Thursday, March 03, 2016

International rivalry - is much of it based on theft?

The Great Brain Robbery”  was the most highly rated episode of 60 Minutes in seven years, about the systematic use of industrial espionage by China and others, featuring interviews based on the work of international tech-econ guru Mark Anderson, whose Strategic News Service is vital for you business-newsletter subscribers, and whose Future in Review” (FiRe) Conference is one of the most important and fun conclaves going

Of course the rapaciously insatiable raid on western inventiveness is a case of killing the goose that lays golden eggs. China's rise has been entirely funded by westerners buying stuff from Asian factories. Just as the same raising-up happened in exactly the same way to Taiwan and Korea, to Japan and postwar Europe and many other zones.

How have Yanks been able to afford 70 years of trade deficits that funded this huge project of uplift? By inventing new industries (rockets, jets, satellites, pharma, telecom, the Internet) to replace old ones we shipped overseas, en masse. Our inventiveness is the key ingredient - after Pax Americana peace - that increased wealth in the world, enlarging a positive-sum pie for all to share.

Chopping at the neck of that goose proves that Asian elites are no smarter than those of any other pyramidal-hierarchical, command society across 6000 years.  Here's a hint. Even if it were a smart move... we won't let it happen.

== How might the turnaround begin? ==

Not in Asia, I believe. Remember the “Helvetian War” from EARTH?  It was my forecast (fictional) that the 2020s might feature a consortium of angry developing nations finally getting fed up and declaring hostilities with… Switzerland.  

And other havens for kleptocratic thieves and other cheaters. Cheaters who are the ancient and recurring enemy of not only the poor, but any chance for flat-open-fair-creative capitalism. Now see why this flight of science fictional extrapolation is starting to look ever-more likely:  Follow the money inside the world's tax havens.

From an earlier article in The Guardian: “The world's super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy.”  According to one expert:

"If we could figure out how to tax all this offshore wealth without killing the proverbial golden goose, or at least entice its owners to reinvest it back home, this sector of the global underground is easily large enough to make a significant contribution to tax justice, investment and paying the costs of global problems like climate change." 

To be clear, this is a separate matter from tax rates! If you think taxes are too high, you should favor international wealth transparency!  Because tax rates on honest citizens would go down, if all the world's skull-duggerously secreted lucre were announced and tallied.  

Indeed, work it out. Those trillionaires would then join the fight for low rates, instead of (currently) chortling happily that you are paying for the roads they use and educating their workers and protecting them from revolution. Nicholas Shaxson discussed this disruption on our economies in his book, Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens. 

They count on that service lasting forever. But even if money can stifle modest protest campaigns, like that of Bernie Sanders, in developed nations, there is always the chance of what I described in EARTH

The struggles of the authorities in Egypt to recover the vast sums hidden abroad by Hosni Mubarak, his family and other cronies during his many years in power have provided a striking recent example of the fact that kleptocratic rulers can use their time to amass immense fortunes while many of their citizens are trapped in poverty. The world's poorest countries, particularly in sub-Saharan Africa, have fought long and hard in recent years to receive debt forgiveness from the international community; but this research suggests that in many cases, if they had been able to draw their richest citizens into the tax net, they could have avoided being dragged into indebtedness in the first place. Oil-rich Nigeria has seen more than $300bn spirited away since 1970, for example, while Ivory Coast has lost $141bn,” notes Heather Stewart in The Guardian

How long before some charismatically smart president in some developing nation discovers how much power he/she would have – legally – as a belligerent in an openly and honestly declared state of war against, say, the Cayman Islands? 

Actually look it up, the inherent rights of belligerent states.  Rights that - say - the Phillipines could apply to seize - say - Luxembourg or Cayman assets anywhere in the world, without a single shot being fired!

 What at first might sound ludicrous begins to sound ever-more plausible, the deeper into it you plumb.

== Theft of our chance to thrive ==

One of the surest signs of the treason called the War on Science has been the obstinate confederate religious doctrine that we must do nothing about improving our energy systems.  

If "climate skeptics" had been sincere, they would have said: "While the jury is out, let's improve efficiency and double research. 

"First: just in case 99% of scientists turn out to be right about the danger. 

"But also because efficiency and research are TWODA -- things we ought to be doing anyway, even if climate change proves false!"

That's what sane "skeptics" would have said. 

The fact that the Koch-Saudi-financed obstruction campaign never once said those things but instead always sabotaged efficiency and research proves that the goal was always to delay efficiency and alternative energy sources and to sell as much coal and oil as possible, till the world awakened. 

(After auto fuel efficiency standards finally passed in 2009, during the brief democratic Congress, every dire prediction failed and every single positive one came true.  We have better, cleaner, smarter, more efficient cars and automakers are selling them very cheap but making profits. Guys, does being wrong EVER change your minds?)

Now Paul Krugman weighs in that it's almost game over, amid low gas prices and American energy independence  - with Saudi political influence in the U.S. at a 60 year low - tech is accelerating, solar and wind and storage are now competitive and costs are plummeting. Despite treasonous delays, a transformation is pulling away from fossil fuels, faster than anyone imagined possible... and all of it despite the continuing-insane mania and anti-science, anti-future hysteria.

Imagine how much sooner and how much better a world, if traitors had not delayed this.

== Class warfare ==

I believe one of our problems is that the Rooseveltean reforms – which historians credit with saving western capitalism by vesting the working class with a large stake, (something Marx never expected) – were too successful, in a way. So successful that the very idea of class war seems not even to occur to American boomers. This despite the fact that class conflict was rampant across almost every other nation and time.  But as boomers age-out, is that grand time of naïve expectation over?

Forbes recently announced that just 62 ultra-rich individuals have as much wealth as the bottom half of humanity. Five years ago, it took 388 rich guys to achieve that status.  Which raises the question, where the heck does this rising, proto-feudal oligarchy think it will all lead? 

To a restoration of humanity’s normal, aristocratic pyramid of power (with them staying on top)?  

