Life on The Other Side

The first step on the way to The Other Side is to recognize that we are not wealthy. Americans buy into the idea that we are rich. We delude ourselves. The nation is rich. We are poor (most of us).

We are poor because we cannot defend our wealth. Each financial crisis shows how easy it is to take our wealth from us. Also, the decline of the fortunes of the middle class shows that the system is becoming more and more unbalanced.

Perhaps most Americans will find this concept difficult because they have bought into the mythology of wealthy Americans instead of understanding that we have a wealthy America and mostly poor Americans. It has become a matter of pride.

Another part of the problem is that so far, we are obviously wealthy compared to citizens of poverty-stricken states. Many of us look down our noses at impoverished people around the world and the pleas for charity. Some of us tell ourselves how great we are compared to them. Others just feel lucky.

However, the real meaning of it is that the American dream has failed miserably. After World War II, the American economy was something like 50% of the world economy. Most Americans naturally expected that the benefits of freedom, democracy, and capitalism would quickly spread around the world. They expected that the world would become more like America. Also, most Americans expected that they and their children would continue to gain wealth and leisure.

Instead America is becoming more like the rest of the world. Today the American economy is something like 25% of the world economy. Most of the nations that were poverty-stricken in 1945 are still poverty-stricken. The rich nations got richer and most of the poor nations went nowhere. Also, employees are expected to do more work for the same amount of pay. See The 24/7 Worker on tosoc.org. Economic downturns are so great for rich people that perhaps they want to keep the economy turned down. Most Americans have had to trade leisure for work in order to maintain their incomes.

As a side-effect, Americans have less time to participate in politics. We are slowly being disenfranchised because the more we work, the less time we have to learn about political candidates and political processes. It is hard for some of us to find time to vote at all, much less know anything about who we are voting for.

The results are elections like the 2012 presidential election. The pundits knew from the beginning that Mitt Romney would be the Republican candidate because he had pre-positioned his political organizations in all fifty states. It gave him a tremendous advantage. No other candidate was wealthy enough to do that, so to a great extent, Mr Romney bought the Republican nomination.

The idea is that life on The Other Side would be quite different. Political participation would be encouraged. More important, most everyone would have more time and resources to make their choices. That is because most workers would be in national labor union organizations, and political participation by the workers would be one of the goals of those organizations.

The national labor unions would also make sure that everyone has a job. In return for our economic security, we all need to participate in the markets. Jobs will look different, however, because now the issue is not so much production, but matching buyers and sellers. These are both jobs, in a sense, and each person will have two jobs. One as an individual buyer and the other as an individual seller.

Second, as said above, life on The Other Side would be economically secure. Most everyone would participate in one internal market or another. National buyers would buy everything needed in the internal markets. As collective buyers rather than individuals, they would have the clout to get the best deals from both the internal and external markets.

Also, since the rich would use a different currency than the rest of us, comparisons of wealth in money terms would become meaningless. It would be easier to work on the gap between the rich and the poor if we were not tied to a single currency.

Third, there would be national sellers of goods and services. As collective rather than individual sellers, they would have the clout to get the best prices possible for our labor and the things we produce in the internal and external markets. They would contract with our labor unions to provide labor that they can sell.

This may seem confusing because how can our buyers get the best deals from us as producers, and at the same time, our sellers get the best deals from us as consumers? Is it not true that any gains we might have as producers are lost to us as consumers? The answer is that this view is an illusion caused by our simplifying language. After all, if you think about it, that is what we already do now. Each of us is a seller into the same markets that we buy from.

The trick is this. As barbers, we sell lots of haircuts to grocers, but we only need relatively few groceries ourselves. As grocers, we sell lots of groceries to barbers, but we only need a few haircuts ourselves. That is, individuals generally produce more than they consume. The purpose of the market is simply to adjust prices to reflect this underlying truth. In a reasonable market, neither discounts to barbers nor discounts to grocers grow so great as to impoverish either barbers or grocers.

Finally, workers in the U.S. have more in common with workers in other countries than either has in common with the international rich. The idea is that there will actually be closer relations with foreign workers on The Other Side than there is today. The nation is important primarily because the national government has the legal right to implement our proposals in its geographical area. Our national buyers and sellers will not be limited within our national borders, however. The goal is not some kind of national socialism with its attendant evils, but a regulated international capitalism. Their rich people will not be allowed to raid our wealth and our rich people will not be allowed to raid their wealth.

In these short blog posts, it is not possible to explain the entire vision at once, but we hope that you now understand that tosoc.org's vision is actually about greater cooperation among the workers of the world than there is today. To get there, we have to stop the raiding of the wealth of the nations by the international rich. Basic economic security must be seen as a right. After that, the multiple exclusive markets and the national buyers, sellers, and unions come into play. In America, that process can only begin when we stop seeing ourselves as wealthy and as some sort of auxilliaries to the international rich. We need to know that we are poor and that we have to work together to protect ourselves from the rich.

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (admin@tosoc.org)

Copyright © 2013 TheOtherSideOfCapitalism

Leaders Go First

All leaders betray their people in one way or another. This is a simple fact of life that we must keep in mind when we talk about politics. Both history and current events demonstrate this. It is why we should never be starry-eyed about politicians. Doing so is a departure from reality, and reality always returns to us no matter how far we stray. The farther we move away from reality, the more unpleasant reality usually is when it reasserts itself.

Recently we read that some members of the U.S. Congress were talking about exempting themselves and federal employees from the provisions of the Affordable Care Act (ACA, a.k.a. Obamacare). That came as a surprise to tosoc.org because we thought that the ACA had already created a three-tier system, with federal politicians and employees enjoying the best healthcare, union members getting second best, and the rest of us getting the leavings. We apologize if we were mistaken. We also want to point out that these misunderstandings happen when "laws" become 2000+ page tomes that nobody actually reads until a decision has to be made.

This illustrates why we believe in the principle that "leaders go first." Politicians and bureaucrats are all too prone to grant themselves exemptions from unpleasant provisions that they want to impose on the rest of us.

It would be best to make them obey their proposed laws first, even before the laws apply to any of the rest of us. Societal leaders should have to lead from the front.

However, since they are the lawmakers and regulators, it is hard see how to use laws and regulations against their will. To align their loyalties with the interests of their people, they would have to agree to limit themselves. At the same time their instincts are about increasing their own power. It seems it would take very unusual circumstances to establish a serious "leaders go first" system using laws and regulations.

It seems more likely that we could arrange an alignment of financial interests.

That is why one of tosoc.org's proposals for multiple exclusive currencies and markets requires politicians and bureaucrats to use and own only an internal currency, or assets denominated in that currency. It is a powerful way to keep them interested in the value of that currency. If they want to be "international," so to speak, let them choose another career path. On the other hand, if they want to lead our nation, then let them link their financial futures with ours.

In this case, politicians and bureaucrats would only have to give up the possibility of abandoning the U.S. for greater wealth elsewhere. Since most of them so far want to stay in the U.S. anyway, it would not be much of a loss.

In return they would gain more stable wealth. Being tied to the international dollar is a problem for them, too.

Finally, it provides them with greater scope to do their own jobs and increases their areas of responsibility. Government implementation of tosoc.org's plans would require a great increase in laws, regulations, personnel, and equipment. It would be a trade off with advantages for both sides, and that is the kind of change that can work.

It would be nice if people in general would act in the general interest rather than their own, but often they will not and do not. It just does not work to try to force them to act against their own interests. Like trusting politicians, that is also a way to lose touch with reality.

