Dr Stuart Jeanne Bramhall's Open Salon Blog

What if Marx Got It Wrong?

Tue, 18 Jun 2013 15:06:18 -0400

Progress and Poverty

By Henry George (1879), edited and abridged by Bob Drake, Robert Shalkenbach Foundation (2006)

Book Review

Progress and Poverty is an economic classic which has been suppressed in the US owing to its subject matter: the elimination of poverty and economic inequality by restoring The Commons. Internationally George’s economic theories are regarded as comparable to those of Marx, Keynes and Galbraith. Despite being the third most famous American in 1879 (after Edison and Mark Twain), George’s work remains largely unknown outside of Australia, New Zealand, Hong Kong and Taiwan.

Written over 130 years ago, the book provides uncanny insights for the current difficulties capitalism faces with our current paralyzing recession, massive public and personal debt and growing income inequality. Given the simplicity and clarity of the concepts George lays out, I find it extremely baffling that his theories have been eclipsed by Marx’s, which in 1879 had yet to be translated into English. The book is a must read for anyone with a serious interest in reducing economic inequality – despite my personal skepticism a land tax would work in the absence of monetary reform. The massive financialization of the global economy over the last three decades has given the ruling elite a monopoly over the money supply, as well as land and resources. Thus for George’s land tax to be fully effective, it would also be necessary to restore public control over money creation.

Why Development Always Produces Poverty

George’s goal in writing Progress and Poverty is to explain, in economic terms, why material progress (i.e. economic development) is always accompanied by poverty and increasing inequality. Employing Adam Smith’s classical definitions of labor, capitol, wages and interest and Ricardo’s Law of Rent, he argues that development must always produce poverty and inequality so long as a privileged elite holds an exclusive monopoly on the ownership of land and basic resources. He starts from the premise that land and natural resources are the source of all wealth, though wealth itself can only be created through human labor. According to George, the relative monopoly the elite hold on land allows them to capture all increases in productivity and production as “rent” increases. He gives numerous historical examples demonstrating that the continual increases eases in land value and rent that accompany development always come at the expense of workers. In fact increases in productivity almost always result in a relative decrease, rather than increase, in wages

Maybe Capitalism Isn’t the Problem

The book also makes an extremely eloquent case that boom and bust cycles (such as we’re currently experiencing) aren’t the inevitable result of capitalism itself but of land privatization. Again with examples, he demonstrates how the monopoly the rich hold on land and resources allows them to engage in speculation by holding them out of production to increase their value. This, in turn, creates the speculative bubbles which cause episodes of “industrial paralysis” when they burst – commonly known as depressions and recessions.

The History of Land Privatization

George’s approach is relatively unique for political economists in his emphasis on the role ideology plays in the economic theories that gain popular acceptance. In contemporary society, no one questions the right of a privileged elite to monopolize land and natural resources for their own benefit. However private land (and resource) ownership is a relatively new concept originating in seventeenth century Britain with The Enclosure Act.

About a third of Progress and Poverty traces the historical evolution of private land ownership. In all human societies, the common right of all people to use the earth to support themselves has been sacrosanct. The concept of individual land ownership only emerged as societies advanced and either concentrated power in privileged classes or seized land and slaves through military conquest. Prior to the rise of Greek and Roman civilization, all land was communally owned and the notion of an individual claiming a patch of land as his exclusive possession was unthinkable. Henry George sees the mass seizure of land by the nobility (in Rome this was referred to as the latifundia) as responsible for the death of democracy in these early societies and the ultimate collapse of both civilizations. In the case of Rome, he points to the inherent advantage German barbarians had as part of a system in which every family was entitled to a share of common land. In George’s view, this egalitarianism translated into character strengths of initiative, creativity and flexibility that made it possible for small bands of individuals to overrun the once great Roman Empire.

