Loss of Jobs in America

[SkeLeton]

Chile may be next, if the right wing populist candidate wins in the next presidential election. Otherwise, Chile may be safe, because we have our economy controled. Yes that is quite contradictory with the neoliberal model, but that's what will probably save us from the others' destiny, although we already had a big crisis in 1982-1983.

[jresta]

If you want to read the whole interview - it's not that long - i recommend it. Korten has the clearest vision of what a different economy might look like, at least from what i've read, and most of what i read is about economics in a community context (rural or urban).

the whole interview is here
http://www.paraview.com/features/korten.htm

"My claim is that we do not have a market economy, but a capitalist economy. Capitalism and the market are presented as synonymous, but they are not. Capitalism is both the enemy of the market and democracy. Capitalism is not about free competitive choices among people who are reasonably equal in their buying and selling of economic power, it is about concentrating capital, concentrating economic power in very few hands using that power to trash everyone who gets in their way. That is not what Adam Smith envisioned. The first principle of the market economy is that it is comprised of many small buyers and sellers, which implies a substantial degree of equity. Another fundamental market principle is that costs are internalized in the producer’s price. The whole thrust of global capitalism is almost the opposite, by externalizing costs as much as possible: get as many public subsidies as possible, and pass off other costs to workers and the environment and anything else. This is not a market, and definitely not a democracy. The basic principle of democracy is one person one vote and in the capitalistic society, we have one dollar one vote. It is interesting to note that the 200 richest people have more assets than the 2 billion poorest."

[jresta]

Originally posted by SkeLeton
Chile may be next, if the right wing populist candidate wins in the next presidential election. Otherwise, Chile may be safe, because we have our economy controled. Yes that is quite contradictory with the neoliberal model, but that's what will probably save us from the others' destiny, although we already had a big crisis in 1982-1983.

It's funny how the last president elected, Allende - was a socialist and the first president elected after the Pinochet regime (I think Frei can be lumped in with that bunch) was a socialist.

It's also interesting to note that the disaster of the early 80's is directly attributable to the economic policies of the neoliberals sent by Kissinger to advise the Pinochet dictatorship.

What kind of reforms has Lagos made to avoid another meltdown? Isn't the country's debt burden still really high as a percentage of GDP? Are you guys still under all the structural adjustments of the 80's and 90's? Isn't economic growth in Chile pretty anemic at this point, like 1% per year? How free from the rest of South America is the Chilean economy? Things are not looking to good right now for Brazil, Argentina is going nowhere, Ecuador, Bolivia, and even Venezuela are having problems. Chile is going to be the domino that doesn't fall?

[SkeLeton]

Allende and Lagos(3rd president after Pinochet) have great differences, both are socialists, but Lagos doesn't want any revolution nor does he want to convert Chile into a new Cuba.
The first two presidents after Pinochet were from a center party.
Lagos hasn't made any economic reforms, but on the contrary of other latin american countries, we have not privatized all state enterprises and used that money in a populistic way (like Argentina)
Our country's debt isn't that high, and currently we're the safest country in Latin america to invest.
Our economic growth is at the same rate as the US more or less, and it went down because of the Asian crisis in the late 90's. Right now it's going up again. And our main economical partner is the APEC, rather than the south american markets.

Sorry for going off topic, but I think it's very important to clarify said facts.

[BKM]

I'm back after the long weekend!

el Guapo did a search an he doesn't find any instance of his using the term 'true conservatives" on Cyburbia. Which once again makes him doubt the liberal media lies of BKM

This wasn't a direct quote, El Guapo. But, I remember you saying something in some thread about true conservatives not necessarily being shills for the corporate elite. That's all I meant, and I didn't mean to misquote you. I think the whole issue of what conservatism means is very interesting. For example, I would recommend another book, Egotopia, that questions the moral implications of the purely economic world view of the "New Man." Interestingly enough, the pure neoliberals seem to share the view of the Marxists that society and humanity are purely economic creatures. That economics is the only thing that matters. In our world, we get clearcut forests in third world countries. The marxists give us festering steel mills.

jresta: About Mr. Roberts-I agree (reluctantly) with you-it seems like some unsavory people (Roberts, Pat Buchanan, etc) have joined in with some of the more naive anti-globalists in talking about these issues. Like you, I can't dismiss their arguments on THIS topic out of hand. I'll have to look form at your reference. One of my favorite books-more of a description rather than a prescription-is "False Dawn" by a former adviser of Margaret Thatcher. I still wonder how in the world we can implement some of the ideas expressed in your quoted interview, but they are interesting ideas.

