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Daily Digest 3/29 - Pension Crises Ahead, N.J. Credit Rating Cut 11th Time

Chris Martenson - 10 hours 24 min ago
  • Healthcare to triple in cost for retired Texas teachers
  • Bill aims to address high health care costs
  • Why local governments and school districts are wrestling with unfunded pension liabilities
  • Pension cuts looming for Ohio teachers and retirees
  • Pension Crisis Ahead: Why Public Employees Should Think About A Golden Nest Egg Now
  • Spain’s Social Security shortfall rises to €18.6 billion in 2016
  • Distressed Funds Find Treasure in China's Mounting Bad Debts
  • Household Debt Near Recession Levels, But This Time’s Different
  • N.J. credit rating cut for 11th time under Christie

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Categories: Economics

Protocol Cooperativism?

Matslats - 15 hours 39 min ago
[Draft intended for the platform cooperativism blog]

Since the first days of political economy, thinkers have framed the big dichotomy in terms of labour versus capital. Marx talked about 'control of the means of production' as the essential political power that the workers needed to wrest from the capitalists. A great deal of activism and political theory is still in that vein: Gar Alpowitz work What then must we do? is all about the importance of that, the cooperative movement has demonstrated clearly that it works, anyone who has owned shares in the company they work for feels the difference in spirit of that enterprise.

But lets face it, as a strategy, and one which has been tried by social movements for maybe 150 years, it has yet to overcome its antithesis; capitalists, have the power to issue almost unlimited credit can throw at their enemies, and social movements however just and popular seem always to be on their back foot if not retreating. So for me it is inconclusive whether worker-owned institutions will ever replicate and eventually dominate the economy? On the one hand we see economic justice trying to break out in many forms and places, and on the other, there are numerous examples of rules being changed to make coops less competitive, and when a whole country swims against the neoliberal flow, they risk a CIA-led regime change. The power that controls property also control the law, the media, the security forces, the military and the banks. You do not demolish the master's house with the master's tools!

Platform cooperativism is the notion that the digital means of production, the platform, should be owned and governed and should enrich the value creators participating in it. It is a straight extension of the most rudimentary Victorian cooperativism, as an approach and as a tactic into the digital age and cyberspace. And that's why I'm not especially optimistic about its potential to change the game.

I believe another strategy shows promise. While the industrial age necessitated machinery, factories, hence large amounts of capital and property, the information age has low cost physical infrastructure but a high cost in skilled labour. That means coordinated teams can achieve a lot without the aid of banks!

A protocol is like a language, convention, or standard and as such, use of it cannot be restricted, prevented or monetised any more than use of a word, gesture, or social code. The Internet is essentially a set of protocols such as TCP/UDP, http, HTML, which leads to a fundamentally more democratic infrastructure. That need not have been so, in a parallel universe, Microsoft invented the web and instead of html every page is a word document MS Office is the only tool for authoring them, and it costs $5000 per year to author web pages and they look all wrong on Linux.

The open protocols avoided that particular dystopia and in the early days provoked a great deal of optimism about how the Internet would level the socio-economic playing field, but the layers on top gave us a very similar dystopia which we now believe to be normal.

The capitalist interests worked out how to build services, private territories and gateways on top of those protocols and to translate the notion of private property and the means of production into it. Only then could web sites like Facebook and Google start capturing and monetising value for investors, even while the lower layers remain free as designed: we pay nothing for example for sending an email or retrieving a web page.

So it is hard to imagine any platform like competing head-to-head with Facebook, ever winning.

One recent protocol that threatened to democratise everything was Bitcoin. Bitcoin is a protocol for different 'wallet' programs on different computers to agree how much is in each wallet. It enables a global payment system without the need for a central institution to keep the definitive ledger, and so it allows a money system without states or banks. Bitcoin itself however turned out to be flawed and its mass adoption led to an unintended form of centralisation. Better algorithms now exist although so far Bitcoin retains its first mover advantage.

So let's talk about ride-sharing, the poster child of the sharing economy, and the pressure point chosen by platform cooperatives, and the current fiefdom of Uber. Ride-sharing could be considered a natural monopoly, which is to say it involves infrastructure you don't want to build twice - users don't want to have multiple identities, apps, user interfaces, price structures etc. Some non-neoliberal thinkers, believe such infrastructure should be available and affordable to all, with minimum restrictions, which usually means it should be provided by government - unthinkable after 3 decades of privatisation. So now the tech company that wooed the most venture capital now holds a virtual monopoly and is undercutting the competition ready to bleed the market for all it is worth. Should Uber slip though the market would descend into open warfare, and neither situation best serves the people with cars and the people who need rides.

