Parasitism vs Public Good

Here is a theory of mine. The US is an immigrant country founded on the populations and territories of multiple empires. The US doesn’t have it’s own stable traditional culture, although a few small sub-populations do.

Because of this, the US has developed a society and economy that is dependent on a constant influx of immigrants and hence a constant infusion of social capital that these immigrants bring. The American Dream is most strongly believed in by immigrants because that is what it is designed for, as advertising to sell a product.

There is a dysfunction at the heart of it all. The US depends on and devours the social capital that other stable societies produce, but doesn’t seem able to produce enough of its own. The US is in many ways a parasitic society.

If the US suddenly stopped immigration or immigrants stopped coming, there would be no more replacement social capital. Could the US survive that for long? Would Americans find a way to transform their society into something more stable and self-sustainable? Or would the whole thing collapse?

The US is a young country. It’s dynamic culture is its strength and weakness. It’s normal for a young country, like a young person, to be unstable and dependent on others. But for long-term survival, a young country has to eventually grow up and gain maturity, if only for the reason other countries will lose tolerance and patience with the immaturity.

Ready or not, the US has to enter adulthood. What kind of society will we grow up to be? Assuming we don’t kill ourselves first, as the young sometimes do.

* * *

As a comparison, what comes to mind are the other countries based on former colonies of the British Empire. Such as Canada, Australia, New Zealand, etc. All of them seem more mature and stable, compared to the US.

Maybe this relates to several factors. The main one is these other countries didn’t have as much good farmland to attract, employ, and feed such massive waves of immigrants. They also didn’t have such vast amounts of other natural resources that allowed the economic boom in the US.

Without such things, they were able avoid the misfortune of having their ruling elite tempted by imperialist aspirations. Instead, they were forced to develop more internal stability and national self-reliance.

Canada particularly stands out, as it is quite a bit younger than the US and yet shares the same continent along with much of the same history. When Canada was founded as a country, it had a population about the same as when the US was founded. A similar starting point that went in a different direction.

For whatever reason, Canada never had large waves of immigrants and I’m not sure they were ever interested in following the immigration example at their southern border. Canadians seem to have had more of an immigrant policy of quality, rather than quantity. As far as I know, they don’t have a gigantic statue with resounding words about inviting huddled masses to their shores.

Is a country like Canada somehow more stable and mature than the US? If so, what might be the reason for this? Is it just because of what I mentioned? Or is there more going on? What makes possible, within a country, the development, maintenance, and perpetuation of social capital and culture of trust?

* * *

Anu Partanen, in The Nordic Theory of Everything, has got me thinking about what countries both create within their own society and how they impact other societies.

One example is education. The US has low ratings for primary education, while the Nordic countries rate more highly. On the other hand, the US has a higher education system that ranks high on some measures, although this is quite misleading.

The major rankings of national higher education only look at the best schools from each country which creates an inherent bias against smaller countries with fewer college students and fewer schools. If including all students in all higher education within the US and Nordic countries, the latter actually ranks higher. So, per capita, the Nordic countries are better educating their populations at the primary and higher levels.

Still, it remains true that the US ivy league schools are among the best in the world. There is an important factor to be considered. A large part of ivy league professors, graduate teaching assistants, and students were born, raised, and received primary education in other countries. The US benefits from the brain drain of other countries, but the US doesn’t have to pay for creating this benefit. The most brilliant people in the world will usually want to work in the best schools in the world and this constantly stacks the deck in favor of particular countries.

As such, the US doesn’t have to improve its own primary education. It can simply rely upon other countries with awesome primary education to keep producing high quality students to attend the US ivy league schools. Even wealthy Americans who go to ivy leagues typically got their primary education from high quality schools in other countries or else private schools in the US that avoid the problems of the US education system, as they certainly weren’t going to be sent to crappy public schools in the US.

The US benefits in many other ways as well. Partanen offered some great examples in how well functioning social democracies help to create an atmosphere of public good that isn’t limited to a single country. A welfare state, what the author calls a well-being state, allows for experimentation and innovation without fear of the consequences of failure. It can be easier to try new things, when there is social capital and a culture of trust to support your endeavors.

