Imagined Property - thoughts from out there

1) Images of the imagined.

I write a lot about beginning again, in part because I am always stopping for some reason or another.  I began blogging with the intention of setting out my theory of intellectual property.  Or perhaps I should say I wanted to offer to the world at large a concept which was both intellectual and mine.  

There are many quaint sayings about 'starting' - a journey of a thousand miles begins with the first step etc.  I believe that journey may begin with the first step but after that it helps to have a map...  So my map takes the form of an outline of a series of connected conversations. My hope is to talk someone through the concept and share image of what I imagine intellectual property might be.

Looking back I realize that there were many 'first' steps.  The ones I feel important enough to describe are ideas about methodology - and epistemology.  My entry point into the discussion of intellectual property was dictated by theory which accorded a big place to an understanding of theory as a process of describing, analyzing and then imagining what next... with this basic structure of how I wanted to think, I began ... I describe this strategy (as theory) in one of the articles attached to this blog.  

My strategy required that I work with concepts.  Again a short description of what I mean by  'concept' is attached to this blog...  and then there were the concepts which shaped intellectual property.  The obvious starting point was filled with the concept of  'property'.  Define property and then modify with intellectual and I would have my concept of intellectual property done.  The problem was not just with property which seemed to defy definition, but with intellectual.  The challenge seemed to me to be to define Intellectual without simply referring to the mind and body duality - intellectual as not physical or intellectual as not tangible.  This, however, lead me to the concepts of work, labour, action, and play - the ideas of Arendt an Huizinga...  

And this is where I will begin my next blog...  

Ignatieff, Liberals and the Great Middle...

Listening to Michael Ignatieff last Sunday (April 19) on CBC radio I began thinking - which was itself an interesting reaction.  Despite my obsessive interest in politics, I find myself turning off the radio when local politicians are speaking - those I support embarrass or worry me while those I oppose irritate me more...  but I listened to Ignatieff.  And although I have not supported (well ok have generally opposed the Liberals) I found myself wishing he was Prime Minister.  The thought came to me that we could have a world renowned intellectual as Prime Minister!

After that thought came the pre-programmed Liberal Party of Canada advert - that Michael Ignatieff, despite the difficulty in saying his name, was the next Pierre Elliot Trudeau...  this made me think of my first political campaign.  Oh I was a LONG way from the action - Christina Lake 1968 listening to the speeches from the Liberal leadership convention.  Trudeau beat Winter - that is what I remember.  And then Trudeau mania and the Trudeau poster in my bedroom.  Trudeau beat Stansfield and the country moved on to 1970 and the October Crisis.  I was almost old enough to vote when I heard Tommy Douglas speaking against the War Measures Act.  So I never did vote for Trudeau.  I threw my lot in with the New Democrats and began my life as a "bourgeois intellectual".  But for the October Crisis I might have been a Liberal and who knows where I might have gone, but as it all turned out, I ended up working for unions...

Ok, I was thinking but still listening to Michael, as I am sure some of his friends might dare to call him, and I heard him talk about George Grant (Lament for a Nation  - great book) and the question about the difference between the Liberals and the Conservatives.  He said a number of things but the two things I remember were (1) that Liberals were not ideological and (2) that they were centrists.

Ok.  Ok. I tell myself.  Ignatieff is an intellectual.  Surely he was simply pandering to the anti intellectual ill informed masses whose votes he needs to do smart things...  Still it was disappointing to hear him say that the party was no ideological because how else can it be 'centrist'.  I mean the whole idea of the party is an ideological construct as part of a further construct of what makes a nation or for that matter politics.  The French Revolutionary Assembly may have had a geographical or physical presence but the whole notion of 'left' and 'right' and thus 'center' have been 'ideas' ever since.  If the party is not ideological, then how sensibly can it be 'centrist'?  

And so, I sighed and tried to forgive Mr. Ignatieff.  Admittedly my brief thought of him as a fellow traveller was fanciful.  

So I began thinking of how Liberals were centrists.  Well in the context of Canadian Federal politics over the last 40 years they are 'centrists' as they claim policies which seem to sit in between the Conservatives (as they now are) and the NDP.  In this they are well served by the NDP as this party survived, unlike the Progressive Movement in the US, and provided the socialist threat which made the Liberals appear 'centrist'.  Of course, the NDP also provided most of the policies which defined the Liberal agenda - the national health program, old age pensions, unemployment insurance and so on.  The demise of the Liberals as a political force was, I suspect, in some part due to the shifting of the whole political agenda to the right in the 1980 - 2000 period which resulted in the demise of the NDP as a serious national force. The Liberals became a centrist party without anything to the left and got sucked to the right...  but here I wander...