[jresta]

Originally posted by SkeLeton
Allende and Lagos(3rd president after Pinochet) have great differences, both are socialists, but Lagos doesn't want any revolution nor does he want to convert Chile into a new Cuba.
The first two presidents after Pinochet were from a center party.
Lagos hasn't made any economic reforms, but on the contrary of other latin american countries, we have not privatized all state enterprises and used that money in a populistic way (like Argentina)
Our country's debt isn't that high, and currently we're the safest country in Latin america to invest.
Our economic growth is at the same rate as the US more or less, and it went down because of the Asian crisis in the late 90's. Right now it's going up again. And our main economical partner is the APEC, rather than the south american markets.

Sorry for going off topic, but I think it's very important to clarify said facts.

Thanks for the clarification. I was always under the impression that Frei, despite being a "centrist" was a Pinochet sympathizer because he never opened his prosecution. I will say, though, that if Allende had not made a commitment to democracy he might still be alive. Castro held onto power in the beginning because he threw democracy in the Carribean. He surrounded himself with the military, rounded up his enemies, and put the rest on boats. Not to say Allende didn't make his own economic and political mistakes but there was no way in hell Kissinger and the CIA were going to watch a democratically elected Marxist run a successful economy - and indeed they didn't.

Anyway - I guess what i'm trying to get at is - Argentina was considered a safe place to invest. So were Malaysia and Thailand. The problem was that their economic growth was all paper. It was all speculative and when the bubble went boom there were little, if any, physical assets to show for it. It was all inflated currency and building booms riding on the crest of investment without the real growth to actually fill new office towers and condos. It was not unlike our own S&L scandal.

So what i'm wondering is - is Chile's growth measurable in its traditional sectors like mining and perhaps automotive and agricultural (fruit)? Is that "growth" measurable in the product being delivered? In other words, is the growth in those sectors real - are more fruit, cars, and copper actually being sold or is just that investments are on the rise so the black ink is growing because more money is flowing in?

The problem being when investors realize that the growth is just ink they pull out and the whole thing collapses.

[jresta]

Originally posted by BKM
I'm back after the long weekend!
jresta: About Mr. Roberts-I agree (reluctantly) with you-it seems like some unsavory people (Roberts, Pat Buchanan, etc) have joined in with some of the more naive anti-globalists in talking about these issues. Like you, I can't dismiss their arguments on THIS topic out of hand. I'll have to look form at your reference. One of my favorite books-more of a description rather than a prescription-is "False Dawn" by a former adviser of Margaret Thatcher. I still wonder how in the world we can implement some of the ideas expressed in your quoted interview, but they are interesting ideas.

It may seem like semantics but i'm not an anti-globalist on any level. Buchanan et al are looking at the globalization thing from a protectionist point-of-view. They want to defend fortress America. I'm of the mind that global trade should come from the grassroots up and not from the top down, that's all. Because when it's miners and farmers who are contributing to the dialogue you can be sure that environmental and labor concerns are going to be a part of the picture. It may mean slower growth in some of those countries but it would be much more balanced in the long run.

But like Korten says, capitalism - or neoliberalism if you prefer - can't survive without externalizing its costs on labor, on the environment, or on communities which brings me to some basic rules of a free market.

Buyers&sellers must be too small to influence the market price
(no Wal-Mart sized operations that tells a seller how much his product costs and no DeBeers type establishment that tells buyers how much they will pay.)

Complete information must be available to all participants and there can be no trade secrets.

Sellers must bear the full cost of the products they sell and pass that cost on in the sale price. (no subsidies and no wage suppression and if some hazardous material was a byproduct the disposal of that would have to be part of the sale price)

Investment capital must remain within national borders and trade between countries must be balanced.

Savings must be invested in the creation of productive capital
(ie, producing something - that means no stock market gambling, no currency speculation, no futures markets)

[jresta]

That's the other thing that all of these neoliberal/capitalist poster children have in common - Chile, Argentina, Thailand, Taiwan, South Korea, Singapore, Malaysia - other than having their economies collapse at one point or another in the last 20 years (actually the last 7 years if you exclude Chile)

all of their "free" economies were only brought about under dictatorships or oligarchies which brings me to the question . . .

is this a very democratic way to do things and is this how an economy would develop under your average, western, semi-democratic beauracracy?

[BKM]

Nor am I really a believer in fortress America. Heck, I'm glad I can buy some imported goods (French (freedom) cheese!).

Some interesting points. My only concern is that imported capital is often the a major way for some countries to advance. And, it could be argued that large scale capitalism and out of town firms have not always been negative forces. How many small town business continued to have regressive social/racial policies in their employment and merchanidisng-until a larger, more "modern" firm came into town?

I find this genteman's ideas interesting. Again, how to implement it will be difficult, as it goes against the entire pattern of current economics. Maybe it will take the United States' collapse (as posited by Mr. Roberts) to bring other ideas to the forefront.

[jresta]

Originally posted by BKM
Some interesting points. My only concern is that imported capital is often the a major way for some countries to advance.

Western investment in some place like the Phillipines or Jamaica is not investment in infrastructure for the commonwealth. It's investment in tools of extraction. In the phillipines maybe it's fishing, or forestry, or garment factories. Either way more capital (natural resources) is leaving the country than is being invested. That's a net loss. My guess is that places like that wouldn't be attractive if there wasn't a quick profit to be made.

Originally posted by BKM
And, it could be argued that large scale capitalism and out of town firms have not always been negative forces. How many small town business continued to have regressive social/racial policies in their employment and merchanidisng-until a larger, more "modern" firm came into town?

I'm not going to give the credit to the Gap for bringing domestic partner benefits to Birmingham. I think the way the economy is in the first place has a lot to do with why those problems exist. In fact, the quickest way to end apartheid in South Africa wasn't to bring in diverse multinationals but to divest completely. They changed their tune quite quickly.

But back to the first part, and what should be the center of our discussion, I look around places like Philly or Chicago and see the legacy that industrialists left behind 100 years ago. Some of the most beautiful parks and architecture in the country, endowments, schools - whatever they left it was and still is part of the physical and social infrastructure. It's wealth.

Now CVS or Wendy's comes to town and takes our money at the cash register and every night it gets deposited and wired to an account in Rhode Island or Ohio. The profit or the franchise fees or whatever you want to call it - leaves the local economy almost immediately. But Philly has Comcast and QVC so eventually some sucker in Ohio or RI is going to break out his wallet and spend that money back into the Philly economy. If you're some city that's short on the Fortune 500 list the problems could be a little more vexing.

The same thing happens on an international scale but the impact is much worse because once the profits come back to the US they are unlikely to be circulated back into the country of origin. Meanwhile they're losing their natural resources and their social capital is being whittled away as well, making an economic recovery that much more difficult.

Let's say some economy like Jamaica needs hospital or water purification equipment that it obviously doesn't produce on its own - Then Jamaica would have to sell us (hypothetically) $2 billion worth of bananas and vacations to have the US currency to be able to buy a new hospital and a new water purification system.

Instead most of Jamaica's trade surplus goes to pay off their huge debt to international lending institutions. Their external debt is $5.3 billion. Their GDP is $10 billion. That's crushing.

[BKM]

. Their external debt is $5.3 billion. Their GDP is $10 billion. That's crushing.

Well, WE should all prepare to be crushed. Especially since, because of our cultural arrogance we may not have a lot of friends left in the world once the monetary bribes are gone.

Everything you are saying echos my concerns about the lack of local or even regional economies. There are few local companies that invest in local communities. A wall of posters at the local WalMart is not the same thing-especially since these companies act exactly like you act. But, you know what, people DON'T CARE on the whole. As long as they can save money, who cares if the store is a blank concrete tilt-up box and the employees are undocumented aliens working 70 hour weeks?

Everything is centralized into fewer and fewer hands. Rightists always complained that "communism doesn't give you any choice." In some small owns, the local economy is gone, so your only choice is WalMart. Admittedly, they are much more efficient that the Russian state at meeting consumers needs, but still, there ain't any choice.

Not sure I agree with you about capitalism creating the social system that denies, per your example, partnership benefits. Too often, local control, local economies, and local culture mean things like Sharia courts, American Jim Crow, the Untouchable Caste System, and the like. Let's not forget the dark side of local control and "traditions."

And, foreign capital is not always bad-it depends on the society receiving that capital. I think you could argue that Korea's economy, for example, DID benefit from foreign capital. Certainly, exploitation of natural resources rarely benefits anyone but a tiny elite and the foreign company.

[jresta]

Originally posted by BKM
Not sure I agree with you about capitalism creating the social system that denies, per your example, partnership benefits. Too often, local control, local economies, and local culture mean things like Sharia courts, American Jim Crow, the Untouchable Caste System, and the like. Let's not forget the dark side of local control and "traditions."

? - As far as the domestic partner benefits thing - That was just in response to you saying:
"How many small town business continued to have regressive social/racial policies in their employment and merchanidisng-until a larger, more "modern" firm came into town? "
And i was saying that i really don't think any of that changes just because the Gap or Barnes&Noble comes to town (both companies offer domestic partner benefits).