Below is the relevant passage from The Nordic Theory of Everything (Kindle Locations 4278-4301):

“We’ve seen how successful Nordic businesses are, and to be sure, in the Nordic private sector, the desire to make money is a powerful motivator. But Nordic societies are also leading innovators in the public and nonprofit arena, which has contributed to their dynamic competitiveness and prosperity as well. The creativity and ambition of Nordic government and nonprofit sectors are living proof that people in a capitalist democracy can be motivated by much more than simple greed.

“Consider Denmark again, a country that is pursuing the world’s most ambitious engineering solution to address climate change. Copenhagen has set a goal of becoming carbon-neutral by as early as 2025, and has been installing an ultra-high-tech wireless network of smart streetlamps and traffic lights that themselves save energy and also help traffic move more efficiently, reducing fuel consumption. All this is good for the environment, the nonprofit public sector, and the private sector. By aiming to wean itself as a nation off fossil fuels before 2050, for example, Denmark has become a world leader in the wind-power industry.

“Sweden, meanwhile, has set itself the ambitious goal of completely eliminating deaths from traffic accidents, and in the process is reinventing city planning, road building, traffic rules, and the use of technology to make transport safer. The country established the goal in 1997, and since then has reduced road deaths by half. Today only three out of every one hundred thousand Swedes die on the roads each year, compared to almost eleven in the United States. Consequently transportation officials from around the world have started to seek Sweden’s advice on traffic safety, and New York City mayor Bill de Blasio has based his street safety plan on Sweden’s approach.

“Of course one could also argue that the biggest Nordic innovation of all is the whole concept and execution of the well-being state.

“Americans might be surprised, too, by the ways that some of the key building blocks of the global technology sector have been the result of nonprofit innovation. The core programming code of Linux, for example— the leading computer operating system running on the world’s servers, mainframe computers, and supercomputers— was developed in Finland by a student at Helsinki University, Linus Torvalds, who released it free of charge as an open-source application. When Torvalds later received some valuable stock options, they were a gift of gratitude from some software developers. In addition Finns have made other significant contributions to the global open-source software movement, a community of coders who volunteer their time and skills to create free software for anyone to use. One of the world’s most popular open-source databases, MySQL, was created by a Finn named Monty Widenius and his Swedish partners. Today just about all American corporate giants— including Google, Facebook, Twitter, and Walmart— rely on MySQL. Widenius and his team have, in the years since, nevertheless made good money, but they did so by providing support and other services, while the software itself remains free to the world.”

 

Minimum Wage, Wage Suppression, Welfare State, etc

I’ll keep this post simple. I mostly just want to offer some views on the wage issue that most people don’t come across. You won’t hear most of this in the MSM. You won’t likely even see it in social media, unless you have some very well informed friends. But first let me summarize the issue while offering some straightforward analysis.

The specific issue at hand is the minimum wage and whether to raise it. Everyone is talking about it. But the discussions I come across most often lack much depth and breadth. I see two related issues: wage suppression and welfare state.

Wage suppression is my main focus. It relates to decades (or even generations) of Fed hard money policy, union-busting, and off-shoring.

The Fed hard money policy is something I came across in William Greider’s Come Home, America. You can find the relevant passage at the bottom of the page.

Union-busting is something I was already well aware of. And off-shoring as well. These two are closely related.

It is easier to bust unions with threats of off-shoring. If labor tries to strike, the scabs will be in far off foreign countries. This is very sneaky and basically immoral in all ways. It undermines both democracy and free markets for there is no such thing as anti-democratic free markets. Corporations often off-shore to countries that lack not only democracy but also lack human rights, workers protections, and safety/environmental regulations. In these foreign countries, corporations are sometimes free to bribe officials and use private goons, police or the state military to bust up unions the old fashioned way.

It isn’t just foreign governments that corporations can bribe, threaten, control and otherwise influence. Off-shoring is possible because our own corporatist (corporate-owned-and-operated) government allows and encourages it with free trade agreements. These free trade agreements are shaped by big biz and so unsurprisingly are business friendly and labor unfriendly. Such trade is only ‘free’ for big biz. In these free trade agreements, there are rarely if any demands for participating countries to have democracy, human rights, workers protections, or safety-environmental regulations.

The second issue is where it gets most interesting.