So what if instead of a platform cooperative, there was a protocol for ridesharing? This in fact has been attempted by an Israeli project, Lazooz, which alas didn't get off the ground. But what if it had, say crowd-funded enough to run an advertising campaign and hire lobbyists in every capital city? People would sign up to the network and announce their availability or their hope to travel. They would find each other and remunerate each other in cash, Bitcoin, home-brewed cider or anything; the line between giving a friend a favour and earning a crust would be very grey. There would be no middle men collecting rent of the infrastructure dictating how drivers should behave as representatives of the company. The protocol might support long distance travel, hitchhikers, diversions to pick people up, maybe even cargo to reduce the number of empty trucks clogging and churning up the roadways. Some rides would be freely given but for most it would be a free market - prices determined by supply and demand.

So this public protocol could completely disrupt our transport ecosystem, vastly reducing the cost of travel and the number of vehicles on the road. It could obviate most full time driver jobs but in any case would offer them no protection. There could easily be a recession and a glut of drivers needing cash to pay the bills would drive prices below dignified levels. (In a recession of course many passengers would suffer to pay dignified wages - should we take sides?). The difference is, with an open protocol, you wouldn't have those in the club earning a living wage while the rest starve - the work would be shared out and in good times the leisure would be shared out as well.

So where does the cooperative come in? Well if most people prefered to be alone in their cars rather than sell or share their empty seats, there are other 'added value' functions which would need institutions. The function of an institution is not to crunch algorithms and own infrastructure that should be public, but to manage trust and social relations. So drivers could aggregate into collectives or coops and offer a trusted brand, guaranteeing new cars, fixed prices, women only drivers, criminal record checks, insurance, or whatever value they can add to the basic automated service.

Moving beyond ridesharing this protocol approach has many domains. Airbnb could be replaced in just the same way. Why should you have to choose one estate agent to sell your house and visit many estate agents to find a house? House matchmaking should be automated long before professionals are selected and summoned. Why is it still necessary in 2017 to advertise a second hand bicycle on a centralised, censored, platform like craigslist, freecycle or the local supermarket or newspaper? Why isn't there simply common space for that?

We are starting to see powerful protocol based alternatives to Facebook emerging in Synereo and Fermat. Indeed the latter is already working on a ridesharing solution: perhaps a killer-app is on the way?

Categories: Blogs

Podcast: Project Equity's Alison Lingane on the Perks of Worker-Owned Cooperatives

Shareable Magazine - 17 hours 14 min ago

"Good decisions are built into worker cooperatives from the inside out," says Alison Lingane.

In this episode of Next Economy Now, Ryan Honeyman, a partner and worker-owner at LIFT Economy, interviews Alison Lingane, co-founder of Project Equity.

Project Equity is a nonprofit organization that fosters economic resiliency by demonstrating and replicating strategies to increase worker ownership.

In this interview, Lingane and Honeyman discuss:

Categories: Economics

Building a Sharing Economy Takes More Than Just a Smartphone

Shareable Magazine - March 28, 2017 - 12:31

I ran into my friend Rick the other day in a small town near our homes in northern Vermont. He was just coming out of the bookstore, holding a pink plastic bag that, I would soon learn, contained a dozen eggs from his flock of free range hens. After a bit of small talk, Rick asked, "You don't by any chance have a pair of jumper cables in your car?" I did."Would you be willing to drive over to the post office and jump my pickup truck? I’ve been trying to park on hills until I can get a new battery, but there just ain't enough slope at the post office."

Categories: Economics

Daily Digest 3/28 - Deaths Of Despair, The Four Deep Drivers Of Destabilization

Chris Martenson - March 28, 2017 - 07:33
  • Is the US facing an epidemic of 'deaths of despair'? These researchers say yes
  • What the Berkshires Learned by Launching its Own Currency
  • The 21st Century’s Horsemen of the Apocalypse: The Big Four Deep Drivers of Destabilization
  • Step Free of Government Chaos
  • An Alabama Prison’s Unrelenting Descent Into Violence
  • A Dream of Clean Energy at a Very High Price
  • Texans Receive First Notices of Land Condemnation for Trump’s Border Wall
  • Trump moves decisively to wipe out Obama’s climate-change record

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Categories: Economics

Cooperativism in the Digital Era, or How to Form a Global Counter-Economy

Shareable Magazine - March 28, 2017 - 05:51

"What if this is not capitalism, but something worse?" McKenzie Wark's question eloquently summarizes the growing criticism of profit-maximizing business models within the so-called collaborative sharing economy.