Far better to work in everyone's interests, and that is what tosoc.org's proposals are designed to do. There is a lot to be done to create internal currencies and markets, and some of that work is just the thing for the government to carry out. For example, a whole new banking system (the internal one) will have to be created. These are things that politicians and bureaucrats should be happy to get into, and at the same time, they will be helping their own people.

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (admin@tosoc.org)

Copyright © 2013 TheOtherSideOfCapitalism

Moving to the Other Side

After reading the previous postings on The Other Side of Capitalism, perhaps you more or less agree with the points we made. Perhaps you are asking yourself what comes next. Let us do that. Rather than listing directives toward a specific plan right now, this will be more of a discussion. It is time for you to engage your minds in thinking about the future and its possibilities. Be like the rich and spend some time working on your visions of our collective future. Here are some thoughts that may help.

Most important, the goals must be "good." We must spend our time and resources as best we can toward ends that expand human minds, encourage everyone to improve themselves, and encourage everyone to participate freely in the markets, as both consumers and producers. We must deny our time and resources to ends that diminish, dominate, and exploit others. If you are someone who seeks to dominate others, then you are by nature an opponent of The Other Side of Capitalism.

While we are imagining new futures, however, we should remain grounded in reality. It is so easy to lose touch with reality. Great wealth can even amplify the problem because people can only indulge their delusions until the money runs out. Rich people can indulge their delusions for a long time.

To keep touch with reality, we must work with people the way they are, not as we wish them to be. Communism failed in part because it had a rigid but simplistic and incorrect view of human nature. Since "re-education" does not really work, in many cases communist policy devolved into simply isolating or killing those who did not "think right." North Korea is still in this phase now with its gulags, starvation, and even outright killings. After the historical evidence of the last hundred years, those who are still communist today are holdouts from reality. Communism does not work. Give it up and join the other side of capitalism.

The reality is that to get what we want, we work and get paid, and we want an environment in which we can do that. Then we spend our pay in markets that offer what we want.

The key individual determinant in this process is whether individuals can earn more than they spend. Whether they can produce more than they consume.

Some produce nothing at all. Others produce some, but not enough to support themselves. Still others produce enough, but not much extra. Those who have a lot of economic strength produce a lot of extra wealth, over and above the amount they need to support themselves.

It is only natural that energetic and productive people control more resources than those with less economic power. That does not mean that they should control all resources, however. History shows that freedom for the few and slavery for the many, total wealth for the rich and only subsistence at best for the rest, make weak and poor societies.

The key point about markets is that individuals have to have wealth to participate in either the buying or the selling. Subsistence dwellers cannot participate. Shortsighted leaders make policies that drive people out of the markets, often under the mistaken impression that they are gaining wealth. They need to change their thinking. The size, strength, and energy of their free markets is their wealth. Damaging their markets to try to make themselves richer or in some perverse fantasy of dominating others simply damages themselves.

This is a greater danger if a society feels that it has peaked and that the future at best will only equal the past. If we reach a summit, the only way forward is down, and perversely our leaders will be just as energetic taking us down as previous leaders led us up. It is not clear that we are in this position today, but there are signs. The journalist Tom Brokaw famously memorialized "The Greatest Generation," those who lived through the Great Depression and then "won World War II." It makes for great publicity and politics, but in reality Mr Brokaw set off a destructive bomb in American psychology  If there really was a "Greatest Generation," then the rest of us are doomed to mediocrity and decline.

If you are prone to feeling that the future will be worse than the past, then you should work to get over this "decline-and-fall" mentality. It is not helpful. We should look and walk forward into the future. We will only stumble if we look backward and walk backward. It is wise to learn from the past, but not to invest in it.

So let us forget about "greatest" generations and other "Golden Age"-style mythologies. Let us get to work on the future.

Earlier we were making the point that it is in our leaders' interests to seed the public with wealth and encourage market participation. U.S. leaders have done that more than others around the world. We think that is the main reason for the enormous wealth in the U.S.

Even individuals who consume more than they produce can help energize the markets. Therefore it is wise to subsidize them rather than complain about them. We should not ruin them or drive them into ruinous debt. We should train them as best we can to improve their skills and increase their market participation.

To some extent we already do this in the U.S. with a variety of programs including food stamps and student loans. However, these policies are not effective enough because they are bound up in archaic prejudices, concepts, and laws. Food stamps have a slight advantage over student loans because they are grants rather than loans and in some senses they are a different currency from the dollar.

Student loans are worse than food stamps because they are denominated in an international currency and, because of politics, there is no escaping them. Bankruptcy will not save the borrower from unreasonable amounts of student loan debt. That is not to say that it will be impossible for borrowers to get out from under impossible levels of student loans, but that it will be a political decision, not an economic one. This raises the spectre of a serious movement toward a political economy rather than a capitalist one in the U.S., one in which individuals must submit to domination by political patrons in order to survive. Tosoc.org has already commented on the folly of this path.

Despite their faults, these programs show the way. Food stamps in particular could be turned into an internal, exclusive currency, and the program could be expanded to include most of the people (excluding the rich). This might be the first logical step toward our goals.

There are several other logical steps we might take. Let us list a few here.

Another logical step might be to create a political movement. It is probably worthwhile to start down this path, but it should be done carefully. It would be very easy to overpromise and then fail the people. It will take a lot of political capital to make these changes and we cannot afford to waste any.

Third, it might be possible to merge with an existing party. This would be a fast-track to political influence and should be seriously considered.

Finally, it might be better to demonstrate results in a smaller venue first. There are many ways to accomplish this.

Perhaps a smaller nation than the U.S. would try it. We have already suggested that a possible way out of Greece's economic problems would be to bring back the drachma as an exclusive internal currency. The same is true of Cyprus, but there are other nations such as Venezuela or Argentina that might benefit from multiple exclusive currencies and markets.

U.S. states, individually or in groups, could try the tosoc.org ideas, too. This would require some national support because the U.S. Congress regulates the currency. There may be a precedent in that U.S. food stamps are already distributed by the states and to some extent the states administer them.

Alternatively, multiple exclusive currencies and markets might be tried first by private business. There are already multiple electronic or digital "currencies" being tried online, such as bitcoin. Right now the volume of transactions is low so the regulatory interest is also low. It is not clear how these will be received by Congress if large numbers of people start to live by them. Even so, there is a precedent in the U.S. for corporations providing a living for individuals that is outside the dollar-denominated markets, so the possibility of corporate sponsorship for tosoc.org's ideas is possible.

We expect that it would take a major corporation to attempt it, perhaps even multiple major corporations working together with multiple retailers. The idea is that seigniorage would make the system profitable for the corporations and maintain corporate interest. With enough employee producer-consumers and their dependents in these markets, it seems likely that the markets would be large enough to give these ideas a try.

We suggest that financial firms, including insurance companies, consider organizing such a trial. These companies might find it easier than other types of businesses because the business of these companies is money and also participation in the businesses of other companies. Organizing other businesses around new currencies and markets seems like a natural extension of their existing work.

There are many ways that the ideas presented by tosoc.org could be put into practice, both public and private. We hope that this discussion has inspired readers to have their own ideas and think of their own possibilities. Done properly and well, we believe that these concepts will prove to be a benefit to society, so we are out to recruit as much help as we can get.

TheOtherSideOfCapitalism (admin@tosoc.org)

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

Copyright © 2013 TheOtherSideOfCapitalism

Vote for The Other Side!

At the risk of inducing election fatigue already, we at tosoc.org believe it is time to start our political campaign for change. If you are not sure where we stand, just read our other blog posts to get started.

