Cash Rules Everything Around Me, Research Time, 12/02/2016

You could probably guess that yesterday’s post concluded with a note of heavy irony. You could conceivably interpret me as having said that only the super-rich should be political leaders because their immense wealth makes them practically impossible to bribe.

It's been twenty-two long hard years of still struggling

Survival got me bugging, but I'm alive on arrival

I peep at the shape of the streets

And stay awake to the ways of the world cause shit is deep

A man with a dream with plans to make cream

Now, I’m pretty sure Steve was just trolling. But he did have a point.

The liberating power of money’s universal power can only go so far. Granted, it does have the power to break the most powerful engine of brute force oppression humanity has yet invented. So there’s that.

Humanity’s major economic problem over the last 20-30 years is rooted in globalization. When I say globalization in this context, I mean the opening of labour, investment, and production markets that have previously been shut to worldwide trade, either through autocratic communism or mass poverty.

This has created a serious economic problem for working people all over the world. Bernie Sanders talks about it all the time.* It’s the horribly raw deal that’s come with total market globalization.

* Donald Trump too, even though Trump scapegoats Muslims and blacks instead of talking about the real problems.

People who’ve had enough money (or access to enough money) to invest in businesses and manipulate securities markets have grown their fortunes exponentially thanks to new markets for investment in new regions like China, India, Russia, and Africa. This includes investment in real productive developments, as well as stock markets.

We the breadwinners, baby, make it peel, sippin' blunts

Smokin' guns, taught M.C.'s how these n***s living

Earn, burning word for ya, curb serving

Got you hooked by the first purchase, birds chirping

Cops listening, with the gun sitting on they lap

But freedom to invest means freedom to move labour. The labour market became truly global once China and India began to industrialize at a mass intensity. The new lowest common asking price for wages was no longer the lowest standard in the United States, Europe, or Canada. It was the lowest asking price out of the entire world.

That's literally billions more labourers in the market. So there was a massive adjustment, since the Western economy couldn’t grow at the same rates as the new entrants to the global business market. 

Newly industrializing countries have massive growth rates because, well, industry is literally being built for the first time. A city like Chicago, Philadelphia, or Toronto can only have similar economic growth rates as Shanghai or Mumbai if they, for example, tore their entire public transit system to pieces and built a whole new one from scratch.

We’re never going to do that. So not only were we outpaced by new market participants, but the only ones in a position to profit were the oligarchs of Europe and North America. 

Only they already started with the huge amounts of capital to make worthwhile investments in countries building mega-projects on the scale of their first mega-skyscrapers. The average office manager with an RRSP and a mutual fund can’t compete with investment flows that huge.

This macro-economic phenomenon, the exponential growth of the worldwide labour pool, is the engine of the staggering inequality from which working people suffer today. But controlling a process with such a global scale is beyond the power of any state's government: no government or law can ever control whether jobs are "shipped overseas." There are no democratic institutions on Earth capable of managing that macro-economic process.

Some say a drug dealers destiny is reachin the ki'

I'd rather be the man behind the door, supplying the streets

A hundred birds go out, looking like textbooks

When they wrapped and stuffed

Four days later straight cash, two million bucks

Strictly powder, no cut

Antonio Negri, in Empire, describes this exact process of Western economic stagnation, writing in the late 1990s, when things were still booming. It’s remarkably insightful, revealing aspects of the economic collapse that make perfect sense, but that most of our chattering classes never quite articulate. Even with the benefit of hindsight.

He achieves this insight by focussing on what a rapidly expanding global market with wide differences in industrialization and workers’ rights across the new territory does to the labour market overall. He watches what happens to the workers. 

Money and capital are the great equalizers because they can put a price on everything. A credit agency can give a rating to anything that exchanges money because Moody’s can evaluate its capacity to repay or service its debt. Anything can have its monetary or wider economic value calculated. A hedge fund can make a killing or lose its shirt on anything whose economic value and credit rating can change over time.

There are no exceptions to this. No individual or institution can exempt itself from the regime of exchanging money. No sovereign power for the global market. 

That is liberation. Liberation from the bureaucratic – but more often throughout history, the military – hand of authoritative state control. But that freedom still comes with extraordinary pain.

Globalization needn’t necessarily have unfolded in its new liberal model. The problem was that humanity, at the end of the Cold War, had no alternative. We just haven't figured out yet how to do socialism without states as mediators between people and their larger society. 

I strolled through the books of Job to unfold

And open bibles, instead of hoping on revivals

Calling on His name and screaming hallelujah

When he hardly knew ya, that's how the devil's fooled ya

See look into my eyes brethren, that's the lies of a Reverend

Why should you die to go to heaven?

The closest we’ve come on a global scale are institutions like the International Monetary Fund, World Bank, European Central Bank, and the United Nations. But they’re largely impotent to develop and implement an alternate model for globalization.

We’re on the verge of working out a kind of people power that can build whole cities working together. Bernie Sanders’ development plan for Burlington, Vermont in the 1980s may have provided one model. But we’re only learning this long after the fact, and there’s still generations of work to do before these lessons can truly go global.

Cash rules everything around me because no authority can rule cash. But the people can.