Category Archives: Economics

Homo Sapiens – a species too clever for its own good, but too stupid to do anything about it

Two prominent scholars, one physicist and one biologist, were asked the compulsory question: do you think there is intelligent life elsewhere in the universe? The physicist said yes: given the unimaginable number of galaxies and solar systems, there must be organisms with cognitive capacities somewhere, from pure statistical reasons.

Faithful to his experience regarding the conditions of life the biologist was more reluctant to conventional wisdom on the matter. He assumed that life can be suspected to follow the laws of evolution everywhere it exists. And evolution doesn’t further higher organisms; the simple ones are the most sustainable. Looked at it that way humankind on earth may exist in a unique and extremely short period in astronomical terms, sufficiently unique that it not necessarily occurs elsewhere right now.

I apologize for this depressing opening, but I’m about to try a rough thesis:

Homo Sapiens is a species too clever for its own good, but too stupid to do anything about it.

We could begin with the most obvious risk of total extermination, nuclear weapons. Sharp human brains have figured out how to exploit the energy inherent in the bonds between elementary particles in the nucleus of atoms. Savvy technicians used this knowledge to construct a bomb with monstrously explosive power. Then these devices were handed over to politicians and generals, usually not famous for their intellectual brilliance.

Maybe the balance of terror and the threat of total destruction have hindered the Third World War (and the definitely final one) so far, but it has been a close call several times. And the attempts to diminish the risks haven’t been overly impressive.

On the contrary, the United States enhanced the danger unilaterally by abandoning the ABM treaty in 2001. Russia was then still a harmless wreck, posing no threat. And anti-ballistic missiles are offensive, first strike weapons, in that they block an enemy from retaliating to a nuclear attack. The stupid part of the human nature accepted this unprovoked increase in the risk of total extermination without much debate. Today the US has installed ABMs in Poland and Czech Republic, obviously aimed at Russia. We can’t do much more than keep our fingers crossed.

A less stochastic menace to human survival than nuclear weapons is climate change. We can now be sure that this threat can’t be eliminated, only somewhat mitigated if we put all our efforts into doing so. But do we?

Let’s look at my country, Sweden, considered to be progressive in a number of ways. If you ask an average Swede what s/he first of all does to save the environment the answer most probably is: “I separate my household waste into different fractions, which I deliver at specific waste stations”. Anyone who knows fundamentals about waste realizes that such efforts don’t save any environment, rather the opposite. It just saves the conscience of a misinformed population.

The next thing a house-owning Swede may do is to drill a couple of hundred meters into the ground to capture somewhat warmer water, install an expensive heat pump and thus reduce the amount of electricity needed for heating his house (what he probably not reflects upon is that earth’s heat mainly comes from nuclear reactions). His reduced electricity bill may please him, but considering what he has to pay for investment, maintenance and repair, the bottom line is not overwhelming. And the effect on global warming is thus insignificant.

These everyday environmentalists are usually friends of wind and solar power but opposed to nuclear power. The most enthusiastic among them buy “wind power” from their power company, install solar cell panels on their roofs and vote for the Green Party. The effects of their conviction is not just to promote symbolic actions, but in fact counter-productive for reducing global warming.

Take solar energy. Happy headlines announced that electricity output from solar cells in Sweden had doubled two years in a row. What the news didn’t reveal was that the total output now amounts to 0.04 percent of the country’s energy demand (that is: equals zero with an error margin). To spend large amounts on meaningless investments affects indirectly also the environment.

And then the dedicated and hoodwinked Swede goes out to buy a car which has some kind of “environment certificate”, satisfied that he has contributed to save the world.

The only energy source capable of really reducing carbon emissions on a global scale is nuclear energy. Countries like China, India and Russia take this seriously and install new nuclear facilities. Russia is an important producer of plants, and even developing countries show great interest in nuclear energy. Is this where the future is built, while pampered and deluded western ideologues are reading the map upside down?

What the climate issue – and thus human survival – really needs is for us to adopt an entirely new lifestyle, which most likely requires a completely different economic system. There will be no room for brainless consumerism generated by perverted profit-hunting. Instead we have to see genuine solidarity among entire populations.

