egregious immorality exposes itself one time too often and is condemned, while the victims are temporality lionized for their courage to protest. The worst predators apologize, resign to their yachts and mansions and are replaced by new avatars with the same power and structures in place which had facilitated the abuse. Politicians rush to embrace the victims in a kind of political and media ‘Munchausen Syndrome by Proxy’ when one considers their own role as enablers of this dehumanization.

The problem is not merely corrupt and perverted individual miscreants: It is the hierarchy of inequality which produces and reproduces an endless supply of vulnerable workers to exploit and abuse.

The most advanced forms of entertainment thrive in an environment of absolute impunity in which the occasional exposé of abuse or corruption is hidden behind a monetary settlement. The courage of an individual victim able to secure public attention is a step forward, but will have greater significance if it is organized and linked to a massive challenging of the power of the bourgeois entertainment industry and the system of high tech exploitation. Sexual abuse of an individual in the workplace is just part of a chain that begins with exploitation of workers in general and can only be stopped through collective worker organization.

Can anyone say with a straight face that the US remains a nation of free and autonomous citizens? Servitude and moral degradation are the outcome of an atomized, impotent laboring class who may change one boss for another or one vulgar president for a moralizing hypocrite. We hope that the exposés will start something but without class conscious organizations we don’t know what will arise.

The original source of this article is Global Research
Copyright © Prof. James Petras, Global Research, 2018
« Last Edit: February 15, 2018, 03:03:16 AM by RE »
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