Here is our facetious campaign slogan – with a grain of truth:

Vote yourself some money this time! Vote for The Other Side!

Here is our draft platform. We are still working on it.  Here are four planks that we hope you find interesting.

1. We need a national lottery run by the IRS. This will be a numbers system based on taxpayer Social Security numbers. Enter the lottery by checking a box on your tax return. What an incentive to do your taxes! One million dollar prize, 1,000 winners per month, costing twelve billion dollars a year.  Pocket change for the U.S. Government and probably the spending would be made up just by people's increased interest in doing their taxes (to enter the lottery). The rules can be adjusted in many ways, such as excluding corporations and the rich. Another advantage – it makes the IRS more popular.
2. We need a national repository of American lives. So many Americans are marginalized and simply forgotten when they are gone. As a way to improve our national history, every American should have the opportunity to deposit writings and record audio, visual, and/or audiovisual statements in an official permanent record of Americans; our thoughts, comments, and opinions.
3. We need a national fiberoptic superhighway for communications. Every American should have access to high-speed communications. It will also be important in support of multiple exclusive currencies and their markets.
4. We need multiple exclusive currencies and their markets, of course. This is what tosoc.org has been saying all along.

For now we are simply listing these planks without a great deal of explanation. The 2014/2016 general election campaigns are far enough away that all we are really doing is expressing intent, anyway.

Until the next election cycle really begins, let us simply present some of our more general viewpoints and visions of the future.

Tosoc.org is about general prosperity and abundance. We see a worldwide trend today toward general poverty, scarcity, and exploitation. We see a trend today toward centralization of wealth – wealth for the few and "austerity" for the many. If this trend continues, then it seems that the worldwide vision governing our future is that the rich shall inherit the earth.

In a sense we are seeing the end of the American Dream.

Before there was a United States, there were educated and industrious Europeans who were dissatisfied with their own cultures. When the new frontiers opened up, they were willing to risk their lives to get away, be free, and direct their own destinies. For many generations they struggled and grew and spread throughout the new lands. They formed their own nations and their economies grew again with the industrial revolutions.

This frontier mentality is the basis of the American Dream of rugged individualism, constant growth, and ever more new lands to conquer – limitless resources. Liberty, individual rights, democracy, and equality before the law.

Now all the land on earth is occupied. All the resources are under someone's control. There are no more enormous technological breakthroughs, just a filling in of gaps. For a variety of reasons, outer space has turned out to be a boundary, not a frontier. The original American Dream is gone.

The only frontiers left are social. We see it in the rise of social media as the darlings of business investment. We see it in the aims of radical fundamentalists who view the people of the United States as a frontier of their religion, a place to be invaded and conquered. Finally, we see it in the growing disparity between rich and poor.

The old social contracts of the frontier society are going away. The struggle is over what will replace them.

Recall that just because some are capitalists does not mean their visions of the future contain capitalism. In the same way, just because some are populists or democrats or republicans does not mean that their visions of the future are about social justice, democracy, or even representative government. The question is which form of social organization suits humans on an earth with no more physical frontiers.

Different people will come to different conclusions, and that is just as true of the rich as anyone else. The historical record of bounded civilizations, however, points to a "Pharaoh future." According to legend, Joseph made all the people of Egypt slaves to Pharaoh in a classic economic squeeze play. In the fat years, he took ten percent of the produce of the people and stored it away. When the business cycle turned, the Great Famine came, and the people were starving. Joseph then used extortion. He made the people pay for the food that they themselves had produced in the fat years. He first took their money, then their animals, then their land, and finally their freedom.

This same sort of thing has been done in many times and places and it still goes on today. Tosoc.org has already described the business cycle as the "extortion cycle." We have already pointed out that the Great Recession has been used as an opportunity by the banks to extort enormous debt out of the U.S. government. They did it by holding the people hostage using the declining economy and the "credit freeze."

The rich have not created a Pharaoh and we are not slaves. However, it is also not clear that the rich will restrain themselves if these opportunities arise. That is not a chance that we should take.

If your vision of the future like ours is of a prosperous, bright, and industrious people living in peace rather than of dull-witted slaves of the rich fighting to survive at the subsistence level, then there are certain principles we all need to keep in mind.

First, we should not work to get rid of capitalism. Instead we want to preserve it within a system that is strong enough to support it. Our current system is failing to do that and capitalism is slipping away from us. Tosoc.org's new slogan is "Capitalism as it should be."

Second, we are not working to get rid of the rich. In fact, we want them to get richer. The difference is that we do not want them to get richer at the expense of the rest of us. This has become a lot more difficult now we have reached the limits of our physical frontiers. We all share in the pie, but if the pie is not growing, the only way the rich can grow their wealth is to take it away from the poor. The question is how to keep this from happening.

Third, we must abandon our Frontier Society ways of thinking. We have populated the earth. We see the limits of our resources. We know that there are limits to growth. It is time to modify capitalism so that it is not so dependent on overall growth. Our frontiers are social and our major gains will now be in the improvement of the human race.

Mainly, we need to acknowledge that society has the power of eminent domain over all major physical resources. This is necessary because both insiders and outsiders will take advantage of openness if they can. (We in the U.S. tend not to think about this because in general, we have so far been the outsiders taking advantage.)

There have been poor nations where the people did not really have enough to eat, yet the crops they raised were exported to earn hard currency – for the rich. Sometimes the rich have re-invested in their own societies, sometimes not. The point is that this should not be solely the decision of the "owners." Those who labor should also have a stake in what they do, and should be able to gain wealth from their work. Simply being allowed to survive at a subsistence level is not enough.

As best we can, we need to make sure that everyone in the world can accumulate wealth from their labor because what we allow to be done to the poorest will surely be done to us.

Fourth, some thoughts about population. On the one hand, tosoc.org believes that the universe would be meaningless without a mind to see it. In a way, each mind is a universe itself because it can see and appreciate the universe around it. In that sense, the more minds there are, the more intelligence there is, and the greater and more meaningful the universe is.

On the other hand, we wonder how populous the earth should be. Right now a lot of human minds are dulled and damaged by poverty and subsistence living. It is a painful yet valid question to ask whether it is better to have trillions of "extra" minds damaged by poverty or trillions fewer minds so that the remainder can be brighter, better-educated, and economically secure. We do not have an answer to that question.

We can predict one outcome of low growth, however. If growth becomes zero because we reach the true boundaries of the earth's resources, then depopulation is one way to simulate physical growth. The Black Plague of Europe was a horror but can also be interpreted as an economic boon for the survivors. The rich had to bid higher for the labor of the survivors.

This simply illustrates how important the question of the earth's population is. We can now control the earth's population without horrors, but the morality of it will always be ambiguous. Furthermore, we need economic changes to deal with the consequences. Consider the effects of the Baby Boom generation on U.S. economics.

It has been perfectly obvious for decades that the retirement of the Baby Boomers was going to be a problem for the U.S. economy and its social programs. As the Baby Boomers retire, they will be net sellers of assets, hammering the markets when they are down and inhibiting growth when they recover. Government income through taxes will decrease and no one knows who will take up the slack.

Furthermore, the labor force will decline at the very time that the Baby Boomers will need increased services. For example, who will replace the Baby Boomer doctors? It seems that fewer and fewer doctors will be working at the very time that the Baby Boomers will grow older and need more health care.