In short: the intelligent side of our human nature has to take command over the emotional (stupid) side.

Perpetual violence – to be cured by more violence?

Baton Rouge again…

This time it’s said to be retaliation for the last time. In that case it’s how violence works, which is a truism familiar to everyone. Also well-known is that violence easily triggers chain reactions, multiplying the killings.

One reasonable explanation for why the US police use their weapons so readily is that they must expect anyone they confront to have a gun. This excuse was put forward in an American online paper, followed by critique of the generous gun laws. But apart from the abundance of deadly weapons in a society, crazy in itself, there are normally specific reasons to kill before anyone takes that often suicidal step. And the reasons are plenty and obvious.

On the international scene Europeans, and their descendants in America and elsewhere, have subdued large parts of the world with brutal, immeasurable violence for 500 years. If people on the wrong end of the club should do what we do, retaliate on the same scale, we haven’t seen nothing yet… And we have not ended our butchery! By setting the whole Middle East on fire we have implanted the violence, making people in the region kill each other brutally.

Domestically the neoliberal assault by the ruling class against ordinary people has created multiple causes for conflicts. Had we lived in the short period of fairly civilized western life, the one we experienced 1945-75, a strong labor movement would have fought back with peaceful means against the self-indulgent, arrogant and greedy little clique that has been allowed to grab most of our countries’ wealth and power.

But the labor movements have lost much of their territory in the ideological warfare launched by the “elites”. It turned out that the little clique controlled most of the media, which in turn made us believe that they were the truthful and objective media in the world (unlike our enemies’ propaganda outlets).

Our propaganda of all kinds – some of it called advertisment – has been pushed down people’s throats. No surprise that we have been made obedient, and passively led to fulfil our purpose in a society whose main goal is to enrich a miniscule group of unbelievably rich, at the same time probably destroying all prospects for human life in a sinister future, which comes even closer by the day.

Hopefully that future is not inevitable. To turn events in a hopeful direction “just” requires global popular struggle, solidarity, a completely different economic system and rational oversight, among many other things. The key issue is to separate economic power from political might, tough enough.

The concept “property” has to be given a new implication. And a really lasting society in which the human species will survive has certainly to be something radically different than the braindead and consumer-slave herd driven for the main benefit of the super-rich.

Something we could really call Democracy.

Americans prefer “Swedish” wealth distribution (would that it were!)

(Back to keyboard after necessary disturbances of different kinds during some months.)

Has the presidential election in the United States anything to do in a postcard from Sweden? Well, we will all be affected by the outcome, one way or the other, and it’s interesting and often telling to follow commentaries in our domestic MSM.

Most astonishing is the fact that income and wealth distribution, as well as justice and fairness, have come into focus, thanks mainly to Bernie Sanders. After decades of him tirelessly agitating from the back benches in the US Senate, to promote the interests of less affluent Americans, he surprisingly enters the center stage. (I happened to find him online some years ago, and have followed him with interest since. But until now I haven’t seen a single word about him in Swedish MSM – very typical).

From Noam Chomsky we’ve learned that a majority of Americans since at least some 30 plus years have preferred a policy similar to Sander’s, but that an effective propaganda apparatus has produced election results often diametrically opposed to people’s real wishes. But it seems as if the inequities finally have become too grotesque to conceal or brain wash away. And suddenly “everybody” talks about wealth distribution and the other progressive issues.

“Yes, the economy is rigged in favor of those at the top” says Hillary Clinton; “The deck is stacked against ordinary people” writes New York Times (N. Kristof) the other day. He goes on to present a study by two scholars (M. Norton and D. Ariely) showing i.a. that 92 percent of Americans prefer a wealth distribution of a “Swedish” type to the really existing one in the US. But this study has a serious flaw.

These are the three choices of wealth distribution laid before a group of nationally representative respondents (the labels “Sweden”, “Equal” and “USA” were not shown to the respondents).