Or to radicalization, as a billion members of the hard-pressed but highly skilled and tech-empowered middle class rediscover class struggle?

The last time this happened, in the 1930s, lordly owner castes in Germany, Japan, Britain and the U.S. used mass media they owned to stir populist rightwing movements that might help suppress activity on the left. Not one of these efforts succeeded. In Germany and Japan, the monsters they created rose up and took over, leading to immense pain for all and eventual loss of much of that oligarchic wealth.

In Britain and the U.S., 1930s reactionary fomenters dragged us very close to the same path… till moderate reformers did what Marxists deemed impossible – adjusted the wealth imbalance and reduced cheating advantages so that a rational and flat-open-fair capitalism would be moderated by rules and investments to stimulate a burgeoning middle class, without even slightly destroying the Smithian incentives to get rich through delivery of innovative goods and services.  

That brilliant moderation led to the middle class booms of the 50s and 60s and – as I cannot repeat too often - it led to big majorities in our parents’ Greatest Generation adoring one living human above all others: Franklin Delano Roosevelt.

There are some billionaires who aren’t short-sighted fools, ignorant of the lessons of history.  Bill Gates, Warren Buffet and many tech moguls want wealth disparities brought down through reasonable, negotiated Rooseveltean-style reform that will still leave them standing as very, very wealthy men.

The smart ones know where current trends will otherwise lead. To revolution and confiscation. 

Picture the probabilities, when the world’s poorest realize they could double their net wealth, just by transferring title from 50 men. In that case, amid a standoff between fifty oligarchs and three billion poor, it is the skilled middle and upper-middle classes who’ll be the ones deciding civilization’s course. And who do you think those two billion tech-savvy professionals will side with, when push comes to shove?

See my earlier posting: Class War and the Lessons of History. 

== Follow the money ==

The father of the billionaires Charles G. and David H. Koch helped construct a major oil refinery in Nazi Germany that was personally approved by Adolf Hitler, according to the just-released  "Dark Money: The Hidden History of the Billionaires behind the Rise of the Radical Right,” by Jane Mayer, a new history of the Kochs and other wealthy families whose meddling in U.S. politics and tax loopholes have netted them billions in returns.  

 Of course there is nothing new about feudal lord cheaters. What is new is our slim but real chance of repeating the miracle achieved by our parents in the Greatest Generation... preserving competition and freedom and a flat-open-fair society, despite every effort to warp it, by short-sighted would-be lords.

How has money warped the political process? In Plutocrats United: Campaign Money, the Supreme Court, and the Distortion of American Elections, Richard L. Hasen analyzes the growing importance of campaign financing to modern elections, and three ways in which money has negatively influenced the democratic process, citing electoral outcomes, legislative influence and eroding public confidence.  Hasan proposes reforms -- involving vouchers for citizens to use for campaign contributions and caps on the what a candidate can spend on an election cycle -- that could result in a greater "equality of inputs". 


Louis Shalako said...

Thanks for the great post.

i_/0 said...

Here's a positive win, win solution to one aspect of these problems:

A progressive tax on all advertising and lobbying spend, with the revenues strictly and specifically earmarked.


This offsets the anti-competition advantage bestowed upon monopolies, some examples; former state owned infrastructure, market infrastructure, such as the inbuilt advantage to the owners of the London and New York stock exchanges and trading mechanisms; other kinds of market dominance; market collusion to fix prices at artificially high levels, through control of supply (utilities) or other means.
Addresses the undeniable asymmetry between corporates, markets, prospective governments and government on one side and citizens on the other through lobbying and advertising, including fringe advertising such as faux articles, documentaries and essays financed and paid for by special interests, employees paid or encouraged to tout company products or ideology via social media, etc.

The value of this tax embodies and enables a level field for smaller innovative solutions to be fast tracked.

Embodies positive values for social change, as did the ban on tobacco advertising, alcohol and speed limits, seat belt and legislation on use of mobile phones by vehicle drivers and passengers.

Creates a limiting factor to the co-option of state by corporations, which currently has no checks and few balances, especially in terms of access, lobbying and spending power. The legislature is becoming a branch of the body corporate, this is a partial solution.

Creates pressure upon high spenders to think more carefully about how much they spend, perhaps even why especially if there really is an equal and opposite reaction to it. It may actually help them to be more effective in their ad and lobby spend by choosing their lobbying spend in a more considered way.

Here's how it might work:

Revenue gained by this tax is earmarked specifically for spending which furthers research, development, implementation, and counter measures to the lobbyists concerned verified and overseen by independent bodies.

Some examples of this:

Renawables and climate control investment reap the benefit from fossil advertising and lobbying spend. Including environmental repair and improvement etc.

Healthy alternatives, access to free gym and sports facilities, education from fast and convenience food advertising and lobby spend. Adjust the tax upward to reflect fat, salt and sugar content in foods advertised. Environmental consequences likewise.

Weapons manufacturers lobby and and ad spend goes to conflict rebuilding, aid for disabled disfigured and psychologically damaged from civilians to ex-soldiers, rebuilding destroyed infrastructure and ensuring the work is actually done!

Tax from big pharma and big agri ad and lobby spend could finance redressing the environmental and health effects of their frequent false claims and misleading research. The Bees knees!

These taxes would not apply to certain organisations, such as certain kinds of charity, aid, NGO work, health campaigns and so on. Plus further exemptions for issues which arise.

An arbitrary example plucked out of my arse for how it might work:

For corporate and business advertising spend
£25 thousand, rate is 15% tax
£50 thousand, rate is 25% tax
£100 thousand, rate is 50% tax
£500 thousand, rate is 100% tax
£5 million, rate is 150% tax
£50 million, rate is 250% tax
£100 million, rate is 400% tax

We'd soon see a revaluation of the power to spend your way to total dominance which is virtually assured by monopoly. All of those revenues would be absolutely ring fenced in ways described above. As you can see, a modest proposal.

