Continued rant about capitalism and our imaginary democracy

But what can we do? Well, I may be pinned as an idealist, a socialist (as if that's an insult), a communist or worst for believing what I believe. But I firmly think there are several areas we need to change.


    1. Fair trading - The idea of fair trading is an interesting one to me, looks very appealing, but also feels a bit idealistic. If there was any way to introduce fair trading practices in the world, at least some of the issues raised on my last post would be considered. Fair trading would attempt to provide fair jobs in developing countries. Instead of having people working at almost slave conditions, we would trade with countries like India, China and Bangladesh in a way that may ensure the growth of a middle class, which is the only real driver of prosperity as seen in history. Sounds great, doesn't it? But I did say it also feels a bit idealistic. One of the problems with this idea, is that it would clearly cut down profits. If the main drive for outsourcing cheap labor to these countries is profit, fair trading would diminish the interest in the idea. I believe that this is the main reason the only time you see "fair traded" labels involves food and other exotic commodities. By that I mean, you can't produce coffee as easily in Canada, so we need to export it from the tropics, no other options there so the big players can afford to push for fair trading. With sweatshops, you don't get that. If all of a sudden local business owners in Bangladesh decided that their working conditions isn't good enough, hence they push for fair trade, Wal-Mart and Fresh Co will just go ahead and shop around other desperate countries to provide the same service for cheap.

    2. Rational protectionism - One other way to prevent some of the problems outlined in my last post is to introduce tariffs to products imported from countries like Bangladesh. I don't think a blanket protectionist policy is a good idea, but I do believe that using tariffs to regulate prices of goods that are coming from developing countries and are made from inhumane conditions can help. A capitalist economy has profit at the bottom line, not global or social prosperity. So they don't care if 300 people have to die in Southeast Asia in order to be able to make large profits. What they do care about is profit, and if these profits are getting chopped at the border because of tariffs, that will change their practices. Maybe implement conditional tariffs that try to enforce accountability, so for instance if a falling building would make it so that from now on, Fresh Co will have to pay significant tariffs to our government because of their negligence in choosing appropriate manufacturers. I hope this point isn't mistaken by people, and make them think I don't believe in globalization and free trade, I do, I just think it needs to be done responsibly. I also think accountability isn't a real factor in the free market, so this is one way to add accountability to the picture.

    3. Tax things we don't like - Another way the government can help this situation is by taxing things we don't want, and giving benefits to things we do want. In this situation, one approach would be to give more tax benefits to businesses that hire locally, and contribute fairly to the local economy. This would obviously impact commodity prices, but I just see it as a necessary evil. Nothing in this world is free, so when we pay so little for things, we have to wonder how this is possible. Efficiency is one possible explanation, but another very real explanation involves the fact that people cut corners. Corners that sometimes should not be cut. For instance, in Canada recently, it has made the news that big banking conglomerates have been firing local workers in order to hire, cheaper, temporary replacements from abroad. They use our government programs in order to increase profits while putting Canadians out of work. Again, this is where taxing or giving benefits comes in, our government is rewarding corporations for bad behaviour. To me this is even more of a problem when you start to talk about the whole "trickle down economic policies", which clearly, and I mean, CLEARLY, is complete rubbish. Businesses want to make profit, they don't give a crap about how they treat employees, or how the overall economy is doing. They just want to make money.

    4. Criminalize lobbying - This brings me to my last point. We do not live in a democratic country here in Canada or the USA. We just call it a democracy, but the truth is that when money is involved, the popular opinion isn't a factor. There are two things that move our countries towards changes. These two are money and power. The government and corporations have a complete monopoly of these two commodities, if you will. Corporations make huge loads of money, that they then turn around and pay for lobbying that furthers their agendas. Lobbying is essentially the exchange of dollars for political power. This is where politicians take corporate money, to not only fund their propaganda during election, but also this is the money that moves politics. Money that prevents stricter gun laws in the USA, when 90% of the population supports the motion. It really doesn't matter what people want, if politicians can just sell bits of their influence to corporations, so that they can fund their next election. Elections nowadays are a joke. It's basically a bunch of corporate puppets paying absurd amounts of money to tell us what we want to hear so that we vote for them next time. I mean, just look at the Conservatives in Canada, spending tax payer dollars on advertising to convince us that the Harper government is environmentally conscientious. While at the same time they are developing and destroying the Tar Sans, they are closing down research facilities in Ontario focused on environmental issues and global warming and they are trying to move us away from freedom of research by muzzling Canadian environmental research. So it really pisses me off to see my money being spent to convince me of a complete lie. So people, wake up! While we are all still comfortably employed, living a relatively comfortable life in Canada, our nation is moving in a very terrifying direction. The direction of a plutocratic nation, away from the democracy we like to say we have.

