Supply-side economics sacrifices people to support corporations

Everyone knows the adage “you can take a horse to water, but you can’t make it drink.” In the case of supply versus demand-side economics, this analogy is instructive. As with many things in economics, the supply versus demand argument is often presented as a chicken-and-egg problem: there can be no demand without supply, and no supply without demand. There are exceptions to this rule. The Black Market is a perfect illustration of how strong enough demand forces supply to make itself available. On the other side, it seems that certain (seemingly unwanted) innovations such as the iPad can make their own market simply through their existence (and superior marketing).

The issue, then, is whether supply or the demand is the more suitable model to manage from a policy perspective. In each case, the market is called upon to make certain things happen without intervention, and the government intervenes in a different part of the market to stimulate this desirable behaviour. Arguments between the two schools mainly focus on the relative effectiveness of government intervention. In this simplified argument between the two, I also propose that the aims of the intervention in each school of thought are different.

Supply-side economics believes that increasing the efficiency of corporations ensures they are able to produce goods that are needed by society. This may involve tax cuts, subsidies, unencumbering the company from restrictive environmental laws, allowing for less legal “friction” in the market (e.g. not restricting banks from being involved in investments in financial instruments), and allowing unhindered financial transactions. In supply-side economics, the place where the government intervenes is fundamentally in paying for externalities of corporations. All of the initiatives listed above involve the government reducing its income to minimise corporate costs (e.g. tax cuts), or accepting to pay for unexpected corporate costs (e.g. environmental deregulation). A good recent example of this practice would be the federal government’s decision to accept the liability for Alberta’s orphan oil wells to the tune of almost $2 billion. The government accepts the externalities of the oil companies in order to ensure they can operate at higher efficiency - avoiding costs and maximising profits. The expected effect in the market is that efficient corporations can grow faster, expand their business, offer lower prices to consumers, and catalyse other businesses into existence.The problem? The fundamental goal of the system is economic growth. It chases a measure that does not have a direct correlation to employment, to health, or to personal satisfaction. Supply-side economics is a sham because it is one of the most harmful examples of Goodhart’s Law. Goodhart’s Law is officially stated as “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes,” but is perhaps best simplified as “when a measure becomes a target, it’s no longer a useful measure.” GDP is supposed to be a measure of how well the economy is faring, but it doesn’t take into account whether there’s hunger, homelessness, or disease. It simply records how much money moved. When corporations prosper, the measures that express their prosperity look good. Since they are denominated in dollars, they are easy to plot, simple to understand, and marvellously easy to use in projections. Not so human security, comfort, happiness, family harmony, or mental state. To relate back to the saying, we can measure how much water there is very easily, but we can’t measure the horse’s desire or ability to drink the water. Because the water is measurable, it’s easier to focus our measures on water availability than horse thirst. In sum, supply-side absolutely assists corporations, but there is no adequate way of proving whether it helps people. On the flipside, supply-side economics blames the consumer for not availing themselves of the plentiful and cheap products of the market. The problem with this concept is that a horse that can’t stand can’t drink.

Demand-side economics believes that stimulation of demand will increase supply, and that government intervention should be on the consumer (or product) side of the market than on the producer side. The core of the policy arguments in this blog has been that UBI rather than food subsidies or income tax cuts is the best way to stimulate demand. The demand-side argument will therefore centre on giving people the capacity to be consumers in the market. This means the government does not accept corporate externalities, does not relax environmental laws to privilege business, does not have to lower corporate tax rates, and doesn’t care if businesses fail. If innovation relies on creative destruction, we can’t depend on legacy businesses to take us there. Supporting the consumer in expressing their desires with money is therefore a better way to encourage economic advancement and fulfil consumer needs. This method also gives policy tools to the government that do not directly affect business. Instead of modifying corporate behaviour through innovation grants, tax incentives, and corporate fines, government will find it far simpler to induce consumers to purchase certain things. A simple thought experiment can illustrate the idea. Imagine the government wants to shift all cars to emissions-free models by a certain date. Would it be better to regulate, induce, and provide grants for corporations to make more inexpensive electric cars available? That would be the process under supply-side economics. Under demand side, governments ensure consumers all have cash to purchase the cars, and set a date by which any and all CO2-emitting cars are fined whenever they are seen on the road. Supply-side economics is far more unpredictable, and relies on the beneficence of companies - which typically runs counter to their self-interest. Demand-side economics uses the self-interest of the consumer and gives them the ability to exercise it. Corporations are conflicted about what to do with their windfall, consumers are not. In demand-side economics, it’s not the fault of the people that they don’t get the product they want - it’s the fault of the corporations. Instead of blaming a person for being poor and not getting what they need, we should give people money to get what they need and let the market adapt to fulfil it. In sum, we should empower consumers to say “I will pay for water here” and allow the businesses that fulfil that consumer demand to reap the benefits.