Leaving aside party politics, there are a number of major contemporary issues facing the Canadian 'nation' which can be arranged as dualities - a range of ideas between two poles, thus permitting a 'centrists' position.  An enduring BIG one is 'federalism' (which usually translates as the status of Quebec within Canada).  At one end there is the "independence of Quebec" and at the other is "Quebec as just another province".   This is BIG but it is not my issue - I have tried to be 'consistent' in my political positions and if national self determination is something to support for Angola, Timor and so on - so it is for the people of Quebec (which also needs to include the Cree Nations to the north - the geographical nation of Quebec is not necessarily the same 'place' as the Province).   But again, I feel quite distant from this issue.

Another BIG issue which has, however, been closer to my heart is that which for lack of a better word can be called 'economics'.  Here the traditional duality is often described (in effete bourgeois circles) as labour and capital.  In business magazines this duality is discussed in terms of the market versus 'big' government.  On the one side of the debate are those who "believe" that the market (structured by that invisible hand) would determine 'value' and coordinate supply with demand (to allocate resources etc) while at the other end were those who believed in the state (the role of government or the public sector) and the need for 'public planning' etc. The grouping of ideas of each sides was labelled, usually by those on the other side, as an "ideology".  The market side became known as "neo liberals' or "Chicago School" or, for the desperate, right wing nuts while the government side became known simply as the opposition - the success of the market side in selling their message becomes obvious as I try to find a 'nice' label for the 'other' side.  The political labels, social democrats, socialists, or communist all has negative baggage (and I would argue was inaccurate) - often those who opposed the free market guys were simply seen in negative terms as pro big government, nanny staters, pro- union, or simply losers and so on...  the market and its allied notions seemed to be winners.

The important thing, however, is to understand that for twenty maybe thirty years this economic debate has involved concepts of capital and labour but it has not been between capitalism (as an ideology) and socialism (as a competing ideology of social structure).  Concepts of labour and capital seemed to inform the debates between market (neo liberal) and planning (pro-government planning) forces, but on both sides proponents accepted as inevitable (dan dare I say durable) the basic ideology of capitalism.   By the 1990's socialism had become "capitalism lite".  The political spectrum had not so much shifted to the right as disappeared.  There was no 'left' there anymore.  And thus, as I argue above, the center also could not hold...

But then, the financial collapse of 2008 happened.  And as I mentioned in my last post, people started noticing 'labour' again.  My question is whether this reappearance of 'labour' will revive the old debate, that between capitalism and socialism or will the struggle continue between those who favour market forces (the privateers) and those who see a role for government etc.  I suspect that without the revival of socialism or some other ideology which confronts capitalism the result may be disappointing.

So getting back to Ignatieff - the question is that he may be a centrist but what or where does he imagine the debate?   Is it a debate about capitalism itself or about the role of government?  And if it is about the latter, where does he stand with respect to the role of private capital in the provision of public services....  and so on...  But then one must ask if this is the right kind of questions because what if the debate should be about capitalism itself - what if the questions are not about the role of government but the possibility of government?  

To get an idea of someone who keeps asking these questions check out Jim Kunslter's blog...  

[and on this subject - I must thank Karen B.  I not only have trouble pronouncing Mr. Ignatieff's name, I seem unable to spell it!]

The great transformation - debt and the degradation of labour...

This month's Harper's Magazine includes yet another article on the economy - "Infinite Debt" by Thomas Geoghegan.  

No surprises that folks keep writing on the subject. What is surprising is that where the analysis is leading. It is leading back to an appreciation of labour.  Geoghegan argues that the 'cause' of the financial collapse is not simply the result of poor regulation and greedy bankers, although both were part of the mix. No, for Geoghegan, a labour lawyer from Chicago, the cause can be found in the degradation of labour typified by outrageous business practices in the 1980's and 1990's and the glorification of capital exemplified by the abolition of ancient laws prohibiting usury.  He writes:

First, we removed the possibility of creating real, binding contracts by allowing employers to bust the unions that had been entering into these agreements for millions of people. Second, we allowed those same employers to cancel existing contracts, virtually at will, by transferring liability from one corporate shell to another, or letting a subsidiary go into Chapter 11 and then moving to “cancel” the contract rights, including lifetime health benefits and pensions. As one company after another “reorganized” in Chapter 11 to shed contract rights, working people learned that it was not rational to count on those rights and guarantees, or even to think in these future-oriented ways. No wonder people in our country began to live for the moment and take out loans and start running up debts. 

