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The most important--and unfortunately the least debated--issue in politics today is our society's steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America's top tier has grown infinitely richer and more removed over the past 25 years. It is not unfair to say that they are literally living in a different country. Few among them send their children to public schools; fewer still send their loved ones to fight our wars. They own most of our stocks, making the stock market an unreliable indicator of the economic health of working people. The top 1% now takes in an astounding 16% of national income, up from 8% in 1980. The tax codes protect them, just as they protect corporate America, through a vast system of loopholes. Incestuous corporate boards regularly approve compensation packages for chief executives and others that are out of logic's range. As this newspaper has reported, the average CEO of a sizeable corporation makes more than $10 million a year, while the minimum wage for workers amounts to about $10,000 a year, and has not been raised in nearly a decade. When I graduated from college in the 1960s, the average CEO made 20 times what the average worker made. Today, that CEO makes 400 times as much. In the age of globalization and outsourcing, and with a vast underground labor pool from illegal immigration, the average American worker is seeing a different life and a troubling future. Trickle-down economics didn't happen. Despite the vaunted all-time highs of the stock market, wages and salaries are at all-time lows as a percentage of the national wealth. At the same time, medical costs have risen 73% in the last six years alone. Half of that increase comes from wage-earners' pockets rather than from insurance, and 47 million Americans have no medical insurance at all. Manufacturing jobs are disappearing. Many earned pension programs have collapsed in the wake of corporate "reorganization." And workers' ability to negotiate their futures has been eviscerated by the twin threats of modern corporate America: If they complain too loudly, their jobs might either be outsourced overseas or given to illegal immigrants.
Incestuous corporate boards regularly approve compensation packages for chief executives and others that are out of logic's range. As this newspaper has reported, the average CEO of a sizeable corporation makes more than $10 million a year, while the minimum wage for workers amounts to about $10,000 a year, and has not been raised in nearly a decade. When I graduated from college in the 1960s, the average CEO made 20 times what the average worker made. Today, that CEO makes 400 times as much.
In the age of globalization and outsourcing, and with a vast underground labor pool from illegal immigration, the average American worker is seeing a different life and a troubling future. Trickle-down economics didn't happen. Despite the vaunted all-time highs of the stock market, wages and salaries are at all-time lows as a percentage of the national wealth. At the same time, medical costs have risen 73% in the last six years alone. Half of that increase comes from wage-earners' pockets rather than from insurance, and 47 million Americans have no medical insurance at all.
Manufacturing jobs are disappearing. Many earned pension programs have collapsed in the wake of corporate "reorganization." And workers' ability to negotiate their futures has been eviscerated by the twin threats of modern corporate America: If they complain too loudly, their jobs might either be outsourced overseas or given to illegal immigrants.
Webb echoes Monks' concern that the declining position of industrial workers in America, and by implication in Europe as well, will eventually have serious consequences.
More troubling is this: If it remains unchecked, this bifurcation of opportunities and advantages along class lines has the potential to bring a period of political unrest. Up to now, most American workers have simply been worried about their job prospects. Once they understand that there are (and were) clear alternatives to the policies that have dislocated careers and altered futures, they will demand more accountability from the leaders who have failed to protect their interests. The "Wal-Marting" of cheap consumer products brought in from places like China, and the easy money from low-interest home mortgage refinancing, have softened the blows in recent years. But the balance point is tipping in both cases, away from the consumer and away from our national interest.
I think the real issue is not capitalism per se, but corporatism. It seems to me that more and more capital is controlled by a smaller and smaller number of ever larger corporations. The largest of them have GDPs larger than most nations. Most are multi-national, meaning they are effectively beyond the control of any national government. They are governed solely by their own internal dynamic which measures all success by profit alone. They have become singularly successful at capturing every bit of economic surplus while avoiding as "externalities" almost all of the social and environmental costs of their activities. Their growing influence over electoral politics in my country, and I suspect in most European countries as well, threatens to overwhelm all democratic and populist impulses. I fear the cumulative effect is unsustainable and ultimately destructive to all the Western democracies. Now where are we going and what's with the handbasket?