It is silly to envy the Baby Boomers with respect to retirement. They have paid higher Social Security taxes than their parents, then had their taxes raised again to pay for the "Social Security Trust Fund." Then they will have to work more years and have to pay more taxes a third time. Except for the rich, the Baby Boomers will never be able to retire like their parents did. In a way, the Baby Boomers will have to pay for their retirement three times. Once for their parents (Social Security is "pay-as-you-go.") A second time for the "Trust Fund." And a third time when they work more years than their parents did before retiring.

At tosoc.org, we see the Great Recession in some ways as an opening event in the economic effects of the coming retirement of the Baby Boomers. It will take decades  for this "lump in the snake" of the demographic charts to work itself out. This is yet another reason to strengthen capitalism so it can survive.

If your vision of the future is of a prosperous, happy, democratic people rather than desperate, subsistence-level, Pharaonic slaves, then we need to make some changes. Some of these changes are in ourselves. We need to care about others and care about the future, meaning that we cannot maintain frontier mentalities that no longer apply to the real world and we must be very smart and diligent about how we work for the future.

We must deny resources to psychopaths and sociopaths who would be our slavemasters. We must strengthen capitalism against its own self-destructive tendencies.

Naturally, as tosoc.org has been recommending all along, multiple exclusive currencies and markets is one of the tools we should use to strengthen our capitalist system.

First, society acts through government. The only way we know to keep the international rich from running the government for their own benefit is to align the economic interests of government officials with the economic interests of the poor. That is, government officials will only be allowed to gain wealth in internal currencies that they cannot use to escape the effects of their own policies. Their economic fate is bound up with that of the nation they claim to serve.

Second, we cannot allow the rich to trap us in another squeeze play. There should be internal banks and external banks, the one using the internal currency and the other using the external currency. If the external banks want us to save them, we can simply print the external currency to build up their reserves. The people of the U.S. cannot be held hostage and there will be no need to increase public debt. The value of the internal currency will only be loosely related to the value of the external currency because the purpose of the internal currency will be to represent and preserve national wealth without regard to the safety of the international rich or the national debt to international sovereigns.

Third, the division into internal and external currencies automatically gives us collective controls over how much of our national resources are used to enrich the external rich and other nations rather than our own people. "Free trade" is not free for the poor and if they can the rich will use it to take even more from the poor, as has happened already in Greece and Cyprus.

Our final frontiers are social frontiers. We need social solutions for our problems rather than systems and solutions that worked (at least as far they actually worked) for our society based on physical frontiers. The fact that our physical frontiers are now essentially closed should suggest to us that we need to re-think those solutions. The evidence suggests that the old economic solutions do not work any more. We need new solutions based on social principles, and that is what tosoc.org is trying to provide. Vote for us! Vote for The Other Side!

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (admin@tosoc.org)

Copyright © 2013 TheOtherSideOfCapitalism

Nothing to Lose but your Chained CPI

The Obama Administration's proposed budget contains a provision to change the way Social Security Benefit changes are calculated so that they use the "Chained Consumer Price Index" (Chained CPI) instead of the CPI. The purpose is to reduce cost of living adjustments (COLAs) to Social Security benefits and save money. We will be told that the result will be just a small sacrifice and it will not have a significant effect on how well retirees live. We will be told that everyone will have to sacrifice a little bit in order to move toward a balanced budget.

The Chained CPI works like this. Instead of using the same product to calculate price rises as one would expect, a product is thought of not by itself, but as one link in a chain of products that can be substituted for one another. For example, U.S. beef is graded with a USDA grading system. The highest grade is Prime, and beef grades down through Choice, Select, Standard, and other grades. Naturally, the price of the top grade of beef is highest and the price goes down as the grading goes down.

Instead of calculating COLAs based on inflation of U.S. Prime beef prices, the Chained CPI calculation assumes that if U.S. Prime costs too much, people instead will purchase U.S. Choice or lower as a substitute. So inflation of beef prices can be calculated by whatever substitute has the lowest rate of inflation. Calculated Social Security increases then can be lower relative to living costs. The very purpose of which is to encourage retirees to eat lower quality beef. They can still afford to eat beef, just not the best beef, and that will reduce Social Security spending.

This seems almost reasonable until we realize that there are many things that can substitute for beef depending on how the government defines "substitution." If the definition for beef substitution is that we eat beef just for the protein, then any food with protein can substitute for beef. The substitution chain used for COLA calculations might also include pork, turkey, chicken, peanut butter, soy products like tofu, or even dog food. However, the point is not that the government wants to make the poor eat dog food in their retirement. The point is that the government can pick any Chained CPI rate it wants by juggling the complex calculations of prices for all the products in the chain.

This already happens up to a point. The current CPI calculation is the result of decades of increasing complexity and is already deceptive. The Chained CPI just adds another layer of complexity to manipulate for political reasons. It is just another political tool.
Some will see the Chained CPI as a political weapon, not just a tool. Partisans always view government policies as a set of clubs with which to punish their opponents, and they will see the Chained CPI as just another club.

Others will worry that the Chained CPI is yet another way in which our society is losing touch with reality. They will see the Chained CPI only as a way for the government to cheat. This group is simply a reflection of the partisans. The partisans strive to get a grip on government power while this group wants to limit government power in case it falls into the wrong hands.

While tosoc.org has more sympathy with this last viewpoint than with the partisan viewpoints, we believe they are all misguided as far as policy is concerned. The real trouble is that the government is pressured by many different economic interests, but it has only one currency through which to take action. We have already commented elsewhere that a single currency is a chain that keeps the poor in place to be whipped by economic uncertainty and further impoverished. With a single currency, the Chained CPI is only one link in the larger chain.

Just as the Greek government impoverished its people to pay the Germans, for example, our government will impoverish us to pay its external debts. Our government has to make its payments to the Chinese and Japanese in the same dollars that we use. The rich must also be paid. To that extent our government is not really ours but represents foreign interests and the rich.

It is actually easier for a government to break its promises to its own poor people than to cheat sovereign nations or the rich. That is what the proposed Chained CPI is all about. It gives the U.S. government a way to cheat poor retirees as needed to pay foreign interests and the rich, and it has the advantage that it gives the government political "cover." All the government has to do is manipulate the cost of living adjustments in plausibly-deniable ways. Sometimes the adjustments will be higher and sometimes they will be lower, but the adjustments will never be made with the interests of the poor primarily at heart.

Please keep in mind that this is not because governments necessarily want to impoverish their own people. All governments want to be able to brag truthfully about how wealthy and happy their people are. It is just that governments find it hard to resist powerful voices. In our current capitalist systems, the poor have to unite to be powerful. When they unite, all it takes is a little money to divide some from the others, and usually the unity falls apart at a very low cost.

We know very little about the Occupy Wall Street movement at tosoc.org, but we suspect that this divide-and-conquer mechanism was used on them. We suspect that some, especially the leaders, were targeted by the rich. For those who cooperated, once their personal economic problems were resolved, they no longer had much motivation to keep the movement going. It takes an utterly desperate level of dedication to turn down what the rich can offer under any circumstances. In the U.S. today, it takes an insane level of dedication and most of us are not insane.

The real issue is that even if governments want to serve their people first, they are as much chained to their single currencies as the poor. When they start having trouble paying their debts, they start inventing deceptive policies like using the Chained CPI so that they can break their promises to their own people and keep their promises to the external rich (which includes foreign sovereigns).

Using multiple exclusive currencies is so far outside the box in which governments think that it seems unlikely that they realize that there is an alternative to policy tools like the Chained CPI. If all a government did was just use one currency for external transactions and another currency for internal transactions, there would be no need for complex, deceptive policies. There could be one simple policy for the external currency and another simple policy for the internal currency.

