Special mention
Posts Tagged ‘information’
Cartoon of the day
Posted: 30 November 2017 in UncategorizedTags: cartoon, corporations, data, GOP, information, net neutrality, Republicans, tax cuts, trickledown, Uber
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Haunted by surplus
Posted: 31 October 2017 in UncategorizedTags: 1 percent, competition, economics, income, inequality, information, mainstream, Monopoly, surplus, surplus-value, technology, Thomas Piketty, United States, wealth
Inequality in the United States is now so obscene that it’s impossible, even for mainstream economists, to avoid the issue of surplus.
Consider the two charts at the top of the post. On the left, income inequality is illustrated by the shares of pre-tax national income going to the top 1 percent (the blue line) and the bottom 90 percent (the red line). Between 1976 and 2014 (the last year for which data are available), the share of income at the top soared, from 10.4 percent to 20.2 percent, while for most everyone else the share has dropped precipitously, from 53.6 percent to 39.7 percent.
The distribution of wealth in the United States is even more unequal, as illustrated in the chart on the right. From 1976 to 2014, the share of wealth owned by the top 1 percent (the purple line) rose dramatically, from 22.9 percent to 38.6 percent, while that of the bottom 90 percent (the green line) tumbled from 34.2 percent to only 27 percent.
The obvious explanation, at least for some of us, is surplus-value. More surplus has been squeezed out of workers, which has been appropriated by their employers and then distributed to those at the top. They, in turn, have managed to use their ability to capture a share of the growing surplus to purchase more wealth, which has generated returns that lead to even more income and wealth—while the shares of income and wealth of those at the bottom have continued to decline.
But the idea of surplus-value is anathema to mainstream economists. They literally can’t see it, because they assume (at least within free markets) workers are paid according to their productivity. Mainstream economic theory excludes any distinction between labor and labor power. Therefore, in their view, the only thing that matters is the price of labor and, in their models, workers are paid their full value. Mainstream economists assume we live in the land of freedom, equality, and just deserts. Thus, everyone gets what they deserve.
Even if mainstream economists can’t see surplus-value, they’re still haunted by the idea of surplus. Their cherished models of perfect competition simply can’t generate the grotesque levels of inequality in the distribution of income and wealth we are seeing in the United States.
That’s why in recent years some of them have turned to the idea of rent-seeking behavior, which is associated with exceptions to perfect competition. They may not be able to conceptualize surplus-value but they can see—at least some of them—the existence of surplus wealth.
The latest is Mordecai Kurz, who has shown that modern information technology—the “source of most improvements in our living standards”—has also been the “cause of rising income and wealth inequality” since the 1970s.
For Kurz, it’s all about monopoly power. High-tech firms, characterized by highly concentrated ownership, have managed to use technical innovations and debt to erect barriers to entry and, once created, to restrain competition.
Thus, in his view, a small group of U.S. corporations have accumulated “surplus wealth”—defined as the difference between wealth created (measured as the market value of the firm’s ownership securities) and their capital (measured as the market value of assets employed by the firm in production)—totaling $24 trillion in 2015.
Here’s Kurz’s explanation:
One part of the answer is that rising monopoly power increased corporate profits and sharply boosted stock prices, which produced gains that were enjoyed by a small population of stockholders and corporate management. . .
Since the 1980s, IT innovations have largely been software-based, giving young innovators an advantage. Additionally, “proof of concept” studies are typically inexpensive for software innovations (except in pharmaceuticals); with modest capital, IT innovators can test ideas without surrendering a major share of their stock. As a result, successful IT innovations have concentrated wealth in fewer – and often younger – hands.
In the end, Kurz wants to tell a story about wealth accumulation based on the rapid rise of individual wealth enabled by information-based innovations (together with the rapid decline of wealth created in older industries such as railroads, automobiles, and steel), which differs from Thomas Piketty’s view of wealth accumulation as taking place through a lengthy intergenerational process where the rate of return on family assets exceeds the growth rate of the economy.
The problem is, neither Kurz nor Piketty can tell a convincing story about where that surplus comes from in the first place, before it is captured by monopoly firms and transformed into the wealth of families.
Kurz, Piketty, and an increasing number of mainstream economists are concerned about obscene and still-growing levels of inequality, and thus remained haunted by the idea of a surplus. But they can’t see—or choose not to see—the surplus-value that is created in the process of extracting labor from labor power.
In other words, mainstream economists don’t see the surplus that arises, in language uniquely appropriate for Halloween, from capitalists’ “vampire thirst for the living blood of labour.”
US is flatlining
Posted: 23 June 2017 in UncategorizedTags: GDP, healthcare, higher education, homicides, inequality, information, justice, minorities, nutrition, progress, rights, United States, violence, water
The 2017 Social Progress Index is out and according to Michael Green [ht: ja], the CEO of SPI, the United States is “flatlining,”
primarily due to its falling scores on measures of tolerance and inclusion. . .