Waco explosion, Bangladesh factory collapse and the free market

In the wake of two recent tragedies, I think we should all revisit this idealized notion of Free Market. First there was the West Fertilizer Company explosion in Waco, Texas on April 17th. This was a very destructive explosion that has killed at least 15 people, injured 160 and damaged over 150 buildings within its blast radius. Horrible tragedy really. A study conducted after the blast, indicated that this plant was last inspected by Occupational Safety and Health Administration over 28 years ago. In this inspection almost three decades ago, the agency found several serious violations including improper storage and handling of anhydrous ammonia, and improper respiratory protection for workers. Although, this did lead to a $30 penalty for the company, which I'm sure would normally have tremendous impact on any multi million dollar operation, and of course lead to the appropriate changes.

I think it's important to remember, we're talking about Texas here. The Rick Perry state, where conservatism and capitalism are as important as the bible. This is  a perfect representation of what I think is wrong with republicans in the USA, and conservatives in my country up north. Conservatives and libertarians love to preach about the tremendous benefits of their version of a "free market". They love to say that Adam Smith's capitalism, much like Christianity, is overseen by the invisible hand. That supply and demand are the most relevant regulatory forces we need. I have a lot of problems with these notions.

While there may be measurable benefits from unregulated capitalist policies - and I'm not advocating that there is - there is a much more problematic hidden caveat. Conservatives claim that this so called "free market" is what will pull the world out of a global recession, they forget that lack of regulation is what put us in the recession in the first place. On top of that lack of regulation, is the bottom line need for profit, which is what led the factory in Waco to be holding over 100 times the allowed amount of ammonia, which arguably was a cause for such a violent explosion.

Alright, let me continue with another event from this week. I'm talking about the collapse of the garment factory in Bangladesh. This has killed over 300 people so far, causing a tremendous amount of pain to thousands of family members and friends. For those that don't follow the news, this week, on the 24th, an 8-story commercial building collapsed in Dhaka, the capital of Bangladesh. This was a building that housed several clothing factories that produce garments for exportation to industrialized nations such as the USA and Canada.

Basically this is a building that would not be allowed to be used in the industrialized world. It was dilapidated, just falling apart. There were major cracks on the walls, and clear signs of a safety problem, which even led the factory to briefly shut off the day before the event. Well, it would cost a very large amount of money to fix, or rebuild structures such as these around developing nations. It would cost a lot of money that they are unwilling to spend because that would mean they can't produce sub par t-shirts for a few cents. People! this is the direct result of several major flaws of what we call today capitalism.


    1. Capitalism is a profit driven idea  based on competition for markets. In no way I think there is a problem in this foundation, the problem with our modern view of capitalism is the importance of the bottom line, profit. Yes, of course profit should be the goal of a business, however, this should not come with lives on the price tag. Wal-Mart for instance reported a net income of 15.4 Billion dollars in 2011 with a 24.7% gross profit margin. These numbers alone are simply astounding, and I firmly believe that success stories like this are inspirational. However, when these types of profits rely on absolutely unacceptable conditions for the people behind the scenes, my view of it is certainly changes. When this 24% profit margin only exists because as consumers we accept that people in the third world are allowed to literally die to produce my cheap sweater, that I'll use gardening so I don't get my nice clothes dirty, there is a problem. I'm not at all free of guilt as consumer, but I think eventually we need to look at how to fix this problem.

    2. Businesses like Wal-Mart not only exploit the third world for profit, but they also do it by removing jobs that used to be local. They move manufacturing outside of our respective countries to places like Bangladesh. Now, that alone isn't a big deal, the problem is that fair paying jobs here in Canada and the USA are being destroyed to produce poverty sustaining jobs in the third world. So we mess up our own economy, to allow developing countries to exploit their population by giving them the absolute bare minimum.

    3. So who wins here? The big players! Massive profit margins definitely benefit the billionaires running these businesses. In terms of economic growth, our economies have been growing in the last few decades, but this growth has mainly been in the top 1%. The billionaires are getting better at making profit, and this is in part done through cutting fair paying jobs to give out unreasonably bad paying jobs in the third world.