Categories: Economics

A Single-Payer Health Care Fix Even Without a Working Majority

It’s likely that the Trump-Ryan failure will push state legislatures to consider expanding Medicaid—putting even more people under the public insurance system.
Categories: Economics

The Favela as a Community Land Trust: A Solution to Eviction and Gentrification?

Shareable Magazine - March 27, 2017 - 13:50

Inextricably linked to Rio de Janeiro's identity for more than a century, favelas today serve the essential function of providing affordable housing to nearly a quarter of the city's residents.

Categories: Economics

Michael Ableman: Urban Agriculture

Chris Martenson - March 27, 2017 - 10:30

Food security is a foundational cornerstone of resilience, which is why here at Peak Prosperity we recommend sourcing a substantial percentage of your food calories locally. Buy from nearby sustainable farms and, if at all possible, grow some of your own food yourself.

While many of our readers are now doing exactly this, we commonly hear how difficult it can be to follow these steps for those living in the suburbs or large cities.

In today's discussion, Michael Ableman walks us through how farming in our cities is indeed possible. In fact, it not only results in healthier foods, but in healthier communities, too.

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Categories: Economics

Michael Abelman: Urban Agriculture

Chris Martenson - March 27, 2017 - 10:30

Food security is a foundational cornerstone of resilience, which is why here at Peak Prosperity we recommend sourcing a substantial percentage of your food calories locally. Buy from nearby sustainable farms and, if at all possible, grow some of your own food yourself.

While many of our readers are now doing exactly this, we commonly hear how difficult it can be to follow these steps for those living in the suburbs or large cities.

In today's discussion, Michael walks us through how farming in our cities is indeed possible. In fact, it not only results in healthier foods, but in healthier communities, too.

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Categories: Economics

Podcast: Jessica Gordon Nembhard on the History and Power of African-American Cooperatives

Shareable Magazine - March 27, 2017 - 09:07

In this interview, we spoke with Jessica Gordon Nembhard, professor of community justice and social economic development at the City University of New York and author of Collective Courage: A History of African American Cooperative Economic Thought and Practice. The conversation centered around the history of solidarity economics — particularly worker co-operatives — within the African American community.

Categories: Economics

Daily Digest 3/27 - Sad Signs Of Collapse, The Quest To Live Forever

Chris Martenson - March 27, 2017 - 08:39
  • Dollar, Equities Slide as Trump Trade Shows Cracks: Markets Wrap
  • Steve Mnuchin Is 'Not Worried at All' About Machines Displacing American Workers
  • Top US coal boss Robert Murray: Trump 'can't bring mining jobs back'
  • Sad Signs Of A Collapse
  • Silicon Valley's Quest To Live Forever
  • Information Wars: A Window into the Alternative Media Ecosystem
  • Self-Driving Cars May Just Be the Start
  • The North Atlantic may get its first-ever named storm in March next week

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Categories: Economics

The End of Finance (audiobook, unabridged)

Matslats - March 27, 2017 - 05:55

Here is section 1.

For the first two recordings I filtered out the background noise, but after that preferred the ore organic sound.

When the whole book is done I'll make it available as a single zip file.

AttachmentSize Intro22.4 MB S1 Ch01 Do we know what the financial markets are?28.16 MB S1 Ch02 Liquidity and Risk30.12 MB S1 Ch03 What is credit?28.39 MB S1 Ch04 What is money?21.24 MB S1 Ch05 Finance starting from the end26.85 MB S1 Ch06 Capitalism and debt: a matter of life and death28.9 MB
Categories: Blogs

Daily Digest 3/26 - One Step From Meltdown, Trump Vs. Congress

Chris Martenson - March 26, 2017 - 09:10
  • Upset in France would have bigger impact here than Brexit or Trump
  • Trump Vs. Congress: Now What?
  • GOP Eyes Tax Overhaul -- And Lessons From Health-Care Failure
  • One Step From Meltdown
  • JNUG up, Stalled? Sell now or get JDST? What happens May 1
  • Russian Roulette, Central Banks, and Gold
  • OPEC In Trouble As Saudis Becoming Weary Of “Free Riders”
  • Food Waste, No More—Scientists Have Figured Out A New Use For Orange Peels

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Categories: Economics

Why This Market Needs To Crash

Chris Martenson - March 24, 2017 - 19:12

Like an old vinyl record with a well-worn groove, the needle skipping merrily back to the same track over and over again, we repeat: Today's markets are dangerously overpriced.

