The political economy of a universal basic income: "your view of what is feasible should not be backwards looking. The normalization of gay marriage and legalization of marijuana seemed utopian and politically impossible until very recently. Yet in fact those developments are happening, and their expansion is almost inevitable given the demographics of ideology... UBI — defined precisely as periodic transfers of identical fixed dollar amounts to all citizens of the polity — is by far the most probable and politically achievable among policies that might effectively address problems of inequality, socioeconomic fragmentation, and economic stagnation." [more inside]
For the past several months, Allergan has been fighting a take over by its competitor Valeant. While mergers and acquisitions are far from unusual in the pharma world, this may be the first time that a public corporation has combined efforts with an activist investor (Bill Ackman of Herbalife fame) in a bid to buy another company. Last week, Allergan sued both Valeant and Ackman, claiming their actions go beyond regulatory arbitrage and enter the realm of insider trading. At risk is Allergan's R&D operation- while Allergan spends roughly 17% or revenues on research (in line with the industry), Valeant, run by McKinsey alum Mike Pearson, spends under 3%. [more inside]
"Hi, Marc... You seem to think everyone's worried about robots. But what everyone's worried about is you, Marc. Not just you, but people like you. Robots aren't at the levers of financial and political influence today, but folks like you sure are. People are scared of so much wealth and control being in so few hands... Unless we collectively choose to pay for a safety net, technology alone isn't going to make it happen." [more inside]
Friedrich Nietzsche, famously a full professor at the tender age of 24, was in a good position to develop an acute sensitivity to the university as machine: "The student listens to lectures . . . Very often the student writes at the same time he listens to lectures. These are the moments when he dangles from the umbilical cord of the university. The teacher . . . is cut off by a monumental divide from the consciousness of his students . . . A speaking mouth and many, many ears, with half as many writing hands: that is the external apparatus of the academy; set in motion, that is the educational machinery of the university." [more inside]
Brazil has spared no expense for the upcoming World Cup. The month-long competition will feature 64 matches in 12 cities across the country. Refurbishing old stadiums and building new ones has cost Brazil $3.6bn. Several of the new stadiums will seldom be used after the World Cup, and Brasilia's World Cup stadium is estimated to have cost taxpayers $900m. [more inside]
VC for the people - "It's just that people who have options are much more likely to actually find success than people who don't." [more inside]
Why We’re in a New Gilded Age Paul Krugman reviews Capital in the Twenty-First Century by Thomas Piketty, and discusses the renewal of the importance of capital in preserving inequality across generations.
Free Money for Everyone - "A wacky-sounding idea with surprisingly conservative roots may be our best hope for escaping endless, grinding economic stagnation." (via) [more inside]
Congress takes a casual look at the peer-to-peer economy - “Finding new ways to monetise used or existing assets has the obvious and immediate effects of raising their value and the wealth of their owners, while simultaneously reducing the value of comparable stuff owned by incumbent companies — for whom monetisation already wasn’t a problem, and who find themselves burdened by the newly competitive environment. The innovations also provide a surplus to those consumers who previously would have paid more to an incumbent. And all without any new stuff actually having to be made.” [more inside]
The return of "patrimonial capitalism": review of Thomas Piketty's Capital in the 21st century (pdf) - "Thomas Piketty's 'Capital in the 21st century' may be one of the most important recent economics books. It jointly treats theory of growth, functional distribution of income, and interpersonal income inequality. It envisages a future of relatively slow growth with the rising share of capital incomes, and widening income inequality. This tendency could be checked only by worldwide taxation of capital." [more inside]
Brad DeLong, recently installed at Equitablog, lays out a future (wonkish) where the returns to capital keep increasing relative to labor: "What do we people do to add value? Eight things... [more inside]
This shift in how companies are governed and raise money is bringing with it a structural change in American capitalism. That should be a matter of great debate. Are these new businesses, with their ability to circumvent rules that apply to conventional public companies, merely adroit exploiters of loopholes for the benefit of a plutocratic few? Or do they reflect the adaptability on which America’s vitality has always been based? - Rise of the distorporation - how changes in the way companies are financed and managed is changing the wealth distribution of America.