Focus on the people, not corporations

A fundamental agreement across the political spectrum is that wealth should be constantly redistributed throughout the economic system. Libertarians and Communists and everyone in between agree on redistribution. They just disagree on who should do it. Moving more to the centre of the political spectrum, where we find the policy range of the major Canadian political parties, there actually seems to be a consensus that corporations should do approximately 90% of the redistribution and government approximately the remaining 10%. This is, of course, based on the unemployment rate in Canada - typically hovering between 5 and 7% of eligible workers. Furthermore, this aid is supposed to be transitory. It is specifically designed to get people back into the corporate cash redistribution program. The differences between the parties on this specific piece of orthodoxy are virtually nonexistent. The most orthodox, i.e. the Liberals and the Conservatives, have modeled the economy on the basis of job preservation through the protection of companies that have large numbers of employees. The only fundamental difference in approach seems to be the companies they prefer to focus on, be they manufacturing in Ontario and Quebec or resource extraction in Alberta and Saskatchewan. The approach, however, is identical.
There are a number of policy levers that can be used to tweak the corporate status quo to achieve the goal of wealth distribution via corporations. Prime amongst these is tax law. There is a belief that decreasing corporate tax rates invites corporations to set up shop, and incentivising hiring through tax deductions is a good way to maintain a healthy workforce. Tax law is used to give innovation subsidies, incentivise pollution reduction, and allow for depreciation on working capital. Here is the problem: the labyrinth of corporate tax breaks are costing us over $40 billion per year. Let’s put that in human terms. That’s enough money to give 1 million Canadians - over 3% of the entire population - a salary of $40,000. To put that in perspective, the COVID crisis has created the worst job loss in recorded Canadian history. About 1 million jobs have been lost. If we eliminated corporate tax dodges, all of these people could have a salary and there would still be money left over.
The obvious objection to this equation is that increasing the amount of money that corporations pay in taxes would shrink the economy as companies would fail. This is because people buy stuff that companies produce, those companies hire people to produce that stuff, and if that stuff becomes too expensive for companies to produce, they go bankrupt. In this chain of consequences, companies appear to create the jobs. If you look closer, however, this is not true. Companies are created by consumer demand, not immaculate conception. The reason that companies produce stuff is because people buy it. People buy it because they have both the desire and the money. Where our models depend on corporations to create jobs, we are actually focusing on the wrong part of the economic chain of being. Stuff is sold because there is demand and money, not because there is supply. Companies are disposable intermediaries between people and stuff. Cash, however, is not a disposable intermediary. The more cash people have, the more demand can be expressed in the market. If we focus on the consumers and not the producers, we will allow the efficiencies of the market to correct for any corporate failures due to the change in taxation. If we support demand, supply will follow.

Cultural Genocide and the Useful Idiots

Sadly, this is where the Boys in Short Pants of the Harper Government were able to make what was one of the most masterfully cynical communications coups of their entire reign. They admitted to the crime of genocide piecemeal, and in so doing, avoided admitting to the actual crime of genocide.

I had griped for a long time that the Harper Government had only one purpose for the Truth and Reconciliation Commission: to negotiate the word "genocide" out of the findings. The word "genocide" frightens politicians to their very core. Genocide means action must be taken. Politicians prefer options, but genocide seeks remedy that cannot be easily redefined, reframed, or spun. Germany understands this perhaps better than anyone: the only option when convicted of the horror of genocide is to hang one's head, admit wrongdoing without reservation, and do everything possible to seek redress for the wronged party. Germany has truly acted legally, symbolically, and politically to ensure her populace understands this culpability. One might consider this a model response to the finding of genocide. With this in mind, I could not accept that such a group of manipulative spin doctors would ever allow the word genocide to slip into the findings. It would be political suicide. And yet, there it was:

The establishment and operation of residential schools were a central element of this policy, which can best be described as “cultural genocide.” [page 6]

Needless to say, I was very surprised and pleased. Finally, the ruthless snake-oil salesmen had done something true and good. Finally, they had allowed themselves to state things as they were, and not as they could be spun to their advantage. But something nagged at me: what, exactly, did they mean by "cultural genocide"? Thankfully, the very same document explains what was meant by this term:

Physical genocide is the mass killing of the members of a targeted group, and biological genocide is the destruction of the group’s reproductive capacity. Cultural genocide is the destruction of those structures and practices that allow the group to continue as a group [emphasis added]. States that engage in cultural genocide set out to destroy the political and social institutions of the targeted group. Land is seized, and populations are forcibly transferred and their movement is restricted. 

Still, the nagging continued. You see, genocide is not defined in Canadian law; it is certainly not defined in the findings of Royal Commissions. The accepted definition for genocide belongs to international law, specifically the Convention on the Prevention and Punishment of Genocide. There is no such thing as the hair-splittingly precise division of this concept into Physical and Cultural. There is just genocide, defined in Article 2 of the Convention as:

...any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such:

(a) Killing members of the group;
(b) Causing serious bodily or mental harm to members of the group;
(c) Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part;
(d) Imposing measures intended to prevent births within the group
(e) Forcibly transferring children of the group to another group. 

In truth, the only thing these definitions have done is split Article 2 subsection a) away from Article 2 subsection e). Sadly, this is where the Boys in Short Pants of the Harper Government were able to make what was one of the most masterfully cynical communications coups of their entire reign. They admitted to the crime of genocide piecemeal, and in so doing, avoided admitting to the actual crime of genocide. Even in the definitions provided by the findings, elements of the internationally accepted definition of genocide are plainly admitted, but are hidden in plain sight.

In this case, they had a little assistance. The term "Cultural Genocide" has actually been bandied about since 1944 by Raphael Lemkin - originator of the word genocide itself. It was never included in any official documents, and its meaning has already been argued about for decades. As a matter of fact, the word almost found its way into the UN Declaration of the Rights of Indigenous Peoples, but was ultimately found to be a distraction, and removed in favour of genocide (simpliciter). There is already a strong tradition of argument about the nebulous and distracting term, and there will henceforth continue to be.

This is where the useful idiots come in. When the findings were reported, there was not a single news outlet that reported this as a finding of genocide. Every single mainstream news outlet reported it as "cultural genocide" without any further soul searching or analysis. They even glossed over the fact that not one line after the admission of "cultural genocide", the findings admit to "physical genocide" and "biological genocide" as well. But that was only the first step. The definition of "cultural genocide" in the report is short and imperfect. It would make the career of any grad student in international law to write a concise legal definition that could be cited from this point forward. Especially now that it is in an official government document. Meanings and ramifications can be argued about in academic circles for decades, and some, like me, might assert that the definition is meaningless and amounts to genocide pure and simple... but that's exactly the point. Now, my interpretation is simply a single inhabitant in a diverse ecology of legal and academic interpretations of what is now official documentation, for which there will be no true final resolution. The charge of genocide has been given to the academics, and they will dissect it to meaninglessness. Those are the true useful idiots - the tools who will be incapable of resisting the urge to whitewash the charge of genocide by assisting Harper's old spin doctors in redefining it.

What does a charge of genocide mean? Political action. Mandatory action. A charge of "cultural genocide" on the other hand means argument and hand-wringing. By the exploitation of an obscure argument, the media sound byte of the final report of the Truth and Reconciliation Commission was deprived of its rightful teeth. You now know that cultural genocide doesn't exist: the destruction of a culture by forced relocation and erasure of cultural artefacts is still genocide by definition. It demands immediate and resolute action to seek redress. Reconciliation will be very difficult if we get this wrong.