If you'd told me twenty years ago that John Kerry would eventually run for president, I would have expected Webb to be in there Swiftboating with the best of them. Originally a conservative Democrat in the mold of his first political patron, long-time Veterans Affairs Committee Chairman Sonny Montgomery of Mississippi, made his bones with the conservative movement by crossing party lines to support Ronald Reagan in the 1980 presidential election -- supposedly because of his rage over Jimmy Carter's amnesty for Vietnam era draft evaders. ... But instead, nearly two decades later, Webb's now the newly elected Senator from my native state (a stronghold of the Confederacy and the national "right-to-work" movement) who's lined up shoulder to shoulder with Howard Dean and Nancy Pelosi and is writing op eds for the Wall Street Journal explicitly calling for what the Republican chattering classes sneeringly condemn as "class warfare" ... If this is the new Democratic "conservatism" the Washington punditburo keeps bleating about, then all I can say is three cheers for conservatism. But Webb's op ed definitely left me with a profound case of political vertigo. My sense of direction (this way is left; that way is right) is getting pretty scrambled. Former Reagan cabinet officers now sound like Abby Hoffman. Connecticut Senators who started out trying to impeach Richard Nixon now sound like John Mitchell. Where's it going to end? I don't know. But if Jim Webb and I are now on the roughly same side on the big issues of the day -- the war, globalization, corporate power, economic fairness, social justice -- it tells you something has fundamentally changed in American politics. It may not be a realignment (a political system this polluted and decrepit may not be capable of such a thing) but when Senators from Virginia start talking like Walter Reuther, it sure the hell isn't business as usual.
...
But instead, nearly two decades later, Webb's now the newly elected Senator from my native state (a stronghold of the Confederacy and the national "right-to-work" movement) who's lined up shoulder to shoulder with Howard Dean and Nancy Pelosi and is writing op eds for the Wall Street Journal explicitly calling for what the Republican chattering classes sneeringly condemn as "class warfare"
If this is the new Democratic "conservatism" the Washington punditburo keeps bleating about, then all I can say is three cheers for conservatism. But Webb's op ed definitely left me with a profound case of political vertigo. My sense of direction (this way is left; that way is right) is getting pretty scrambled. Former Reagan cabinet officers now sound like Abby Hoffman. Connecticut Senators who started out trying to impeach Richard Nixon now sound like John Mitchell. Where's it going to end?
I don't know. But if Jim Webb and I are now on the roughly same side on the big issues of the day -- the war, globalization, corporate power, economic fairness, social justice -- it tells you something has fundamentally changed in American politics. It may not be a realignment (a political system this polluted and decrepit may not be capable of such a thing) but when Senators from Virginia start talking like Walter Reuther, it sure the hell isn't business as usual.
This convergence continues, and I recall David Corn of the Nation and Pat Buchanan debating the Democratic field in advance of the Democratic National convention, where Kerry was formally nominatated. The discussion turned to Dennis Kucinich, the lefty candidate who refused to concede to Kerry even as all other candidates did, and while David Corn was notable nonplussed by Kucinich's refusal to rally to that worthless putz the Democrats eventually nominated, Buchanan was extremely complimentary, in fact damn near reverential of him. I honestly suspect paleo-con Pat Buchanan probably would have endorsed Dennis Kucinich had he gotten the nod, while paleo-con Scott McConnell did in fact endorse John Kerry over George Bush.
The convergence continues, with Justin Raimondo earlier this year attacking Hillary Clintonfrom the left in the pages of Pat Buchanan's American Conservative.
A big disclaimer is in order of course: there's still a big chasm between the two on race issues and the so-called "culture-war" schism along which run, in America, the issues of gay marriage, abortion, stem-cell research and prayer in school. But the divide is receding in inverse proportion to the the economic pressure many working class Americans are feeling.
