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The 18th century is often regarded as the pre-industrial run-up, when the necessary organizations and products were developed to industrialize with. In reality, the markets, trade routes, sources, and products had been through successive iterations over centuries. Central to the nation-state was the funded national debt, and, allied, the development of pension funds.
With no attempt at total accuracy, the French and the British had both, by the year 1800, developed systems by which a person could buy a share, which would then pay a small income. In this way the lower and middle classes of the bourgeoisie could buy a share in the stability of the state. The state became more adept at issuing notes and bonds, freeing the state from the financial markets.
Initially regarded with considerable misgivings, and muttering about how any squire doing their accounts at the kitchen table could tell you it wouldn't work. Wielded with skill, these tools worked well- the British funded the whole of the Napoleanic Wars on their national debt and the promise to pay later- and became fantastically wealthy by doing so.
By 1900, France, German, and Great Britain all had mature and functional pension systems providing some degree of financial assurance to citizens and a column of financial stability for the state. I believe the importance of pension systems, in maintaining a stable and predictable base of demand for the economy, is generally underrated.
In America in the same year of 1900 the only national pension system was the system of payments to veterans. Americans could put their money in banks, which frequently went broke, or invest in railroads, which always went broke and wiped out the smaller shareholders in bankruptcy proceedings. America did not begin the 20th century with any clear idea about social security, or the role that a national social security system might play in the national finances.
Since the beginning of Social Security the propaganda din against it has been almost deafening, but the real outlines of the system are easy enough to discern. This popular system collects almost a half of the federal revenues from taxation and is wholeheartedly supported in doing so by the general public. For 25 years the amounts collected have been greater than the amounts paid in pensions, and the Social Security system has supported the federal government financially by using the surplus to buy US treasury notes. This is the success we need to emulate in the matters of healthcare, and low-income housing linked with LEED development.
Running through all of this is the concept of a funded national debt- an important tool of good government.
Saturday, November 20, 2010
Thursday, November 18, 2010
What Is A Market?
A market is a concretion of a fair. A fair, where people gather to buy and sell, is commerce stripped to the barest essentials. Fairs happen regularly; markets are generally open on a continuous basis. Structures- financial, social, and political as well as physical- are built to improve the function of the market.
Collecting and reusing the wealth from all this commerce is the primary task of the market, and the most direct way to do this is to charge admission, and, incidentally, provide some protection from the world outside to those admitted. The medieval city, with burghers who also don battle gear or stand watch, and nobility competing with the commercial classes in the market, provides a vibrant image of a market.
Even in the earliest times we can see the distinction between the market of the hinterland, which supplies the city, and the international market for goods that are bought and sold over vast distances. The interior market of the city can function somewhat independently of the international market and vice versa. With the development of the nation-state came the notion of interior markets for nations, and this notion is of particular import for Americans as for over a hundred years the US has had the largest interior economy of the world.
The US has the world's largest interior market and it's not hard to see why- we've built highways and airports, and we send our children to school where they become proficient and highly productive of modern goods and services. For over 200 years we've been investing heavily in productive capacity, and any sober review would award the government with credit for many of those improvements. In short, the people of the US have a legitimate claim to some say in how this market is run.
Of course, this is hardly the only original thought we'll encounter on our journey to self-government. To be honest, many of us have a depth of historical knowledge that would fit comfortably in a few Classic Comics books. On the plus side, it can be a lot more fun learning about this stuff when you're old enough to reach the top shelf. Recommended reading- The Disastrous 14th Century, by Barbara Tuchman .
Collecting and reusing the wealth from all this commerce is the primary task of the market, and the most direct way to do this is to charge admission, and, incidentally, provide some protection from the world outside to those admitted. The medieval city, with burghers who also don battle gear or stand watch, and nobility competing with the commercial classes in the market, provides a vibrant image of a market.
Even in the earliest times we can see the distinction between the market of the hinterland, which supplies the city, and the international market for goods that are bought and sold over vast distances. The interior market of the city can function somewhat independently of the international market and vice versa. With the development of the nation-state came the notion of interior markets for nations, and this notion is of particular import for Americans as for over a hundred years the US has had the largest interior economy of the world.
The US has the world's largest interior market and it's not hard to see why- we've built highways and airports, and we send our children to school where they become proficient and highly productive of modern goods and services. For over 200 years we've been investing heavily in productive capacity, and any sober review would award the government with credit for many of those improvements. In short, the people of the US have a legitimate claim to some say in how this market is run.
Of course, this is hardly the only original thought we'll encounter on our journey to self-government. To be honest, many of us have a depth of historical knowledge that would fit comfortably in a few Classic Comics books. On the plus side, it can be a lot more fun learning about this stuff when you're old enough to reach the top shelf. Recommended reading- The Disastrous 14th Century, by Barbara Tuchman .
Wednesday, November 17, 2010
It's Our Marketplace
The city was the basic building block of the modern democratic nation-state. The cities provided the mercantile intercourse without which any amount of innovation in the countryside would have been meaningless. Cities absorbed, distributed, and ultimately demanded improvements in agricultural output, eroding the feudal economy and fueling improved production within the city walls.
The city walls were not defenses for times of war, but for times of peace. To do business in the city, you had to enter the city and play by their rules. They went to a lot of expense to create the market, had every intention of being successful, and felt fully entitled to make their own rules.
