Lobbying costs the public

Lobbying = social costs

Lobbying against key US climate regulation ‘cost society $60bn’, study finds

Standard economics explains foisting the burden of increased costs to the public as so-called “externalities.” Nope, through lobbying and other forms of Dark Money, passing along costs is an essential part of the business plan of capitalists. By controlling legislation and regulation, businesses rely on the taxpayer to pick up to bill and the citizen to deal with the health harms.

An example of this has been revealed in an article “Lobbying against key ‘climate regulation costs society $60bn’, study finds” appearing in Climate Briefs May 27, 2019. The author, Josh Gabbattis, provides background to illustrate how lobbying increases corporate profit at the expense of the public. Great reporting, Josh! Pay close attention to this informative website.

This article depicts a basic flaw in capitalism that will prevent an adequate response to the threat of climate catastrophe.

World Population stabilizing?

World Population: Slowing Growth

I have speculated that economic and population growth will not meet conventional expectations, contributing to a challenge to capitalism to grow. As fertility rates (live births per woman) fall below 2.1, Zero Population Growth is achieved. The slowdown of population growth is big news and deserves some attention. If population slows within a decade or two, capitalism must adapt. How? With what consequences?

Population Trends

When I was born in August, 1945, the world population was just below 2.5 billion. As I write on May 25, 2019, the world population was about 7.6 billion, according to the U.S. Census Bureau. Thus the human population tripled during my lifetime, adding another 5 billion humans. Read that sentence again. Grasp its significance for yourself before reading any further. Get it. Only then move on.

Demographers, a cautious lot, follow professional authoritative sources, such as the U.N. The projections of the U.N. predict that the population will hit 9.8 billion by 2050 and 11 billion by 2100. Keep in mind that vital statistics (pertaining to births and deaths) are highly reliable.

What Population Growth Means

Population growth underlies economic growth, thus capitalism. Lower population growth suppresses total economic growth, not necessarily growth per capita, however. So consider these effects that are at stake:

Consider: Lower Productivity Times Fewer Workers = Degrowth, Stagnation, Steady State

Thus: Active workers times productivity = economic (monetized) production. I will argue below based on solid authority that both the size of the workforce and its productivity will continue to rise but more slowly than at any time since the period of industrialization (Industrial Revolution in England starting around 1750 and the inauguration of the Anthropocene — a big topic to be considered later. Thus, economic growth will slow, approaching stagnation.

However, it you belong to the ecological camp of Herman Daly, you look forward to the realization of the steady-state economy, or, as others put it, de-growth. This is a dramatic consequence to be digested with deliberation.

This means a larger work force to help the growing aging population (like me, at 73 — but I am at work as I write, just not paid) create a rising dependency rate (I have saved and invested, most have or can not), and provide the future’s consumers (aggregate demand) and workforce. Consumers with adequate income purchase these goods and services. allowing for capitalism to grow, which it must.

In this context, consider this article by demographer and economist Neil Howe appearing in March 29th, 2019, Fortune magazine, a proponent of capitalism, Nations Labor to Increase their Birthrate. He advocates pronatal policies, including a neoliberal subsidy to have children:

“What are countries doing about it? Many governments have taken a neoliberal approach by offering direct financial incentives to families with children, such as tax breaks, housing assistance, or discounts on public services. ”

William Reville argues the same in the Irish Times in March 7th, 2019. He cites evidence that the human population will never rise above 8 billion.

See recent data on fertility rates by country; USA is 2.06, where Zero Population Growth is below 2.1 births per woman.

The size of human population by mid-century may prove critical in the trajectory of capitalism. I will soon spell out the ramifications of these possible trends:

  1. Reductions in the workforce and even worker shortages could occur as population declines or simple ages.
  2. Decline in the worldwide productivity per worker continues.
  3. Shift of capital investment to social overhead capital to mitigate and to forestall the effects of climate catastrophes. Expect interest rates to surge, crowding out private investment.

Livelihood

Livelihood = Home + Community + Earth Care

My prior focus has been directed toward the dysfunctions of capitalism, both in this blog and expanded recently in my reactivated website. The second part of this project defines a long term strategy to limit the scope and proportion of capitalism within a fuller notion of the economy.

The post on the Braudel Trilogy has provided background toward an alternative economy that inverts and shrinks capitalism. No, this is not Socialism, the ownership of the means of production by the government. Rather, the emphasis is to decentralize economic life, bring it closer to home and to community, disclose and expand ways of value production outside of capitalism, and to protect the Earth. A guiding light is the masterpiece by Alexis de Toqueville, Democracy in America.

So, the name to this three-level arrangement, Livelihood, tells the story. The term, often associated with subsistence-based economies, suggests that a small-unit approach works best toward promoting a living, local economy.

Followiing Braudel, I define three layers to material and cultural life while remaining within capitalism:

Home: the Household

Home is where you live and love. As in, after work, you go home. Home is where the heart and hearth is. Home envelopes a major part of our lives from childhood through old age. Capitalism has no metric or, frankly, little use for the value produced at home. So let us start by recognizing that having a vibrant, comfortable, secure home is where we need to start an expansion of value in our lives.

Economists include home as households, where the consumer buys goods and services, takes on the debt of a mortgage, and where labor is “reproduced,” by raising a family. Leisure emanates from home life. Vital statistics on births and deaths are kept but the essential value of homelife, largely the (dis-valued) domain of women, is not within the purview of capitalism.