These pressures crowd out misgivings many old-line conservatives in America may have about the so-called culture-war issues, and the supposed divide these issues put between them and the lefty unwashed. The simple fact of the matter is that in any society, such artificial cultural constructs as the so-called "cultural divide," between so-called "religious" Americans and "secular" Americans are an aspect of decadence that can only be afforded when affluence warrants it. (Real divides do exist, but they are about far more than moral beliefs, and are existential in nature).
And despite outward appearances, the relative affluence of America is in inexorable decline, a decline felt more, to be sure, by some classes than by others, which would explain not just Webb, but Schuler as well for me to some extent.
And it isn't just old-line conservatives who are moving towards the lefter shades of the political spectrum in America: lefter shades are becoming more tolerant of old-line conservatives as well. Webb would never have gotten elected without massive progressive support - both in his primary election, and in the general. And Webb is an old-line convservative, the passage from the urinal speaks to this.
Ditto Schuler.
I chalk the increased tolerance of progressives to old-line conservatism as an aspect of disgust with the Democratic party establishment, and their craven indiferrence to progressive ideals as they underwrote Bush's imperial policies back when they had the power to push back (eg, in 2002). Many saw folks like Raimondo, Buchanan, McConnell, and the granddaddy of them all, George Kennan standing up against imperial war alongside Alex Cockburn and Perry Anderson not to mention Wellstone, Kennedy and Kucinich on the political front. They saw all the big swinging dicks in the Democratic party, folks like Biden, both Clintons, Kerry, Lieberman, all rally behind the increasingly proto-fascist regime in Washington and started wondering "who the hell's side are we really on?"
I know I did.
Keep in mind that the old-line conservatives in America by and large are, about the only constituency in America which shares a disdain for neo-liberalism with those of us lefter shades over here (but notably not with the elites in either parties).
Anyhow, in a nutshell, I think this explains what's going on. There's a bit of populist convergence going on in America. It might not end up being a good thing, but at this point, it appears to be unavoidable, and is likely better than the proto-fascist path Dubya and crew have embarked upon, with critical Democratic party support. I would be ashamed to admit that I had risen from the ranks. When I rise it will be with the ranks, and not from them Eugene Debs
Depends on which side gets the upper hand.
As regards America, I've more than a few doubts... I would be ashamed to admit that I had risen from the ranks. When I rise it will be with the ranks, and not from them Eugene Debs
If you mean by Populism the greatest single progressive movement ever in USA history, please use the capital "P".
If you are still confused, please read up on the history of real Populism. I have written a short one that can be found here:
http://www.elegant-technology.com/resource/The_Kos_Diaries_Populism.pdf "Remember the I35W bridge--who needs terrorists when there are Republicans"
Only one problem with his position: it puts the blame on other countries labor AND on "illegal immigrants". Just "externalities" that won´t send him a bill.
I don´t want to look at tables of numbers to prove either case. I want politicians with a humane ethical code, which does not blame the most needy for wanting to survive at any cost. Any cost.
Does anyone mention the historical causes? Does anyone take responsibility and ask for human solidarity "efforts"? Our knowledge has surpassed our wisdom. -Charu Saxena.
Pat Buchanan, for his part, often says, when talking to lefty audiences, that "we may not agree on the causes and the prescriptions, but we do agree on the basic nature of the problem," and in that regard, I think he is correct. Which is precisely why it's good to have guys like Webb shaping policy. Because though he's clearly a bit wrong-headed in his thinking about prescriptions and causal relations on these extremely important issues, he at least gets that there is a fundamental problem, and that problem's name is the same neo-liberalism that Naomi Klein is lamenting.
Which is more than I can say about 90% of the Democratic party establishment. I would be ashamed to admit that I had risen from the ranks. When I rise it will be with the ranks, and not from them Eugene Debs
Despite the vaunted all-time highs of the stock market, wages and salaries are at all-time lows as a percentage of the national wealth.
