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]
Don’t Want Me to Recline My Airline Seat? You Can Pay Me [New York Times]
"...airline seats are an excellent case study for the Coase Theorem. This is an economic theory holding that it doesn’t matter very much who is initially given a property right; so long as you clearly define it and transaction costs are low, people will trade the right so that it ends up in the hands of whoever values it most. That is, I own the right to recline, and if my reclining bothers you, you can pay me to stop."
The Age of Uncertainty, A Personal View
by John Kenneth Galbraith
was a 12 (or 15) part documentary mini-series about the fickle art of economics, co-produced by the BBC, CBC, KCET & OECA
, and broadcast on television in 1977.
Galbraith’s dry Scottish Canadian wit, and the 70’s-style art-direction, are worth viewing for those who like this sort of thing. The parody corporate videos for the Conglomerate UGE
anticipated some of the ideas explored later in the 2003 documentary The Corporation
Some parts will seem dated, considering that this series was produced in the thick of The Cold War
, before the rise of Reaganomics, Thatcherism, The Fall of the Berlin Wall, the rise of the EU, yuan, electronic transfers, etc. The basic insights about the instability of financial markets are still real, as always. [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]
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]
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.
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
investments. However, it could be equally entitled: How The Industrial Age Political-Economy Doesn't Work Anymore
, viz. Surviving Progress (2011)
... [more inside]
PayPal locked down the developer’s account, and said it could only have 50% of the funds. The rest would be released as development continued, based on PayPal’s assessment of the situation. PayPal was, essentially, going to become a producer going forward. Crowdfunding's Secret Enemy is PayPal
The costs of cash.
Economists know that using cash has a built-in cost
, compared to electronic forms of payment like credit cards or direct deposits. (Prepaid cards, not so much
.) This creates a "digital divide
" that may contribute to income inequality.
A new study
out today from Tufts quantifies these costs, which hit the poor over three times as much as wealthier folks, on average.
"We condition the poor and the working class to go to war. We promise them honor, status, glory, and adventure. We promise boys they will become men. We hold these promises up against the dead-end jobs of small-town life, the financial dislocations, credit card debt, bad marriages, lack of health insurance, and dread of unemployment. The military is the call of the Sirens, the enticement that has for generations seduced young Americans working in fast food restaurants or behind the counters of Walmarts to fight and die for war profiteers and elites."
-- War is Betrayal. Persistent Myths of Combat
, an essay by Chris Hedges
of Truthdig. Responses within. [more inside]
Economists and the theory of politics
- "why unions were often well worth any deadweight cost" [more inside]
Who's the Shop Steward on Your Kickstarter? "The true product for sale on Kickstarter is not your art project, but your community and networks. ... Our projects that facilitate the funding are a side effect, a cost of doing business—the business of drilling our relationships for all they are worth."
In Praise of Leisure
- "Imagine a world in which most people worked only 15 hours a week. They would be paid as much as, or even more than, they now are, because the fruits of their labor would be distributed more evenly across society. Leisure would occupy far more of their waking hours than work. It was exactly this prospect that John Maynard Keynes conjured up in a little essay published in 1930 called 'Economic Possibilities for Our Grandchildren
.' Its thesis was simple. As technological progress made possible an increase in the output of goods per hour worked, people would have to work less and less to satisfy their needs, until in the end they would have to work hardly at all... He thought this condition might be reached in about 100 years — that is, by 2030." (via
) [more inside]
"I can say with confidence that rich people don't create jobs, nor do businesses, large or small," said über-rich venture capitalist Nick Hanauer in a March 1st TEDx talk, which TED is refusing to put on its website. [more inside]
Out of thin air?
"Have you ever said something like 'Let me buy you a beer next week'? I'm sure you have. We all issue promises of this sort. And we frequently use such promises as a form of currency... I have just described a simple credit exchange. Societies rely heavily on promising-making and promise-keeping. It is the foundation of all financial markets. I'd like to point out something about the promises you make. They are made 'out of thin air.' " [more inside]
Interview with Gary Gorton
) - Fascinating look at private institutional bank money
creation (really) and subsequent run on the shadow banking system that hearkens back to the late-19th century banking crises
with securitization playing the role of checking before the advent of deposit insurance. "Gorton is a lucid narrator of a complex tale
." (via via
Meet the new form of prison currency: Honey buns
How much money do you make with that webcomic internet thing? Dorthy Gambrell of Cat And Girl Answers.
A simple idea: take an ordinary savings account, but instead of paying interest to account holders, hold a lottery to see who gets the lump sum. Freakonomics Radio investigates Prize-linked savings (PLS) accounts (Part 1
, Part 2
), which combine two things that seem completely at odds with each other: saving money and gambling. In Highland Park, MI, PLS accounts have been very successful
at converting "non-savers" into "savers". Why hasn't it caught on in the US? It's illegal in most states, of course.