Neo-Mercantilism

When consulting with developing countries about restructuring their debt, the IMF generally determines what cash crops would grow best in the area and encourages their cultivation as one way to bring in foreign currency. As advice, this is not terrible. In theory, if a Ghanaian farmer can crop cocoa to sell, he can buy cassava to eat and pocket a profit for himself in Ghanaian cedi that were purchased with the US dollars that bought his cocoa. A boon for him and his government, the constant purchase of Ghanaian currency by US dollars ensures baseline demand for the cedi. With a baseline value set for the cedi, the currency can float within a reasonable margin. This allows Ghana to purchase US dollars at a steady rate so they can acquire strategic resources such as oil at a stable relative price. In this theoretical instance, everyone benefits.

In reality, things are slightly different. While exports of Ghanaian cocoa do create a baseline demand for Ghanaian currency, that is about where the benefits cease. Cassava, once the staple starch of a large portion of sub Saharan Africa, is much less available as cultivation of cocoa has replaced it. You see, as one country goes, so have gone her neighbours. If one country has had its debt restructured by the IMF and the rest have not, then trade of cash crop income for staple crops might allow for one country to arbitrage its agricultural sector against another country's. In reality, however, everyone is chasing the same strategy, because everyone is having their debt restructured by the IMF. Cassava plantations still exist, but the fact is that you make real cash with cocoa, and buy Thai and American grain to eat.

Ironically, the only states that can pursue the production of low-value staples are first-world countries which typically subsidise this production heavily. So, instead of Ghana producing profits through cocoa sales and buying cassava from Benin, they spend their capital on Thai and Chinese rice and American corn. The Ghanaian diet has changed due to the changes in their markets. Whereas the cash cropping brings in a relative monetary gain, it gets spent in nations that don't need the money, on subsidised produce that is not the traditional food of Ghana. While temporarily liberating the countries in question from want of money, they become yoked to first world nations for want of calories – and fertilizer.

Cash cropping deals in dollars per acre. This way of looking at agriculture is not going to be fruitful if the price of staples increases. An increase in the price of staples means a reduction in profit for all the nations who, like Sri Lanka and its tea, Ghana and its cocoa, and Colombia and its coffee, are depending on arbitraging that difference in value between luxuries and staples to remain fed. When the prices of staples rise, calorie farming is more important than cash cropping. Word to the wise: the price of staples is rising. What’s more, in order to increase yields per acre, developing countries with cash crops have gotten themselves onto the agribusiness treadmill. While I am pretty ambivalent about the health issues surrounding GMOs (I don’t really think they are that terrible for you), I am completely livid about the economic implications of addicting farmers to seed contracts. Agribusiness has a way of eating up the profit of farmers big and small to pay for seeds and chemicals. If we look at this issue fundamentally, it’s a question of good, old-fashioned mercantilism. The proverbial North demands the proverbial South to produce its luxuries, the South obliges, and find itself unable to feed its populations. Never fear, says the North – we will sell you the grain you need to survive, and we’ll give you the pesticides and seeds you need to grow more cash crops. Just give us back that profit you made on the first shipment of coffee, and we’ll be on our way…

Agriculture is one sector that can't turn on a dime. Olives take 20 years to mature. Apples might take five. Shifting from one field crop to another might take one year, but it also entails selling one's entire product one year for enough money to buy the seeds or plantings for the next. If the tea market goes flat, and it makes sense to pull up the tea bushes (Gods forbid) and plant something starchy, there's the loss on the fire sale, the labour to pull up the old production, but then the investment in the precursor implements and seeds for a whole new type of farming. That's an enormous opportunity cost. When money is scarce, this change is difficult at the best of times. Like any one of us changing to a completely new line of work, we have to start at the bottom, and that is a choice any one of us would put off as long as humanly possible. This is why, if we hit a price barrier for any given agricultural commodity, it is possible a large plurality of farmers would simply give it up en-masse because they had held out to the last minute and had no other way out. Like cacao farmers infested with frosty pod, they will keep producing until they can produce no more.

The solution? Under the current economic regime there is no real solution. Scientists in the North will develop more interesting varieties of cacao and sell them to the people in the South, diminishing the South’s profit while still shackling them to the task of producing our luxuries. The creation of a GMO is certainly a solution to the problem of a chocolate shortage. It is not a solution to the systemic problem of the mercantilist exploitation of the proverbial South. Lack of crop diversity will make them more prone to food shortages, and reliant on agricultural subsidies in other countries to maintain the low cost of their own labour. This is both a fragile and abusive relationship that simply increases long-term instability in the system.