After the Roman Empire fell, feudalism was characterized by systems of communal and exclusively private property rights that operated in parallel. A feudal estate was considered to belong to society at large. The king, as the chief representative of the people, merely granted its use in trust to church leaders and military officers in return for services rendered to the commonwealth. Churches were expected to provide for the care and welfare of the sick and poor. For their part, feudal lords were expected to defend the king’s interests militarily. As of 1879, France still held almost ten million acres of communal land. Moreover despite enclosing (privatizing) over eight millions acres between 1710 and 1879, at the time Progress and Poverty was written, England still maintained two millions acres as commons (though most was unsuited for agriculture).

Because they allow the British system of private land ownership to persist in the US, in George accusing the founding fathers of failing in their efforts to establish a true republic. Despite abolishing heredity titles and establishing the right to vote, they failed to reestablish the communal property rights that enabled the Greek and Roman to flourish. He contends that political equality, when coexisting with wealth inequality, must always lead to either dictatorship or anarchy. He also highlights the steady social decay (crime, insanity and increasing prison populations) that always accompanies increasing income inequality.

Restoring The Commons Through a Land Tax

George proposes that the wealth inequality, recessions and numerous other evils commonly attributed to the capitalist economic model could be totally eliminated by restoring public ownership of land and resources.

Rather than advocating outright government seizure of private land, he proposes to accomplish this by imposing a tax on unimproved land roughly equivalent to its rental value. Such a system would allow landholders to preserve their right of tenure, while discouraging them from speculating by holding land and resources out of production. While ending land speculation and recessions, this type of tax would simultaneously expand land and resource access for workers and capital investment. Any productivity increases (beyond interest on capital), would accrue to the government, rather than private landholders.

With this approach, everyone whose interest as a worker or capitalist (i.e. investor) exceeds their monopoly on land would also experience direct gains. Employers would be forced to increase wages because workers would have easy access to land and self-employment opportunities. Workers, in turn, would no longer fear the technological advances (e.g. automation) that increase productivity as they would share directly in the rewards.

The government, in turn, would use revenue from the land tax to pay down debt without resorting to austerity cuts that dampen productions and to abolish taxes on wages and capital, which also discourage production.

Upcycling: Saving the Planet by Design

Sun, 16 Jun 2013 15:06:27 -0400

The Upcycle: Beyond Sustainability – Designing for Abundance

By William McDonough and Michael Braungart

2013 Northpoint Press

Book Review

In The Upcycle, American architect William McDonough and German chemist Dr Michael Braungart offer a new improved version of the cradle to cradle (C2C) vision they first introduced with their 2002 book Cradle to Cradle: Remaking the Way We Make Things. C2C design is an approach to architecture and manufacturing that seeks to lessen environmental damage and the impact of resource scarcity by revolutionizing the way we design products, factories, buildings and cities – as opposed to trying to undo or minimize the negative effects of conventional production. There are no villains in C2C design. McDonough and Braungart are highly critical of the current tendency to demonize carbon, given its role as an essential building block of life. There’s simply too much of it accumulating in the atmosphere when it should be returning to the soil for food production. They also object to labeling incandescent light bulbs, air travel, long showers and disposable diapers as “bad for the environment.” Instead of shaming and penalizing people who use these products for “wasting energy,” we should be trying to find more efficient ways to produce them.

Imitating Nature’s Design Principles

A fundamental precept of C2C design is its emphasis on biomimicry, i.e. copying the genius of nature’s design principles. One of the major drawbacks of conventional industry is a built-in inefficiency in which valuable resources are lost to the landfill, incineration or runoff. In C2C design, as in nature, there is no waste. Instead products, industries and processes are designed in such a way that waste from one provides the raw materials for others. McDonough and Braungart argue that the initial design of any product, building or factory should include detailed planning for the new products that will be made from its basic elements when it wears out or is torn down. For example, a C2C computer would be designed to be returned to the manufacturer and easily disassembled into safe, environmentally friendly components that can easily be put to other uses.