And then we dismantled the most ancient of human laws, the law against usury, which had existed in some form in every civilization from the time of the Babylonian Empire to the end of Jimmy Carter’s term, and which had been so taken for granted that no one ever even mentioned it to us in law school. That’s when we found out what happens when an advanced industrial economy tries to function with no cap at all on interest rates.

Here’s what happens: the financial sector bloats up. With no law capping interest, the evil is not only that banks prey on the poor (they have always done so) but that capital gushes out of manufacturing and into banking. When banks get 25 percent to 30 percent on credit cards, and 500 or more percent on payday loans, capital flees from honest pursuits, like auto manufacturing.

Why is this surprising that analysis might lead back to an appreciation of labour?  Afterall classical economists from Ricardo on saw labour as a primary source of value.  Well after 20 to 30 years of being ignored or reviled, it is surprising to see labour make a comeback.  And then the introduction of the status of "labour" into the meltdown mix made be think of Polyani (the author of The Great Transformation). Of the many points he made in that book, one I remember was his explanation for the difference in status (or lack there of ) of manual and factory jobs between England and Germany.  The difference, Polyani wrote, could be explained at least in part by the fact that workers in the UK were forced into the factories and suffered a diminution in status about 50 years before the serfs in Germany were sent off the land and turned into workers.  The timing and the fact that for one group their lives as workers were worse than they had been before and for the other life in factory was an improvement has consequences which shape the world of work today.  

Geoghegan argues that talent flooded into the financial sector in the US because that was where the money was to be made...  I wonder, though, how much of the explanation rests with the relative low status of any manual or factory work in the US - as in the UK.  Why would the ruling class in either country worry about keeping factory jobs in the country when, of course, they were best done by the socially (or dare I say racial) inferiors - at home or somewhere else?   The enduring prejudice against those who sold their labour to the man is evidenced everywhere. Why else would so many people, so ill suited to academic life enroll at universities?   And why would skilled tradespeople and their associations (ie unions) be the object of so much public derision.  Yes, part of the problem in the current financial situation is the degradation of labour ...

Socialism?

Today The Nation kicked off a 'dialogue' on socialism with Barabara Ehrenreich and Bill Fletcher's essay "Re imagining Socialism".   This will be an interesting discussion.  For while economic determinism is way way out of fashion, I suspect that many of those on the left, including myself, still believe... they believe that somehow the socialist utopia will arrive with the collapse of capitalism.  Ok I may be over stating the faith but many socialists believe that the present financial crisis portends the revolution. I want to point out, paraphrasing Mao, that neither the crisis nor the hoped for revolution will be a tea party.  The future will be interesting and not necessarily nice.

This is why this discussion about socialism is important.  If capitalism is dead or dying and socialism is next up, then it is important imagine and re-imagine socialism.  It is also necessary to remember that socialism was never defined, never described and never tried...  Owens, St Simon, Marx amongst others wrote about socialism and even tried out a few socialist ideas.  But they all left out a lot of the details. Almost any utopic or nice social ordering can be called socialist.   And here it is also important to remember that at the height of the first or second wave of socialist debate, at turn of the 19th century, for every passionate socialist of the left, there was an equally rabid socialists of the right.  Some have argued that the capitalists claimed the center.  So if we are to talk about socialism, we may also have to use be clear that we mean socialism of the left.   And this may require that we mention fascism and think about what went wrong with communism - and explain what socialism is and is not... 

Here I would like to note that I am aware that there are many problems with using 'left' and 'right' to describe political views.  The words, left and right, describe where people sit (or hold themselves) in relation to each other.  The words do not say anything about the substance of belief.  As most people know the idea of using these words to describe politics comes from the revolutionary French Assembly. For me, ideas about left and right needs to be developed if only to better understand what socialism might be.  For the purposes of this and many other essays socialism is on the left and capitalism is on the right.  

The problem with both capitalism and socialism is that they can only be understood as abstractions - theoretical concepts.  In itself, capitalism doesn't exist any more than socialism.  Reality, lived experience, doesn't come with such labels. So as  abstractions capitalism or socialism can take many different forms. Some see capitalism as life with fine choice - plenty of food, nice cars and constant entertainment. The experience of socialism at the same time is often seen by way of contrast with capitalism and as such uncomfortable and, likely, boring.  Of course, some describe capitalism as systems of exploitation and misery ...  regardless, it is difficult to reduce either capitalism or socialism to short descriptives and the labeling of some countries as capitalist and others as socialist has always been misleading as the whole story was likely more complex.