In the end, the economic system is made up of every single relationship it facilitates. A failure in one part is never isolated, and those who perceive themselves to be immune from shocks are delusional. If we increase the fragility of the links in our economy, we are ensuring future failures. If understanding of the economy from a systemic perspective were the norm, we would curb our own profit motive not simply out of altruism, but for our own self-preservation.

It Wasn't Me

In Halifax, November 1998, one Mr. Richard Marriott and Ms. Gail Stone were shot in an as-yet-unsolved double homicide. They were common-law partners, and owned substantial real estate investments. As you may know, both marriage and common-law unions give spouses extremely powerful property rights: as soon as I die, my spouse automatically inherits everything I own. When there is a double homicide of this nature, to put it morbidly, who dies last, wins. Ms. Stone died four days after Mr. Marriott, and therefore her estate inherited everything. Now, if you're in a loving and equitable relationship, and you've done your wills together, and you make certain both sides of the family are taken care of in either will, then you hope that there will be no fighting over the spoils... but quite frankly, every single will in existence has probably been perceived as unfair by most beneficiaries of the estate. In this case, there was a fight over the properties, and during said fight, some interesting facts popped up.

You see, Mr. Marriott was a drug dealer, and his cars and bling and houses were proceeds of crime. Proceeds of Crime statutes exist in pretty much every jurisdiction around the world (possession is 9/10ths of the law, after all!) and they all say more or less the same thing. If a gain is ill-gotten, it don't belong to you. If you get an ill-gotten gain from someone else, it's still ill-gotten. Just because you didn't cap someone's ass and steal their prize-winning pet Japanese Carp to sell on the black carp market, doesn't mean it's not a hot carp any more. The carp's still stolen - it's just now in possession of someone who didn't otherwise commit a crime. As a matter of fact, a person who purchases (for example) a hot carp - even if they had no knowledge of the fact it was stolen - may still be charged for being in possession of proceeds of crime. One key mitigating factor in sentencing is typically the amount of "due diligence" a buyer does before purchase. If a judge asks the question "ok, you had no knowledge that the carp was hot, but how hard did you try to find out whether it was hot or not?" then you'd better have done some searching and legitimately come up with nothing. It's like the typical "but she told me she was 18" defence: if you didn't try to verify the facts, you're still guilty. And a dipshit.

What happened to the properties? Well, they were subject to some pretty serious court wrangling. For those of you whose eyes glaze over at the very sight of legalese, I'll save you the pain and duress. This case was an appeal of an earlier decision that awarded - in the eyes of the Crown - too much to the estate of Ms. Stone. Specifically, the estate had somehow managed to claim one of the houses in its entirety when all money used to purchase the house, except the down payment, was a proceed of crime. The court eventually sided with the Crown, indicating that the house would be forfeited and the deceased's estate would receive the amount of the legitimate down payment. Justice was done, and Her Majesty the Queen of Canada slept well that night, after tucking in all her corgis.

The nice thing about this case is that we can all understand the essential issues of justice surrounding it. If you do something bad, you should not gain because of it, nor should anyone else gain from anything ill-gotten. It's not about the person who possesses the ill-gotten gain, it's about the ill-gotten gain itself. If I come to your house, surrounded in police, and wave a forged title deed in front of your face and have you forcibly evicted, I have uttered a forged document (Criminal Code s. 368) and gained by it. If I die and pass that property on to my squeaky-clean volunteers-in-an-old-folks-home patriotic-to-a-fault rescues-animals-from-shelters always-buys-a-crate-of-girl-guide-cookies-and-gives-them-to-the-homeless son, the property is still ill-gotten. No matter how good a person my son is, he's now in possession of the proceeds of crime: YOUR rightful house! I doubt you'd consider him a particularly good person unless he gave it back to you. His claims of "but *I* didn't steal the house!" would likely (and rightly) fall on deaf ears. We all understand the basic justice in this. It's simple. In the terms of our tradition of English law, it's "Natural Justice": fair and unbiased application of law in the spirit of procedural fairness. Property rights have been an essential part of our laws for centuries.