Strange as it may sound, it's our opinion that the sooner a major market correction happens, the better. Crash now while there’s still chance of picking up the pieces afterwards and making something useful from them. The longer we push off the inevitable fall, the more destructive it will be and the more difficult it will be to recover from.

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Categories: Economics

Positioning Yourself For The Crash

Chris Martenson - March 24, 2017 - 09:05
Executive Summary
  • Why economic growth is not going to ride to the rescue
  • The alarming warning signs the auto, fine art, retail & housing industries are flashing now
  • The actions you should be taking now to protect yourself from (and position for) the coming crash

If you have not yet read Part 1: Why This Market Needs To Crash  available free to all readers, please click here to read it first.

Sometimes I wonder if I'm ever going to run out of new things to say about the state of the world, especially economics.  The more obvious our predicaments become to me, the less appetite there seems to be ‘out there’ to discuss them.

What more can be said about a system that is so obviously corrupt and destined to fail, and piles up more and more evidence that this is the case, and yet refuses to engage in the most minimal of introspection? 

Well, lots as it turns out. 

You see, we're finally getting to beginning of the end.  Our long national -- and global -- experiment with using flawed economic models is now running smack dab into reality.

The edifice of central planning omnipotence is crumbling and when it finally breaks down in earnest, the financial markets will implode, the central banks will be overrun and discredited, and investors will discover that overly-long parties come with massive hangovers.

There will be hell to pay.

For reasons we have discussed previously, and extensively,  GDP growth has not been a feature of the world stage for over a decade, and is unlikely to return both because of debt levels that are far too high to support rapid growth and because any return of rapid growth will run smack into higher oil prices.

So…how’s that story working out?  Not so hot.  It’s been sub-par on a global scale for more than a decade. And the same is true for the US.

And here’s where we are today...

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Categories: Economics

Daily Digest 3/24 - Good News Friday: Detroit Saved By Art, Treating Money Like Food

Chris Martenson - March 24, 2017 - 08:43
  • Detroit Exits Bankruptcy, Thanks to Its Art Museum
  • Want A Fat Bank Account? Treat Money Like Food
  • The microbes in your body that you couldn't live without
  • Dakota Access pipeline: ING sells stake in major victory for divestment push
  •  These Cities Are Pulling Billions From the Banks That Support the Dakota Access Pipeline
  • Americans Ate 19% Less Beef From ’05 to ’14, Report Says
  • The Penguins That Take A Morning Bath
  • Energy carbon emissions in 2016 flat for third year: IEA

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Categories: Economics

ING Bank Just Divested Their DAPL Financing—We All Helped to Change Their Mind

Last month, bank officials met face to face with leaders of the Standing Rock Sioux, and this week they announced the bank had sold the loan at the request of tribal leaders.
Categories: Economics

Off The Cuff: Weariness Everywhere In The Markets

Chris Martenson - March 23, 2017 - 13:43

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • Weariness Everywhere In The Markets
    • The post-election price support is evaporating
  • Confused Leaders
    • Chris recaps his latest meetings at the U.N.
  • Boomer Guilt
    • Divisions between the older haves & younger have-nots are growing
  • Banks & Government
    • A partnership of evil

Charles returns to Off The Cuff this week to note the recent lack of vigor in today's financial markets. Does it portend a turning point?

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.

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Categories: Economics

How L'Atelier Paysan Cooperative in France Supports Independent Farmers

Shareable Magazine - March 23, 2017 - 08:23

L'Atelier Paysan is a French cooperative that works with farmers to design machines and buildings adapted to the specific practices of small farm agroecology. In addition to distributing free plans on its website, L'Atelier Paysan organizes winter self-help training sessions, during which farmers train in metalworking and build tools which they can then use on their own farms.

Categories: Economics