As well as being abstractions, the words, capitalist and socialist, reflect a value judgments - either good or bad depending on one's political perspective.  Those on the "right" may see capitalism as good and socialism as bad while those on the "left" may see capitalism as bad.  But here even as a simple value statement, the words become complicated because both words were seen for may years as words of the left.  The reason for this may be that capitalism and socialism were words used by intellectuals (and university teachers), many of whom were identified as socialists - of the left.  It was this group who then provided labels (capitalist, socialist, fascist, left, right and so on) for everyone else... and here it needs to be pointed out that many people, politicians included, genuinely believed themselves to be beyond ideology of either the left or the right.  As was the fashion- they did not see capitalism as an economic or social ordering or even consequence of human activity. But those who professed no ideology were more likely to be in favour of capitalism than socialism even if they might not have used the word, 'capitalism'.  Socialism was, however, even less socially acceptable as a word or descriptor. In the US few people even dared to identify as 'socialists'.  For years, the mere mention of capitalism served to identify oneself as of the left...  there was no need and some risk to say the 's' word in public. 

At the same time, a working understanding, even caricature of capitalism and socialism emerged. Capitalism came to refer to the corporations and private sector and rich people while socialism came to be associated with government and public initiatives.  The difference between the two was grounded in a disagreement over whether government could solve social problems through taxing and spending. The image though was of the capitalist as strong and independent while the socialist was weak and dependent on government (hand outs etc).  For some capitalists were winners and socialists were losers...   

After the fall on the wall in 1989 capitalism was triumphant. In the 1990's  the world became flat leveled by capitalist aspirations for more and more and more - capitalism.  By the new millennium highways, schools, hospitals and food banks were being re designed around cost centers with profit as the key to success. Socialism seemed quite dead, but this was an illusion.  Socialist tendencies lived on. Socialism could be seen in public health care and education, in unemployment insurance and old age benefits - and in progressive income tax.  Of course, many of these socialist activities could also be seen as Christian charity and good governance but the idea that those who could, helped others is clearly part of most socialist images.  And if one's view of socialism includes socialism of the right - the dark anti communist (and strangely pro capitalist) kind of socialism - this too never disappeared from the world scene. This socialism of the rich, the 'privatize profits and socialize losses' kind of socialism continued to shape a number of governments.  But this was the kind socialism developed by the fascists - the brutal socialism of Mussolini who got the trains to run on time and the corrupt horrifying socialism of Hitler who got Germany working again - and would not likely be described as socialist.  More likely this kind of socialism would be described as state capitalism, crony capitalism or simply as corrupt ...

This, of course, is not the socialism which the Nation wishes to re imagine.  In their article Ehrenreich and Fletcher describe what they meant by socialism when they explained why socialists did not have a ready prescription to heal current economic woes.  They write:

... we should explain that socialism was an idea about how to rearrange ownership and distribution and, to an extent, governance. It assumed that there was a lot worth owning and distributing; it did not imagine having to come up with an entirely new and environmentally sustainable way of life. Furthermore, the history of socialism has been disfigured by too many cadres who had a perfect plan, if only they could win the next debate, carry out a coup or get enough people to fall into line behind them.

At the same time they argue that there is a "great project of collective salvation" which must be undertaken to replace the anarchic madness of capitalism.  Their inspiration is the civil rights movement, the women's movement, the labour movement. Their call is for organized solidarity in the face of increasing poverty and injustice caused by the economic crisis. It is clear that their socialism is of the left. 

I wonder though if many Americans will accept this socialism unless they realize the dangers of refusing this path.  The problem is that if socialism follows the collapse of capitalism,  then the greatest danger may well lie with a socialism of the right.   The desire to avoid socialism, simply because it is socialist, may feed a willingness to to whatever is necessary to restore capitalism - but if capitalism, like Humpty Dumpty, cannot be put back together again, socialism of the left needs to be seen as the next best thing...  and what this socialism will look like is not simply "not capitalist" but "not fascist" as well. 

Enough - already

I began a post the other day and then stopped - I was trying to write about property, the object of this blog and realized that I want to write about the financial crisis.  Today the stock market fell again. And they can still fall further.  My brother pointed out that the crash of '29 took three years to happen - the markets fell and then plateaued and then fell again and stabilized - until 1932 when they had lost 80% of their value.  So the markets can still fall.  

And then my mother asked if this was all happening because so much money was stolen. My answer is yes and then no.  At the time the guys took the money, no one called it theft.  

Who are these guys?  First, they are nearly all men.  Second they range in age from 30 on up but the majority are, I imagine, boomer and later boomers.  Third, while many may not be 'well born', most have a university degree typically in business or economics from an American or Americanized institution. And most importantly, these guys are the well paid captains of industry and finance.  For twenty years they were the winners - the ones with the million dollar homes, the holiday houses, the private jets, flash cars, white teeth, and gold plated retirement packages. 