Appreciate (investments should appreciate) more fully just how important your home is, how valuable it is, how much time you spend there, and what a treasure (asset) your home provides. Leisure, neglected in economics but not culture, occurs at home. Take better care of your home, embrace it, improve it. The true value of your home and the world within it exceeds the value capitalism places on housing.

Home produces immense real value. Labor happens within the home, but is not counted in the GDP statistics. Women do most of this work, so this activity is systematically dis-valued by the metrics and the norms of a market society, i.e., capitalism.

You can easily gain more value from your home. Home investments, such as in energy, likely provide the best investment that you can make. Time devoted to maintaining your home is not taxed. Look at your paycheck to realize how much money is diverted.

Go home.

Community: Commerce, Civics

Braudel entitled his second massive volume  “Commerce.” The original definition of commerce was a convivial activity involving face-to-face communication, not the abstraction of anonymous monetized transactions.

Communities form a vital but largely unnoticed social capital, an enduring set of relationships that serve our direct needs. At this level, monetized transactions make sense, vibrate, take on a human face. We worship in community, find care, and togetherness. We share. Embrace community life (Putnam).

Commerce, embedded in social relations in Scottish villages, was idealized by Adam Smith in his The Wealth of Nations. To the ancient Greeks, the agora, the place where commerce was transacted was a vital community-building space. The Medieval City that wrested material life from the barons of feudalism, the marketplace took place within or just outside of the nascent trading towns: “Stadt Lucht macht Frie,” meaning “City air makes you free.” Commerce and community need to be integrated, accompanied by an active exercise of citizenship, the essence of democratic practice.

Karl Polanyi advocated a socially and culturally embedded market at a human scale. We all have experienced the excitement of a marketplace, perhaps a local farmers’ market.

For a decade, I served as the founding Trustee of the Economic Development Corporation of Jersey City, New Jersey, a non-profit contracted to perform economic development services for Jersey City, not a trivial charge.  This is a tough turf with a history of corruption to be overcome. The path-breaking success of the EDC has been for me a formative personal experience.

The waterfront facing New York City provides the most dramatic achievement but the activity within neighborhoods (also politically potent wards) was invaluable and essential.  Working with banks and small businesses was a core activity. The entire enterprise gives me insight into the lived experience of local economic development. I claim some credibility here. Toxic dumps (the first Brownfield projects) now provide thriving economic zones. I chaired the first Free Enterprise Zone. Did I mention that I did this work on the ground in Jersey City? Cred.

There are technical aspects to community-building that must nurture the local economy. Much of our economic lives surrounds us. Like our home, our community must be valued, protected, safeguarded, and nurtured. This will be explored soon on my website.

All such activities, despite Adam Smith, have little to do with contemporary capitalism. Like the home, the community has not been appreciated as the economic the economic entity that it surely is. You and I know this.

The community/commerce/civic nexus provides the building-block to counter the larger domain that Braudel called the World System. To that we must turn next.

The Earth: The Civics of Earth Care

As cosmopolitan citizens of the Earth and our species, the level of our capability to participate have been greatly exceeded. Once we have lost that capability, abstractions replace direct contact, allowing trans-national corporations to run amok over us — and the only planet we inhabit.

Start with representation, where democracy becomes indirect and diluted, and where we have lost control. Globalization, international relations, even at the state or provincial levels exceed our capacities to understand, much less control. We must respond strategically: “Think globally and locally but act strategically” (Bookchin).

I will point out how Adam Smith, a shrewd Scottish nationalist and professional philosopher, handled this dilemma. I will argue that Smith has been greatly misunderstood so that instead of a hero of neoliberal capitalism he, like John Maynard Keynes, advocated localism and community. Again, my purpose is to invert capitalism and to rebuild from the local base around Livelihood. This is not socialism, but citizenship.

I will take a dramatic step here. I regard the external political economic forces as displacing our legitimate place in the world with their placing us within their Matrix of profit and control. We must resist respectfully and intelligently:

Three principles will guide our bottom-up approach to globalization:

  1. The perspective of a cosmopolitan localist provides our critical analysis. We build on our home as a base.
  2. The analysis must be informed, systematic, and smart: thus strategic.
  3. The nation-state now belongs to the forces supporting globalization, not localization. The global system has been formed from the top-down, including the U.N. and global capital since World War II. This arrangement is outside of our control.

Our assertive cosmopolitan localism guides our contesting the forces that rip us apart, replace local autonomy with global remote control, rips off the surplus value produced locall, and, perhaps worst of all, precludes our taking action to instill Livelihood in our homes and communities.

Conclusion

Our response to the dysfunctions and contradictions of capitalism builds on our cosmopolitan citizenship, an expression of our active, expanded liberty. These are the steps to take:

  1. Build Livelihood in our communities and regions. Resist the domination of outside authorities. Go local. Think as a strategic, engaged cosmopolitan citizen within a potentially hostile world.
  2. Appreciate our homes, our families, that which we love and care for every day. This is our personal foundation.
  3. Nurture our communities around locally-supportive commerce and engaged citizenship. Extend this action and spirit to our neighboring communities and the bio-regions that nestle us on Earth.
  4. Care for Earth but recognize the political, economic, communicative, and ecological forces that will displace our autonomy with their attempt to place us within their Matrix.

The outline above, like the critique of capitalism, provide a manifesto of sort that needs to be spelled out.