Dwarf Fortress: A Marxist Analysis
What one does in Dwarf Fortress is create a colony of an existing dwarven fortress – you’re always sent out as a team from a much larger existing stronghold elsewhere, and your foreign relations with other dwarves are limited to that particular fortress, on the whole. Even though your settlement is independent and self-governing, and the relations with the mother fortress mostly those of trade, the purpose of the game in all its open-endedness can be nothing other than to create oneself in the image of the previous fortress. In other words, fundamentally in Dwarf Fortress you reproduce the existing structure of dwarven society on a merely quantitatively expanded scale.[more inside]
How The Economic Machine Works by Ray Dalio actually makes a case against austerity and for redistribution, but also for money printing (and, arguably, for bailouts), while stressing the need to keep making productivity-improving public and private investments. However, it could be equally entitled: How The Industrial Age Political-Economy Doesn't Work Anymore, viz. Surviving Progress (2011)... [more inside]
Washington DC has had restrictions on the heights of its buildings since the first year of its existence, thanks to its namesake -- George Washington himself laid down a limit of 40 feet in 1791 (and then suspended the limits, as did several of his successors). The limits waxed and waned over the next century or so until the U.S. Congress, in its capacity as the over-government of America's capital, laid down the Heights of Buildings Act of 1910, setting the upper limit of any building at 130 feet. Now that the city is gaining population again (for the first time since the 1950s), developers and officials may be looking to release the federal height restrictions and give control to the city government (which already has zoning limits in various areas that further restrict heights). The WaPo provides a visualization demonstrating what the skyline might look like if the limits are raised, or even if areas filled out to the current Height Act maximums.
Always totalize! This is the majuscule axiom — the maxiom, let us say — for revolution. Revolution is a total thought, a thought of the totality; they are necessarily entangled. Reform, repair, regime change, recuperation: all of these are the politics of the partial, of isolating specific problems as if they admitted of independent solution. Ezra Pound said that the epic is a poem that contains history. What matter that we might amend the last word, a minor amendment at that, a swapping out of inseparable concepts? The epic is the poem that contains totality. [more inside]
Visualisations of corporate ownership for six banks: Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, JP Morgan and Wells Fargo.
Economists and the theory of politics - "why unions were often well worth any deadweight cost" [more inside]
Among the ballot initiatives up for consideration on Tuesday is California's Proposition 34, which would eliminate the death penalty in favor of life imprisonment without parole. If successful, this measure would make California the 18th state to abolish capital punishment, following Connecticut's April 2012 abolition. It would also apply retroactively to the 727 people currently on death row in the state, the most of any state in the country by nearly 100%. While support has been increasing for Prop 34, as many as 17% of California voters remain undecided. [more inside]
From the mid 40s to the mid 50s Coronet Instructional Films were always ready to provide social guidance for teenagers on subjects as diverse as dating, popularity, preparing for being drafted, and shyness, as well as to children on following the law, the value of quietness in school, and appreciating our parents. They also provided education on topics such as the connection between attitudes and health, what kind of people live in America, how to keep a job, supervising women workers, the nature of capitalism, and the plantation System in Southern life. Inside is an annotated collection of all 86 of the complete Coronet films in the Prelinger Archives as well as a few more. Its not like you had work to do or anything right? [more inside]
Trade-offs between inequality, productivity, and employment - "The poor do not employ one another, because the necessities they require are produced and sold so cheaply by the rich. The rich are glad to sell to the poor, as long as the poor can come up with property or debt claims or other forms of insurance to offer as payment..." [more inside]
If you haven't heard much about how takeover deals like Dunkin' and KB Toys work, that's because Mitt Romney and his private equity brethren don't want you to. The new owners of American industry are the polar opposites of the Milton Hersheys and Andrew Carnegies who built this country, commercial titans who longed to leave visible legacies of their accomplishments, erecting hospitals and schools and libraries, sometimes leaving behind thriving towns that bore their names. The men of the private equity generation want no such thing.Greed and Debt: The True Story of Mitt Romney and Bain Capital
Mitt Romney and Bain Capital. The Obama campaign has been running ads attacking him for outsourcing while at Bain. Mr. Romney claims this unfair, he says "he left the firm in February 1999, but a review of public records shows that his authority lingered for three more years as Bain repeatedly listed him on government filings as the man in charge". [more inside]
What's also obvious is that this phase of Occupy, with talk of credit unions and occupying the SEC, while eminently worthy, is also kind of boring, especially when compared to the thrill of Occupy's park phase. Some, though, are ready to move on. "It's easy to go back to the park occupation and fetishize it, in a way," says Occupy Chicago's Brian Bean. "I prefer not to run a mini-society – I want to run society." - The Battle For The Soul Of Occupy Wall Street - Rolling Stone - Mark Binelli.
DEAR AMERICA: You Should Be Mad As Hell About This. Here is a helpful series of excellent visual aids that shed light on the state of our current American socioeconomy.
Solyndra used to make thin-film solar cells, but they could not make any money. The Department of Energy tried to help with a $535 million “Green” loan guarantee but the DOE missed the memo that says EBITDA needs to be in the black if they expect to keep taxpayers out of the red. Private investors kicked in another $70 million eventually but only after the DOE primed itself. As White House economic advisor Larry Summers noted, “…[government] is a crappy vc [venture capitalist]…" Thanks to the DOE though, 40 employees and 150 contractors got to keep their jobs for an extra week last year according to the WaPo.