And how did they get the money?  They were 'paid' for services rendered...

So why on earth, the question becomes were they paid so much money?   This is the tricky question because the various answers usually avoid the question.  Some say that these guys simply paid themselves - they had their fingers in the till... that was part of the story but there were a number of reasons executive pay rose so quickly and so high.  There was the real or imagined competition between corporations for management talent and the willingness of corporate boards to pay through the nose to get it.  This leads to the second reason given for the high salaries - the owners of the corporations, the shareholders, did not care how much management was paid as long as share prices and dividends increased faster than inflation...

Both answers point to the real problem - and not surprisingly the problem was structural.  The story begins with the idea of the company which after WWII became the story of the publicly owned corporation (family and private corporations were still important but not the main vehicle for commercial activity). As the story goes men returned from the war ready to build something, a family, a house, a business. (Women were forced home to new houses in the suburbs and men went to work.)  For many of these guys, they had lived through a time when government was good - good government won wars, created jobs, provided social security and so on.  The world view was one where businesses made things and government solved social problems.  

The 1950's and 60's were periods of unimaginable growth in North America ...  by 1970 the place was rocking and the WWII vets were clearly in charge.   Then there was the problems of the 1970's - the oil shock and incredible inflation.  For the WWII vets this was an unpleasant reminder that the economy could still be scary.  Throughout this period neo liberal ideas about government and the market were gaining ground.  And then WWII vets started moving on - retiring and dying...   in many places veterans of the Korean War took charge.  The world view was increasingly one in which the point of business was to make money and the point of government was, well, to get out of the way...  

By the 1990's the children of the WWII vets were in charge and for these guys, the only point was to make money.  And while the rhetoric was about making money for shareholders, the real point was to make money for oneself - so much the better if one was also a shareholder.  Government was not the place for any man with ambition to be (and maybe this explains why so many women were able to get good jobs in government).  Politicians were seen as crooks and gangsters, taxes as theft and regulation as completely useless.  By this time most of the guys believed that the market would provide - and for the guys it surely did.  

Given the objective was to make money, then those guys who made money deserved to be paid a king's ransom...  who cared if they destroyed the business, sold the capacity to make or build anything to the Chinese, as long as they seemed to make money.  And who cared how they made money as long as people believed and still bid up the price of the shares...  but with money as both the goal and only measure, the temptation to cook the books grew and, as we all know now, it proved too much for too many of the guys to resist, especially for those in the financial sector.  These guys, these wizards of finance, produced nothing but money - or rather clever financial instruments which inflated the accounts of their employers and justified huge salaries.  In a way they did not so much as 'steal' as swindle - like middle men in a pyramid or ponzi scheme they took a cut of the imagined gains before the gig was up....

And in this version of the story - I think that it is more than coincidental that the great stock market Ponzi scheme began to collapse in 2007 - some 60 years after WWII...  you see the children of the WWII vets, boomers and those just a bit older, were retiring - taking their money retiring to Florida (or other warmer places) buying houses for their children and pretending that the good times would last for the rest of their lives...  

Re-regulation - nice but really...

I was reading Robert Scheer article posted on Truthdig.   And I thought that I would write back...  and so I sent the following email.  

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I note that you don't want or need more political commentary so I won't attempt to write anything for submission.  I wanted to offer a comment on Robert Scheer's comments.  I am a fan of his and wanted to point out that he needs to think more about what he means by "regulation".   What I will suggest is that sadly, there cannot be an easy re-regulation of the banking (food, employment or whatever) because the basic structure of the 'rule of law' is missing.   What is needed is political will to fix the legal system - the problem is that no one seems to notice that it is broken. 

Your response may well be that I am just another 'nutter' running around saying that the sky is falling in.   If so, my comment is that your response proves my point.   Following on from HLA Hart and other neo positivist legal scholars and the idea of a rule of law as a system, what is critical in ensuring that the system 'works' is not so much the basic norms or principle (although these are important) but the consensus among the insiders (the lawyers, judges, police, sheriffs and so on) as to these basic principles.   For 20 years legal talent has been told to find the money - not justice, not fairness - just money.    The legal system has come to be understood as an instrument of private (and at time public policy).  The metaphor these days is that the law is a hammer or screw driver rather than the a 'tree' or other living organism, an image which informed the law for many in the 1920's and '30's. 