 

wealth distr

The authors reveal in a footnote that the pie chart named “Sweden” depicts the income distribution, which was chosen solely to get some middle alternative between Equal and USA. The Swedish wealth distribution is something completely different, and in fact quite similar to the US one, as seen in this diagram:

The y-axis shows the sum of net wealth in billions SEK (§1 = appr. 9 SEK), debts subtracted, in the percentiles 1 to 10. Adding 9th and 10th percentiles one gets around 85 percent of total wealth, which is almost identical to the US figures. 60 percent of the population has no net assets at all.

Since Sweden endured its neoliberal, right-wing government (2006-14) the economic divide between rich and poor has grown faster than in any other European country. That government was lead by an empathy exempt man who as a young man was living an Ayn Randian wet dream. But that’s a story worth a separate chapter.

Sources:
http://www.nytimes.com/2016/02/18/opinion/americas-stacked-deck.html?emc=eta1&_r=0
http://www.people.hbs.edu/mnorton/norton%20ariely%20in%20press.pdf
http://ekonomihandboken.se/rika-och-fattiga-i-sverige/hur-rik-ar-varje-svensk/

My collected reader’s comments to NYT articles

Follows a collection of commentaries I’ve made in the New York Times Reader’s Comments section on different articles (mostly for me keeping track of them myself). They’ll be accessible as long as NYT keeps the links alive, I suppose.

31 January 2015. A comment on the vaccine debate that followed the recent outbreak of measles in U.S.:

http://www.nytimes.com/2015/01/31/us/as-measles-spreads-in-us-so-does-anxiety.html?comments#permid=13989276
-.-.-.-

25 March 2015. On signs of increasing poverty albeit growing wealth in the society (Sweden) as a whole:

http://www.nytimes.com/2015/03/25/opinion/how-poor-are-the-poor.html?comments#permid=14521337
-.-.-.-

30 March 2015. On the horrific number of deaths in China during the Mao era, which we constantly are reminded of, compared to the even larger mortality caused by capitalism in India – which we very seldom hear of:

http://sinosphere.blogs.nytimes.com/2015/03/30/cambodian-historians-call-for-china-to-confront-its-own-past/?comments#permid=14562852:14581199
-.-.-.-

3 April 2015. Another complete imbalance in our fields of interest: our laser-like scrutiny of terrorism carried out by others, compared to the forbearance with our own, much graver and deadlier terrorist activities:

http://www.nytimes.com/2015/04/03/world/africa/garissa-university-college-shooting-in-kenya.html?comments#permid=14598017:14604023
-.-.-.-

9 May 2015. This article appeared simultaneously in NYT and Dagens Nyheter (Sweden), not surprisingly. It’s that kind of text our propaganda model loves: a Russian author who more or less regrets that his country defeated Nazi Germany in WWII. He just thinks that one oppression was replaces by another, obviously unaware of the Nazi’s Generalplan Ost which aimed at exterminating most people in Russia and enslaving the rest. This was not some high-flying Nazi plan or empty threat, it was implemented from day one of the German invasion. The existence of the special Sonderkommando with the explicit task to exterminate Jews, Communists and other unwanted humans was the terrible evidence of that reality.

One could have hoped that NYT and DN had been kind enough to save the poor ignorant (or just propagandistic) author from his embarrassment, but the temptation to publish his sentimental excesses was maybe to overwhelming. As some Readers’ Comments point out, the article was also a slap in the face on Putin and Russia, on the very day, sacred for Russians, of commemorating the death of 27 million people which Russia had to sacrifice to defeat the most atrocious and inhuman ideology in all history: Nazism.