It's for this reason that we can now, potentially, look at this news story, regarding the use of Beaver Lake Cree land by oil companies, through the lenses of the same justice. When corporations are able to use properties that impinge on the rights of anyone to the rightful use of their own property, they cannot make the "but *I* didn't confiscate the land" defence. When the judiciary of Canada makes a decision that the rights of the Beaver Lake Cree Nation under Treaty 6 could be violated by current oil extraction, we can understand through the lens of Natural Justice that the claim (and the finding) is sensible and right. Whether a corporation says "she told me she was 18" or "we didn't knowingly violate Treaty rights", the result should be the same: under our system of law, in the eyes of our own idea of justice, and in the spirit of Natural Justice, the Beaver Lake Cree have a claim that must be heard. Whatever the final decision, they certainly deserve a hearing.

I didn't come here to talk about some random drug dealers, obviously. When I speak to my (non-First Nations) friends about First Nations issues, many routinely counter the arguments by saying "why are they blaming me for something I didn't do?" Well, it's correct that none of us took First Nations' lands, none of us violated the Treaties directly, we are not in any way directly responsible for the situation almost all First Nations find themselves in... but some among us are benefiting from the proceeds of crime. While that does not mean we are bad - it cannot change our ethical essence - it means we may be in possession of something that isn't rightfully ours. We need to understand that no matter how good we are (and most of us are good), no matter how generationally removed we are from the Treaties, the First Nations are not telling us "you did something wrong", they are saying "some among you are benefiting from the wrong done by others".

I'm a product of British Isles stock and a third generation Canadian. There isn't a drop of First Nations blood in my body (any First Nations peoples reading this will likely add the ellipsis "...that you know about"). I look at things through a distinctively European lens, and my capacity to comprehend the First Nations' worldview is particularly weak - but I do understand the philosophical concept of Justice, as do you. Next time you hear about a First Nations issue, please - PLEASE - use your empathy. I'm not asking for you to give up everything you own, put on a hairshirt, and self-flagellate for the rest of your life. I just ask you, I beg you: please have empathy. Please listen. Please understand that the First Nations are simply trying to claim what is their right under the Treaties the government signed with them. If I took your house by the use of a forged deed and passed that house on to my son, you would still try to get your rights back. Your quarrel is not with my son, but with the rights I passed to him.

I would fight for your rights to your property under law, firstly because it's the right thing to do, but also because protecting your right to your property strengthens my rights to my property. Our approach to our First Nations brothers and sisters should be no different. Protecting their rights to their lands under the Treaties strengthens our own legal claims to our legitimate property. We should seek justice for all. For Canadians like us, it's only natural.

Subverting the Global Economy through Local Action Part 2

[part 1 here]

For a while, I had intended to write this post all by myself and make it a masterpiece of bloggery, so I started looking around for inspiration and links.

And I found others have already mastered this topic.

So I'm not going to write an article, post, diatribe, or paean: I'm going to stop right here and link to others' works that cover the topic far more thoroughly than I could in a single article. The overriding thesis: we don't need to do anything particularly organised to overturn the current economic order. All we need to do is reduce our overall need for money. That can be done through sharing, gifting, cooperation, crafting, making, and swapping - all of which is fun and builds community, which is far more useful than money. But don't take my word for it:

The concept of Earthship Village Ecologies links ecological concepts by creating work and resource flows rather than currency flows, and creating community instead of economy.

This is a good core article on the economic underpinnings of the Sharing Economy, and how we can resuscitate it for the modern age.

The Creative Commons is a global open-source style movement that gives a legal basis for sharing IP without giving corporations or individuals the opportunity to monetise or acquire the rights to an idea, product, or piece of work. A good example is this website for the sharing of free designs for 3d printing, in this case featuring designs for how to print an entire flying quadcopter. It's quite simply a fact that IP stifles small-scale economic development and in many cases is counterproductive. The people who realise this can share their concepts and code through these above movements so that their ideas serve the greater good of the community and allow small-scale economic development to expand.

The anti-colonial and anti-enclosure movement rising in (primarily) the third world seeks to defend cultural legacy from corporate patents.

The Transition Towns movement seeks to create regional and local economic autonomy and development from the "great powering down" that is starting now. The link is a practical primer on how to get local research to assist in economic development on a local level.

This is just the tip of the iceberg, but countless groups are looking at a less cash-intensive future that is more community-based, sustainable, and happy. Less money can mean less security in these cash-intensive times, but less need for money means greater security, more community, and in the end, more happiness for all concerned (except the bankers, who might actually have to learn to work for a living).