 

I am a Canadian - but 'even in Canada' there are very few lawyers, judges police etc who believe in the system.   Criminal and administrative legal processes have been so grossly underfunded that the justice produced has become arbitrary and, at times, grotesque.   What happens depends on who the decision maker is - are you lucky today and get a 'good' judge?  If not, well, suck it up.    So for everyone who says 'we need regulation' - I ask and just 'who and what' are going to be able to provide this - of course assuming that the regulation you mean has something to do with fairness, justice and maybe the rule of law?    But if you mean by regulation, throw all of those greedy bankers (you know the ones who took the bonuses and lost the money) into jail, then by all means - go for it. Of course, it will be nice if all the ones who end up in jail are not just there because they are hispanic, jewish or over 6' tall.  

Oh I suppose that the US Justice Department is hiring more investigators and maybe even there will be more lawyers and accountants trained in the fine art of forensic accounting, but is anyone looking at how  one can make the ruling class accountable using the system made by and for this mercantile class?   Surely the case of Bush v. Gore must give those who think that the courts can fix politics pause. 

I will stop here.  

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Now I have to admit that I sent this email in the hopes of being read - in the hope that someone,  would notice me and so on and so forth.  But I wrote it because I am beginning to understand what is happening and from this understanding to develop an analysis and sense of what may happen next.   

I stopped where I did because I am trying to write shorter pieces.  Of course, in order to defend my comments, I need more words.   Many people would challenge my description of the legal system but I stand by my opinion that very few people who work 'in the system', believe that it is 'good'.   Administrative law is in a particularly bad place. The thing is that if the law is seen as a legal system, then it always is in a 'bad place' - the issue has always been how to make the system better.  The only problem now is that the only guiding light is money - better has been for a long time 'more efficient'.    But efficiency is not a goal - money for the sake of money is silly...

The end of the world.... ?

I was recently reading Jim Kunslter's blog?  The most recent is about current events - the mess the world of business is in....  he writes about the Deflationists versus the Inflationists...

The use of dichotomies / dualism to structure discussion is useful but I am not sure that I agree with the two poles he has chosen...  I think the two poles are:  on the one side, those who see this as just another crisis, only the worse one to hit capitalism since 1929, and on the other, those who see this as something quite new and potentially, possibly (even likely), the end of the world as we know it.

I was reading that the cost of oil production in Russia is $80 US a barrel.  It is around $70 even in Saudi and, if the accounts were done in Nigeria, around $90 there for the light crude.  But future contracts are going at $40.   One guy on the radio said that the EC (it was on the BBC) should agree with Russia to pay at least $75.   Why?  Because at $40 or less, the instability and the damage to future production was going to be really something very expensive.  The bills may not come in for 12 to 18 months but the price could very well be around $200 a barrel as supply will then be half what is needed (around 30% less than what is available today etc).  Take a look at Alberta - the roll back in production on the oil sands may save the environment, but it means that source of oil will not be developed...

What I read in this is that the 'market' is over.  Not only was the market over hyped, it was not ever really there or if it was, it has now sunk under the weight of expectations...  Sure the market forces would regulate commercial activities...  just like the tooth fairy sets the price for baby teeth.  So what happens when folks realize that just like there isn't a commodity market for oil, there isn't any 'market' for houses?  What happens when people realize that they have spent their entire lives working to pay for something that has no value (because it cannot be sold or cannot be bought at anywhere near the former purchase price).    There will be a lot of former free market guys wanted 'regulation' - they will want rules to protect their property!

So back to Kunslter's argument - whether the process is deflationary or inflationary won't matter as much as how the new 'pricing' mechanism is developed.   And maybe it will be a form of private public partnership (at least initially) whereby the rich folks of the private sector work with the government to 'stabilize' things...   (which of course means that they well try to ensure their privileged ownership status continues).    My worry is that the middle class risks being destroyed in the process ...  a large working 'middle' class is largely a post WWII event.

And on other topics - Kunstler's books are quite good reads...  I just finished The World Made by Hand.  I would recommend it...

Cycling in New Zealand...

I spent the morning writing a letter to a radio show on cycling...  here it is...

A big part of the problem is the culture of the car.  I don't know how long New Zealanders have loved the car, but when import duties were taken off cars in the late 1980's, for the first time everyone could have their very own car.  

New Zealand saw a huge increase in the numbers of cars on the roads in a very short period of time. No new roads but lots and lots of new and used cars filled the streets.  The congestion made driving much less fun but did not seem to lesson the ardor.  These days most New Zealand households have at least one car - some have one car for every adult member.  Many people are deeply attached to their cars - some even define themselves by their cars. The bigger and better the car, the more important they feel.   And driving fast - why the better the car and the driver, the faster you should drive.  Only the old and infirm would drive slowly - the speed limit is the declared minimum.