The Cradle to Cradle Products Innovation Institute

With their new book, the authors elaborate on their earlier work by introducing the concept of “upcycling.” This they define as optimizing the materials, ingredients and process pathways in such a way that waste is converted to raw materials for nature or some other industry. By ensuring that scarce natural resources, such as aluminum, copper, water and wood, are continuously reused, there is less pressure to destroy more and more of the environment to replace them. After consulting with hundreds of businesses and cities on adopting C2C design principles, in 2010 they started McDonough-Braungart Design Chemistry (MBDC) and the Cradle to Cradle Products Innovation Institute. The latter issues C2C certification for companies and products based on five quality categories:

Use of materials that are safe and healthy for humans and the environment
Incorporation of design principles that allow all products to be reused by nature or industry.
Use of renewable, non-polluting energy in the manufacture and assembly process.
Use of production processes that protect and enrich the water supply.
Treatment of all people involved in a socially responsible way.

The Upcycle presents numerous real life cases demonstrating the enormous economic advantages C2C technology can have for business. Lower energy and water processing costs can save tens of millions of dollars in both upfront capital costs and long term operational costs.

The Argument Against Biofuels, Nuclear Energy and Dam-Based Hydropower

A large section of The Upcycle analyzes the cost and desirability of current renewable energy options. Biofuels, nuclear energy and dam-based hydropower are rejected as being incompatible with C2C technology. The authors reveal the present biofuel industry is responsible for massive rainforest destruction in Indonesia, without offering a significant reduction in CO2 emissions (because they contain the same complex carbon chains, biofuels produce as much CO2 as fossil fuels). Nuclear technology, in turn, creates a massive amount of permanent waste that can’t be diverted to other safe uses. Finally large dams, which cause the same kind of environmental damage and habitat destructions as strip mining and nuclear energy, has virtually decimated the wild salmon population in the Pacific Northwest. The authors give much higher marks to small scale high head hydro generation in which water flowing downstream turns a ferris wheel-type generator.

They also feel solar, wind (especially offshore wind generation, which is less aesthetically controversial), geothermal and biogas from manure and landfill waste have great promise. They note that as of June 2 2012 wind-generated electricity is two cents per kilowatt hour cheaper than coal.

A Small Caveat

The Upcycle promotes two viewpoints I take strong exception with. The first concerns overpopulation. The book’s argument that each new person is a “potential source of raw materials” fails to address concrete space limitations and the epidemic of species extinctions linked to human over population. Likewise the authors’ argument that business is more potentially helpful than government in the transition to a C2C society seems incredibly naïve. They claim that business is less subject to corruption and more “adaptable,” owing to pressure to be profitable or die. As society is currently structured, there is virtually no check on corporate corruption. Moreover businesses have no disincentive against employing maladaptive strategies when they know the government will bail them out.

Reposted from Dissident Voice

The Coming Economic and Political Turmoil

Mon, 3 Jun 2013 09:06:12 -0400

(This is the first of two posts about a recent Farleigh Dickinson University study about changing American attitudes towards violent revolution.)

A new study from Farleigh Dickinson University reveals that 29% of Americans believe an armed revolution may be necessary in the next few years to “protect liberties.”

18% of Democratic respondents shared this view, 27% of Independents and 44% of Republicans.

A decade ago, the notion that anyone other than a few thousand fringe extremists would contemplate violent revolution was unthinkable. At the very least, these results suggest a significant minority of Americans are profoundly disillusioned with the government’s apparent indifference to their needs and expectations.

The End of Growth: An Inconvenient Reality

Despite government claims to the contrary, recovery from the deflationary spiral that started in 2008 (aka The Recession) has been elusive. Although stock prices continue to soar, productivity, employment and consumer spending have stubbornly refused to return to pre-2008 levels. Some latter day (non-Wall Street) economists believe the era of economic growth has ended – permanently – owing to the soaring cost of fossil fuels. In their view, the world has returned to a steady state economy.

Nearly all human cultures operated as steady state economies prior to the explosion of fossil fuel use in the late 19^th century. Given the historic link between growth and “full” employment (jobless levels below than 10%), they predict the industrialized world is heading towards a scenario in which roughly half the adult population is unemployed. The paid work that remains will be low paid, part time, temporary jobs, unprotected by unions, employment rights or health and safety regulations.