Governments should unite their poor under themselves and restrict financial access to them using the exclusivity of at least two currencies. This does not guarantee wealth, but it does guarantee that the loyalties of both the government and the people generally will be to one another, not to external influences. At tosoc.org we think this will help stabilize economies and protect the wealth that societies build, avoiding the fate that we saw befall the Greek government and people in recent years.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (tosoc.org)

 Copyright © 2013 TheOtherSideOfCapitalism

Theory of Wealth

Tosoc.org is about abundance, not scarcity. Wealth, not poverty.

We are also concerned about everyone – the many and the few. We feel compelled to act now because even in the United States, still the wealthiest nation on earth, the wealth gap between the rich and the poor is growing when it should be declining. We are against the use of tactics that increase the wealth gap in capitalist systems: business/extortion cycles, austerity/poverty measures, and economic fear. We therefore believe that understanding wealth is an important part of creating a better capitalism.

Wealth is the power to control resources. From a "hierarchy of needs" standpoint (see Maslow), the basic required level of individual wealth is to control enough resources to survive – that is, subsistence. Those who control a lot of resources are "wealthy" or "rich". The rest of us are poor. (At tosoc.org we do not have much use for distinctions such as "middle class" partly because the middle class is disappearing in the U.S.)

Previously we have said that the rich are those who can escape with their wealth when threatened by laws and regulations, either by running away or by countering policy with policy within the government itself. Let us add another way to distinguish rich from poor. The rich are able to avoid the business/extortion cycles and austerity/poverty policies. (They avoid economic fear of course by the very nature of being rich.)

The rich are not entirely immune to poor economic results, of course. For example, there were a number of suicides among the wealthy as a result of both the Great Recession and the fall of Bernie Madoff. Madoff himself did not escape the law, either. The general case remains however that the rich are getting safely richer while the poor are getting poorer.

Here is how tosoc.org understands wealth. Wealth only exists in a social context. In capitalist societies it is measured generally in money. In other societies, it is measured generally by political power. For example, in the old Soviet Union, resource control was vested in the Communist Party. Money was distributed as needed according to political needs. The "wealthy" in the communist system may not have a lot of money, but they do have a lot of clout within the Party. When they need money, they just print it.

In the U.S., it is often the opposite. Those with a lot of money often do not have much political clout. When they need it, however, they just buy it.

Even in capitalist societies it is worth asking if money and wealth are the same. The answer is that they are not quite the same depending on one's definition of money. For example, Warren Buffett is worth billions of dollars, but that does not mean he actually has billions of dollars in his personal bank accounts. He keeps most of his wealth in financial instruments like stocks and bonds. His wealth gets reported in dollars because reporters want to keep things simple. The dollar figure comes from marking Buffett's assets to market prices and adding up the dollars. Therefore Buffett is richer or poorer depending on market prices.

Since Buffett is one of the market movers, there is something of a circular quality to his wealth. If he wants to be worth more in a given period of time, he simply buys and drives the market up. Or sells and drives the market down if he needs to be worth less than before. (Note that this one of the ways that the rich have advantages over the poor. The poor cannot distort markets as they wish.)

If wealth is control of resources, then creation of (or discovery of) and destruction of resources corresponds to creation and destruction of wealth. The word "resource" covers a lot of ground. There are natural resources and human resources. There are also technical resources. Technical resources are non-human resources that do not occur naturally, but emerge from complex technical infrastructures. The automobile and radio telecommunications are examples.

There is a saying that there is nothing new under the sun. When it comes to technological advances, at least, this is simply not true.

There is some similarity between the tosoc.org theory of wealth and previous theories of value, such as the labor theory of value. Tosoc.org finds the concept of value to be too difficult and too narrow, however, so we prefer the concept of wealth. We think that "value" implies price and therefore is not general enough. Also, theories of value are usually narrow because they focus too much on only one element that contributes to value, such as labor or land.

So far, however, our notion of wealth has been static, as in control of quantities of resources rather than the movement of those resources. The fallacy of this is illustrated by the old Soviet Union which was so proud of itself when it surpassed the U.S. in production of steel. It evokes the image of Marx, Lenin, and Stalin perched on a giant pile of excess steel that they cannot use. They say to themselves that based on solid Marxist-Leninist principles, their labor force has created much more value than the dirty capitalists. So why aren't they rich?

The problem was that they focused too much on increasing labor (the production or supply side) and not enough on matching supply with consumption (the demand side). They also paid too much attention to relatively static quantities rather than flows that move production to consumption.

In other words, wealth is not just about static quantities of resources, but also about the dynamics of resource use. Resources can be held in reserve, but for the most part, wealth is related to the social context of resource use – as represented by purchases in active markets.

In the perfect market, the rate of production (resource use) exactly matches the rate of consumption by end-users. There are variations on this, such as the buildup of inventories and speculative purchases, but matching supply and demand is the basic principle. Suppliers do not waste any resources in unwanted production and no consumers are left unsatisfied. So let us modify our definition of wealth as control of resources in the social context of active markets that use those resources.

If static wealth can be measured in money, then the creation of wealth is measured by savings (a.k.a. profits). This is where tosoc.org's theory of wealth matches the common idea of wealth. The more of your income that you save, the wealthier you become.

This dynamic view of wealth creation also means that wealth is dependent on the speed of transactions. The faster a market moves, the more income it produces and the faster savings can be built. Anything that slows or stops markets destroys wealth – in the sense that less wealth is created than is possible.

Following the ideas presented above, it should be clear now that wealth is really a social concept in a social context. In a capitalist system, the meaning of wealth depends on markets. Control of resources only makes sense if saved money can be used to purchase resources in a market. (If resources cannot be purchased in a market, then it is not a capitalist system.)

These thoughts also lead to the idea that wealth creation is about leadership and the morale of the people. To maximize wealth creation, the people should be encouraged to both produce and consume at maximum rates. The best leadership is not found in "command" economies like that of the old Soviet Union. People do not respond well to forced transactions, markets that are not free, and the criminalization of saving significant amounts of money. Command economies will always create less wealth than free market economies.

Free market economies are best at creating wealth because they use natural human behaviors and desires. "If I work hard, I can save enough money to accomplish my dreams." It is easier to lead people in the direction they already want to go. Provide the people with the education, skills, and resources for both production and consumption, and they will feel that the system really is set up for them to get ahead, gaining wealth. This is positive reinforcement that will encourage wealth-producing behaviors. Superior leadership supports and invests in these things so that the system sustains itself.

Increasing the wealth of the people therefore means inspiring them to be as active as they can be at work and at play, consuming but also saving so that wealth is better distributed among the population. It seems to tosoc.org that the trends are in the opposite direction in the U.S. right now. The Great Recession and government policy responses destroyed a great deal of saved wealth, redistributed large quantities of the remaining wealth to the rich, and also made the people suspicious of the markets. No wonder the economy just limps along.

Nothing has really changed in our economy, so tosoc.org still recommends multiple exclusive currencies and markets. The cost is a lower wealth creation rate due to the required government controls over market-to-market exchanges, but the advantage is that the wealth of the poor will be better-protected. The people will not work hard and save if they are sure that they will only be cheated out of their wealth in the end.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (tosoc.org)

 Copyright © 2013 TheOtherSideOfCapitalism

The Capitalist Road to Serfdom

To some, Friedrich Hayek's book The Road to Serfdom is a cautionary work. To others it is an instruction manual. It answers the question under what conditions free people can be made into serfs.