Conservatives, libertarians and even many mainstream Democrats complain about what they deem an out-of-control welfare state. But this welfare state ultimately functions in two ways. Because minimum wage workers aren’t making a living wage, they end up on welfare which means the welfare state is a massive apparatus to use taxpayer money to subsidize big biz. And so without welfare the average American would be even more desperate.

What does desperation breed? Populist reform or even revolution. The ruling elite will never willingly end the welfare state because, along with mass incarceration, it is a social control policy. If minimum wage and all welfare was instantly ended, there would be revolution over night.

The minimum wage and welfare combo is the only thing making wage suppression and social oppression tolerable. As long as people are getting by, even if only barely, they won’t fight for their rights as citizens. It is the old bread and circus routine with big biz media serving the circus part of the equation.

There are a number of options here:

  1. We can raise the minimum wage while continuing wage suppression and while not increasing welfare.
  2. We can strengthen and broaden welfare while continuing wage suppression and while not raising the minimum wage.
  3. We can more moderate raise the minimum wage and increase welfare while continuing wage suppression.
  4. We can end wage suppression and solve the problem at its root.
  5. Or we can do none of the above and wait for the populist revolts to begin.

There are no other options. Excluding a return to such things as feudalism, indentured servitude, debt bondage, slavery, etc. Although there are other ideas that could work, such as a basic income, related to Paine’s citizen dividend. So, at least within the present system, there are no other options.

* * *

Here are a few links to helpful articles and a couple of discussions:

An Idea Conservatives Should Love
By E.J. Dionne, Jr.
truthdig.com
Feb 17, 2014

The Skills Gap Argument as Cover for Wage Suppression
By J.URIS D.EBTOR
January 23, 2013

Suppressing wages and increasing corporate profits:
The tough math behind the current economic recovery.
By mybudget360

Suppressing wages
By davald
The Observer
December 10, 2012

The China trade toll
Widespread wage suppression, 2 million jobs lost in the U.S.
By Robert E. Scott
Economic Policy Institute
July 30, 2008

NAFTA AT SEVEN
Its impact on workers in all three nations
By Robert E. Scott
Economic Policy Institute
April 2001

ALEC AND WAGE SUPPRESSION
By Mary Bottari and Rebekah Wilce
from PRWatch
July 23, 2013

The Force Behind Bills To Lower Wages and Suppress Workers’ Rights? You Guessed It: ALEC
By Mary Bottari and Rebekah Wilce
inthesetimes.com
July 30, 2013

Union Busting adds to corrupt bureaucracy and incites crime
By zacherydtaylor
open.salon.com
September 26, 2013

On Becoming a Nietzschean Society
By Greg Horsman
About Questioning and Skepticism
November 1, 2013

What is ‘wage suppression’ and is it real?
Discussion on talkrational.org

Why should taxpayers subsidize low wage workers? (fast food, minimum wage, salaries)
City-Data forum

And below is the aforementioned passage from William Greider’s Come Home, America.

* * *

Kindle Locations 557-562

It was mainly the Federal Reserve-sheltered from public scrutiny and protected from political accountability-that engineered America’s great shift in fortunes. The Fed “hardened” the value of money and wealth with its successful campaign to suppress price inflation. Then it proceeded to encourage or passively allow the scandalous financial behavior that followed-wealth being concentrated in the financial sector, the growing inequalities among Americans, deregulation and the creation of dominating megabanks, and recurrent frauds and financial bubbles followed repeatedly by government bailouts of banks and financial firms.

The Federal Reserve’s policy essentially tilted the normal economic balance hard in one direction, then held it there for a generation. It favored wealth over wage income, creditors over debtors, capital over labor, financial investors over producers.

Kindle Locations 601-602

“Hardening” the value of money may modestly benefit average consumers, but the true winners are people with vast accumulations of financial wealth. As the Federal Reserve drove the inflation rate lower and lower, eventually getting it close to zero, disinflation was a great gift to the wealthy, one that kept on giving.

Kindle Locations 621-635

The “hard money” policy was sustained in a way that might have shocked many Americans if they had known about it. The Federal Reserve suppressed inflation by targeting the wages of working people. It prevented their incomes from rising even though, in a healthy economy, wages would normally rise consistently. Nobody in authority ever acknowledged this strategy in a straightforward way, but the reality was well understood by economists and financial investors. By holding back the natural energies of the economic recovery, this monetary policy kept labor markets slack and the unemployment rate higher as a result, at around 6 percent. That made it very difficult for industrial workers, union and nonunion, to demand higher wages. If the economy had been allowed to grow faster, more jobs would have been created, unemployment would have fallen, and workers would have gained bargaining power.