Not despite, but because. Profit has to be taken away from somewhere. *Lunatic*, n. One whose delusions are out of fashion.
Where the question is, how do you get capitalism without corporates developing. *Lunatic*, n. One whose delusions are out of fashion.
What is capitalism? That political power is also with those who have the capital? Or that everyone is a capitalist?
I wish everyone were a capitalist, in the sense of having access to the economic power to make "their thing" happen, as opposed to the sense of allowing people to own 10 in shares and telling them "you're a capitalist now, your interests are big capital's interests".
The question of whether one can avoid a Pareto distribution of capital I would probably answer in the negative. the question is how flat, and what the lowest cutoff is. Those whom the Gods wish to destroy They first make mad. -- Euripides
How does
The issue is, you can't get anything accomplished without capital [broadly defined], not really.
relate to
Albina Ruiz {...] started what turned out to be the most successful recycling program in her country. She is "the" recycling person in Peru. She even made recycling legal there! And brought business to hundreds of people. In fact, her model was so successful that other Latin American countries want to copy her.
Did Ms. Ruiz have access to capital (and how much is enough?), or do people (including brain power--ideas/strategies/etc.) count as effective capital?
And is there a cut-off point where smallscale = okay, but large scale = no chance without Capital support (noblesse oblige)? (The "we will have to have a violent overthrow coz they'll never give up power voluntarily" scenario?)
I mean, is the situation like this?
Smallscale projects: human labour (in all forms including intellectual) + solidarity + commitment through time = real accomplishment
Largescale projects (e.g. energy production): without cash, no go. Who controls the cash decides the direction.
I'm interested in the small scale, and wonder where the (fuzzy?) dividing line between small and large lies, esp. when large (microsoft, shell, BP, tesco) are multiple aggregates of small choices (the OS I and X many others use, the petrol I buy, the food I eat.)
(Ref: to boom in solar and developments re new lighting materials--"Factories are springing up"--where does that fit on the scale?) Don't fight forces, use them R. Buckminster Fuller.
I'll let Barbara speak to the case of Albina Ruiz, but the question is, how early did Ashoka get involved paying Albina a salary so she could devote herself to her project full-time? Lobbying legislators to make recycling legal, that takes very little capital. But everything else? Those whom the Gods wish to destroy They first make mad. -- Euripides
So, forging a positive route: given that most people have access to at least some capital (whether it be a job, material possessions such as computers or telephones or washing machines, or mangles), and if our aim is to emancipate those who have least capital, and given that some tasks are beyond the powers of some of us (coz we don't have enough capital)...
I suppose I'm wondering how much "money" is being overvalued...to the benefit of capitalists.
(I mean, yes I have a computer. But I have it now and it will work for X more years, so there's the start of everyone having a bit of capital...I know, or I don't know...ach...weaknesses, fissures in the structures...talking of new narratives and meta-games...
How about: It's not the inevitability of the power of inertia (=weight of capital?) that is important: it's a given. It's the...flexibility and speed of new shoots? And the quick feedback mechanisms: how did it work, what did it take, could we do it quicker, with less resources, to greater effect? Taking anger and frustration and turning them to energy and clever thinking...That kind of thing...I've wandered from the subject, I'm sure. Don't fight forces, use them R. Buckminster Fuller.
I'm sort of trying to fight against the depressing thought that "We're all doomed, coz they have the cash." ... I suppose I'm wondering how much "money" is being overvalued...to the benefit of capitalists.
</doesn't understand finance snark> Don't fight forces, use them R. Buckminster Fuller.
Fighting inflation is one of the most important redistributive policies, thus my hawkish stance on ths ECB (with a wink to redstar, if around) In the long run, we're all dead. John Maynard Keynes
We googled'up correlations. It appears inflation is very bad when it turns to hyper-inflation, but mild inflation has little redistributive impact. It can be good for the middle class with easy access to credit, by melting the debt (it helped most boomers of the now-industrialized nations after WWII), but does nothing for the very poor.