Just because some people are capitalists (meaning rich people), it does not make them supporters of capitalism. Under certain circumstances, they will act against the principles of capitalism. For example, they will generally not refuse a profit or a new idea for profit just because doing so endangers competition, the markets, and perhaps the very system that made them rich. They do not run their affairs by any particular philosophy but by the rule of always working to increase their store of capital. If the best way to do that seems to be enslaving the population and moving away from capitalism, then they will be sorely tempted to become slavers. If for no other reason, they will do it in self-defense, to prevent other capitalists from striking first and enslaving them instead.

In fact, the notion that free markets are self-regulating for the good of all encourages capitalists to "think outside the box" in order to maximize their capital. That is, capitalism itself encourages them not to let moral or philosophical boundaries restrict their scope of action. Playing by the rules is for losers. After all, the free market itself will restrain them if they go too far.

Or not. This is where philosophies of capitalism break down. Cooperation is not always the "rational" choice (meaning "rational" in economic terms). When the disparity in wealth between rich and poor becomes large enough, the free market is no longer strong enough to regulate the activities of the rich. From the capitalists' standpoint, it is no longer worthwhile to cooperate in poor, weakened markets even if they themselves are the ones who weakened the market. At that point, the rational choice may be coercion rather than cooperation, and the rich may choose to work to make the markets less free, less competitive. So much for Adam Smith's "invisible hand."

These thoughts might be considered theoretical except for the recent examples of Greece and Cyprus. The coercive tactics by the troika of the EU, ECB, and IMF are on public display. In Cyprus, the government has been forced to restrict capital flows and confiscate deposit accounts, all in the name of saving capitalism. And all against the principles of capitalism.

Fortunately for the average Cypriot, the proposal to confiscate funds from "insured" accounts was too raw and was eventually dropped. However, the idea does tell us what European leadership was thinking. They want the money, and they will get it by whatever means they can. The poor dodged a bullet in this case, perhaps.

Unfortunately there is more than one bullet, and the Cypriot people will not dodge all of them. One large bank already is being closed, leading directly to higher unemployment and leading indirectly to economic pressure on the bank's vendors. Capital controls will slow the economy even further and increase the price of doing business. We do not know exactly how things will work out, but it seems likely that the average Cypriot will experience even tougher times in the near future than they have already experienced.

At least the rich "Russians" will take the bigger part of the immediate hit, perhaps losing up to 40% of their deposits above the insured limit of 100,000 euros. For the really rich ones, we can be sure that this is very annoying, but it does not threaten their livings like confiscations would threaten the livings of the poor. In addition, the rich, foreign "Russians" (really, many different entities and not necessarily foreign to Cyprus) are already seeking to blunt the confiscations and make deals so that they recover as much as possible. The rich are never without resources.

We hope that the people of Cyprus will take this incident as a warning that they should take collective action to secure their savings in better ways.

From tosoc.org's point of view, poor Cypriots thought they were depositing their euros in safe, insured accounts, and that bank regulations would keep the banks from investing in risky assets. The truth was that the banks were combining internal deposits and external deposits, insured and uninsured, and using them to invest in highly risky external assets. Poor Cypriots did not realize that their deposits might be considered reserves against the failure of those risky asset purchases. They also did not realize that external "Russian" money was used to multiply the risk.

It all seems especially crazy since the Cypriot bank managers already knew about the banking crises in two other island banking centers by the end of 2008, Iceland and Ireland.

We recommend that Cyprus bring back the pound (a.k.a. the lira) for internal transactions. Except for those in government or working for the government, Cypriots would generally choose which market they want to be in. The risky external market using the euro or the safer internal market using the lira. Those in the internal market will only be allowed to own lira while those in the external market will only be allowed to own euros.

The reason why persons in the government would only be allowed to own lira would be to make sure that their self-interest is to protect the lira. If the interest of the Cyprus government is in the euro, then its interest will be in conflict with the interests of the people (which explains why recently the Cyprus government was considering confiscating "insured" deposits). Even if by some chance the government had the people's interests at heart, the Cyprus government has little power over the euro anyway.

The banks would have an external division and an internal division. The external division would work in euros, would not be insured, and would have light regulation. Deposit at your own risk.

The internal division would work in lira, would be totally insured, and would be heavily regulated. In particular, the reserves of the internal division would not be available as reserves for the external division. The use of different currencies would make this easier to accomplish because no external entity could "vacuum up" all the available cash. The ability of the Cyprus government to print lira would also make sure there was always enough cash.

The tricky part is how to convert euros to lira and vice versa, and how much conversion to allow. The nation of Cyprus would have to earn euros and spend euros for international trade. External debt would be denominated in euros and it would still be possible for the nation to get into debt trouble. However, the economic relationship between Cyprus and the eurozone would be simpler, and simpler to regulate. At the same time, unlike euros, the eurozone could not use Cypriot lira anyway even if they could get hold of them. The temptation to coerce and confiscate would be less.

The Australian economist Steve Keen has criticized the current dominant form of economics ("neoclassical economics") in part because it assumes that capitalist systems are stable. Like him, but for somewhat different reasons, tosoc.org does not at all believe that capitalism is stable by itself. Sure, if markets are free and fair, capitalism is great. The trouble is that the very operation of capitalism produces capitalists who gain the power to coerce the markets. Once the markets are not free any more, the neoclassical models are almost useless. Two current examples of this are Greece and Cyprus, who are suffering because of coercion. The creation of multiple exclusive markets with their exclusive currencies, each market regulated to have better-balanced competition than the single huge market, would help prevent the market distortions that capitalists cannot help themselves from creating.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (tosoc.org)

Copyright © 2013 TheOtherSideOfCapitalism

Cyprus: The Breakdown of Capitalism II

Coming from the "rich tail wags the poor dog" department, we find this week that a few decision-makers in the Cyprus banks, plus failed Cyprus bank regulation, have caused risk to every Cypriot's savings. One proposal was to confiscate 6.75% even from allegedly "insured" small accounts! And the politicians claim, "We have no choice!"

In tosoc.org's eyes, this is a typical financial squeeze play. In order to save the world, the poor have to pay for the mistakes of the rich.

It worked like this: first you lure Cyprus into the euro zone in 2008. Then you allow Cyprus banks to take in deposits from Russia and elsewhere until the banks are 7 to 8 times the size of the Cyprus GDP. Mix in a financial crisis and a lot of bad loans to Greece, and suddenly the people of Cyprus find themselves on the hook to save the banks.

If we seem repetitious at tosoc.org, it is because we see the same trick working over and over again. You chain the poor with a single currency and they are prosperous for a while. Then a financial crunch comes and you whip them with economic fear until they cough up their money. The poor cannot escape because they are chained to the single currency.

The rich on the other hand work in many currencies. They escape.

If you say this cannot happen in the United States, tosoc.org says that it already has. It has just happened in a different form. Instead of confiscating our bank accounts, the government has added enormous amounts of public debt. This is debt that the rich ultimately do not have to pay because if taxes get too high, they can run away to "friendlier" countries, leaving the debt problems behind.

If the Cypriots do not pay up, another proposal is that they sell their country cheap to raise the cash. In an online Reuters article by Michelle Kambas here, the plan is described this way:

Trying to placate its lenders, the government proposed to parliament a "solidarity fund" that would bundle state assets, including future gas revenues, as the basis for an emergency bond issue, likened by JP Morgan to "a national fire sale".

When an entire nation has to sell its future cheap to pay off obligations made by a few, capitalism has broken down. That is why we called the Greek experience a breakdown of capitalism, and this is just another manifestation of it.

Note also this quote in an online article by Jeff Macke from Breakout, and the accompanying video discussion with Jon Najarian.