Well, some may say, well that's just the dark side of capitalism, there isn't anything we can do. That's where I disagree. What needs to happen is regulation, and accountability. Right now in North America, there are tax benefits involved with importing goods from developing countries. The way the government sells us these benefits is almost as if they are convincing us they are doing good in the world. Of course allowing easier trade with Bangladesh will help their economy grow, where is the harm in that? The harm is in the fact that while this sounds good in theory, the reality is that across the ocean big corporations abuse the fact that there are desperate people out there in order to give them horrible working conditions for their profit. There is no oversight of these conditions by the big corporations for obvious reasons. The lack of oversight by Canada and the US is partly because of the important of economic influence (lobbying), and the lack of oversight by third world authorities is an attempt to maintain their country as a viable source of almost slave labor which does help their economies to some extent.

This is where I would like to challenge all my conservative and libertarian friends to tell me how this Ayn Rand capitalism is good for anyone besides the top dogs?

You are a pirate

Recently it dawned on me that my needs for pirating have changed greatly since I started doing it, back in the Napster years. Pirating was something that began as a bit of a desire to have digital content such as music, videos, games and general software. As a teenager and eventually a university student, I just wouldn't be able to afford all these things. Once I got a job, and began my career I started to be able to afford things and I also started to feel the need to support things I cared about. I had heard the opinions of some many publishers and musicians that despite losing money from this practice, still supported it.

The first one I can remember, actually came from Fred Durst who always supported music sharing because it is how a lot of his music and the music of his peers even began to gain popularity. At the time I was a musician myself, and I voluntarily placed my music on Napster and similar services, in the hopes that if my music was linked to other popular artists I would be able to get it out. Obviously that didn't work for me in the end. The industry's attitude towards piracy has always been negative, of course because they make less money, however this is clearly an attitude of self interest, and of capitalist greed rather than a true desire to expand the reaches of the art. Also, what's even the point of trying to fight a war that has already been lost. All this pointless effort does is cost millions of dollars, affects greatly the few that actually get sued by these companies and in the end gets them nowhere.

Another great example from the industry for me was Notch, the Swedish game developer responsible for Minecraft. He basically said that he doesn't mind pirating. He made this game that eventually became very successful and the main reason for his success was efficient sharing of his content. Notch said that he prefers that people play an enjoy his game even if it is pirated. Obviously he prefers if people pay for it, but in the end, he would prefer someone playing the game for free than not playing it at all. It obviously gives him great personal satisfaction. Now, to be completely honest, when I first heard of Minecraft I thought "I don't get why this game is good". I was still intriged by it's sudden popularity during the beta days. So I downloaded it in torrent form. I played it for a week or so and decided it was good, so I purchased a license of the beta game. That wasn't the last time I did that either.



In the end, fighting against piracy is futile. Instead intelligent folks like Gaben and the guys behind Netflix decided to use the change in the industry to make money. They have been extremely successful and I gladly pay for their services. I have no problem paying money to support services trying to improve customer experience during a time where so many others are losing money.

Another big change in my downloading practices is that I started to pay money to pirate things. I dislike the idea of anti piracy efforts so much, and the anti privacy policies involved so much, that I rather pay for a third party to provide me with annonymity, than to pay for the media I'm wanting to use, just not enough to pay for it. This has an upside and a downside. On the downside, these anti piracy moves threaten the very essence of the internet. It threatens the greatest advancement in humanity of the last century, which is now the core that moves information, disseminating it over our ever shrinking world. Which means we have to continue to fight to maintain our cybernetic freedom. On the upside, I think this fear produced causes people to be more careful and make them attempt to protect themselves as well as educated themselves. Me, I learned all about networks like Usenet, which is a history lesson as well. I learned about VPNs, and how to hide behind proxies. All very useful information in this age where we are quickly becoming more vulnerable.

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Anyone, just to wrap this post up here is a relevant video http://www.youtube.com/watch?v=bEBbu-wkKrs

First Assange, then Pirate Bay

Just saw a story about a co-founder of Pirate Bay getting arrested in Cambodia to be brought back to Sweden.

http://www.cbc.ca/news/arts/story/2012/09/03/tech-ap-pirate-bay-arrest.html

 I'm not sure how to interpret this, especially since he's only being charge for 1 year in prison in Sweden. That does seem like a relatively light sentence, but seeing this after what they did to Assange does seem to suggest Sweden is no longer as independent from North American influence. That's a bit sad, as Sweden has always been such a progressive nation when I comes to the distribution of information online.