Upon thinking about it a little more, I came to the idea that it's may be inequality to access to the money supply, the other armed hand of the central bank. Many say the present bubble stems in part from the fed "printing money", increasing M3, etc.. So once there's so much money, all asset classes spike up - which is actually inflation, except it doesn't impact the retail sector. But honestly, retail isn't the main budget item of the middle class, it's by far the rent/mortgage for the housing, followed by the more or less compulsory savings for retirement (except with those crazy americans) - and if the assed where you put you're savings are spiking, you effectively suffer from strong inflation.
So the "real" inflation in the past years, taking into account those bubbling assets, has indeed been very hard to the people, much more than core price index would say. Net wages have eroded even worse than you argued in many passed comments. But this is a side note, back to my money supply idea...
This supplied money is injected mostly on the state and corporate bonds markets, where banks loan all this cash they don't know what to do about. They have so much they make risky loans with very low rate premiums, to corporations/hedge funds primarily. Never to Mr. Average D. Joe. The supplied money does not trickle down, it stays in the asset bubbles. And benefits the investment bankers who take fees, the CEO with the options and golden parachutes, and corporations which can fund capital-intensive projects to eliminate workers at cheap rates, then buy back their shares (so the funds and fund managers benefit also). Pierre
When averaged over a longer period covering the 1992 crash, housing inflation in France is more moderate. But not everyone has the resource to hold on during the bubble years in a market with 15-year cycles.
I think the long term driver (averaging over a generation) cannot be anything else than demographics, hence the housing collapse in Germany. Spain, with its record low fertility rates, looks like the perfect hyper-bubble to me. Will burst when the retired Britons buying on the coast will no longer be able to "commute" their on low cost airlines... Pierre
That's part of the whole class war, and Trichet, who again dared say last week that he followed asset prices, was roundly condemned for outdated thinking.
Hang on to your euros. In the long run, we're all dead. John Maynard Keynes
When you rent it is counted in inflation, but rent raises are controlled in most countries (like France) so this doesn't show up in inflation. And most people do not rent anyway so the weight in the inflation basket is not high.
I think that when we assume that inflation hurts the poor, we assume that things like mimimum wages, marginal tax rates, welfare and pension allowances, family and housing allocations cannot be indexed, when the fact of the matter is they can be (and indeed, in France though not in America, largely they are).
I simply take Milton Friedman's word and suppose that monetary theory's implication is that inflation is simply a tax on holders of the currency being inflated (again, largely by monetary policy). Holders of currencies tend to be in direct proportion to wealth denominated in said currencies. Thus inflation can be quite progressive, assuming of course that pensions, after-tax wages and other allowances are properly indexed.
Of course, the economist in me recognizes that there is economic inefficiency in inflation, ie, there can be too much inflation, as seen in a good numer of studies correlating high inflation to lower economic growth. Which makes sense given the amount of energy folks waste trying to avoid its effects in environments where inflation is quite high.
But 2% is not that benchmark. 4% probably is too low as well. I would be ashamed to admit that I had risen from the ranks. When I rise it will be with the ranks, and not from them Eugene Debs
But since the "official" inflation figures are openly biased so that they don't include those assets (although they are the heaviest part of mandatory daily spendings), the tax burden has effectively been transfered onto the poor.
Statistics institution don't even need to tweak retail prices to shave 0.5% off the inflation benchmark, this is near conspiracy-theory, when they are already very openly shaving 10% off by not including :
Over the long run, inflation cannot be avoided by holders of assets it seems to me, though in the short term, there are clearly cases where this is not, temporarily at least, the case, though the bubbles we tend to see are most often seen in environments with low inflation. I note bubbles in the EU, and this is despite a more or less "successful" targetting of inflation by the ECB of 2%. Similarly, inflation in Japan was minimal when they had their bubble, and in the US, while not as Germano-anal about monetary policy as the ECB, consumer inflation has also been largely under control. Either way, someone somewhere eventually has to deal with converting a return denominated in "local currency" to a return adjusted for "currency conversion." Or, if the asset is denominated in one's home currency, this soneone has to deal with a real depreciation of the value of that asset and the cash flows it generates relative to his or her liabilities, which are likely to be denominated, at least to some extent, in other currencies. (A formerly middle- to upper-class Argentine will recognize what happens in this dynamic when something drastically goes wrong, though at lower rates of stimulatory inflation, the "tax" is not going to be as distorting, as France and Italy in the 1970's arguably encountered.)