Should the EU come under meaningful strain because of a $13 billion bailout, then it was never a real Union in the first place. For the time being, Cyprus is a camera opportunity. The real victims are lined up in front of ATMs trying to extract their deposits, while the truly well-heeled make alternate plans.

Exactly. Many have made this point, including tosoc.org. Why are the few allowed to victimize the many?

Laws and regulations have failed to put a stop to this. That is why tosoc.org recommends multiple exclusive currencies and markets. This automatically imposes capital controls when not everyone is allowed to own units of some currencies. If the internal economy of Cyprus had still been run on the Cypriot pound (a.k.a. the lira), and no one but poor Cypriots allowed to own it, then there would be no currency shortage and threats of confiscation now. There would have been no internal bank closures and the poor would have access to their money.

At the same time, with multiple exclusive currencies, external Cypriot banks could still have played the external currency game with the Russians. Everyone would have known that the people of Cyprus would not be on the hook for international shenanigans. Let the international rich take their own chances. Yes, the banks could fail and some Cypriots would be put out of work temporarily, but it would not have become a national crisis and burden.

One way to express the basic problem is that large banks can put entire populations at economic risk, and they do. The way to stop that is to firewall them away from the rest of us by making them operate in worldwide, external currencies that the poor do not use. That way they cannot reach directly into the pockets of the poor to save themselves, or hold the people hostage in order to make governments help them do it.

The case of Cyprus puts the open and raw extortion efforts by the EU, the ECB, and the IMF on public display. We have a solution at tosoc.org, so please help us put a stop to it, both in the U.S. and elsewhere.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (tosoc.org)

Copyright © 2013 TheOtherSideOfCapitalism

The 24/7 Worker

No matter how much you work, it is never enough. No matter how much you train, it is never enough. No matter how much you give, it is never enough. That is the attitude of world corporations. Continuous improvement. "Harder, better, faster, stronger." The question is what this vision of the future will lead to.

Take for example the popular Agile with Scrum management methodology. It organizes the time of teams of workers by sprints, often two-week periods of work on projects. The goal of management of course is to pack as much into these sprints as possible. After the team finishes one sprint, they immediately start another. The teams are always sprinting, never resting, and never really thinking because they have short-term delivery goals. In the past, long-term difficult projects became death marches. Now they can become an series of death sprints. Nothing has really changed.

Consider also today's employee evaluations, used to decide who gets higher percentage salary increases each year. They are used as well to help decide who to let go if times get tough. Frequently the highest mark on these evaluations is "exceeds expectations." This would make sense if the worker were being compared to an average worker in the position. But in the "harder, better, faster, stronger" world, that is not the case. Workers are expected to exceed their own expected efforts. That is total nonsense, of course – how can one expect to exceed what one already expects? Managements lose a little of their touch with reality when they put this kind of thing in their employee evaluation process.

As with politicians, however, maybe it is better not to ask whether "expecting to exceed expectations" makes any sense. Maybe it is better to ask what management means when they say it. At tosoc.org, we believe that it means that workers' productivity is expected to grow between every evaluation period and the next. The only job security workers have is to continuously increase their output. And for the same pay.

The issue, really, is what constitutes fair pay for work done. There is a story from the old Soviet Union in which a young Communist Party member is sent to work in a coal mine. On his very first day he notes that it is easy to meet the assigned quota and wonders why his experienced co-workers cannot keep up.

When they realize what he has done, however, his co-workers do not praise him. Instead they gang up on him and shove him against the wall. "You fool! Look, if we meet today's quota, then tomorrow they will increase the quota! And then more after that! We pretend to work and they pretend to pay us, and it is good enough as it is. Take your Revolutionary fervor and shove it! Do not make it harder for us to live!"

The point is that management, either capitalist or communist, will always demand more productivity. If they successfully convince workers to "take the hill," then they will exploit the workers as far as they can. They will exhort workers to "take" a sequence of ever-higher "hills" until the workers fail.

This accomplishes two things. First, the managers can tout their own glory. "See, we got more out of our workers than our competitors did." Second, it is always psychologically useful to put workers in the wrong by making them fail, especially if one can make them break their own promises. This is a variation of the financial "squeeze play" that tosoc has mentioned before.

As in the story from the Soviet Union, workers get used to being in trouble at all times and to failing management expectations. In fact, it is important to fail in order not to be exploited. Workers cannot overtly resist management, so resistance must be passive – passive-aggressive. This has advantages for both sides because it is essentially an armistice. The workers do enough work, get paid enough, and take the blame for their failure to do more. The managers get to crack the whip, blame the lazy workers, and feel personally superior to the "average man."

Gradually, however, management is beginning to intrude more and more into the lives of American workers. The downside of instant communications is that you are never more than a text or phone call away from work. How can a worker refuse to do just an hour or two of urgent extra work every once in a while (unionized workers being an exception)? It is when urgent situations, or emergencies, last for weeks and even months that one realizes that one is being exploited.

Some managers call workers in for overnight sessions, offering some kind of energy boosting drink for free. Instead of the exception, putting in extra unpaid hours is expected, though managers try to make it as "fun" as possible. This makes some sense for start-ups where the workers have significant numbers of stock options and are trying to get rich. However, many of these situations are fakes because workers get only a few stock options and the company has no chance of being the next "Google."

Now that so many enterprises are 24/7, tosoc.org expects that managers once again dream of 24/7 workers. If only there were a drug that workers could take so they would not need sleep and would stop caring about what happens outside the workplace. At one time, amphetamines were the solution, but it turned out that amphetamines have undesirable effects. Now that there are companies with "X"-hour energy drinks, however, maybe further research will increase them to 10- and 18- and, ultimately, 24-hour energy boosts.

There are limits to growth, yet the job of corporate management is to encourage growth in every way. For workers, that means ever-more training, ever-greater donations to the company's favorite charities, and ever-higher productivity per worker. Management is always a little insane because they by nature question all limits. It is true that science and technology have helped humanity overcome so many limits over the last few centuries. This may have led us into overconfidence that all limits can be overcome and all expectations exceeded.

To illustrate this, there was once a U.S. general in charge of a satellite communications program who was told that there was a four-millisecond delay between sending and receiving. Naturally the general became angry, demanding that this four-millisecond delay be eliminated. Of course, the four-millisecond delay is due to the speed of light, a physical law. It is not clear whether the general was ever convinced that it is pointless to demand the overturning of a law of physics.

On the other hand, an enterprising researcher might say, "Sure, General. We can do that with a new research program. We estimate that it will take 20 years and 100 billion dollars." Do not fight the craziness; work with it.

All management is a little crazy in demanding never-ending growth and improvement. Tosoc.org thinks that this is necessary, however, to keep us all on our toes and to keep us questioning our assumptions. That is one reason why we support the rich and propose external currencies and markets for their businesses.

What we want to avoid is crazy systemic processes that drive workers to fail and into passive-aggressive behaviors. To accomplish that we recommend multiple exclusive currencies and markets, national unions for all workers who are members of internal markets, and that all elected officials and government employees be paid only in internal currencies. These steps plus a few others will by their nature blunt the exploitation of workers by external companies and by their own government, and reduce the impact of management craziness.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (tosoc.org)

Copyright © 2013 TheOtherSideOfCapitalism

In It for the Poor

These tosoc.org posts have focused more on the rich than the poor.  The reason is that the rich lead the way:  they have the resources to do so.  We need the rich so that they can lead the way on multiple exclusive currencies.  We have already listed some of the advantages for the rich in the In It for the Rich post.