Stranger danger - a look into protectionism

Protectionism is often a point where I tend to disagree with a lot of people. I think the rise of developing nations into more significant roles in the world economy makes this topic come up more often. The BRIC countries (Brazil, Russia, India and China) have been growing and developing a new role in our globalized economy. This makes a lot of sense, when you consider the fact that globalization helps spread wealth around. Wealth that decades ago would have stayed in one region for much longer, all of a sudden can go between continents in the matter of seconds. Outsourcing manufacturing jobs is not new at all, however, we see more and more outsourcing of other services to different nations and the spread of money and knowledge just allows innovation to occur more often in new places. When you put all this into context, it makes sense. If you consider that there is a finite amount of wealth in the world (which isn't necessarily true but the analogy helps my point) and all of a sudden a lot of the wealth that use to be generated and spent in North America and Europe is being diverted to emerging economies.

Well, isn't that a good thing? Don't we want to spread the wealth? More often than not, I feel that the answer is yes but no. Yes, it's good to give the opportunity for other nations to develop, and more innovation to occur. That's good. We want struggling nations to be able to lift people from poverty and maybe even develop a middle class. These are all great things, I agree. However, I also feel that we need to look at what the side effects of these things are. For instance, think about why this money started to flow to developing areas. This happened mainly because companies realized that in order to stay competitive; they needed to lower costs, and one way to achieve that, is to outsource work to places with cheaper labor, cheaper land and maybe cheaper taxes. The bottom line is that jobs that use to be done within developed countries, moved abroad. Considering people can keep having cheap products, people that are employed in NA and Europe are happy.

It still doesn't look that bad, after all, they just eliminated unskilled work pretty much. People will just have to get more educated to do other types of jobs. On the other hand a big effect this has in the economy is that companies are making a lot more money, and that money isn't really trickling down to the bottom as politicians like to claim. Richer companies, can afford to be even more competitive, which smothers the little companies (ie. Walmart). This destroys reasonably paying jobs, destroy small companies and innovation from the little guys. A company that doesn't have to work hard to monopolize a market, has less incentive to innovate. On the other hand the developing nation which is now seeing a lot more wealth running around, isn't really used to this, and labor policies don’t always benefit the little guys either. Workers on average are making more there, but the wealth distribution is just becoming more segregating. So the nations that use to provide everyone with a great share of the wealth, now are doing less of that. While nations that always had larger wealth disparities, are just raising the lower class from the dirt while they fill up their pockets with money. 

The reason why North America in the middle of the 20th century was so prosperous was the fact that the economy worked for the people. There were always class differences, and I think there should always be such. But the bottom line was that the financial agenda was to keep the country running smoothly and efficiently, providing a piece of the pie for everyone. Capitalism was controlled and worked well. When Capitalism takes over everything else, and making money is the sole goal of a society, human greed affects how the system works. It begins to alienate the elite from reality, instead giving them the sense that capitalism wants them to make money no matter what. Once this infectious mentality spreads to governments, the real problem emerges. That's when democratic nations become plutocracies, and values go from being about the welfare of the people, to the welfare of this constructed concept of the economy.

That's why I think protectionism isn't all that bad. It's a bit like capitalism, in that it is an idealistic concept, but I think it is important. Going back to the idea that there is a certain amount of wealth available, I think a nation needs to ensure enough of this wealth stays within the borders, and even more importantly, is distributed well. Of course that means people can't have as much "stuff" that's made elsewhere, but ensures a healthy job market and a healthy economy, that is sustainable and fair. Individual governments only have power over their own policies, so they can't ensure that China or India treat their people fairly, however they have the power to try and make their own country as good as it can be. By making sure business practices are done responsibly, and with the people's welfare as a priority.

(I also wrote a little on free trade in the past if you are curious to see that)

Occupy Toronto

I think there is still a lot of confusion to what the Occupy Toronto protests are about, so here is a brief overview of what people are trying to get accross:

        OccupyTO is a movement that will start on October 15th, 2011 that intends to show our solidarity with the Occupy Wall St. movement and stand in unity with the rest of the world to seek and work towards drastic changes to economic systems that are destroying our economy, social fiber, and environment. We are, through entirely non-violent means, sending a message to the financial sector worldwide that banks exist to serve us, not the other way around, that the practices of speculation and fractional reserve lending have created a massive inequality and are no longer valid systems.
        Current monetary policies, whether they are enacted under the idea of globalization and privatization, or some other guise, are unacceptably hurting the people that have propped them up, the very people they were created to help. Our target is to change these systems to help the 99% of the population, instead of just the elite 1% that they currently benefit. Everyone is encouraged to join the movement, this movement affects us all.
       We are the 99%. You are the 99%. And THEY don’t want you to know how powerful WE are.