I also think, like you, that we do need to be careful when we are talking about consumer inflation, and it is indeed true that government agencies and central banks can play with them or not aggregate them the way we might think most relevant. For one thing, CPI is usually considered a unitary figure, at least as far as the US goes, when in fact, regional variations as well as different CPI trends by income strata are often observed. I assume this is the case in the EU as well. This being said, at least as far as US inflation statistics are concerned, asset inflation does impact the calculation of CPI via owner's equivalent rent.
Now, it is true that OER doesn't track asset inflation perfectly, and that it does tends to understate inflation when there's a hot real estate market. But over the long term, this too corrects itself when the market inevitably cools off and the OER portion of the index snaps back. (Year on year OER is in the 3-4% range in the US now, and rising, after being around 2% from 2002 onward.)
Outside of housing, I'm not sure what other portions of CPI are directly impacted by asset inflation, so as far as lower income deciles are concerns, I'm not sure we need to worry much about it for the purposes of indexing to protect them from the effects of inflation. And lower deciles don't typically hold assets to speak of, so discussions of asset inflation beyond OER is largely irrelevant.
As for those who actually hold the assets, eventually they do pay the price of that inflation. It is simply a matter of time. And while stimulus may feed bubbles which work their way out, eventually, via a period of asset deflation it seems to be that some of the bubbling effects of such stimulus can easily be addressed via fiscal means (for example, greatly increased taxation on capital gains, greatly increased local property taxes on unimproved land, or on non-primary residence property). I would be ashamed to admit that I had risen from the ranks. When I rise it will be with the ranks, and not from them Eugene Debs
It's true consumer inflation does matter the most for the underclass, but note that the middle class most often has both assets and debt, denominated in the same (local) currency. Historically, assets like housing have well survived inflation in France, so when debt melts, inflation helps the middle class. Except when they have to resell housing on the bad side of the wave and the debt is 30+ years (the coming picture in France).
Another thing is state debt: euro nations have had a tradition of letting inflation melt away their public debt, and although this should have stopped with EMU, bad habits die hard and this will hurt (they're still emitting much debt that won't melt away this time...)
But there are smart asses in some of France debt management agencies, like CADES which now has 8% of its debt in foreign currencies, and is betting hard against the US$. I guess the main AFT agency will soon follow. This time the trick is that they borrow dollars, sell them off for euros, spend them domestically, and when time to refinance will come the dollar will have tanked and they will borrow in euros again..
This will buy eurozone nations some years of relapse before they follow the same path as the US (state bankruptcy I think...) Pierre
Agreed on the middle class, this is a generalized thing in industrialized economies, I think, though home ownership is not as prevalent in France as it is in other parts of the OECD like the US. (I know I could never have afforded to buy a house in France when I was still living there, but mortgages were 15 years and I was early on in my career. Home ownership is easier when 30 year terms are offered, which is likely the point, and likely why a semi-autonomous government agency so actively underwrites such loans in the US.)
Of course, also generally speaking, the middle class tends to have adequate representation in OECD countries. The poor, not so much, and especially not in the US.
Assuming inflation is simply a tax on one's assets, I'm not so sure this is any better or worse, in theory, than explicit taxation. It is a maco-economic level which was available to policy makers in advance of convergence, but now, not so much.
Please elaborate on the latter point. Are you saying the ECB tight-money policy is designed to ensure this macro-economic lever is no longer available whatsoever to policy makers (beyond those at the ECB)?