An interesting difference: Dagens Nyheter didn’t open its comment section on this article, as opposed to New York Times. This is one reflection on the difference in effective freedom of expression which is taken much more seriously in the U.S. than in Europe. My comment, like some other critical ones, was listed as “NYT Pick” by the editor, another sign of openness for critique. But on the other hand: the propaganda gain was taken home by the printed article. (I suppose that the reader’s comments are mostly read by the commentators themselves.)

http://www.nytimes.com/2015/05/09/opinion/mikhail-shishkin-how-russians-lost-the-war.html?comments#permid=14915384
-.-.-.-

11 May 2015. A comment on one of Paul Krugman’s many enlightened columns in NYT.

http://www.nytimes.com/2015/05/11/opinion/paul-krugman-wall-street-vampires.html#permid=14932711
-.-.-

17 May 2015. An article on the prospects for western economy after the last collapse, with discussions about singularities, neglecting the overall picture.

http://www.nytimes.com/2015/05/17/upshot/dont-be-so-sure-the-economy-will-return-to-normal.html?comments#permid=14975427

Syriza and Podemos – steps on the road

First Syriza in Greece and now Podemos in Spain. Citizens take to the streets for serious efforts to exchange the neoliberal political paradigm for a policy obviously aimed at relieving ordinary people’s grievances. The only thing one likes to ask is: what took them so long?

The answer is not too far fetched. It’s obvious that austerity measures can be pushed quite extensively in time and in suffering before people walk out in protest. Bourgeoisie politics protecting the banks and supporting the rich relies on a middle class, also hurt but not as bad as those below them, but nonetheless defending what they got by sticking to those above. And the enormous propaganda machine to beat is overwhelming.

For us who were young in the 1960s the developments in Greece and Spain evoke memories, and thus also hope for a change of direction. We know from experience that a lot can be achieved. During the 60s the traditional masters of mankind where on the defensive. In Sweden the basis was laid and laws enacted for much improved workers rights, for publicly driven child care to facilitate women’s liberation, for upgrading workers protection, for strengthening job security and for many other progressive measures. NGOs engaged in numerous different topics were growing like mushrooms and it was a vibrant atmosphere of freedom and hope for the future.

Well, the real masters didn’t wear their swords in vain. They made use of their economic power and stroke back, successfully. The period of remarkable liberation was cut rather short. As a Swedish poet and newspaper man said when the defeat seemed inevitable: now it all depends on how the left deals with its disappointment.

Well, the left didn’t deal with anything; they were overpowered by neoliberal forces mobilized among politicians, economic “scientists”, journalists and other pillars of society prepared to fight for the only ones that really profited from it all: the minuscule percentage of the rich that really owned a lot, and ended up owning almost everything. But: not all the gains were lost, the ground level was raised.

Setbacks also this time shouldn’t discourage anyone. The underlying progression is there; the human brain will in the long run prohibit unreasonable developments. We need only to look back and compare our time with any other human era to find evidence for such a trend. But with every battle new territory is gained, and the important thing is to not lose all of it in the next counterattack.

There Is No Alternative: reason will prevail!

MSM: Sweden vs. USA, plus Krugman on inequality

An anecdote has it that Noam Chomsky grinds his teeth when he reads the New York Times. But he also recognizes that there is some serious and professional reporting alongside the skillful but goofy propaganda stream. One can say the same about the Swedish Dagens Nyheter, save the level of professionalism. Thus I subscribe to the NYT web edition to get a broader outlook, apart from it being somewhat less pathetically “mainstreamed” than DN.

When it comes to the selection and presentation of the kind of world news that has to be aligned in accordance with the propaganda model, the similarities between DN and NYT are striking. The material is probably molded already in news agencies, and then DN seems to snitch from NYT and others. Often the wording is identical, and certainly the bias. But there are some differences. Especially interesting is what kind of “big news” in USA that becomes “no news” in Swedish media.

To name one example: Citizens United, a central concept in US debate which is carefully kept out of media in Sweden for reasons one can only speculate on. Is it the fact that the Supreme Court’s decision is incomprehensible for most people here, who probably would compare it with codifying unlimited corruption?

Another more random example is the Cliven Bundy case, which has passed almost unnoticed here. It’s not that violence or crimes as such are censored, on the contrary. Events like school shootings and other mass murders in the US are covered intensely by media, so the difference opens the field for speculations again. Is it that crimes committed by individuals have limited implications for the society, whilst the Bundy insubordination revealed a weak public authority that opened for mafia-like actions challenging law and order (thus degrading USA)? It’s anyone’s guess.