What I really like about this is that it throws the gauntlet to the free-market feudalists. Free market? Prove it by enabling real competition.

donzelion said...

Dr. Brin - As one of those pinstriped lawyers referred to in the article (who spent a couple decades or so doing this sort of work in the Middle East), I know a bit about how this is done, and why. "Transfer pricing" is seldom as straightforward as depicted in the Guardian article - typically, an "efficient" structure can reduce a 35-40% corporate income tax rate down to 14-22%, or defer elements of it for a prolonged period - but never eliminate it entirely.

Why it's done dates to strange choices made in America after the 16th Amendment. For Americans, we're subject to income taxes for any income earned anywhere in the world. Nobody else does it that way. American companies can avoid that by setting up foreign subsidiaries under foreign law - in effect, creating a 'new foreign person' who is not subject to American taxes. From the perspective of American politicians offering simplistic tax arguments (e.g., Chuck Grassley of Iowa), the entire world becomes a "tax haven."

The "tax havens" do play a role in transfer pricing schemes, but if those schemes were performed the way the Guardian presents them, that would violate laws in both the country of origin and the country of destination (in that illustration, both Ecuador and France would cry foul - and block the shipment). Rather, an offshore haven permits Apple (which has over $200 billion in such accounts as of July 2015) to instruct Apple sales channels in France/UK/Germany to park their money in a single account - extending credits and debits to the various subsidiaries for sales and purchases. Apple reports all those holdings to its shareholders - they're not 'secret' - but they're not in any hurry to move that money back to the American parent because when they do, it'll be taxed (at 20% as a dividend, rather than at the corporate rate - but still more than 0%). Why should they bother? It's not like they want to branch out into cars, planes, or other Apple-branded projects, when they're already making more than they can spend from iPhones et. al.

Is Apple cheating? Probably not, though there may have been some issues somewhere or other. Is 'secrecy' driving this stockpile of stealth funds? Probably not, though bank secrecy does make it much easier to operate (less reporting = fewer accountants).

i_/0 said...

Are Apple cheating? Only an accountant would limit that question to numbers. Let me count the ways...

Tantalum (Coltan,) Gold, Tin etc.

Restrictive Trade...

Walled Gardens...

Anonymous Viking said...

Re: 'Oil-rich Nigeria has seen more than $300bn spirited away since 1970, for example, while Ivory Coast has lost $141bn,” notes Heather Stewart in The Guardian. '

Sounds like the average citizen of Ivory Coast, Nigeria and Egypt would have been better off as colonial subjects?

i_/0 said...

"Sounds like the average citizen of Ivory Coast, Nigeria and Egypt would have been better off as colonial subjects"

Tin ears?

David Brin said...

They'll be better off as belligerents demanding war reparations of 200% from every "haven" that sheltered klepto-stolen lucre, thus directing murdering many Nigerian and Ivorian children.

donzelion said...

Anonymous Viking - "Sounds like the average citizen of Ivory Coast, Nigeria and Egypt would have been better off as colonial subjects?

You could ask them for their views. Egypt's had some difficult times, but since Nasser, there hasn't been a year of general mass starvation - there were many when the British controlled their economy (similar to Ireland, different reasons). You could also ask how many have tried to revert to 'colonial rule'...

Mubarak's "billions" - by the way - are likely to be exaggerated: many (hundreds, possibly a thousand) businessmen who owe debts have tried to shift payment obligations to Mubarak's estate, citing claims that their own debts were secured against assets and cash in notes held against Mubarak, and thus, they should not have to pay. Some of those claims may be meritorious, but many are not (and any Egyptian oligarch knows that he must posture as a victim of Mubarak, when in fact, he most likely earned his wealth by playing along).

Can't speak to Nigeria and Cote D'Ivoire, as I have no personal knowledge of how corruption operates there.

Andy said...

Regarding class warfare, this entry makes a really important point I hadn't thought about much before - the difference between social and economic class.

Also has some interesting theories on how the different classes are divided and allied against each other.

Laurent Weppe said...

* "I got to see my wife clapping for something Romney said today"

Newsflash! Donald Trump succeeds where the GOP failed: by making him snap and express exasperation at his bullshit, Trump demonstrates that Mitt Romney is, in fact, not a robot!


* "Yes, they were nasty, racist “labor unions” controlled utterly by Himmler etc. But there was lip service."

Just like "People's Republics" paid lip service to democracy. You seldom find people claiming with a straight face "Democracy is bad because look at the People's Republics"


* "amid a standoff between fifty oligarchs and three billion poor, it is the skilled middle and upper-middle classes who’ll be the ones deciding civilization’s course"

Unless the oligarchs decide to resurrect the varangian guards and use heavily armed bullies to threaten the middle-class with slaughter if they cease to comply.

Oh, sure, at most it would delay the inevitable uprising and should the oligarchy makes good on their threats, they'll end up loosing everything in the end.

But if you think they wouldn't dare staging a suicidal last stand out of spite, just look at what happened to Syria: the first shots of the civil war were fired against protesters in the Alawite bastion of Latakia, when even the "skilled middle and upper-middle classes" Alawites decided that the preferential access to scraps, jobs and education the regime had granted them for decades wasn't enough to turn a blind eye to its corruption and incompetence.
Then, when it became clear that revolution was inevitable, the regime took very deliberate steps to sabotage it: that's what corrupt aristocrats do when backed in a corner: they drop all pretense, proclaim "A world that doesn't belong to us isn't worth existing, so we'll burn it down and unleash our monsters on it" and proceed to do exactly that.


* "Hasan proposes reforms -- involving vouchers for citizens to use for campaign contributions and caps on the what a candidate can spend on an election cycle"

France has both public funding of political parties (the reform was introduced to curb down the endemic embezzling that politicians did to finance their campaigns during the post-war era) and a spending cap on election cycle: for instance, a candidate for the presidency cannot spend more that 22,5 million Euros for his or her campaign.