Green said that in order for under-performing countries like the US to improve their scores in 2018 and 2019, they’ll need to embrace long-term investments in protecting people’s rights.
“The US is not under-performing because of the Trump administration or the Obama administration,” he said. “It’s about the story of long-term under-investment in the justice system, in the education system, in healthcare. Those are the real challenges.”
Overall, the United States ranks 18th out of 128 nations.
The only area in which the United States outperforms other nations of similar wealth is higher education, with a large number of colleges and universities. But that doesn’t include cost and thus accessibility, which is reflected in a low score on inequality in the attainment of higher education.
And then there are all the other categories in which the United States comes up short in comparison to the rest of the world: nutrition and basic medical care (36th), water and sanitation (27th), homicides (70th), access to information and communications (27th), environmental quality (33rd), political rights (32nd), freedom over life choices (65th), and discrimination and violence against minorities (39th).
That’s why the overall U.S. score is only 86.43, which puts it behind many other high-income nations: Denmark, Finland, Iceland, Norway, Switzerland, Canada, Netherlands, Sweden, Australia, New Zealand, Ireland, United Kingdom, Germany, Austria, Belgium, Spain, and Japan.
The authors of the report note that, while social progress generally improves as national income rises, there’s no one-to-one correspondence between them. Thus, the United States underperforms on the Social Progress Index compared to its per capita national income.
What is clear, from the sample of countries in the chart above, is the United States has a much more unequal distribution of income compared to countries that rank higher in the SPI.
That’s one of the real reasons why, independent of Trump and Obama, the United States is flatlining when it comes to social progress.
Hide the gap?
Posted: 14 September 2015 in UncategorizedTags: cooperation, inequality, information, United States
We know that economic inequalities have been increasing in the United States for decades now. And there’s been no let-up since the economic recovery was officially declared in 2009.
And many of us believe the grotesque inequalities we’re seeing these days have a corrosive effect on U.S. society. Not only are the majority being left behind; everything from the public infrastructure to political discourse appears to be deteriorating because of the growing gap between a small group at the top and everyone else.
A recent research paper by Akihiro Nishi, Hirokazu Shirado, David G. Rand, and Nicholas A. Christakis, published in Nature, suggests it’s not inequality per se that is socially pernicious, but the visibility of that inequality. (Readers who don’t have access to the original article can consult the report by Aimee Picchi [ht: ja].)
Nishi et al. set up a series of social cooperation experiments (participants were given the option of cooperating by decreasing their wealth in order to boost the wealth of their neighbors or of defecting by paying no cost and providing no benefits) in which they manipulated both the levels of inequality and the visibility of the wealth of other participants What they found is that
wealth visibility facilitates the downstream consequences of initial inequality—in initially more unequal situations, wealth visibility leads to greater inequality than when wealth is invisible. This result reflects a heterogeneous response to visibility in richer versus poorer subjects. We also find that making wealth visible has adverse welfare consequences, yielding lower levels of overall cooperation, inter-connectedness, and wealth. High initial levels of economic inequality alone, however, have relatively few deleterious welfare effects.
Importantly, in the high initial inequality situation when inequality was made visible, richer than average neighbors were less likely to cooperate than those who were poor. The result: the rich got even richer. However, the authors add, high initial inequality per se does not affect the degree of cooperation and may actually lead to greater wealth for society as a whole.
There’s a reason those on top—individual employers as well the country’s elite—try to keep information about economic disparities under wraps. They fear social cooperation will diminish if the word gets out.*
But, of course, the word does get out—through individual displays of conspicuous consumption as well as public recognition and discussion. (Even then, as many studies have shown, people tend to underestimate the degree of inequality.)
Since existing inequalities are now so large and increasingly out in the open, the real question is, why are people so concerned about inequality? Is it because, as apologists like to claim, those at the bottom are envious (and they should be satisfied with what they have or just work harder)? Or, alternatively, are people simply angry at the existence of growing gap between a small group at the top and everyone else—that such a gap violates the promise of fairness or “just deserts”?
Even as they try their best to continue to work and contribute, they realize they’re the only ones still committed to such cooperation. As a result, they want to see not just empty promises, but real movement in the direction of greater equality.
*Many years ago, my colleagues decided to share information about our salaries and were ordered by the dean at the time to cease and desist. Salary information was a closely guarded secret and, in his view, should remain so.
What comes next?
Posted: 31 July 2015 in UncategorizedTags: capitalism, commodities, ethics, information, noncapitalism, technology
The other day, I expressed my doubts about Paul Mason’s arguments about postcapitalism. But others see his argument in a much more positive light, including some friends of mine, Jenny Cameron, Katherine Gibson, and Stephen Healy [ht: sk].