Anonymous Message - OIWS

After nearly one week of protesting in Wall Street and other areas of the US, it seems that the media is finally unable to ignore the slowly growing movement happening right in their own backyards. The Occupy Wall Street protests have been happening, and including quite a bit of police abusing their power and in some cases even brutality to silence the emerging movement, which seeks to awake America to corporate greed and social injustice that has occurred for a while now, causing the 2008 recession and everything that followed. Personally I've been very frustrated with the lack of repercussion to the disgusting practices of financial institutions, and the seeming nonexistent response from Americans to white collar crimes happening right in front of their eyes. Well, it seems that we may finally see something happen, as broadcasting stations are beginning to show what has been happening and celebrities like Michael Moore have started to get involved. I'm not a big fan of Michael Moore, but I am happy to see support from people of influence. Just now I have also discovered that the hacking group ANONYMOUS will also be launching an attack on Wall Street on Oct 10th, here is their message to the people:

This should be interesting.

They have also sent the following message to the media:

Greetings, Institutions of the Media.
We are Anonymous.
The events transpiring within Wall Street have caught our eye.

It seems that the government and Federal agencies enjoy enforcing the law a little bit too much. They instate unjust laws as mindless automatons, blindly following orders with soulless precision.
We witness the Government enforcing the laws that punish the 99% while allowing the 1% to escape justice, unharmed, for their crimes against the people.
We have observed this same Government failing to enforce even the minimal legal restraints of Wall Street's abuses. This Government who has willingly ignored the greed at Wall Street has even bailed out the perpetrators that have caused our crisis.
We will not stand by and watch the system take over our way of life.
We the people shall stand against the government's inaction.
We the people will not be witnesses to your corruption and ill gotten profits.
We will not labor for your leisure.
We will not assist you in any way.

This is why we choose to declare our war against the New York Stock Exchange. We can no longer stay silent as the population is being exploited and forced to make sacrifices in the name of profit.
We will show the world that we are true to our word. On October 10th, NYSE shall be erased from the Internet. On October 10th, expect a day that will never, ever, be forgotten.

Vox Populi, Vox Anon.
The Voice of The People is The Voice of Anonymous.
We are Legion. We are the 99%.
We do not forgive. We do not forget.
Wall Street: Expect us.

Germany and their inflation phobia

We are and have been in the middle of a period of economic uncertainty. A lot of experts have warned that a double dip recession is a possibility and the ones that don't believe that, still agree that economic recovery in the industrialized world has been very slow since 2008.

The US was the main focus of the recession that started in 2008, despite the involvement of many other nations in its development. While the US is still a very similar country in terms of economic policies to what it was in 2008, this time around economists have indicated that economic instability for the next recession is likely to come from the EU. Countries like Greece, Spain and Portugal are some of the main problem nations, but there are a lot of other trouble makers as well. However, not all countries in the EU are in trouble, which may be the only reason their economy hasn't collapsed yet. Germany has had a strong economy for many decades, and despite the economic events in recent years, the nation still boasts of fiscal responsibility and economy stability.

Recently, as expected, a lot of the troubled nations have been approaching Germany for loans and other forms of help. Not only that but they have also been asking for help from the European Central Bank. One interesting bit of information about this central bank is the conditions in which it was created. Back when European nations decided a centralized bank would be a good idea, Germans were very hesitant, so in order to go ahead with the creation of the ECB, a clause in the contract said that the ECB could not engage in quantitative easing. This was a main condition in order to keep Germans comfortable with this unification.

The European systemic instability that we have been seeing has led some countries to ask the ECB for help, even though the help they are asking for is prohibited. The other interesting aspect of this story is the reason why Germany is so reluctant to allowing the central bank to print money.

This goes back to the 1920's and it has everything to do with inflation. After WWI the german government was in a lot of debt, so they had to borrow a lot of money from the rest of the world and often that wasn't enough. This led the government to issue an order to their central bank to print as much money as they needed. This obviously led to a massive loss in value of the Deutsche Marks (German currency), which is another way to say high levels of inflation ensued. The following decade of high inflation is thought to have enabled the Nazi party to gain popular support. Social distress caused by hyperinflation in Germany was not very different from the social distress in Italy that allowed for the rise of Fascism in that country. So it isn't hard to understand why Germans are so hesitant to break these rules established during the institution of the ECB. This is aside from the obvious fact that printing money to pay debt seems like a shortsighted solution to anyone with half a brain.