Currently, both the former president Nicolas Sarkozy and the fascist leader Marine Le Pen are in hot water with judges because of it: Sarkozy because he overspent during his campaign, and Le Pen because she created convoluted financial networks to channel public money intended for her party back into her and her friends' pockets.

Predictably, both are currently claiming to be victims of evileftistactivist judges hellbent of thwarting the Willofthepeople.


* "Sounds like the average citizen of Ivory Coast, Nigeria and Egypt would have been better off as colonial subjects?

Yeah, because subjects of the french and british colonial empires were so much better when a few thousands wealthy white landlords owned their countries and funneled all of their country's wealth back to their métropole to the point it caused often mass starvation: Algeria, which before the french conquest was a large exporter of grain -Napoleon fed his Grande Armée with algerian grain bought at credit- suffered a famine as bad as the Holodomor after it was conquered by France. Wanna know why? Because the european landowners, 5000 men who owned 75% of the country's arable lands decided to replace grain with cash crops so they could get filthy rich quicker.

donzelion said...

@Laurent - same page, as always. An interesting thought or two here though -

"amid a standoff between fifty oligarchs and three billion poor, it is the skilled middle and upper-middle classes who’ll be the ones deciding civilization’s course"....Unless the oligarchs decide to resurrect the varangian guards and use heavily armed bullies to threaten the middle-class with slaughter if they cease to comply.

Ah, the Varangian my mind, raise two thoughts:
(1) Robot mercenaries, as a modern successor to Rus-Nordic warriors, would be significantly more plausible today. I would expect that a modern plutocrat war would be "over" in minutes - as the power-brokers blasted all the satellites of their rivals, then fielded fleets of drones and tanks to control key water supplies and other essentials.

(2) Despite the Varangian prowess - the secret of Muslim conquest of Eastern Christendom, esp. in the 7th century, is taxation. After a 100+ year war between Byzantium and Persia, the North African and Levantine provinces became increasingly frustrated by Byzantine taxation, recognizing how they were exploited by the metropole. Enter the Muslim Arabs: a people without any siege equipment, who nonetheless "conquered" a string of fortified cities - usually meeting token resistance. Amazing how many Christians will embrace any ruler who offers a tax holiday!

One doesn't need to bother with 3 billion poor, but only with the poor who reside in a geographic area one wishes to control. The middle class will present the greatest hurdle for primacy - but the middle class will often favor a faction that cuts their taxes - especially if they regard themselves as being unfairly exploited. I've often found it odd that Californians, by and large, do not feel exploited by just how much more Alabama, Mississippi, and many other 'deep Red States' receive from the federal government than they pay in - while we pay in far more than we receive...and wondered if/when that would rise to a point of friction. You'd think those 'Deep Red States' would feel grateful at least, rather than typically contemptuous...

Laurent Weppe said...

* "Robot mercenaries, as a modern successor to Rus-Nordic warriors, would be significantly more plausible today."

Damn it, that was my "This is what they should have done to keep the Terminator series interesting and relevant" pipe dream when they made Salvation in 2009.

Instead of having the boring fight between John and CGI Schwarzenegger in a blue-tinted factory, have him and the resistance assaulting the machines HQ only to discover that it is in fact a heavily fortified luxurious arcology and realize that Skynet never rebelled: it just dutifully terminated all those that the people who funded its creation deemed superfluous. "There was no uprising, there never was: the machines were still the dutiful, obedient slaves of their creators", cue the credit.

Jumper said...

Further musings on taxation:
There's a difference between progressive taxation and exempting the first X dollars of a tax base. As I pointed out before, Singapore has an interesting progressive real estate tax recently implemented. It has an exemption plus progressive rates above the exemption. (I'm not coming out either for or against implementing this in the U.S., just pointing to it for study.)
Wealth tax. I believe we used to have widespread state property taxes on wealth in this country which have faded away to nothing. I need further research on this. (For those who haven't had coffee, note a wealth tax is far different from income tax. Now, if you manage to evade income taxes, there is no tax on wealth whatever. Except real estate and vehicles, I think.

Not Locum said...

Dear echo chambers,

I have now been silenced for making unpopular arguments.

In Dr Brin's hypothetical world of "reasonable professionals", would I have been sent to a re-education camp, or perhaps I would have disappeared?


A Vicking

Unknown said...

I'm so pleased to have found this blog. I stumbled upon it because I searched for "supply side dogma" in Google after watching the 3/3/2016 GOP debate and thinking to myself "why in the world are we still hearing about tax cuts and balanced budgets portrayed as panaceas?".

Thanks for sharing everybody! I'll be around!

Still not locum said...

By the way, your rabid hatred of the Kock brothers is misplaced. Their role in supplying some parts to one refinery pales in comparison with the role of IBM, who were setting up a system for keeping track of all the Jews using their punch cards.

Also, the current Republican front runner is not to the liking of the Koch brothers, they would have preferred a libertarian leaning candidate like Cruz.

-- Anonymous Viking

David Brin said...

Notice how our whining vicking-viking first mewls about being repressed... then comes back as if ... he wasn't!

What's pathetic, of course, is the notion that "libertarian" might even remotely apply to those currently using that word, who despise open-fair competition and are the propertarian neo-feudal enemies of open-creative competition, and who never ever mention the name Adam Smith.

But yes, Cruz is the kind of crazed-bile-spewing "libertarian" the Kochs like. Keeping confederate infantry lobotomized and drooling hatred at their countrymen... rather than at their own class oppressor plantation lords.

Luís Salgueiro said...


But how can the citizens deal with the oligarcs when whole nations are kept at the mercy of internacional bankers?

What can the People do when a law is proposed and the debt rates go up because the "markets" don't like that law? Or when a given party or candidate starts to gain influence and the public is warned that voting in party A or B could have dire consequences for the economy, and such speech is backed by stock exchange crashes and debt rates going up? When a frown from an international notation agency can cause entire countries to colapse into Weimarian nightmares?

donzelion said...