They, too, however, assert that “technology does not in and of itself guarantee a better future.” What are needed, and which they see emerging in the midst of capitalism today, are “explicit ethical commitments that are developed independent of online apps and cyber networks.”
Technology is augmenting relations of care for others. Technology does not bring these relations into being.
In our research on the diverse economic practices that exist outside the purview of mainstream economics, we find people are forging new types of economies around six ethical concerns:
- What do we need to survive well?
- What happens to surplus, or what is left over after our survival needs have been met?
- How do we act responsibly to those whose inputs help us to survive well (whether other people or the environment)?
- How much and what do we consume in order to survive well?
- How do we care for the commons – the gifts of nature and intellect that we rely on?
- How do we invest so that future generations can also live well?
I think they’re right: we do need to be aware of the ways the existing set of relations—the relations of capitalist commodity production—not only create capitalist subjects, but also noncapitalist subjectivities.
The way I’ve put it in my own writing, capitalist commodity production both presumes and constitutes particular kinds of individual subjects (which Marx referred to as “commodity fetishism,” i.e., particular notions of “freedom, equality, property, and Bentham”). But it also brings into existence new collective subjectivities—new ways of “being in common”—that can transcend capitalism.
A concrete example might help here. The existence of capitalist healthcare (of healthcare providers as well as healthcare insurers) both presumes and supports the idea that healthcare is an individual concern: we are supposed to take care of our own individual healthcare (whether through the established healthcare system or via “alternative” therapies) and purchase healthcare commodities (again, either established or alternative) if and when they are necessary. But it is also the case that the existence of healthcare commodity markets also brings together providers and consumers—nurses, doctors, and patients—who have an interest in a different kind of healthcare, one that is less interested in profits and more in the well-being of both providers and consumers.
That alternative subjectivity—that “being in common” in relation to healthcare—can serve as the basis of a noncommodified, noncapitalist form of healthcare. And, pace Mason, new kinds of information technologies might even be useful for connecting producers and consumers in postcapitalist ways. There’s nothing automatic about it, of course. Still, both new ethical commitments and information technologies signal the possibility of ways of moving beyond capitalism.
The key is to find ways to combine those emerging technologies and ethical concerns in a political movement that is inspired by a fundamental critique: both what is wrong with the existing order and an imagining of a concrete alternative.
That’s what comes next. . .
Beware the mole!
Posted: 19 March 2014 in UncategorizedTags: capitalism, crisis, data, forecasting, Fox, hedgehog, information, mole
The discussion these days seems to be all about foxes and hedgehogs.
Those are the terms Nate Silver borrows from a phrase originally attributed to the Greek poet Archilochus to define his new journalistic project—the fox who knows many things as against the the hedgehog who knows one big thing. (But see my critique here.)
The pair of animal also turns up in James Surowiecki’s review of Fortune Tellers: The Story of America’s First Economic Forecasters by Walter A. Friedman.
Philip Tetlock, a professor of psychology and management at Penn who conducted a 20-year study asking almost 300 experts to forecast political events, has shown that while experts in the political realm are not especially good at forecasting the future, those who did best were, in the terminology he borrowed from Isaiah Berlin, foxes as opposed to hedgehogs—that is, the best forecasters were those who knew lots of little things rather than one big thing. Yet forecasters are more likely to be hedgehogs, if only because it’s easier to get famous when you’re preaching a simple gospel. And hedgehogs are not good, in general, at adapting to changed conditions—think of those bearish commentators who correctly predicted the bursting of the housing bubble but then failed to see that the stock market was going to make a healthy recovery.
The fact is, the two periods that led to more sources of information for economic forecasting preceded the two greatest crises of capitalism we’ve witnessed during the past 100 years—after which new ideas and movements erupted that provided concrete alternatives to capitalism. It’s not that they had more information. They honestly used the data at hand about what was fundamentally wrong with existing economic arrangements and, instead of sticking with tired formulas and failed policies, dared to imagine a world beyond capitalism.
Someday, then, we too will be able to exclaim, “Well burrowed, old mole!”
Cartoon of the day
Posted: 7 March 2014 in UncategorizedTags: cartoon, Cold War, Crimea, film, information, internet, media, merger, Monopoly, Russia, slavery, Ukraine, United States
Against dumbing-down the visual display of information
Posted: 13 May 2011 in UncategorizedTags: graphic design, information, teaching
Long ago, I decided not to use PowerPoint in teaching (although I often use it for multimedia conference presentations). It’s just a way of dumbing-down, in the form of bullet points, material that is already dumbed-down in textbooks. Plus, it makes students into passive consumers of information, or induces them into slumber.
Later, I read Edward Tufte’s critique, which served to justify my decision.
Now, Tufte works for the White House, designing the visual display of information for Recovery.gov. Here’s his first map: