economics

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Market of the free.

For many people today, it’s hard to imagine government doing much of anything right, let alone breaking up a company like Facebook. This isn’t by coincidence.

Starting in the 1970s, a small but dedicated group of economists, lawyers and policymakers sowed the seeds of our cynicism. Over the next 40 years, they financed a network of think tanks, journals, social clubs, academic centers and media outlets to teach an emerging generation that private interests should take precedence over public ones. Their gospel was simple: “Free” markets are dynamic and productive, while government is bureaucratic and ineffective. By the mid-1980s, they had largely managed to relegate energetic antitrust enforcement to the history books.

This shift, combined with business-friendly tax and regulatory policy, ushered in a period of mergers and acquisitions that created megacorporations. In the past 20 years, more than 75 percent of American industries, from airlines to pharmaceuticals, have experienced increased concentration, and the average size of public companies has tripled. The results are a decline in entrepreneurship, stalled productivity growth, and higher prices and fewer choices for consumers.

Chris Hughes on megacorporations.

2019-07-08T11:56:38+10:004th November, 2019|Tags: culture, economics, politics|

Reality (re)Bytes.

The neoliberal economic conditions that gave rise to the influencer—and all those side hustles and personal brands—simultaneously have made it harder to attain a normal middle class existence. Even if your goals are of the modest, slacker variety—an hourly wage job, a roof over your head, junk food to eat, and TV to watch—that’s all a hell of a lot harder to come by these days.

[…]

But perhaps that realization will lead some to divest from the belief that hard work and self-optimization will lead us to some capitalist promised land. The neoliberal ideal has reached its peak and, well, it’s not as though we’ve solved income inequality with all our hard work. Quite the opposite. As [Will] Storr writes of our culture’s failed promise: “It wants us to buy the fiction that the self is open, free, nothing but pure, bright possibility … This seduces us into accepting the cultural lie that says we can do anything we set our minds to … This false idea is of immense value to our neoliberal economy.”

Rosie Spinks on the return of the slacker.

2019-07-01T09:19:42+10:0027th October, 2019|Tags: culture, economics|

88 million short.

[I]nternet investors don’t want a modest return on their investment. They want an obscene profit right away, or a brutal loss, which they can write off their taxes. Making them a hundred million for the ten million they lent you is good. Losing their ten million is also good—they pay a lower tax bill that way, or they use the loss to fold a company, or they make a profit on the furniture while writing off the business as a loss…whatever rich people can legally do under our tax system, which is quite a lot.

What these folks don’t want is to lend you ten million dollars and get twelve million back.

You and I might go, “Wow! I just made two million dollars just for being privileged enough to have money to lend somebody else.” And that’s why you and I will never have ten million dollars to lend anybody.

Jeffrey Zeldman on VC.

2019-06-04T15:00:05+10:0016th October, 2019|Tags: economics, tech|

Soft power.

[T]here is one element missing in [recent commentary around China]: our (West’s) collective hypocrisy.

We in the West should very well know what and who we are dealing with — China might be decked out in Louis Vuitton, but underneath, it is still a single-party, quasi-communist nation. Knowing the Western desperation for growth and the insatiable needs of the stock markets, China also knows it can yank anyone’s chain.

Huawei isn’t a recent problem. It was a problem a decade ago. The dynamic in this spat between the NBA and China isn’t new — China gets what China wants, not the other way around. Why are we being outraged now? The West signed up for this.

[…]

Sitting in Delhi, it is fairly easy to be reminded of the time when most of the world felt the same way about the American influence on culture, economy and politics. Growing up in socialist India […] I read countless articles in newspapers and magazines that bemoaned American hegemony.

Now the shoe is on the other foot now, and China is doing the kicking with its way of governance, controlling speech and business.

Om Malik on hegemony.

I’ve cut out a quote here from someone else that essentially points out China and India were dictating global market norms for nearly two thousand years before the West (i.e. Europe and America) showed up in the last few hundred to mix things up a bit. But China in particular has been waiting and planning its resurgence, and with America so outwardly weak and internally fractured, well. Now’s the time.