To appreciate that US economic growth is at a standstill, it’s essential to look at undoctored economic data. For example, when Obama and the corporate media trumpeted a 7.5% unemployment rate for April, they neglected to mention that this figure only reflects the number of workers newly unemployed in the last six months (i.e. the number still receiving basic unemployment benefits). Unlike other countries, the official US jobless figure doesn’t include workers whose benefits have run out. A close look at Department of Labor data reveals that U-6, which includes workers who have dropped out of the labor force and part time workers seeking full time jobs, reveals that true unemployment actually rose by 1% in April to 13.9%. The Obama administration also neglected to report that out of 296,000 new jobs created last month, 278,000 were part time.

According to John Williams, founder of shadowstats.com, the government also manipulates GDP figures to make it appear the US economy is continuing to grow when the annual GDP increase over the last five years is virtually zilch.

The 2008 Economic Crash Was Predictable

Prominent members of the Peak Oil movement, most notably Michael Ruppert and Richard Heinberg, predicted the 2008 economic crash. They based their predictions on declining oil reserves, the failure of oil production to keep up with increasing demand from developing countries and the steep rise in oil prices that began in 2005.* Based on their calculations, mankind had extracted half of the world’s available oil reserves by November 2005. This was officially known as Peak Oil. We reached Peak Natural Gas several years before that, though we won’t reach Peak Coal for another decade or so.

Although there still remains tons of oil, gas and coal left in the ground for us to extract and burn, we are now on a downward slope. Not only is production continuing to outstrip demand, but most of the remaining oil, natural gas and coal are difficult to get at, expensive to extract and rely on dangerous, expensive, environmentally destructive and controversial technologies, such as deep sea oil drilling, tar sands extraction fracking and mountain top removal.

Capitalism and Productivity

The steady economic expansion we call growth is a relatively new phenomenon in human history. Prior to the 19^th century, the major nations of the world operated steady state economies. In fact the argument Heinberg and others make is the burst of productivity most of the world attributes to capitalism had nothing to do with the capitalist economic model itself. Rather it was based on the widespread abundance of cheap fossil fuels. British economists at the Fiesta Institute provide abundant data justifying this argument in Fleeing Vesuvius: Overcoming the Risks of Economic and Environmental Collapse. They point out that even at current oil prices, it costs far less to use a machine to perform work than to employ a human being or even a draft animal.

The birth of capitalism wasn’t just about the exploitation of fossil fuels. It was about the exploitation of all natural resources – clear cutting forests, large open pit mines to extract steal, copper, gold, bauxite (for aluminum), gold diamonds and rare earth minerals, draining swamps and eradicating wetlands. When oil started becoming more expensive (in the 1970s), it was also about moving western factories to third world countries to enable wholesale exploitation of human labor. Government encouraged this wholesale extraction and exploitation because it produced enormous prosperity for most of western society over many decades.

At the same time there were immense human and environmental costs. Western capitalism produced incalculable suffering in the third world as indigenous people were driven off the land that gave them a subsistence living, with the lucky ones obtaining jobs in brutal sweatshops that paid starvation wages. Suffering in the first world was less visible until last decade, when residents of the industrialized world began to realize they were being systematically poisoned with toxic industrial chemicals, increasing levels of both nuclear and microwave radiation and harmful organisms that had contaminated our air, water and food chain.

*Historically the oil price ranged between $2-4 a barrel prior to 1973 oil crisis. It remained between $10-20 a barrel until 1979. From 1979-1986 it fluctuated between $20-38 a barrel until 1986, when it dropped below $20 a barrel until 1989. It dropped below $20 a barrel very briefly in 1999. It hasn’t been below $40 a barrel since 2004.

To be continued with a discussion of various factors affecting the likelihood of violent revolution.

photo credit: athens.rioter via photopin cc

Interview with Syrian President Assad

Mon, 20 May 2013 16:05:01 -0400

A highly illuminating interview (for Argentinian TV) in which Assad argues that the Syrian people should decide who rules Syria in internationally monitored elections scheduled for 2014. They would be conducted according to constitutional reforms enacted in 2011-2012 that limit the power of the ruling Ba'ath Party.*

Assad also has some interesting observations on changes in US foreign policy under Obama. He notes our current president favors proxy wars relying on terrorist mercenaries rather than direct military intervention.