Richard Wilkinson: How economic inequality harms societies (ted/yt) - "We feel instinctively that societies with huge income gaps are somehow going wrong. Richard Wilkinson charts the hard data on economic inequality, and shows what gets worse when rich and poor are too far apart: real effects on health, lifespan, even such basic values as trust." (previously)
"But it is the worry that the key source of corporate profitability — Chinese labor — may no longer be docile and cheap for much longer that mainly nags at the country's corporate guests as well as its rising capitalist class. And many fear that the very ruthlessness that Zizek talks about — the iron fist that the Chinese state has deployed over the last three decades in order to achieve the unbeatable 'China price' — has become a central part of the problem."
New York Magazine has crunched the numbers, Park Slope has taken the title of most livable neighborhood of New York. [more inside]
This recent academic article [PDF] by Catherine Hakim presents "a new theory of erotic capital as a fourth personal asset, an important addition to economic, cultural, and social capital," and proposes "a new agenda for sociological (and feminist) research and theory." Here's a stripped-down magazine version. The theory is controversial and thought-provoking, sure, and there are counter-arguments. The Financial Times notes the obvious: If eroticism is indeed a kind of capital, then there is a market in it. Meanwhile, newspapers get yet another reason to print pictures of sexy people. [All links are SFW]
Is Silicon Valley a systemic risk? Treasury decides to treat venture capitalists like hedge funds The Obama administration wants to regulate venture capital firms to prevent systemic risks. Silicon Valley residents are scratching their heads and asking: What risks? The rest of us should ask why Washington is targeting a jewel of the American economy that had nothing to do with the housing bubble.
Strategery is a unique hedge fund.
A close reading of the text of Volume One of Marx's Capital in 13 two-hour video lectures by David Harvey. (Two online so far) David Harvey is a Distinguished Professor of Anthropology at the City University of New York. He has been teaching Karl Marx's Capital, Volume I for nearly 40 years. Marx biographer Francis Wheen speaks on NPR as to why the book remains required reading.
Diversity counterproductive to "social capital?" James Wilson's article in Commentary magazine talks about Harvard sociologist Robert Putnam's essay recently published in Scandinavian Political Studies. In the essay, Putnam publicizes the findings of his research, conducted in rural districts, towns, and cities, whose conclusion establishes that diverse neighborhoods show less "social capital" because ethnically diverse residents seem to distrust each other. [more inside]
A recent article in Reason magazine discusses a World Bank report that comes to some unexpected conclusions, not the least of which is that "human capital and the value of institutions (as measured by rule of law) constitute the largest share of wealth in virtually all countries." Worldwide, the study finds, "natural capital accounts for 5 percent of total wealth, produced capital for 18 percent, and intangible capital 77 percent." In other words, rich countries are not rich because they have cheap natural resources (or exploited those of other countries), they are rich because of their social institutions. [more inside]
Burma's military overseers, possibly in fear of a US invasion or internal strife, are moving the country's capital. At 6:37 a.m. on November 6th, (a time selected by one of the country’s leading astrologists), Myanmar's government began relocating its ministries to a 100 square-km complex in Pyinmana, a remote forest-bound location about 390 km north of Rangoon. Some analysts said the move is being driven by fears of a US invasion, while many in Myanmar believe it is due to worries about a possible internal uprising. (This despite a commitment to a "discipline-flourishing democracy".) The country's neighbors were put-off because they hadn't been informed of the move. Fortunately, the government is sure the relocation won't affect the country's tourism industry.
Greek Temple Architecture: They were houses--houses for cult statues, storehouses of treasures given to the gods--they were not churches. Worship consisted, by and large, of sacrificial ritual--animal sacrifice: killing animals and eating them, for the most part--and, hence, it was done out of doors. The Internet Ancient History Sourcebook's Accounts of Hellenic Religious Beliefs and Accounts of Personal Religion give additional flavor and context. Greek religious architecture evolved from wooden structures and was tradition bound--they built in stone as they had in wood according to variations on a traditional canon called the orders, first and foremost, the Doric Order , the Ionic Order and the Corinthian Order. Here are some restorations. I love restorations, on paper or models rather than at the actual sites. The first in a series.
Hernando de Soto is the founder of the Institute y Libertad Democracia, one of the world's premier think-tanks on economic development, based in Peru. His argument is that development in the third-world has failed because of institutional barriers which prevent ordinary citizens from legally registering their own property. His viewpoint is not unchallenged though, as Robert J. Samuelson challenges that he overlooks significant cultural differences between the West and "the Rest". These differences reward different values than the West's capitalism, and cause development to take a very different course than Western economists predict it should.
PK Interactive receives funding from idealab According to the article on Yahoo News, "New York's PK Interactive, best known as the owner and publisher of popular "dot-com deadpool" site, F---edcompany.com, has received $18 million in private funding from idealab and its existing investors, Chase Capital Partners, Flatiron Partners and TechFund Capital." Sort of a strange turn of events, no?
Automatic Media is gone Confirming earlier speculation: Automatic Media's homepage announces that "AS OF JUNE 8, 2001, Automatic Media, Inc. has ceased operations due to an inability to secure additional financing." What does this mean for all the Automatic Media sites? Will Suck's vacation be permanent? Thoughts?