Extreme Team No-one on this issue, but it is… definitely frustrating to constantly see the utter lack of self-awareness (or, at best, special pleading of the “but when we do it’s it’s Good!” variety) from American commentators. Not to mention some of the stuff China is getting blamed for1 is starting to smell a li-ii-ii-ittle bit like Yellow Peril 2.0, so… yeah. About that…

Edited to add:

For what it’s worth, I think Stoller is correct in his analysis and his proposed solutions… bu-uu-ut he’s also pretty much the Ur-example of the sort of hypocrisy Malik is talking about above. And, like, take a shot every time someone says “kowtowing to the Chinese” which… yi-ii-ikes. Can we not?

  1. Yeah, I’m looking at you, everyone who likes to point fingers at China because Disney and Marvel—the latter of which in particular is run by a Republican with a known history of conservative editorial interference—won’t make boys kiss in your Extruded Superhero Product Films. Like, don’t get me wrong; China is definitely shitty on this issue. But, like… America has hardly been better. So you’ll have to forgive a little skepticism on my part that this one is solely China’s “fault”. []
2019-10-11T09:14:15+11:0011th October, 2019|Tags: culture, economics, pop culture|

Rentiers.

What matters above all else is something central to the operation of capitalism today. As profits become harder to find through the textbook route of investment and the creation of new markets (whether for goods or services), capitalism in general is turning towards various forms of rent-seeking. It’s significantly easier to enforce property rights on what has been created elsewhere, and demand tribute for access, than it is go through the costly and risky business of creating new value yourself.

James Meadway on value extraction.

From an article specifically about platform technologies (e.g. Amazon, Facebook, Apple) and the Future of Capitalism™.

2019-04-28T17:46:54+10:0028th September, 2019|Tags: economics, tech|

¿Por qué no los dos?

Digital companies work the same way as their extractive forebears. When a big box store moves to a new neighborhood, it undercuts local businesses and eventually becomes the sole retailer and employer in the region. With its local monopoly, it can then raise prices while lowering wages, reduce labor to part-time status, and externalize the costs of healthcare and food stamps to the government.

The net effect of the business on the community is extractive. The town becomes poorer, not richer. The corporation takes money out of the economy—out of the land and labor—and delivers it to its shareholders.

A digital business does the same thing, only faster. It picks an inefficiently run industry, like taxis or book publishing, and optimizes the system by cutting out most of the people who used to participate. So a taxi service platform charges drivers and passengers for a ride while externalizing the cost of the car, the roads, and the traffic to others. The bookselling website doesn’t care if authors or publishers make a sustainable income; it uses its sole buyer or “monopsony” power to force both sides to accept less money for their labor. The initial monopoly can then expand to other industries, like retail, movies, or cloud services.

Such businesses end up destroying the marketplaces on which they initially depend.

Douglas Rushkoff blames capitalism.

2019-03-25T10:56:53+11:0014th September, 2019|Tags: economics, tech|

Capitalism killed the flying car.

David Graeber on how capitalism (specifically, the boom of neoliberal capitalism in the ’80s and ’90s) has, contra popular opinion, ground “big idea” style technological innovation to a halt.

Also nice to see Graeber still using this essay as an excuse to bang his favorite drum, i.e. how much he hates doing academic administrative work (which is also something he covered extensively in his book), although to his credit he does link it into a broader criticism of how university adoption of neoliberal ideas like branding, competition, and marketing have ruined academic research.

2019-03-22T09:18:36+11:009th September, 2019|Tags: culture, economics, pop culture|

Monetize me!

We live in the era of the hustle. Of following our dreams until the end, and then pushing ourselves more. And every time we feel beholden to capitalize on the rare places where our skills and our joy intersect, we underline the idea that financial gain is the ultimate pursuit. If we’re good at it, we should sell it. If we’re good at it and we love it, we should definitely sell it.

[…]

That’s not to say there isn’t joy to be found in turning something you love into your life’s work — it’s just to say that it’s okay to love a hobby the same way you’d love a pet; for its ability to enrich your life without any expectation that it will help you pay the rent. What would it look like if monetizing a hobby was downgraded from the ultimate path to one path? What if we allowed ourselves to devote our time and attention to something just because it makes us happy? Or, better yet, because it enables us to truly recharge instead of carving our time into smaller and smaller pieces for someone else’s benefit?

Molly Conway on hobbies.

Hahaha publishing hahahaha.

[something something gig economy is making people poor and platform capitalists incredibly rich something something]

2019-02-27T14:13:50+11:0025th August, 2019|Tags: culture, economics|