@Luis - here's a dirty secret of colonial rule and international banking: you can never keep a whole nation hostage, but you can almost always find a potent minority willing to do business (esp. if they can get someone else to pay their debt). The international bankers don't need to dictate anything: people look to borrow to fund expansion, and those people look to dictate to others in their own country. When bankers empower them, they tend not to become genocidal in their aspirations, but increasing oppression is all to common.

In Greece, the bankers gave them a choice: we will not cover your state budget as it is, you cannot force us to do so, and thus we suggest borrowing somewhere else or curbing your deficit. When there's nowhere left to borrow from, it gets tricky (and local politicians blame oppressive foreign bankers - the World Bank, IMF, et. al.) for failing to bail them out). So with many post-colonial regimes: governments borrowed heavily, then blamed the creditors for trying to collect. 'How dare you oppress us! We have starving people to feed!'

The trick is to avoid hyperinflation by resisting populism. A populist always has a 'get out of responsibility free' claim linked to math-magical fairy tales - which are so appealing that folks buy into it without thinking - and grow furious at others who question the magic formula. Alas, Weimar came after a Kaiser squandered Germany's wealth in a massive war; they repaired the damage after swallowing a horrid pill and applying common sense medicine. Alas, that trauma was so deep that when a sorcerer emerged offering an 'easier' way out (Aryan purity + rage deployed abroad) - many chose that over responsible policies. So to in Egypt (under Nasser, a socialist sorceror), and many post-colonial regimes.

Jeff B. said...

On a topic near and dear to many here: an analysis of the status of entrepreneurship and startups in today's economy:

I haven't gotten through the analysis yet, but the gist seems to be that successful startups appear to be having more difficulty succeeding in recent years. And this does appear to be tech-company oriented.

Jeff B. said...

And, since we're also on the topic of the new confederacy, a (surprisingly) in-depth examination in Slate of the efforts to break up the Klan during reconstruction in one violent SC county:

donzelion said...

@Jumper - a 'wealth tax' is a core element of Muslim tax theory (2% or so of actual assets, rather than income or other taxes). Malaysia and Indonesia have gone back and forth on that, so it would make sense for Singapore to have nuanced that approach. After all, 40 years ago, Singapore and Hong Kong were largely "tax havens" - but they've grown up to become so much more.

Wealth taxes are a powerful tool of conquest when a people are being exploited by absentee landlords (as were most people in Byzantine provinces)(which relates back to earlier discussions about the Roman Republic a few weeks ago - where provincial politics disfavored taxes upon 'foreign' territories).

My ultimate point though is nuance and depth is required to understand reality. Dr. Brin, for example, has expressed hostility to entities like the Interstate Commerce Commission - ostensibly formed to rein in oppressive exploitation of farmers - only to discover that oppression is easier to label in theory than to identify in practice. So too with many tax policies...

Luís Salgueiro said...


That's the problem, a few well placed bribes and suddenly a countries debt skyrockets because of transactions no sane person would ever do, and yet it's the whole population that has to pay for it. When in Portugal the first bank failed the politicians were going about saying that there would be blood on the streets if the bank went bankrupt and the depositers would lose all their savings.

Also part of the strategy is to represent any regime that doesn't comply as "being their own fault" "they borrowed too much" "were living at the expense of other countries taxpayers".

Maybe an independent country can't be held hostage (Iceland comes to mind) but one belonging to the EU can (Greece).

Take note also that a 1% increase in debt rates in a small country heavilly indebted can represent more than the whole health or education budget. And cutting heavily in both or either will not increase the probability of paying the debt in full or even reducing the debt beacause you're only covering the debt rate and not reducing the debt itself. The diminished investment and less available money means that the economy will shrink leading to deflation, reduced consumption eventually will help balance the debt beacause of lower trade deficit but that only means that some other country will suffer beacause it will lose exports! It's a lose-lose situation.

Of course the worst outcome is that a population that feels exploited is what any would be tyrant wants.

In Dr.Brin's last blog there was talk of gun control. I don't know American reality but in Prtugal the estimated number of firearms ronds the 2 000 000. Thats 20% of all population, the majority being hunting rifles in the hands of trained war veterans. Trained in anti-insurgency warfare.

LarryHart said...

Ryan Preston:
after watching the 3/3/2016 GOP debate and thinking to myself "why in the world are we still hearing about tax cuts and balanced budgets portrayed as panaceas?".

I don't know. I thought Supply Side was dead with the failed attempt at privatizing Social Security and the disenchantment with the Bush presidency in 2005. But by the elections of 2010, it was back again as if it was accepted truth all along. And it has been so ever since.

I'm not sure that even cutting off the head and burying at separate crossroads is going to kill that zombie.

LarryHart said...

Laurent Weppe:

"Yes, they were nasty, racist “labor unions” controlled utterly by Himmler etc. But there was lip service."

Just like "People's Republics" paid lip service to democracy. You seldom find people claiming with a straight face "Democracy is bad because look at the People's Republics"

Excellent point.

To the extent that National Socialism reflects on socialists, the Union of Soviet Socialist Republics and the People's Republic of China should reflect on the Republican Party.

Jumper said...

Our Republican governor is unhappy with requiring "balanced budgets" but being Republican he is discreet over how he frames this. Because Republican.

Laurent Weppe said...

* "Maybe an independent country can't be held hostage (Iceland comes to mind) but one belonging to the EU can (Greece).

Iceland situation has nothing to do with its non membership to the EU: Iceland is a country with large natural resources and a small population: since the world isn't going to stop consuming huge quantity of animal proteins and aluminium any time soon, it was possible for the country to tell its creditors to fuck off, because it could afford to function without borrowing money by relying on its exportation of raw resources to bring enough liquidities in.

Greece never had that luxury: had it been outside the EU, or had Tsipras listened to the worst demagogues in his own camp and left the Eurozone, the country would be facing a situation akin to Venezuela's: it would have become a country with a worthless currency incapable of importing anything for want of liquidity and credits. And given than Greece is a net importer of fuel, food & drugs (basically, the stuff that keeps people alive), the country would have faced complete societal within weeks (and then we'd have 10 million greek refugees seeking haven in western Europe on top of the Syrian ones, joy of joys)

Luís Salgueiro said...