Quite simply,  I would gently suggest that most people in New Zealand seem to believe that driving is a god given right - and that it is good.  

Thus cars, not pedestrians or cyclists, have the right of way on the road.  Pedestrians know better than to expect a car to slow or swerve to avoid them - it is up to the pedestrian to take care. Even when a car crosses the sidewalk into a parking lot, pedestrians stop and wait for the car to pass. People accept that the car's progress is more important than their own - perhaps as in many Third World cities where the well born ride while peasants walk.  

Thus planners design roads for the car.  Where space is limited, the road is designed for the car alone. Throughout Auckland sidewalks and cycling lanes along the roads often narrow abruptly or simply end in order to make more room for the car.  The walker or cyclists is left with no option but to fend for themselves amongst the speeding cars on a busy (and dangerous) stretch of road.

Add to the legal and moral sense of the cars' priority, a bit of aggression and busy roads become battle grounds.  The guy with the biggest car (or truck) wins.   What chance do cyclists have?  (Any wonder the rich buy SUV's)

Twenty years ago I rode regularly from Kingsland to downtown Auckland.  But I don't anymore - cycling in Auckland has become much more dangerous.   The last time I tried to ride to work just before Christmas, I was very nearly killed.  So now I ride very early on Saturday or Sunday morning.  Even at that hour, every time I ride there is at least one or two incidents - near accidents - because drivers either don't know how close they are to me as they pass (or don't care) or don't see me and turn left or right forcing me to brake hard.  More often than one should expect, drivers - usually young men - yell as they pass (often advising me get off the f**ing road).  Sometimes they even throw things at me.  I try not to return the gesture or shout anything back as twice  (both times out by the airport) drivers have stopped and gotten out of their cars to continue to abuse me.  Sure you can report the drivers if you catch the license plate number, but the police do not pursue the matter (they likely feel that they have better things to do).  And then there is the sense that drivers blame the cyclists for any problems - as if the cyclist simply by riding on the road was provoking drivers to behave badly.

It does not have to be this way.   There are a number of cities, world class cities, where cyclists are accepted, even respected, as road users.   I come from Vancouver Canada  where the car does not have a legal right of way.  Cars will often stop to let pedestrians and cyclists, through.  There are, of course, accidents because cars are very dangerous machines.   But it is a lot better.   And it could be better here.  If only the cult of the car was toned down, everyone would be able to enjoy the city so much more.

And this should not be an impossible task.   I suspect that many people living in the city are getting tired of the car always winning.  And there are many drivers who already know and have the necessary skills for a world in which the car does not take precedence over pedestrians and cyclists.  For a number of years I walked a dog.  Every morning I crossed a particularly tricky intersection and at least once or twice a week I saw a very near miss - between cars.  For every driver who drove as if the road was for him or her alone,  there was a driver who was paying attention and looking out for others.   The 'others', the non car drivers, are numerous and increasingly 'out there'.   I regularly see the "walking buses" taking kids to school.  And then on the weekend I see hundreds of cyclists attempting to enjoy the road.    I am not sure how we can convince some people to take the car less seriously but it is critical for the life of the city that we do.   It is not by coincidence that the most livable cities in the world are those designed to meet the needs of people, not the car.   Making cycling safe would be a big step in improving the quality of life in the city for everyone - including car drivers.

Obsessing about the financial meltdown...

First things first.  Last week I wondered about what to call the present social / economic event.  And wouldn't ya know it...  there has already been a contest on a name.  The Nation launched a competition last June to find a name for these times - or the period from the late seventies to the present. There was an impressive panel of "progressives" as judges, including the Barabara Ehrenreich, Howard Zinn and Walter Mosley.  See "Name our epoch".    

The winner was announced this week.  And the winner is...   The Borrowed Times

So read all about it.  It is a good name but I doubt that it well catch on.  I think that the name people will use will hang the disaster around the necks, rightly or wrongly, of several US presidents.  It may be called Reagan Bush period or age.  These guys will leave their name on the door much as Metternich left his and Victoria left hers.  But we won't know the name for some time yet.  It won't be 'us' who will be naming. Those who are left will do that.

And getting back to my naming game - I think that the crisis is best described as the "Financial Meltdown" as in all that is solid melts into air - the quote from Marx and the title of Marshall Berman's book.

