♫ Once... I Had... A Secret Law... ♫The Trans-Pacific Partnership and the Environment

NOT the logo, but should be...

If I have been absent from the blog a lot, it is because I've been reading Naomi Klein's prizewinning book, This Changes Everything: Capitalism vs. the Climate. The book is utterly essential reading for anyone who calls him- or herself an environmentalist, but I'd be the last to deny it is challenging reading on several levels. Especially on point regarding the environmental consequences of the TPP are two chapters: chapter 9, Blockadia: The New Climate Warriors; and chapter 10, Love Will Save This Place: Democracy, Divestment and the Wins So Far. It may be possible to read these chapters independently without starting at the beginning of the book; I'm not sure because I so strongly feel you should read the entire book.

Leaders of TPP member states
(courtesy Wikipedia))

Reading the chapters led me to pursue more information on TPP on the web. Goodness knows there's both a lot of it, and not enough of it: the damned thing is being written in secret, from the public of the involved nations and (in America) from Congress, by 600 people who might politely be called corporate lobbyists... no environmentalists involved. But someone leaked an early version of specifically the environmental section of the draft, WikiLeaks published it in January 2014, and a team assembled from Sierra Club (SC), World Wildlife Federation (WWF) and Natural Resources Defense Council (NRDC) published an analysis (.pdf), also in January 2014. This is surely not the final version, but it does include a comparison of two earlier versions of the environmental chapter. Believe me, it isn't pretty!

For background, you might want to read about the two decades of NAFTA, the only major trade agreement in town at the moment, and see how that has worked out. Back to TPP, here's a recent TechDirt article of possible interest, mostly about how the US thinks it can get around TPP's provisions... yes, the ones for which no one has been permitted to know the text... and an op‑ed by Sarah Rose at SFGate urging that TPP not be fast-tracked.

The whole thing sucks little green dog dicks. And I doubt we can stop it; TPTB have shown little interest in what the public thinks in any nation involved. But we have to try: democracy already means little enough, and IMO we are obliged to give it some help.

Study: State Laws To Enhance Business Growth Widen Wealth Inequality

I suppose the results presented by DSWright at FDL should not be surprising:

Who beggars whom?

When state governments try to create a better business climate they run the risk of encouraging a more stratified society, according to a new study by David Neumark and Jennifer Muz of the University of California. The study compares two different policy approaches to improve the business climate of a state – those that attempt to increase growth by lowering business costs and those that work to improve the quality of life.

There was little exacerbation of wealth inequality when states enacted policies to improve their quality of life to create a better business climate, but when the method was lowering business costs to augment growth the wealth gap widened.

...

(NOTE: the "new study" link above is to a summary of the study. If you want more, downloading the full paper will cost you $5 unless your receiving email address is connected with an "appropriate" institution. Oh, irony! The CityLab link is free, and has more general info about the relationship of business climate to wealth inequality.)

This suggests to me that when business conditions improve, the businesses that benefit do not use any significant portion of their enhanced profits to pay their employees more, let alone to hire more people. This indifference to including employees in the gains reflects what I saw over my working life: my own increased productivity never significantly increased my salary. This result is part of what led to my becoming a full-time contractor (a solution which had its own set of problems for the worker who chooses it).

As far as I can see, there is no simple modification of what passes for capitalism in America that would benefit both employers and employees. All the "job creation" that Mitt Rmoney bragged about is exclusively at the discretion of, and largely to the benefit of, the employer. And states and cities that try to buy into the benefits on behalf of their working citizens by lavishing expensive benefits on the business community are wasting their time... and to a large extent their money.

A Few Brave Capitalists Try To Salvage The Wreck That Is Capitalism Today...

Why American capitalism doesn't work

... and Robert Reich explains to those few that the primary task is, unavoidably, to make changes to American capitalism so that it benefits a much broader segment of the American people. That means raising the minimum wage significantly and making useful jobs (e.g., infrastructure maintenance) available to far more people, both by government action at least in the short term. And even with the best-managed government, we have to raise taxes on the 1 percent, back to where they were in, say, Eisenhower's day. If we don't have lower- and middle-class consumers as customers, we don't have the slightest chance of running a free-market economy, and if we don't pay the middle and lower classes a living wage, we don't have consumers... and that's not even considering the consequent human suffering.

You'd think that simple truth would be enlightened self-interest for every small business owner, large company CEO, etc. But at present it's not. Most of them seem to want to emulate the Kochs or Adelson or Trump or some other obscenely wealthy and socially useless (bleep!). I don't have a lot of hope for Reich's success, but it is somewhat heartening that at least some very wealthy Americans see that our current path... I've read that 95 percent of the gains in the so-called "recovery" have gone straight to the top 1 percent... leads to a dead end.

When The 'Invisible Hand' Is Efficient AND Exploitative

In high school and college, most Americans studying the basics of economics are taught about Adam Smith's invisible hand of the market, and how the principle shows us how "competition channels ambition toward socially desirable ends," which no capitalist (and no successful student in Econ 101) denies it does.


Except when it doesn't.

Robert Reich has a good example involving his flight out of NYC just before Frankenstorm Sandy, one of the last flights for the West Coast before the route had to close because of the storm. He had purchased his ticket the week before, paying "a few hundred dollars" for it. As the storm loomed, the airlines raised the price of similar tickets to $4000, promptly oversold existing, known full flights, and started bidding up by offering small bonuses to few-hundred-dollars ticket-holders who would relinquish their seats on the last flight out for a ticket for the next flight out at some unknown future time, presumably after the storm passed... the bonus a pittance intended to compensate them for their inconvenience.

First of all, note that the storm makes all the difference. Under normal circumstances, the airlines have little motivation to overbook flights more than a small percentage, and passengers have ways of rebelling against airlines that overbook large numbers of seats as a standard practice. But with the storm, the airlines have the effective power to renege on the implicit commitment of a sold ticket, in the interest of obscene profits for themselves. They have to get the ticket-holder's consent, of course, by offering a small bribe, but the airlines still make several hundred percent profit on the deal in exchange for not providing the service they sold at a "fair price." Some free market! Here's Reich:

Assuming that the 47 extra passengers had each paid $4,000 to get onto the plane at the last minute, and the 47 who gave up their seats for them received $400 in return, the trade would have been “rational” in narrow market terms. After all, the seats were “worth” $4,000 to those who bought them at the last minute, and switching to the next flight (whenever that might be) was “worth” $400 to those who agreed to do so.

But the transaction was also deeply exploitative. The airline netted a huge profit because of the impending storm.

I couldn’t help think this was a miniature version of the America we’ll have if Mitt Romney is elected president. Rational and efficient in terms of supply and demand, guaranteed to maximize profits, but fundamentally unfair.

I don't know what capitalism was like one or two centuries ago; I suspect it was not much different from the version re-emerging in our shiny new American century. But in my lifetime, capitalism has yielded the best of all possible economic worlds for the capitalists... at the cost of a not-so-great world for workers selling their services and customers buying services and products. How much added service did the airlines provide for their extra several thousand dollars profit?

Think before you answer. If you are utterly convinced that the economic value of a prepaid flight out of NYC increases tenfold based on a change in the weather, to the extent that an airline company should be able to profit obscenely from the inconvenience of its own paying passengers, by all means, tell me that unregulated capitalism provides that best of all possible worlds.

But if you, like me, are unwilling to live that way, in a world in which your everyday purchase happens (or doesn't) on terms determined and potentially redetermined exclusively by the seller, entirely for the seller's benefit, please help me to avoid that world... the world of a President Rmoney. It isn't virtuous and it isn't the free market; it's just the same old exploitative flim-flam.