However, we also need the poor to participate.  Our criticisms of the rich are all well and good, but so far there has been little said about the poor.  The poor will also ask what is in it for them.

Similar to the case of the rich, the tosoc.org solution will allow the poor to remain poor and socially justified.  As it is, the rich use "scarlet letter" methods in the attempt to make the poor poorer.  Not only do the rich label the poor as whiny and lazy, they seem to believe that the poor are really not even worth the money they are paid.  See our No Sauce for the Gander post and the quotes from Australian billionaire Gina Rinehart.

The United States is unusual partly because the population does not realize how poor it really is.  No matter what your income, you are poor if you cannot protect yourself against financial attacks.  Tosoc.org does not believe that there was a giant conspiracy among the rich to bring on the Great Recession.  We believe instead that the crisis was brought on in the usual course of business by the rich defending themselves against the results of their own mistakes and excesses.

If the strong do not provide the means to stabilize the economy, then the weak are forced to pay.  The defenseless poor have ended up paying almost all the costs of the crisis simply because it is easier and cheaper to take their money and property away from them.  In this case, most of us in the U.S. had something important taken from us in the crisis -- a job or a house, for example.  Tosoc.org sees this as proof that most of us are really quite poor.  Our wealth is really mostly smoke and mirrors and can be easily taken from us.  We imagine ourselves wealthy because we only compare ourselves to those who are even poorer.

It works like this.  In a financial crisis, lay off a million people, wait a while, then foreclose on their houses.  Convince the government that you are too big to fail and make it borrow on the backs of the poor to keep you in business.  When times improve, sell the poor back their houses at high prices.  The rich get richer.

Then wait a decade or two, and repeat.  This is the exploitation cycle.  It should be easy to see its relationship to the business cycle.

We believe that the exploitation cycles must be stopped.  The way to do that is to provide a measure of economic protection to the poor.  Everyone should have the basics:  food, clothing, and shelter.  The way to do that is have the government buy these in bulk and drive hard bargains.  Anyone who wants can join this plan voluntarily.  There will also be ways to exit the plan for those who prove themselves competitive enough to deal with the rich directly.


There will be no unemployment, no foreclosures, and no bankruptcies for those in this basic plan.  However, those who prove themselves competitive by profiting too much will either have to return their excess to the government or exit the plan.  Their choice.

Those who join this plan will also be given work through government-run agencies and contract out to private businesses.  One way to think of the agencies is as unions.  As well as matching workers to jobs and handling other personnel issues, the agencies will assure adequate working conditions.

The government will charge the businesses for labor and the businesses will charge the government to supply food, clothing, and shelter.  This is where tosoc.org's idea of multiple exclusive currencies comes into play.  External businesses will be billed and paid in an external currency.  Internal businesses will be billed and paid in an internal currency.  The government will set policies for all currencies.  The purpose of these policies is to assure that the agencies of the government can operate at a profit in all markets as needed.  This means that the government itself can never be overwhelmed by its own debt.

The rich might complain about coddling the poor, as if beating the poor with economic sticks is helpful.  Their arguments will not hold when one considers that they offer economic security to their own even if it is not earned by work -- their relatives and close friends.  That is economic tribalism, nothing more.  Their notion of what one must do to deserve economic security is self-serving and hypocritical.  To the extent that we, the poor, buy into these notions, we are not intelligent enough to defend ourselves against the rich.  Tosoc.org intends to be intelligent enough, and at the same time, help defend those who cannot defend themselves.

We at tosoc.org want to rid the world of the idea that basic economic insecurity is the best whip to use to drive laborers to work.  The rich who support this idea cannot justify it except by creating class distinctions and economic tribalism -- at the same time that they decry class warfare by those who resist the whip.

Instead we need to create a world where the economically defenseless still have the security of food, clothing, and shelter.  A world where they cannot be bankrupted or foreclosed or fired without recourse.

Tosoc.org sees the common currency as the chain that works with the whip.  Without the chains to hold us down, the whip is almost useless.  Get rid of the chains and we can deal with the whips.

Socialism for the socialists and capitalism for the capitalists.

TheOtherSideOfCapitalism (tosoc.org)

Copyright © 2013 TheOtherSideOfCapitalism

Climate Control

While "The Other Side Of Capitalism" is generally about using multiple currencies to help us achieve a more stable and fair worldwide economic system, there may be times when other topics are discussed.  This post is about climate change.

There is no question that we need to reduce our dependence on fossil fuels.  Whatever the true magnitude of the effects of rising carbon dioxide levels, there is no doubt that some level eventually will be "too high."  Unfortunately, rather than presenting the facts in an open and straightforward fashion, we advocates of policy changes to reduce greenhouse gasses frequently have chosen to frame the issue in faux religious apocalyptic terms, making doubtful and unsupported claims.  Our writings often seem similar to sermons about the wages of sin; about hell and damnation.  This hurts our credibility.  It seems doubtful that these patronizing approaches will do any good.  Perhaps they actually are doing harm to our cause.

In simplistic terms, our basic point has been that greenhouse gasses retain heat and that humanity has stumbled into a situation where we are dumping large amounts of greenhouse gasses into the atmosphere to support our energy needs.  Only recently have we realized that the result will be climate change of some sort.

The original expected result of retaining more heat was that worldwide average temperatures would rise quickly, and the original expected apocalyptic result was that unless we repented of our environmental sins, we would eventually bake ourselves to death.  The solution was first, to stop adding so much carbon dioxide to the atmosphere, and second, to possibly reduce atmospheric carbon dioxide.  This process turned out to be more complex than expected, so now we talk more about climate change than rising temperatures.  The approach has been to focus narrowly on climate change and its disadvantages.

A better approach, however, may be to lay all the cards on the table and take a more wholistic approach.  First, our energy needs are related to the number of people we have to support.  The more people, the more energy.  For many reasons, not just climate change, we question just how many people the earth can support.  What is the "best" population of the earth and have we already exceeded it?  Part of the discussion on climate change should be about population control.

Second, we should reframe the issue as one of climate control rather than climate change.  Humanity stumbled ignorantly into climate change, but now we know why it is happening and generally what to do about it.  It is no longer just a big accident.  We know what we are doing.  So we should start making our real claim, that we control the climate of the earth by raising and lowering the proportions of greenhouse gasses in the atmosphere.  Once we accept that, we should ask the next question.  What temperature should the earth be?

No one wants to bake or freeze, but some might like the temperature a little higher and some might like it a little lower.  Some might want the seas a little higher and others might want them a little lower.  We need a consistent worldwide climate policy because otherwise nations might initiate opposing policies to achieve their own climate goals.  It is hard to say what will happen if some nations intentionally generate greenhouse gasses to warm the earth up while others take measures to cool the earth down.  Another part of the discussion on climate change should be about worldwide development and enforcement of climate regulations.

Finally, we should be careful not to frame climate change conservatively or in a reactionary fashion.  Some of us tend to make faux religious arguments that assume that the earth was specially placed here so support humanity -- and that if it were not for our environmental sins, the earth by nature would be the best of all possible worlds for life as we know it.  There is simply no evidence for this and promoting this kind of thought denies both evolutionary principles and the evidence of large extinction events in the past.

Rather it may be within our power, and for a time, to make the earth into the best of all possible worlds for ourselves, and to freeze evolution, making the earth a sort of protected zoo for all species as they exist now -- not perhaps the best of all possible combinations of living things, but at least the living things to which we have become accustomed.

TheOtherSideOfCapitalism (tosoc.org)

Copyright © 2012 TheOtherSideOfCapitalism