*The US clearly disagrees with Assad's proposal, as he would likely win the elections. A substantial majority of Syrians want to retain secular government and are immensely fearful the rebels and their US and Saudi backers will install a repressive Islamic government (as in Libya). I am reminded of the Obama administration's decree in 2010 that socialist ex-president Jean-Bertrand Aristide could only return to Haiti if he agreed not to run for president. This was after two US-backed coups against Aristide, who was democratically elected, in 1991 and 2004. The US government also opposed the decision of the overwhelming majority of Venezuelans to elect socialist Hugo Chavez as president.

photo credit: Ammar Abd Rabbo via photopin cc

Pissarro and Angelina's Mastectomy

Sun, 19 May 2013 16:05:01 -0400

The Bather by Pissarro

Guest post by Jerry Fresia

(A response to my post “The Company That Owns Angelina Jolie’s Breast Cancer Gene”)

There’s an old joke from grade school that I still remember. It’s rather dumb, but the punch line turns on a thought that has relevance. Maybe that’s why I remember it. Two guys on an island. One is a millionaire smoker who has a ton of cigarettes but no matches. He’s freaking out. The other guy has a book of matches and says to the millionaire smoker, “I’ll give you my matches for $1,000.” The smoker jumps at the chance, hands over $1,000 and the guy with the book of matches rips out the matches from the book and hands them to the smoker. “That’s not fair,” implores the smoker. “I still can’t light a cigarette. I have no striker.” “So true,” says the guy with the empty book of matches containing the striker. “But I will sell you the striker for $50,000.”

Let’s call this the “striker phenomenon” or SP for short. SP occurs when someone controls, often a monopoly control, some single thing that substantially impacts the life chances of another. Okay, are you still with me? Enter Pissarro.

Pissarro, as you know, was the philosophical leader of the Impressionists. What historians wish us to remember is that the Impressionists broke the rules of traditional painting and came up with a new aesthetic. This isn’t wrong. But this emphasis trivializes, to say the least, the Impressionist contribution. The Impressionist contribution that is much more relevant to painters today was not their rule breaking aesthetic. Instead it was their brilliant way of avoiding the SP or to say it another way, they devised a way to sidestep what was an aristocratic-state controlled monopoly over exhibitions (think distribution) of their work, ie., the Salon. In short, the Salon of mid-19^th century Paris required that artists paint certain themes and in a certain way (in order to make noble and moral the vast accumulation of wealth by a few). If you didn’t, you would have a hard time surviving. The genius of Pissarro et al, was in devising an institutional response to an institutional constraint on the freedom of artists. The model that Pissarro came up with was based upon a baker’s union: the Impressionists (called “intransigents” at the time), launched a series of independent exhibitions, gained controlled over the exhibition/distribution of their work and, hence, the production of their work as well. Or to put it in plain English, they became free to paint whatever the hell they wanted in the way they wanted. Enter paintings of joy.

But alas, the story doesn’t end well. Yes, the control by the aristocratic state faded away, but a new control over the exhibition of their work (and hence their production) arose in the guise of the private entrepreneur or dealer, the most famous of which at the time was Durand-Ruel. To be sure, Durand-Ruel was credited with opening markets, especially internationally for the Impressionists and for a time, especially early on, was praised by the painters themselves. But the SP, unmistakably, reasserted itself. Pissarro, ever alert to the control by another over his direction, would lament, as he struggled financially, that he had “to please Durand.” Resigned to his fate, Pissarro wrote to his son when he was 68, “Durand-Ruel, who has given me the same prices for ten years….It is true that he takes all my work, but on the other hand, he has too much power over me.” The Impressionists, jumping out of the state controlled SP frying pan, jumped into the fire of the private enterprise SP.