But the conservative Federal Reserve regarded rising wages as an inflationary threat and worked deliberately to prevent it. Throughout the 1980s and most of the 1990s, the Fed protected its victory over inflation by keeping its foot on the brake and tapping it occasionally to make sure the economy did not get too healthy. That is, the federal government-represented by the central bank-ensured that the broad ranks of working people would not share in the “good times.”

Paul Volcker used to carry in his pocket a card setting out the latest wage settlements in contracts negotiated by unions. When politicians urged him to let up and lower interest rates, the Fed chairman would cite recent wage agreements as evidence that he must hold tight. Monetary economists devised a theory to justify the antiwage policy. They claimed inflation would return if the Fed let the economy progress to below a so-called natural rate of unemployment. The theory was bogus; it was subsequently disproved by real-world experience when unemployment fell to 4 percent in the late 1990s, yet no inflation appeared.

The Federal Reserve, in other words, has played a central role in suppressing wages during the last three decades, a policy that was powerfully reinforced by globalization and the migration of US jobs to low-wage economies. Was this in the public interest? The question was not discussed in polite circles. The presumption among the governing elites, including the most influential newspapers, is that everyone shares a common interest in subduing inflation and therefore wage suppression is required. Wall Street celebrated the central bank’s success in restraining economic growth by dubbing it the “Goldilocks economy”-not too hot, not too cold, but just right. It may have seemed just right to financial investors. For working people, it was way too cold.

Romney’s Mormonism: Socialism, Progressivism, Xenophobia

A caller on Diane Rehm’s NPR show (I think it was October 11) offered an insightful observation. And the two guests, mainstream talking heads, were utterly clueless in typical fashion.

The caller commented on how Ryan spoke of Romney’s charity. The caller thought that charity was great and that it was great that Mormons take care of their own, but he wondered how much Romney donates to charities that aren’t Mormon.

In a president, you want someone who will be concerned about everyone, not just those seen as part of their group. This is the fundamental problem about Romney honestly admitting that he thinks 47% of Americans are unworthy of his concern and compassion, that therefore he is genuinely only interested in representing the upper classes and other groups of people he happens to personally identify with.

What really caught my attention was something else the caller said. He pointed out that the Mormons are socialist within themselves. This is common on the right. Conservatives are fine with socialism for people within their own group, but not for those not part of their group.

This is where the cluelessness of mainstream talking heads comes in. They denied this was socialism. How can smart people be so ignorant about such basic issues. Of course, it’s socialism. Just because it doesn’t fit Cold War anti-communist propaganda doesn’t mean it can’t be socialism. Most early socialists in America were religious and limited their socialism to the in-group.

This is clueless in another way. The guests argued that the Mormon church isn’t a government. Of course, the Mormon church is a government.

 
Mormons have always kept their church governance closely tied with political governance. In Mormon Utah, the church essentially is the government, in fact originally tried to create a government separate from the  United States. You move to a Mormon town and you will be forced to follow Mormon-based laws. Furthermore, tithing is a tax, not a choice if you want to be a Mormon just as federal taxes aren’t a choice if you want to be American, although both being a Mormon and being American are choices that one can always choose otherwise. Mormons don’t even have a choice in how their church government spends their money, certainly less choice than an American citizen for at least democracy allows for one to vote in or out one’s leaders.

Besides, the right all the time uses the government to fund their religious programs. Churches get tax exemptions and many religious organizations get government funding. For example, the religious right voted in Bush who then rewarded them by funding abstinence only sex education. Compassionte conservatism is ultimately religious ‘socialism’ being implemented in secular politics (‘socialism’ in the broad sense as defined by conservatives).

This is all made clear by looking at history. Back when immigration was low and there were fewer foreigners\outsiders, Mormons were strong supporters of the social welfare programs of Progressivism. Now that immigration is at a high point, Mormons vote against the very programs they once voted for. Such xenophobia is sadly predictable, and it is equally true for the rest of the religious right.