And that is the point: Greece can never leave the eurozone without comiting suicide. However the same entities that now make demands on Greece were more than happy for years to accept dodgy accounting and to extend the credit until the present situation developed. A whole nation of around 10 milllion was mannouvered into a position where they are defacto hostages of non-elected entities. If the Greek government wants food, fuel and drugs they have to keep a small number of people happy by complying whith whatever those few demand. It is a defacto feudal situation, but on an unprecedented scale. The only option left to the serfs is to flee... but for how long.

Also if the country has money but the people don't the situation is bad anyway.

Iceland having a small population undoubtedly helped. But they were willing to risk a lot by defaulting on their debt.

On a tangent: Portugal offered to accept 10 000 refugees. Guess how many accepted.

David Brin said...

donzel, The ICC had to go because it was utterly captured and the archetype of zaibatsu control of markets. Alas, it was Ayn Rand’s archetype of vileness… and democrats banned it… yet not a single randroid allowed that fact to enter consciousness.

Jumper said...

With some European countries have no ability to receive more refugees and without a joint European solution in sight, the Portuguese Prime Minister, António Costa, informed his colleagues of some EU member countries that Portugal is available to receive about 10,000 refugees . In this way our country may receive more about 5800 refugees than those established by the Community quotas.

According reported a source close to the Government to Lusa, the letters sent to Greece, Italy, Austria and Sweden contain similar proposals to those submitted to the German government earlier this month.

The Government invokes the spirit of European solidarity to make yourself available to receive more about 5800 refugees beyond what was provided for in the quota set for Portugal under the refugee relocation system between Member States. The initial quota provided that our country received a total of 4486 refugees.

The Portuguese proposal by António Costa has demonstrated the availability of universities portugueseas receiving a total of 2,000 students, 800 people for vocational and further education 2500-3000 refugees with skills to perform duties in the agricultural and forestry areas.
Until last February 10, according to the Minister of Internal Affairs, Portugal received only 30 refugees, who were at the time to be evaluated about 90 requests for replacement.

donzelion said...

@Dr. Brin - my point wasn't that the ICC was good, bad, captured, or salvageable (it's safety portfolio was transferred, its price-setting powers revoked) - but rather that it's mandate proved to be extremely complex in practice. It's difficult to determine which prices represent "oppression" and which are a fair result of "competition." The same can be said of antitrust enforcement.

Two classes of 'solutions' to such complexity are most common: (1) struggle to confront that nuance, or (2) bypasses the problem. For railroads, the ultimate "solution" was freeway construction - replacing what had been the world's most extensive, fastest, and most efficient railroad network with an entirely new system. For a few decades, power shifted from Chicago and the railroad hubs to Detroit and the auto hubs.

For Byzantine tax policies in the Levant/North African provinces, the solution was conversion to Islam/submission to the Caliphate, rather than Constantinople.

For the phenomenon of offshore accounts, if 3 billion poor people try to strip the accounts - it's not clear to me that this will result in greater or lesser 'flat-transparent-competitive' markets.

donzelion said...

@Luis - the concept of "being held hostage" is part of the problem: in any debt crisis, the creditor claims "we will not be held hostage by being forced to extend any more credit to you!" The debtor turns around and claims, "We will not be held hostage and forced to change our system in order to get the credit we deserve!"

Who is the hostage? Hard to say: nuance, and very close review of the facts is warranted.

the worst outcome is that a population that feels exploited is what any would be tyrant wants.

Exactly. As in my previous post, my concern is that once the populace refuses to confront hard truths - they become susceptible to populists who offer a "magical" solution, usually consisting of (1) Blame a minority/the former powerbrokers & their entourage/foreign imperialists; (2) Confiscate assets linked to whoever was blamed (3) Default on the debt (4) cite nationalism as a justification for every policy, and finally (5) explore military action.

The idea behind the IMF, World Bank, and other international lenders was never to help develop poor countries, so much as to capture enough dictators and thugs so that they would not form alliances with one another (uniting 3 billion poor people, say, into an actual military alliance). Creditors don't lend to a dictator because that dictator is a "good investment" - but because once that dictator is dependent on foreign credit to retain power, his incentives to join with another populist in his region are (theoretically) reduced.

By that measure, the purpose of the EU is not necessarily to help members develop economically - so much as to prevent France/Germany/Britain/Italy from going to war against one another (or rather, to have them fight it out through thousands of pages of bureaucratic-techno garble - rather than bullets).

locumranch (really) said...

As we watch the US political debacle unfold, it becomes increasingly clear that the Yale boys are correct: The US & the Enlightened West have become a Douglas R Mason-style Oligarchy in the insidious manner of the slowly boiled frog.

Slowly but surely, the Polity has been enslaved. The differences between the Right & Left are largely imaginary: Both are hierarchies; both oppress & enslave the majority; and both feature minority privilege & rule.

In the case of the Right, the Iron Fist is apparent & the minority subjugates the majority for the exclusive purpose of minority enrichment; whereas, in the case of the Left, the Iron Fist is velveted, the minority subjugates the majority for the stated purpose of majority enrichment which can only be enjoyed by an exclusive minority.

The difference between the two is MENTAL: The Left offers comfortable oppression (aka 'House Slavery') which some call 'Heaven'; the Right offers 'Field Slavery' (aka 'rudimentary oppression') which some call 'Hell'; and, the Mind is its own place, and in itself can make a Heaven of Hell, a Hell of Heaven.

Here at least we shall be FREE.
Here we may reign secure, and in my choice
to reign is worth ambition though in Hell:
Better to reign in Hell, than serve in Heaven.

As the Cherubs sing slavish praises to their EU masters.


Acacia H. said...