And how does Angelina Jolie fit into this story? As noted above, she underwent a double mastectomy because tests showed that were she not to do this, she would have a high risk of developing either breast or ovarian cancer. The tests in question are tests that can identify the mutation of specific genes, and it is this mutation that could lead to life threatening cancer. But here’s the rub: the private SP is back in spades. There is private monopoly control over these tests:

“A Utah biotech company Myriad Genetics owns the patent to BRCA1, the so-called “breast cancer gene” responsible for Angelina’s Jolie’s decision to have a preventative double mastectomy. They also on the patent on a similar breast cancer gene called BRCA2. Moreover these gene patents also give Myriad a monopoly on testing for these genes.

At present a suit cancer groups have filed to invalidate these patents is being heard in the U.S. Supreme Court. Cancer advocates argue that it’s illegal and unethical for biotech companies to patent nature. Joseph Stiglitz has written in Slate that allowing Myriad to hold exclusive patents for BRCA1 and BRCA2 removes the opportunity for other scientists to come up with better and cheaper tests. In this way, they make the tests less widely available and possibly prevent women from knowing they carry these genes and taking preventive measures.[i]“

In the U.S. a full test for each of these genes costs about $3,000. Private insurance policies may (or may not) cover the cost. But this highlights the problem. Access to those things that give us life, be they medical tests for someone like Angelina Jolie or creative processes as in the case of Pissarro and painters, are less likely to be controlled by the state in the western world today, and more likely to be controlled privately by those seeking to maximize profit and market share. Myriad Genetics is the Durand-Ruel of the gene world. They seek, in all their creativity, to control the distribution of golden eggs so that they are able to control the goose that lays them.

So what’s the point of all this? The point is that painters today are quite aware of the great boogie-man of “censorship” when it is government doing the controlling. But what we totally ignore are the private enterprise controllers who shape what we do, how we do it, and who we are. Not long ago I was explaining to a painter the method of painting that I teach. One of its virtues, I offered, was that it affords the painter “a great deal of control.” My artist friend recoiled at the mention of the word “control.” It was as if I had said that the method I teach gives you a deadly bacterium. “Control” over what a painter does, painters will declare, is to be avoided like – well – like the plague. And so it goes: painters today, unknowingly –or perhaps I should say unreflectively – embrace practices that control the very creative processes that could give them life. “To be an artist today,” I heard someone say recently, “you really need to get into marketing.” No, I thought to myself; that would be an entrepreneur (who bends every creative urge to meet the schedule, aims, and interests of a myriad of agents and investors and consumers), not an artist (whose only interest is taking the next step in her unfolding). The entrepreneur is someone who plays the private enterprise game, establishes points of market control – monopoly control if possible, and is someone who is both market and profit driven. The artist is someone who seeks freedom from the control that market-driven entrepreneurs, market-driven investors, all those people who control exhibitions-exposure-competitions, and all those people who grab you by the short hairs require.

“Here’s the work I do to make money. And here’s my own work,” is the refrain of so many painters. Oh crapola. What kind of creative people are we if we slink along as a servile following half the day and during the other half hope to find ourselves? “Freedom” was the clarion call of the Impressionists, be it from public or private centers of power. But guess what? We are taught that the only source of censorship is public; private enterprise is always good. We are taught, too, that the Impressionists were about the end result, the brush strokes, or the mode: going outside. This is not surprising, but it is appalling history. Here’s the deeper truth: the Impressions said screw you to power – both to the state and the entrepreneur (whom they politely referred to as the bourgeoisie). We know our self-worth they declared and we will find an independent means of entering upon the scene of history. The scandal that still instructs us today was not about their paintings. It was about their disobedience.

[i] Australian Business Insider, http://bit.ly/17DIoiU

[1] Australian Business Insider, http://bit.ly/17DIoiU

Jerry Fresia received a PhD in political economy and studied painting in the studio of William J Schultz. In 1988 he published the amazing book Toward An American Revolution: Exposing the Constitution and Other Illusions. It inspired me to take a closer look at the not so benign intentions of the men who wrote the US constitution. He blogs (on painting) at http://www.fresia.com/blog/.

photo credit: cliff1066™ via photopin cc