I was fleeced by Madoff

"I was fleeced by Madoff"
The financial guru's Ponzi scheme cost me 30 years of retirement savings. How could he do this to me -- and why did I let him?
By Geneen Roth

http://www.salon.com/mwt/feature/2009/01/07/madoff/index.html

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Your friend's message:

This sure shows how vulnerable people are: we do look to government to identify and stop people like Madoff.  I wonder if this person would support strict regulation of financial markets- now?

-------------------  my reply

Hi - the sad thing is that this woman likely thought that the markets were regulated...  in my classes the kids often react to any perceived injustice by saying "that is illegal".   There is a sense amongst the unwashed that the powerful are right - that government is too involved in our lives.   The corollary of this is that the government will protect them from such terrible crimes (as in stealing all their money).   The sense that the market ideology presumed  that people would take responsibility to get 'full information' etc to look after their own interests (which Smith's hidden hand etc of self interest requires) was not widely held.  What many people like you understood was that the ideology obliged people (or again simply assumed) to do what they were not in a position to do - ie to understand the markets; to get information and so on...   how could the ordinary investor hope to understand when the financial culture was one of over paid superstars (read Wizards behind curtains) working in a culture of friendly handshakes and insider trading?   

The whole market was a pyramid scheme set up as a multiples of ponzi schemes.  I have been telling people for years that the housing market was an international pyramid scheme.  I didnt think of expanding my analysis to the banks because despite 14 years of university study and 25 years as a lawyer I didn't feel I understood the mortgage business.  You may recall I have asked you to explain derivatives to me a couple of times.  I took the stock brokers course (and did quite well) but I still don't understand hedge funds...  so it seems obvious to me that folks like this poor woman had no hope of understanding - and this ignorance extended to an understanding of what was and what was not being regulated. 

Even now the media here (in NZ) whines on about the "nanny state" - even now the government is in the business of getting out of business.  And so I don't expect any move to responsible government anywhere will be easy - there will need to be a shift in the whole tenor of the political discussion for a return to 'governance' for the people and of the people etc as was the case following the 1930's.    I simply don't think that the media would let the message to get through - talk about circuses - that is all that we will have on the media (whether the 'circus' is a foreign war or the Olympics). 

My sadness and some suggest, my unhealthy obsession is that there will be rules - but that these rules will protect the rich.  The wealth accumulated by  the winners in this world wide ponzi scheme will not be returned to help pay for the costs of the 'bail out".  The public will pay for the mess with increased poverty, decreased social services and so on.   The response of the government will be like that (in terms of rough analogy) of the victors in 1919 as compared to the response of 1946.  As you know, in 1919 the victors wanted peace but more than that  they wanted a return of the old regime and decided the best way to get there was to have Germany pay for it.   

Here, those running the show (ie the government) want to get back to where they were? But where is this?  1970?  1980?  or 1999?   What is the bench mark for success?  5% growth or 2%? And home ownership of 45% or 85%?   The Canadian government is giving $4 billion to the auto industry - what are the guidelines?  what is 'success'?  Oil at $100 a barrel?  Oh the government will pretend that recovery is coming - that things will be as they were.   But ...  how can they ever be as they were?   Sadly I suspect that regulation will simply be rules closing the barn door after the horse has begun to smell (using this analogy more than it should be - I would suggest that the horse needs to be examined, its cause of death determined and then it should be appropriately buried - all with the barn door wide open).    The problems are profound - a democratic solution (as opposed to fascism on display) would involve electoral reform.    But is won't happen.    Why?Because the whole culture is no longer one which sustains the old fashioned notion of good governance.  It is a culture in which everyone feels that they are special, that rules are important but getting caught is the problem, and that the best outcome is money money money...

Y's  experience with the Federal Government taught me a lot about the current attitude to governance in Canada.    Of course everyone pretends that the system is 'fair'...  but there is no fairness in a system in which files go missing - where hiding and delay is the best legal tactic.  Contracts are let and money is made on the basis of who you know not what you can do... All over justice is reduced to a dollar sign - and yet hundreds of millions of dollars in fines are left uncollected.  Who pays?  Who doesn't?  Read Bleak House lately?   

What is justice when the main and often only economic activity in much of the province is the cultivation of an illegal drug?  How does such a large industry get established, keep going in a supposedly law abiding part of the world?  Do only the unlucky or unconnected get caught?  What happens to the community when the richest citizens pay no taxes because their business is illegal.  Here look south - some argue that  Mexico is skating closer and closer to collapse... why?  because of the attempt to enforce drug laws...  or the attempt to determine who profits from this trade?   

And then where is the justice in a financial rescue when the most wealthy in society somehow manage to keep their homes, yachts and medical insurance when the less wealthy are told to eat their losses.   

Ok - I am angry.   Alas...  and I don't know who to blame...