The real games rich people play with money are not, actually, about having money to spend per se. They’re about having money to use, preferably in the . . .
[N]eoliberals were less interested in markets per se (and even less in market competition) than in what could be achieved through them. Though neoliberals usually aim to eliminate any state intervention that interferes with the free decisions of private enterprise, they are not opposed to all forms of state intervention. Neoliberals are, of course, less concerned with forms of state intervention that redistribute to core business groups (through generous tax exemptions or massive bailouts during financial crises) than they are with the kind of intervention that mandates redistributive measures for the working class. Similarly, neoliberals vow to extend markets and market logics to all forms of social and political life but are less concerned if this ends up leading to unfair competition or outright monopoly.
Second, it is now well understood that neoliberals need strong states to impose — and enforce — their free markets, even if it takes the form of outright repressive state measures.
Neoliberalism, then, is much more than just a set of ideas about free markets. It’s a political project that aims not only to reduce the power of the state but, more concretely, to undermine the efforts of any collective actor — be it states, labor unions, political parties — to interfere with the decisions of private enterprises. This project to alter the balance of power is the key to its resilience.
Not a particularly thrilling or original take on the death of free market economics . . . except for the fact it was .
The market alone cannot be relied on to provide basic services for all people. That’s why we have fire departments, for example. Decent societies (that are wealthy enough) provide universal basic healthcare, because it is a basic human right, and because the market is not particularly good at valuing human life over profit. Australia ranks 7th in the world for life expectancy globally, for example, while the USA ranks 40th. Yet Australia spends far less in GDP terms (9%) than the States (17%) on health. The US relies more on the market, whereas Australia prefers a universal system (however flawed) geared to serve the public good.
I can see why libertarian types might see shrinking of government as a virtue: they believe it will empower the individual. But even from the libertarian perspective, this will not be the consequence of UBI. Into the vacuum of a retreating government we won’t see the individual, but Jeff Bezos, Zuckerberg, Larry Page, and all the rest. We’ll receive our services from Amazon, our news from Facebook, our scientific research via Google, and our moral compass via the fucking Disney corporation.
Tim Napper on.
Incidentally, my understanding of the US healthcare figure is that it’s a massive under-estimate of the total cost, because it’s only counting direct expenditure (more on which in a sec). The reasons it’s so high compared to other industrialized nations is a somewhat paradoxical combination of:
- people delaying early intervention treatments, which are significantly more cost-effective in the long-term, because they can’t afford to treat conditions until they become emergencies, and
- the private healthcare market having a vested interest in generating the most profit by selling the most services.
In other words, people who can’t afford healthcare are under-serviced, while people who can are over-serviced. Or, in other other words, the “market” is ridiculously inefficient at allocating the “right” amount of healthcare to the right people.
The other factor, which I believe is not (fully) captured in the GDP figure, is that an enormous quantity of US “health” expenditure actually goes to paying the middlemen and rentiers in the private insurance industry, which was worth a little over $8 trillion in 2018. Basically, paying all the salaries of all the bureaucrats — and, to be clear, just because they’re not government employees doesn’t mean they’re not bureaucrats — in every different insurer, and all the administrative staff in all the hospitals and doctors’ offices who have to deal with them (think about every nightmare story you’ve ever heard about itemized bills of “provider networks” or whatever other ridiculous red tape people in the US have to deal with the get basic healthcare).
Think about it this way: If you have one government provider, e.g. Medicare in Australia, you have one agency and one department doing most of the legwork. The Department of Health employs a little over 4,000 people, Services Australia a little over 30,000; both agencies do more than “just” administration of Medicare, so it’s hard to get the real number of staff from flicking through corporate reports, but you get the idea. Medicare serves as the main healthcare provider for about 25.6 million Australians, out of about 25.7 million total. So, like. Basically everyone.
Compare and contrast to the US, which has somewhere over nine hundred different health insurers. And, sure, the population is bigger and most of those insurers probably have less than 30,000 employees . . .1 but you’re telling me there’s no duplication of function in any of those companies? Multiple HR departments and IT departments and procurement and payments? C’mon.
The point here is that the argument for private healthcare fails on its own merits, when those merits are the ones spoken aloud (“efficiency in health services delivery”) rather the quiet parts (“making a small number of people extremely rich”).
And, yes, you may have also noticed that this argument — that a central single healthcare insurer — is more efficient is exactly the same argument right-wing types make for UBI (a single benefits scheme is more efficient than the current system of multiple types of claims).2 Almost like the whole thing is ideology-driven nonsense on the face of it . . .
*taps side of head* Don’t have to pay income tax if . . .
The tl;dr is that this is, incidentally, why all those stories of CEO’s “only” taking middle-class-ish salaries are PR bullshit. The thing about wealth is that you eventually get to a point where all your major assets are probably tied up in investments and/or corporate vehicles like ownership shares. This money sits there, making money money, until you need it (if you need it) for some kind of major purchase. Like a new private jet (which is, of course, a “business asset” and purchased through your company, not your personal wealth). If you’re taking a salary at all — as opposed to just living on the disbursements from your various investment trusts — you’re doing it to get pocket money to buy yachts and solid gold fountain pens or whatever.