I totally agree that provincialism is dangerous. I just think ramming an economic system down the throats of communities that it doesn't benefit is a poor excuse. I'm sure the brightest minds can come up with better ways (as i mentioned in the case of South Africa it was DIvestment not INvestment that ended apartheid) to left the veil and free the water fountains.

And, foreign capital is not always bad-it depends on the society receiving that capital. I think you could argue that Korea's economy, for example, DID benefit from foreign capital. Certainly, exploitation of natural resources rarely benefits anyone but a tiny elite and the foreign company. [/QUOTE]

If i read you correctly you're saying that foreign capital is beneficial for economies trying to modernize/industrialize. I also agree that South Korea benefited substantially from foreign investment but i'll give that with a caveat. Certain people in South Korea benefited substantially while most everyone else in the country trudged along. Years of crony capitalism backed up by the military dictatorship of the 80's insured benefits for a few. Massive street violence was the only thing that changed that situation - the people had enough. Continued labor unrest is the only thing that guaranteed it . . . and if you've ever seen a picket like in South Korea - well let's just say they make the longshoreman's strike in Charleston (where 17 were arrested for duking it out with the cops) look like a sockhop.

I agree that foreign investments are def. a way to speed up the process of development but it's just not necessary and it causes more problems than it solves. Every country has a GNP - that product can either be reinvested in the country or it can go out as dividends and loan repayments.

What countries need for development is foreign currency. You can't order a ship from Denmark unless you're paying for it in Euros or Dollars. The way countries get foreign currency is either through loans or other investments, tourism, or direct trade. If trade were balanced there would be no reason for foreign investment. The developing country would grow as fast as its GNP would let it. People looking for quick profits are interested in seeing an economy rapidly expand but in the long run it doesn't do the rice farmer or Hyundai worker any good.

[BKM]

I always find the articles about Korean trade unionism pretty amazing.

I'm not sure we are necessarily disagreeing, jresta, overall.

[jresta]

I went to a screening of a documentary last night that United Artist has picked up and will be releasing in 9-10 months.

It's called the "Yes Men" and let me just say I haven't laughed that hard at any movie in a long time. http://theyesmen.org/

These 2 guys made a parody website of the WTO called
http://www.gatt.org/ If you bother to read it you realize that is says some pretty blunt stuff about the "free trade" agenda that any PR firm would soften up but they kept getting emails and phone call invitations to speak at seminars, summits, and other trade meetings. So they got their friends involved, went to the meetings as "experts" on free trade and taped all of them.

They were saying the most ridiculous, facetious things - that if most people were to take seriously they would find them highly inflammatory - hoping someone would realize they weren't who they claimed to be, or at the very least challenge them. No one made a peep and their questions suggested that they took the presentations seriously.

In the first instance they get invited to Finland and he gives a presentation on the KLM & Alitalia merger and saying that a barrier to integration is the laziness of the southern european workers who sleep when they feel like it rather than at night like the northern europeans. Then he went on to talk about how voting could be made much more efficient if it were brought into the marketplace and if candidates actually had to bid on votes in an online auction. The questions offered after his presentation were "what is the WTO doing to counter these protestors who have no idea what they are talking about?"

In the second one they constructed this costume that consisted of an inflatable phallus with a computer monitor on the end of it from where a manager could keep track of his employees through "humanely planted" tracking devices. After saying how slavery would've come to an end itseld because it is more expensive to maintain slaves than it is to pay sweatshop wages in poor countries he reveals his suit which he had been wearing under a traditional suit and tie. He inflates the phallus and explains that it would "allow management greater flexibility and leisure". Not a word, just applause, from the audience in Vienna. Afterwords the only challenge came from a woman who was slightly insulted at the suggestion that only men could be managers.

I can't wait to see this in its entirety. The producer said it will be opening in the San Francisco area so maybe you can check it out.

[BKM]

Further ammunition for my skepticism about Richard Florida. Not that this source is "accurate," but I think it does clearly illustrate some trends in the world.

www.ctheory.net/

look for the story on off-shoring intellectual employment: "The Digital Death Rattle of the American Middle Class."

[jresta]

I totally agree that cities are fighting over a dwindling middle-class. But that doesn't necessarily refute Florida's argument. Cities can't decide "well we're just not going to compete" well, they could. They could adopt a different economic strategy all-together, one that implies a social contract . . . but you know, that would be . . . "socialist"

So yeah, i think cities are faced with two choices. Compete for the dwindling middle-class and tech workers or reinvent the ball game.

[BKM]

Well, you're right, jresta. I guess my point is that because the middle class is dwindling, most cities will fail at this competition and that the Creative Class is not really going to save our cities (they will be unemployed).

I thought the WalMart article on Planetizen was interesting. The rapid rush to the bottom for all but a tiny few continues.