I would suggest it is exactly such undemocratic, autocratic and unresponsive federal tendencies which undermine public confidence in the European project in general and EU institutions in particular, as evidenced by the firm rejection of the constitution by voters given a chance to voice an opinion on it.
Sounds like an excellent plan on paper. The carry-trade in the service of man, excellent plan. I think the secular USD decline might be too gradual to be of practical use to them, though. I'd think a conservative fund manager (which they would necessarily be given their position) would avoid such strategies, though I suppose it would depend on how it is structured.
This will buy eurozone nations some years of relapse before they follow the same path as the US (state bankruptcy I think...)
I don't share your pessimism here, the parlous state of the US both in terms of federal and state budgets deficits (remember the latter, it is usually ignored, but a lot of that bonding is for general fund uses, much as seen in many Argentine states a decade ago) as well as the trade deficit are cause for worry. The EU on the other hand has consistently seen a BOP figure in surplus, because unlike the US, the EU actually still produces things, thanks in large part to an active industrial policy, and despite the hand-wringing of its elite class (no more gloriously on display than on France's right), it is still quite an attractive place for investment.
OTOH, seems to me a little inflation and a bit of growth such inflation would likely kick off would relieve budget pressures in the EU core. Further, we are likely to witness the secular decline of the USD as reserve currency in our lifetime, which bodes well (though certainly not exclusively) for the general cost of capital in the Eurozone, to the USD-zones' detriment. I would be ashamed to admit that I had risen from the ranks. When I rise it will be with the ranks, and not from them Eugene Debs
lease elaborate on the latter point. Are you saying the ECB tight-money policy is designed to ensure this macro-economic lever is no longer available whatsoever to policy makers (beyond those at the ECB)?
I was meaning: the ECB is simply conforming to its mandate, keeping inflation low. It is committed to doing this, even if it implies monetary choices which were not those of the member countries before EMU and before the independence of central banks.
But there is a gap with the political class and the bureaucrats of a number of countries, like France, who haven't yet assimilated that the debt they are emitting now will not be as painless as the debt emitted by their predecessors of 30 years ago, because the rules of the game have changed and competitive devaluation cannot take place in a monetary union. They are totally living on another planet. The situation requires urgent action on both the fiscal and spending sides. Pierre
People, solidarity and commitment still need "means of production" to get a real accomplishment. Those whom the Gods wish to destroy They first make mad. -- Euripides
Which means that you need the elites in government directing corporations, not in corporations directing government.
Technocrats is the solution.
Of course I'd say that, I'm one of them, you'll say. And I rest my case. In the long run, we're all dead. John Maynard Keynes
We need a State in which the People and Corporations (reinvented as "Open" Corporates)are participators and Members and not OF which they are subjects.
That is not only possible, but absolutely essential. "The future is already here -- it's just not very evenly distributed" William Gibson
The beauty of the "Open" Corporate (of which the UK Limited Liability Partnership is the first example, with the dubious addition of "free" limitation of liability) is that it is an entity which consists of BOTH the Member individuals AND an entity which embodies a consensual agreement between them.
ie the "Joint" responsibility of a Partnership, but without the "Several" individual responsibility.
It is an entirely new concept, and takes a bit of getting your head around, but there are over 13,000 in the UK now, they are breeding like rabbits, and no-one has a clue WHAT people are using them for. "The future is already here -- it's just not very evenly distributed" William Gibson
Even in an "open" form, the Corporation should be a Servant, not a Master.
(I will freely admit I don't really understand corporate structures. To me, what you have written on ET about LLPs make it sound like "a bunch of people agree on some stuff, put it on paper, and then do it, with some legal protection for what is agreed on" I am all for allowing people to agree to form whatever partnerships they wish, and legal protection to uphold those partnerships. Still any Corporate structure makes me uneasy, for so many of them seem so evil.