Salaries, in other words, are for workers. The ruling class has money to make it more money, and money isn’t taxed nearly as hard (or, frequently, at all) as the proles . . .
So, y’all know what a “monopoly” is in economic terms, right? At least in a vague, pop culture-y sort of way. But did you know there’s also the concept of a monopsony, which is basically the mirror image of a monopoly, i.e. a market with one one (or very few) buyers. In a monopsony, the buyer of a product effectively gets to dictate the price of it, regardless of what the sellers would like to (or have to) charge. The most common place monopsonistic exploitation is encountered? The labor market.
I’m sure it’s no coincidence whatsoever that this incredibly important, ideologically disruptive, yet little known idea was . . .
Shipping and logistics is extremely expensive, far more than the membership fees charged by Prime; Amazon spent $37.9 billion on shipping costs in 2019, and much more in 2020. No matter how amazing your logistics operation, you can’t just offer free shipping to customers without having someone pay for it. Amazon found its solution in the relationship between Prime and Marketplace. It forced third party sellers to de facto pay for its shipping costs, by charging them commissions that reach as high as 45% [. . .] merely to access Amazon customers. That’s nearly half the revenue of a seller going to Amazon! And this high fee isn’t just because fulfillment or selling online is expensive; Walmart charges significantly less for its fulfillment services and access charges to its online market, and eBay’s market access fees are also much lower than Amazon’s. [. . .]
How do sellers handle these large fees from Amazon, and the inability to charge for shipping? Simple. They raise their prices on consumers. The resulting higher prices to consumers, paid to Amazon in fees by third party merchants, is why Amazon is able to offer ‘free shipping’ to Prime members. Prime, in other words, is basically a money laundering scheme. Amazon forces brands/sellers to bake the cost of Prime into their consumer price so it appears like Amazon offers free shipping when in reality the cost is incorporated into the consumer price.
Now, if this were all that was happening, sellers and brands could just sell outside of Amazon, avoid the 35-45% commission, and charge a lower price to entice customers. “Buy Cheaper at Walmart.com!” should be in ads all over the web. But it’s not. And that’s where the main [antitrust claim] comes in. Amazon uses its Buy Box algorithm to make sure that sellers can’t sell through a different store or even through their own site with a lower price and access Amazon customers, even if they would be able to sell it more cheaply. If they do, they get cut off from the Buy Box, and thus, cut off de facto from being able to sell on Amazon.
Matt Stoller on.
This article is worth reading in full, since it explains the (a har) logistics behind the antitrust sharks currently circling Amazon, but the tl;dr version is Amazon uses it customer monopoly to keep prices artificially high on all online retailers.
An important feature in the wider political landscape [of the early 20th century] was the existence of a competing economic system in the Soviet Union and Eastern Europe. [T]his was instrumental in making capitalists in the West accept the need to come to terms with labor. It is important to note that the welfare state was never an expressed aim for the labor movement before it was created. The stated aim, of course, was socialism. It was the fear of socialism that drove capital to concede [. . .] unregulated, crisis-stricken capitalism had to come to an end because, if it didn’t, the balance of forces meant that capitalism itself might fall. It was under the Keynesian model of regulated capitalism that the social and economic foundation for the welfare state was created.
Stick with me here, but what if people weren’t lazy — and instead, for the first time in a long time, were able to say no to exploitative working conditions and poverty-level wages? And what if business owners are scandalized, dismayed, frustrated, or bewildered by this scenario because their pre-pandemic business models were predicated on a steady stream of non-unionized labor with no other options? It’s not the labor force that’s breaking. It’s the economic model.
Anne Helen Petersen on.
What if — and stay with me here because I know this is a wild one — but what if you don’t actually have a “right” to own a business, and if your business can’t survive in, for example, the economy because it can’t, for example, afford to pay staff competitive wages then maybe, just maybe, you’re not actually cut out to run a business.
What all of this tells us is that reducing growing social problems to new technologies is simply not accurate. Framing the problem in that way makes it seem as though if we create better platforms, our problems will be solved — but if the platforms are responding to the economic incentives of the capitalist system, maybe that should get more scrutiny.
Are we to believe that social polarization is the product of Facebook, and not the fact that income inequality has returned to pre–Great Depression levels (and is likely much worse due to the pandemic)?
Are we to believe that a distrust of elites and politicians is the result of Google’s search results, and not the fact that the political system is unresponsive to the needs of the vast majority of the population, while the government lets industry regulate itself, leading to tragedies like the Boeing 737 MAX?
Are we to believe that the breakdown in community and personal relationships is the result of clever algorithms, and not the fact that capitalism has commercialized most aspects of our lives, decimated public spaces, and ensured our communities are built in a way that separates most people into auto-oriented suburbs?
I think you know the answer.
The point here is not that Google, Facebook, et al. are somehow blameless benevolent actors (they are not), but rather more that they are symptoms of a greater sickness.
Cure the virus, not the fever.