) - "The sources of American economic inequality
are largely political
– the result of deliberate political decisions to shape markets
in ways that benefit the already-privileged
at the expense of a more-or-less unaware public
." (via bd
) [more inside]
A former magazine writer in his late fifties moves to San Diego and lives on very little money indeed. In the October 1977 issue of The Atlantic, he describes the stratagems behind his thriftiness
. [more inside]
"We infer that beyond about $75,000/y, there is no improvement whatever in any of the three measures of emotional well-being."
Two social scientists at Princeton, Angus Deaton
and Nobelist Daniel Kahneman
, have a new paper in PNAS about money and the determinants of happiness. Increased income above $75,000 is not associated with higher subjective happiness, though it is associated with superior scores on measures of overall life satisfaction. Other tidbits: "Religion has a substantial influence on improving positive affect and reducing reports of stress, but no effect on reducing sadness or worry... The presence of children at home is associated with significant increases in stress, sadness, and worry."
Goodwill: Monetary policy for the 21st century Here's my proposal. We should try to arrange things so that the marginal unit of CPI is purchased with "helicopter drop" money. That is, rather than trying to fine-tune wages, asset prices, or credit, central banks should be in the business of fine tuning a rate of transfers from the bank to the public. [more inside]
Basicland vs. Sorrowland
A parable about how one nation came to financial ruin by Charles Munger
. For extra colour there's... [more inside]
The new monetary standard: Copper.
Hard up for cash? Roll your own
:P [more inside]
House Financial Services Committee Chairman Barney Frank
gave a bank, whose capital ratio equaled only 1.88% of assets at the bank, versus a desired level of about 6%, TARP money after heavy lobbying. Frank inserted into the bill a provision to give special consideration to banks that had less than $1 billion of assets, had been well-capitalized as of June 30, served low- and moderate-income areas, and had taken a capital hit in the federal seizure of Fannie Mae and Freddie Mac. (WSJ link) [more inside]
Oil's got one
. So does cocaine
. There used to be one for light bulbs
and another for uranium
. While we know one currently exists for diamonds
, some folks think the music industry
has one. [more inside]
Money as Debt. Paul Grignon's
47-minute animated presentation of "Money as Debt"
tells in very simple graphic terms what money is and how it is created.
The Harvard University Worklife Wizard
, created by an international team of journalists, economists, and statisticians, is Barbara Ehrenreich's wet dream. It's also a fantastic resource that has flown pretty much under everyone's radar. The Worklife Survey
drives the constantly-revised, constantly-refined Salary Comparison Tool
, which is always hungry for more data about employment from around the world. And when they say they want data from everyone, they mean it-- there's even a VIP Salary Checker that pits the wages of the Yankees against those of the Red Sox
. (Plus if you take the survey, you can apparently earn a chance to win a trip to South Africa). Personally, I love the Workplace Horror Stories
(and there's a competition there too). I can't look at a nail clipper the same way now.
The other religious riots.
While much of the world's press has covered the Muslim cartoon riots, not nearly as much ink has been spilled over the continuing violence in Nigeria. A good analysis of underlying factors here
A Shell report
points to oil as a proximate cause of violence as well. For oil companies, this may not be a bad thing
(If I was more interested in trolling, I'd have framed this as "Christian Leaders Fail to Condemn Religious Violence." The real world's a little more complex).
I'm the 24,519,565 richest person on earth!
According to the Global Rich List, which says I make more than 99.506% of the people alive today. Only 24.5 million people between Bill Gates & myself...
The Million Dollar Homepage.
Sure, you could buy gigabytes of online storage for a year with $100, but wouldn't you much rather have 10x10 pixels here? Is it stupid? Yes, but havn't you always wanted to make hundreds of thousands of dolars without doing anything?
Something else happened during that chaotic scene, something that convinced Chen of the monkeys' true grasp of money. Perhaps the most distinguishing characteristic of money, after all, is its fungibility, the fact that it can be used to buy not just food but anything. During the chaos in the monkey cage, Chen saw something out of the corner of his eye that he would later try to play down but in his heart of hearts he knew to be true. What he witnessed was probably the first observed exchange of money for sex in the history of monkeykind. (Further proof that the monkeys truly understood money: the monkey who was paid for sex immediately traded the token in for a grape.)
predicted by Stephen Roach
, the chief economist at investment banking giant Morgan Stanley. He's been right before
Where Wealth Lives "The top 1% of families, as measured by net worth, receive about 15% of income but own 30% of the nation's assets -- including stocks and bonds, homes, and closely held businesses. That's according to the Federal Reserve's Survey of Consumer Finances. The top 10% of families, as measured by net wealth, own 65% of assets, and the top 50% own a stunning 95% of assets..."