Subverting the Global Economy through Local Action, Part 1

It's a common and nonetheless sad story that, no matter where or who we are, we assume that the only way to change our lot in life is to rally behind a figure who, inevitably, betrays his or her ideals once in a position of power. The politicians who win elections can bend but won't act, and those who won't bend and would act: don't win. Leaders are, on the whole, incapable of NOT doing what the system is set up to make them do. In a democracy, politicians appeal to their base with stirring rhetoric to get elected, and once in power, must compromise and please the majority. That's the democratic system. On the other hand, authoritarian concentration of power comes greater need to offer power and wealth to the people who support you, and no matter how benevolent the despot, his innate sense of entitlement and ability to rationalise make it impossible for him to resist the trappings of power and reject its substance. So much for leaders.

So what have we got to rely on? First, we must take power over ourselves. Power over oneself is the greatest of powers, but we just happened to have become acculturated to giving this power up to authority to the point that we don’t know that it’s gone. Next, realise that there’s a lot more in this society than just governments and individuals. We're not only talking about ourselves, but the communities that we left behind to inhabit our soulless suburbia. Building on a few of my previous articles, I wanted to talk about how to use your personal power to make the world a better place. No, this isn't intended to be some kind of self-help or inspirational article. This is a blueprint for a peaceful and insidious revolution that just happens to be inspiring.

The global economy has made many goods very affordable. The more globalised we become, the cheaper everyday items seem to get. Economies of scale, container ships, and big box stores are efficient: they are able to produce the most amount of widgets for the lowest price. Efficiency is exactly what the global economy is about. Companies can move production of widgets to the countries with the lowest-cost workforce, countries that provide the most favourable tax laws, or countries that subsidise corporate inputs. Given the smorgasbord of potential options for cost externalisation (fancy language for how corporations make other people pay for the stuff they use) and arbitrage (fancy talk for simultaneously exploiting the margin in price between two regions for profit), companies can naturally make their homes in locations that offer them lowest cost for their operations.

The problem with this efficiency is that it means one thing: concentration. Profits become concentrated when corporations operate in an environment where they are free to reduce or externalise their costs. As much as I believe in the free market, I believe that everything from lower salaries and cheap electricity to favourable tax legislation and undervalued currencies are externalities naturally produced by the current way of doing business. My definition of a truly free market is as free of these corporate advantages as it is free of hindrances. All externalities must be internalised to create a truly free market. Economies work best when all actors have an even playing field. When the field is uneven, groups can effectively arbitrage (for example) the high-currency consumer power of country A with the low currency and tiny salaries of country B. There are plenty of multinationals that would be unable to survive if it wasn't for these arbitrages and externalities. In my opinion, they shouldn't survive: they are poster-children for unfair business practices and unsustainability... but I also understand that, when the only goal of a corporation is to expand share value, they will naturally act amorally to achieve these ends.

The WTO (formerly GATT) has facilitated a kind of corporate wonderland where corporations (through their governmental proxies) can take countries to court for throwing up trade barriers. Trade barriers, in this case, can mean even something as simple as health legislation (where the US forced the EU to accept hormone-laden beef that has been linked with increased risk for cancer) or environmental protection legislation (where Venezuela forced the US to allow them - effectively - to sell more polluted gasoline on the US market than extant EPA legislation allowed), or indeed human rights legislation (where Massachusetts was forced to deal with Myanmar even though they had made legislation that disallowed them to deal directly with despotic regimes). This is simply in their nature: corporations act to increase share value. They will use all tools at their disposal to grow, and prying open other markets is one of the things necessary for growth past a certain point. It is no surprise that GATT became the WTO and the WTO may likely expand to the TPP. It's a natural evolution. Predictable, really.

We need a way for economic proverbial Davids to compete against proverbial economic Goliaths. The purpose is not to abolish the WTO, throw out the multinationals, eat the rich, and establish a dictatorship of the unions. That can't be done, especially not through any kind of direct conflict. No, the purpose is to make the people in your immediate area able to compete against money. Not simply against this company or that company, or this product or that product, but against the fundamental underpinnings of the entire neoliberal economy: money itself. 

More in the next instalment. Read this for a taste of the direction we're going. A shout out to The Valhalla Movement, a step in the right direction.