What would be fun, though, with the European decline of marriage, and all, would be to replace that outdated form of legally protected partnerships with LLPs. That way one can get any grouping of individuals desired and specify conditions for the partnership, obligations, rights, etc. For two people, or however many one would like. Can this be done? Can I form an LLP for cohabitation agreements and income sharing with my partner(s)?)
So Cook Family LLP will have as members: Daddy Cook, Mummy Cook, and two Young Cooks, plus a "Trustee".
We don't need a will, because the LLP agreement specifies what happens in the event of death.
Agreed assets and agreed "Equity Shares" in current and future revenue streams are invested in the LLP.
Also, it's a very tax-efficient way of passing down "Equity Shares" in property rentals through the generations. Some interesting wrinkles there (my rates are very reasonable!).
It essentially makes much of Family law obsolete, replacing the complex and costly Trust relationships with simple collaborative alternatives.
You can see why most lawyers appear to think I'm the "anti-Christ"? "The future is already here -- it's just not very evenly distributed" William Gibson
Legal recognition anywhere is essentially irrelevant, because you are contracting out of local jurisdiction and in to the LLP, except in respect of assets within your jurisdiction. What you may then need is a suitable entity - as a "Trustee" Member of the LLP - on your home turf to operate as the "Trustee" of domestic assets.
The LLP agreement will specify what jurisdiction is to apply (say for disputes) although I always build in a "Referee" role for the Trustee, plus an Arbitration provision.
You do have to file LLP accounts and Member returns in the UK though, but its's no big deal, and the detail in accounts minimal unless you are Bill Gates. "The future is already here -- it's just not very evenly distributed" William Gibson
I suppose that the fact that only 6% of polytechniciens having blue collar parents today vs 29% 30 years ago (and that power has moved to énarques where the proportion is even worse) is one symptom that that last condition is not fulfilled today.
Education - and access to good education - is the key, as always. In the long run, we're all dead. John Maynard Keynes
As long as it remains solvent a corporation is effectively immortal, an advantage not presently available to you or me. As its only real purpose is the pursuit of profit and growth, the successful ones simply grow ever larger, like a cancer out of control. Their growing economic power inevitably lends them ever growing legal and political power. Over time their rights have tended to grow without bound, while their responsibilities have somehow atrophied to the single minded goal of maximizing shareholder value, increasingly defined solely in monetary terms, and irrespective of any other consequences. Now where are we going and what's with the handbasket?
Wasn't that decision itself an effect of the already excessive weight of corporations? Southern Pacific was owned by the worst of the railroad moguls, who established their state-corrupting power well before this decision. *Lunatic*, n. One whose delusions are out of fashion.
He's got good sections on all the American railroad guys.
I personally believe that anything that was good in big business in America probably died about the time Carnegie sold his steel company(a partnership) to Morgan at the turn of the 20th c and Morgan spun US Steel.
Professional management and absentee ownership have been very toxic for America, IMO.
All in favor of smart governmental technocrats riding herd on the dinos, however.
Doubt that I will ever see it happen. "When the abyss stares at me, it wets its pants." Brian Hopkins
The railroad moguls gained power thanks to a policy that went truly bonkers with the construction of transcontinental railroads: the railroads got land grants they could sell to settlers, meant to cover construction costs, but instead attracting estate speculants, who built crappy railroads at high speed, and then grew rich from selling land, and then bought politicians, and then got those to write out further land grants... the railroad corruption (in which the young Lincoln himself was not unguilty) got really bad during Grant's Presidency. Their power was curbed only by Grover Cleveland (who miraculously won in one of the ugliest campaigns of US history according to Mark Twain), sadly in the same timeframe as that court decision you mention (I checked, that was 1886, the Interstate Commerce Act was 1887). *Lunatic*, n. One whose delusions are out of fashion.
In short: corporations are a way to rape the planet and escape any legal responsibilty. Ever since I learnt about confirmation bias I've started seeing it everywhere
<head explodes> Peak oil is not an energy crisis. It is a liquid fuel crisis.
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