Congrats to SpaceX for a successful launch this evening. I suspect the first stage landing was not successful... just double-checked and as expected, the first stage did crash. But hey, nice try. They did reach the drone ship at least. :)

What matters is that they successfully launched their cargo and it's on its way to geosynchronous orbit (at a faster rate than originally planned several months back). Most likely they'll nail the next landing. :)

Rob H.

David Brin said...
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David Brin said...

This landing was VERY hard to stick. A Geosynch transfer mission uses up lots of fuel and takes you way downrange. I am happy all the way around and I am sure Elon has great data.

Locum illustrates a very simple phenomenon:

"I know my side is stark jibbering insane and dominated by evil oligarchs who aim to destroy everything decent in Western Civilization and impose soul-crushing Orwellian tyranny.

" I am psychologically incapable of even imagining that my fellow citizens on the other side - whom my (I now admit evil) oligarchs have propagandized me to hate - might NOT have been as foolish and easily misled as I have been. That would be unbearable and hence I will not admit the thought, even glancingly, even though that side includes almost every scientist and person of knowledge and logic in the nation.

"Therefore I must hallucinate and wave incantations that let me cry out They Are Just As Bad! Perhaps - (yeah, that's the ticket) - even worse! Yeah!"

Funny thing, though. Where - pray tell - have we fallen FROM? Some bucolic ideal 1950s? Built by the Greatest Generation? Who adored, above all living humans, FDR?

Trapped, whichever way you turn.

Acacia H. said...

Oh, here's something for your amusement, Dr. Brin:

It has an interesting concept behind it (and the writing style... well, I was almost reminded of Asimov in the early Foundation books, but not in a good way), but I saw multiple flaws in the reasoning. Computer hackers alone would destroy Manna before it got as widespread as it did.

Nor do I think it would work well in managing people. Mostly I think it's an anti-technology screed... and if you eliminate the lower 50% of the population as deadbeats put in housing units that are kept out-of-sight, out-of-mind... well, if the rich have all the money, then the economy falls apart because you need consumers to make the economy function.

But hey, still an interesting concept.

Rob H.

locumranch said...

David's response illustrates the over-simplification that is two-dimensional dichotomous thinking (summarised below):

(1) There are only 2 sides to every question;
(2) I believe that MY side is rational, correct & sane.
(3) Ergo, the side other than my own must be incorrect, irrational & insane.

Since David self-identifies as a left-leaning progressive who likes change, he therefore assumes that those who disagree with him (as I often do) must therefore be a 'right-leaning conservative', even though that is a false conclusion, as there are many other 'sides' to any multidimensional question.

For example, there are now more than 3 sides in the US Presidential Election: Establishment Democrats (Clinton), Establishment Republicans (Rubio; Cruz; Kasich), Right-leaning Nationalists (Trump) and, quite possibly, Left-leaning Socialists (Sanders).


Alfred Differ said...

umm... Cruz isn't establishment. Ask Senate leadership.

David Brin said...

"Since David self-identifies as a left-leaning progressive"

Pants not just on fire but magma. It is you who are zero-sum dichotomous, son. And admitting that your side is mad, you cannot conceive that there are other "sides" who are not.

Unknown said...

O misspelled, misspelling Viking - you are mistaken. You have not been suppressed; we've merely been ignoring you, because your arguments are tripe.

Laurent Weppe said...

* "A whole nation of around 10 milllion was mannouvered into a position where they are defacto hostages of non-elected entities."

And here comes the tired, bullshit cliché.
Greece wasn't the hostage of non-elected entities:
Greece's woes, and more specifically the beating it took during the last round of negotiations regarding its debt, did not come from a nefarious cabal of evil technocrats imposing diktats from their ivory towers: it came from heads of governments, a majority of which had been elected on pro-austerity platforms, and were under pressure from their own constituents, a majority of which were getting increasingly hostile to Greece.

Ultimately, the villain of the story was the Eurozone's and EU's own public opinions, something those who rush to defend Greece are loath to admit, because it shows that the pretty narrative of the plucky democracy bravely facing the big bad technocratic ogre is in fact fictional: that the abuse received by Greece was, in fact, the will of the people, that the Grexit drama unfolded in no small part because a plurality of ordinary citizens decided to use their franchise to be abusive jerks.

duncan cairncross said...

Just a clarification
Both Greece and Iceland
In neither case was the debt incurred by the Governments

Both cases the debt was incurred by private non government entities (Banks) - when the banksters screwed the pooch the Governments ended up covering the debts,

In Iceland the Government made sure that it's own citizens did not lose their deposits and jailed some bankers
People from other countries did lose their money

Greece was not that smart or that independent so it made whole everybody who had money in the banks (And the stockholders!!!) - and ended up in debt

Greece was already a bit in debt due to it's failure to collect taxes - BUT the majority of the Greek debt was NOT due to the Government at all

Austerity was a later disaster - and that was due to the EU citizens drinking the kool-aide

Noticeably the country that has been keenest about the Greeks suffering austerity is Germany, the country that had all of its debts (including a massive debt to Greece) forgiven

Anonymous said...

Ho hum pleas to "save the planet." The planet will be fine. How viable a biosphere is left behind by your greatest generation of car sitters—the Dutch at least had a Kindermoord campaign back in '73 and vastly better results at limiting death rates from your technological terrors—well, future folks will have to get by, as ever. How are your aquifers doing? Hopefully no trichloroethylene on account of long-since closed companies related to the odious car sitting habits of your greatest generation? Oh dear the state budget cannot cover the cleanup costs. Whoops!

Now, the salary class well knows who butters its bread, and perhaps knows the fate of the wage class over your greatest generations, and will vote accordingly. Meanwhile, Toynbee has a slightly different take on matters historical—notions of linear history being mere illusion to him—and points to a radically limited number of folks as the actual movers and shakers, movement that will not come from however many crores of purportedly tech-savvy professions, for this bulk by and large copies and pastes from stack overflow and follows trends as a herd does grass.

locumranch said...

I apoligise for defaulting to a 'Little Hands' defence & I hereby repudiate it.