On the Ukraine issue Swedish MSM has a completely one-eyed view applied to both commentary and news reporting alike, a view postulating that Vladimir Putin is the master villain responsible for everything horrible that happens. Thus we are not shared any inclusive reports on for instance the shelling of innocent civilians or the hardship people in Luhansk suffers, or anything else outrageous that the Ukrainian government is responsible for. In this case NYT has a more professional attitude and once in a while sends a reporter to give readers a more complete picture. (I’ve mentioned earlier one reason for this difference, namely that Russophobia, through some kind of epigenetic mechanism, seem to have become inherent in Swedish genes.)

With the morning coffee I consequently browse quickly through the DN site, continue with NYT to stop for some reading and then spend more time with The Nation and other informative links. In my opinion the prime voice of reason in NYT is Paul Krugman, an economist differing from many of his colleagues by using his brain instead of reflexively rely on dogmas from a depleted science. His progressive views are so rare in NYT that he appears to be a kind of liberal alibi for the prestigious paper.

(A cute parenthesis: for subscribers NYT has a top-10-list labeled “Recommended for you”. In analogue cases most sites has a simple plug-in that keeps track on visitor’s preferences, so that recommendations really reflect the reader’s interests. Not so the NYT; here “recommended” obviously means what the editor think I should read; hence links on that list very rarely fit my liking. But to find a link to Paul Krugman I just have to click on “Most read” or “Most emailed” instead, where Krugman’s columns regularly appear among the top hits.)

In his column today (ranked No 1 in “Most emailed”) Krugman has some really intelligent and informative commentaries on “Our Invisible Rich”. Developments have gone to such an extreme the last decades that people just can’t grasp how grotesque the inequality has become. In a recent survey people in various countries were asked how much they thought top executives of major companies make relative to unskilled workers. In the United States the median respondent believed that chief executives make about 30 times as much as their employees (which was roughly true in the 1960s) compared to the real figure which is something like 300 times more, not to mention the really lucky, like the top hedge fund managers, who pick up some 10 000 times more than an ordinary employee.

To this one may remark that neither Aristotle nor James Madison thought that such an unbelievable development would ever be possible. Both took for granted that a majority in a democracy would vote to expel inequalities of that kind, but they chose different solutions to the problem. Aristotle concluded that society had to accept equality as a basic principle, while Madison preferred democracy to be limited. One way for Madison to achieve this was to establish a senate not elected directly by voters. It turned out that Madison was too cautious; he had no clue as to what modern propaganda would be capable of in the coming centuries. Today the super rich are safer than ever from any democratic threats, though the senate nowadays is appointed directly by voters.

It’s not that people’s preferences are unknown. If they estimate the high boss’s salaries to be 30 times higher, they would prefer the difference to be considerably less. The tool to achieve that is called democratic struggle, and that is something bound to come – trough collective action.

Four more years of roughly the same – election anti-climax

There was a parliamentary election in Sweden last Sunday with an almost undecided outcome.

Eight years of center-right, neoliberal governance have lead to deterioration of living standards, not just for unemployed, sick and retired, but also for low-income and half-time workers. Poor relief, intended as the last resort, is increasingly being paid to working people not able to survive on their wages, something never heard of in the welfare country we used to have. On the other hand the well-offs have gained substantially, as in most of the world.

The fabricated motive for the austerity measures was to “create jobs” (the real one to create greater profits), so unemployment consequently is higher today than in 2006 when this government took office. The neoliberal fingerprints were spread all over the place: more schools being owned by private equity firms making quick and large profits while PISA-results plummeted in record speed; scandals in private nursing homes with grave maltreatment of the elderly; municipalities giving away daycare centers and hospitals for pennies, making a few lucky people millionaires; neglected railway maintenance resulting in numerous disturbances in railway traffic – all the usual neoliberal failures familiar in other countries blessed with the same market dogmatism.

This government was close to the exit door in the last election in 2010. Their harsh and very un-Swedish new rules for sick and unemployed had made people furious. The sentiments were symbolized by a highlighted case in which a woman dying from cancer had to report for work at the State employment office in order to get her allowances, so that she could get some food for the time she had left. Less than two years prior to the elections the opposition had a lead by almost 20 percent units ahead of the government, a record difference in Swedish politics. Still the government survived the elections.