Instead, I'd like to point out that the Positive Sum Mentality (aka 'The Economics of Excess') is incompatibly at odds with the established Scarcity Economics of Supply & Demand, leaving modern society with something of a motivational conundrum.

How do we maintain social order, forward momentum and/or cultural primacy in the pursuit of that excess which we do NOT require, value or wish to pursue?

Just THINK about that for a moment:

We all understand the motivating aspects of insufficiency, hunger, scarcity & want, yet only irrational mental illness would compel the morbidly obese to stuff ever more unnecessary calories into their cavernous gullet, the lover to sacrifice when love is freely available & therefore valueless, or the worker to labour ceaselessly when he may satisfy all of his desires with only a few days of labour.

Hence the 'Austerity Solution' in which we FALSELY contrive scarcity, insufficiency & want by book-keeping fiat in order to motivate production from an increasingly moribund populace, the problem being that this leads to social disorder & disintegration because we all KNOW that such scarcity is artificial, false, untrue & unfair.

Supply & Demand arguments also justify a Top 1% Plutocracy, btw, because their very rarity implies social value according to Scarcity Economics.

Jumper said...
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Luís Salgueiro said...


You are wright. In the last act of the Greek Drama, it was the action of the elected representatives of various coutries (that had been elected on an austerity basis) that forced Greece into the corner. I know that the officials from Portugal had a lot invested and were some of the most. outspoke (Btw the then Portuguese Finance minister has a new boss:ARROW GLOBAL, a debt recovery company, the one before was hired by the IMF just after leaving the government). he anger of the people towards Greece was easy to incite because a) the behaviour of Greek politicians and of the Greek people b) the citizens of other coutries were told that a debt cut would reflect in higher taxes.

I don't defend deficitary budgets. On the contrary budget rigor is essential for a well run country. What I'm talking about is the interest rate on the debt. For a small coutry whose debt is owned by external entities even a small raise on the rate of the debt can cause the nation to colapse. the "wierd" thing is that a bank can ask the BCE for money with 0% rates and use that money to buy Greek debt at 7% interest rates but the national bank can't. A debt cut would solve Greece's troubles on the short run, but eventually the situation would rise again. However negotiating a payment plan with lower rates was possible, but maybe not desirable.
Let me make this clear: what I'm saying about non-elected entities is regarding the need of a nation to finance itself from private sources. This is not a new fenomenon... afterall the French king Phillipe 4th borrowed heavilly from the templars did he not?

The lack of solidarity between the european populations is one of the biggest problems the EU has.

LarryHart said...


How do we maintain social order, forward momentum and/or cultural primacy in the pursuit of that excess which we do NOT require, value or wish to pursue?

Isn't that circular reasoning? It sounds like you're saying "If so little work is necessary in order to provide for basic needs, then people won't have any incentive to spend more time doing work." Isn't that a win-win?

Supply & Demand arguments also justify a Top 1% Plutocracy, btw, because their very rarity implies social value according to Scarcity Economics.

In the words of Monty Python: "No, it doesn't"

Useful items are more valuable when rarity causes a bidding war.

But, a useless item isn't made valuable just because there isn't much of it.

David Brin said...

Except... it is your clan, locum, that contains the vastly more obese portion of the population, unable to exert self control over its impulses, appetites and -- rages. Dour, dyspeptic rancor and pessimism - resignation to your inability to affect or benefit future generations nor accepting the glimmering possibility that they might be better than us, even wiser... how is THAT anything but the very worst kind of insanity?

For such minds to lecture us would be sad, if we weren't already appalled by the inability of your kind -- so oft expressed that the wound grows dull -- absolute inability to grasp the very notion of positive sum. Indeed, inability to grasp how utterly silly every attempt at paraphrasing the concept sounds, from you.

I tell you, lad, without hope of getting through. Your neuronal systems have never allowed you to grasp the concept withing light years. You simply cannot do it.

David Brin said...



Jumper said...

I think he was trying to be funny. It's hard to tell.

In any case, the answer to "How do we maintain social order, forward momentum and/or cultural primacy in the pursuit of that excess which we do NOT require, value or wish to pursue?" is deliberate manufacture of goods which malfunction and must be discarded. "Planned obsolescence" at its most venal. In this case snark is appropriate.

David Brin said...

Bah. It is in Europe that they have used prefrontal future-thinking to introduce pre-fees on consumer products to amortize their recycling or disposal costs. One of our biggest short-sighted sins is failure to include externalities - like damage to the ecosystem and to our grandchildren - from inclusion in market costs and decisions.

Locum whines that we aren't doing that, but watch him scream if we ever tried to do anything about it.

In fact, our biggest items, homes and cars, now are of VASTLY higher quality and lifespan, largely because of regulations that demand far, far better quality... but also because of savvy consumers demanding less "obsolescence." In other words, diametrically the opposite to L's rant.

But you see, facts do... not... matter. All that matters is the incantation and the narrative.

David Brin said...



Howard Brazee said...

It used to be out-in-the-open theft, with states taking what they can from neighbors and workers. In the last century it got more hidden, that's all.

It seems obvious to me that it won't be long before 90% of goods will be produced by 10% of the population. We have to decide what the economy will look like then, and how we will get from here to there.

Or - what it *should* look like. And imagine less attractive alternatives.

Anonymous said...

Dr. Brin, your statement about what will happen when the Bottom Half realizes how much they will gain from the wealth of a mere 60 something people is something I have been raving about to anyone who will listen. But I take it a step further and postulate that soon (say 20 to 40 years) there will be sufficient "wealth" to allow every single human alive to live like a NBA superstar. How will this play out? Will the would-be trillionaires just try to pretend that such wealth does not even exist? Will they pour billions into immortality tech and then strategically wreck the world economy so that they can be worshiped as gods by our neo-Iron Age descendants? I am sure that there are many plutocrats planning just such a worldwide coup, but are so divorced from reality that their grand plans will blow up in their faces. I just hope that me and mine are not in that blast radius.