One simple explanation to this seemingly odd outcome is that the bourgeoisie parties have almost monopoly support by private media. The Social Democrats have a lesser number of minor newspapers, most of them published in small towns away from Stockholm. Public service radio and television have instructions to be neutral, but in a forest where all but a few small trees are deeply leaning the same way, “neutral” means leaning quite a bit too. Anyway, the opposition didn’t respond to the widespread discontent among a majority, perhaps in fear of being killed by the media.

The situation was somewhat similar this time. Swedish schools have continued to deteriorate considerably; senior citizens are appalled by their tax rates, which are higher than those paid by working people; unemployment among the young is record high, and they cannot afford to acquire own apartments; in short: many people are not content at all (though people with good jobs get along pretty well, and the rich still prosper enormously). Thus the opposition this time had a lead by 10 percentage points for a long time prior to the elections. And like the last time the difference shrunk to almost nil, though the opposition finally got a slight upper hand. There will thus be a change of government, but its prospects of survival are not hilarious.

One key issue in these elections was about profits earned by private welfare companies. Two opinion polls have shown that only 10 percent of Swedes accept the present state of affairs in which those companies can pay arbitrary dividends to their owners (apart from manipulating the tax system, moving to tax havens etc.). The 90 percent want either dividends prohibited or profits completely banned. Among those voting for the Social Democrats only one (1) percent is comfortable with the present situation. In complete defiance of 99 percent of his own voters the party’s chairman, Stefan Lofven, when he took office, openly declared that he had no intention to change any of the conditions for the school and welfare businesses. Again: maybe he was afraid of being killed by the media. Only a short time before the elections, when time restricted media’s ability to act, he did make vague promises to somewhat revise the system. That’s “democracy” western style!

When people are dissatisfied for reasons concerning their important living conditions and no party stands up to offer solutions – then there is room for parties of discontent who give simple answers, genuinely beside the point for certain, but attracting people since nobody provides the right answers. Here that party is Sweden Democrats, with its roots in fascist circles, but nowadays housebroken and dressed up in suites and ties. Their answer is: if we stop immigration then all important problems will be solved. This party is kingmaker until the next election.

The Sweden Democrats doubled its share of the votes to become the third largest party in the parliament. It’s true that Sweden has one of the most liberal asylum and immigration policies, certainly in Europe. It’s also true that no other party has immigration restrictions on their programs. But those parties had every possibility to stop the neoliberal austerity measures that are the real underlying reasons for the discontent, in Sweden as well as in other countries. One has to be completely void of even the shallowest knowledge in history, not to see this obvious correlation. The most crying example is of course the birth of German Nazism in the aftermath of the economic breakdown in the Weimar Republic.

New York Times have by chance an article in today’s issue about the differences in immigration and asylum policies between Sweden on one side and Norway/Denmark on the other (they could have added Finland to the latter). Both Denmark and Norway have, or have had, openly xenophobic parties in their governments. In Sweden it’s most improper in the mainstream to even mention restrictions on immigration. But since Swedes aren’t more altruistic by nature than their neighbors the problems with relatively large-scale and increasing immigration was bound to surface sooner or later. For that moment to arrive when no party seem to do anything at all to address people’s real interests, problems or grievances is in no way surprising.

It’s true that the Swedish economy came through the 2008 financial crisis in a fairly good shape (on average that is; distribution as mentioned much skewed). Austerity measures and an attractive product catalog for strong markets like China played their parts, but the question is which role a gigantic private loan bubble has had. Demand has been doped with 200 billion SEK each year in private loans for a decade, mostly fictitious money with no foundation in the real economy,  and money which still has to be paid back in real life (1 USD = 7 SEK). No one knows which effect this enormous stimulus package with imaginary money really has had since economists doesn’t deal with the question, as least not as noticed by accessible media.

Our politicians got the Parliament they deserve, and people were fooled to vote for a government they don’t want; a government not interested in solving people’s really important problems.