How much expense? Enough to survive sieges, both of the military and economic variety. Enough to build cathedrals that reigned in height until the era of the skyscraper. Enough to transform the economy of surrounding regions and distant lands. Enough to defy the landowning nobility and make kings their debtors.
Because cities were corporations of commoners, and because the productive forces were pent in city walls, real forms of democracy emerged- enough, at least, to ensure that any prolonged starvation of the workers would be rewarded with destructive urban rioting. A crude tool, but, over time, sufficient.
This is important because cities harnessed the forces of 'market capitalism' by unashamedly regulating and taxing markets- markets that could not have existed in a 'state of nature'. The proposal is that the US of A is, in fact, a market that we have every right to control democratically- and that "To secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed..."
This is our market. We've spent trillions creating it, surrendering vast amounts of personal agency in the process, but, strange to say, usually at great benefit to ourselves and others. No imaginary "invisible hand" has ever come anywhere close to the ability of democratic government to create value. The history, first of the city-state, and then of the nation-state, illustrate this, but what will come next, in the context of global warming?
That is hard to tell, but putting our own house in order would be a good first step in preparing to deal with whatever it may be.
The city walls were not defenses for times of war, but for times of peace. To do business in the city, you had to enter the city and play by their rules. They went to a lot of expense to create the market, had every intention of being successful, and felt fully entitled to make their own rules.
How much expense? Enough to survive sieges, both of the military and economic variety. Enough to build cathedrals that reigned in height until the era of the skyscraper. Enough to transform the economy of surrounding regions and distant lands. Enough to defy the landowning nobility and make kings their debtors.
Because cities were corporations of commoners, and because the productive forces were pent in city walls, real forms of democracy emerged- enough, at least, to ensure that any prolonged starvation of the workers would be rewarded with destructive urban rioting. A crude tool, but, over time, sufficient.
This is important because cities harnessed the forces of 'market capitalism' by unashamedly regulating and taxing markets- markets that could not have existed in a 'state of nature'. The proposal is that the US of A is, in fact, a market that we have every right to control democratically- and that "To secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed..."
This is our market. We've spent trillions creating it, surrendering vast amounts of personal agency in the process, but, strange to say, usually at great benefit to ourselves and others. No imaginary "invisible hand" has ever come anywhere close to the ability of democratic government to create value. The history, first of the city-state, and then of the nation-state, illustrate this, but what will come next, in the context of global warming?
That is hard to tell, but putting our own house in order would be a good first step in preparing to deal with whatever it may be.
No Earmarks Here
In a recent article at Common Dreams, Nick Turse looks at American base building in the mid-east, and finds quite a bit of it. In fact, you would be astounded if these construction projects came to your town, and for a brief time there would be no recession there.
But this highlights the difference between the chronic cyclical cratering of the poorly regulated capitalist economy, and the chasm of the structural depression that is opening before us. There may be some value in these construction projects for those who take them over after we leave, but there is none for us. They are every bad thing you can imagine doing to an economy wrapped in one giant regret-now and pay-later down elevator to Hell.
Even worse, we don't even know how to change. Amazingly enough, most of us are still enjoying ourselves so much that we can't find the time to master tedious details about saving energy or preventing global warming. Amongst average university grads, the conversations on these topics typically are about as sophisticated as chimpanzees showing each other children's blocks, and agreeing that they like the 'train' block and don't like the 'car' block.
Will this be enough? In democracy, it's always hard to tell. But if we were a hockey team, there'd be no plans for the post-season. Because, in this game, if we're not good enough to make it into the post-season, there won't be any post-season. And right now, we're nowhere close.
But this highlights the difference between the chronic cyclical cratering of the poorly regulated capitalist economy, and the chasm of the structural depression that is opening before us. There may be some value in these construction projects for those who take them over after we leave, but there is none for us. They are every bad thing you can imagine doing to an economy wrapped in one giant regret-now and pay-later down elevator to Hell.
Even worse, we don't even know how to change. Amazingly enough, most of us are still enjoying ourselves so much that we can't find the time to master tedious details about saving energy or preventing global warming. Amongst average university grads, the conversations on these topics typically are about as sophisticated as chimpanzees showing each other children's blocks, and agreeing that they like the 'train' block and don't like the 'car' block.
Will this be enough? In democracy, it's always hard to tell. But if we were a hockey team, there'd be no plans for the post-season. Because, in this game, if we're not good enough to make it into the post-season, there won't be any post-season. And right now, we're nowhere close.
Monday, November 15, 2010
Never Saw That Coming!
On the one hand, the solvent-for-thirty-years Social Security program has nothing to do with the deficit the deficit reduction commission was supposed to be dealing with.
On the other hand, every rich person in America agrees that Social Security, the one government program running in the black, must be changed. The very plumpness of Social Security assets quietly returning dividends is an affront to rich people who can never have too large a slice of the pie.
What goes on here? Let me connect the dots. They mean to keep the tax, but take the revenues for themselves. Even better, every dumb company in America will be paying the tax, as the employers part, but the money collected, after being suitably laundered in Washington DC, will be given to no-bid contractors and other slimy Cheneyite creatures of the sort we became so familiar with under George Bush. Ba-da-BING! The oligarchy scores again!
The demands of the oligarchal warfare state have simply outstripped the ability of the nation to pay. If the oligarchs don't find something new to steal, and soon, they're finished. You can't cut the subsidies and military spending on the industries of the oligarchy, leaving only SS as a large asset to be looted. Whatever the question, the answer will be plain- end Social Security!
On the other hand, every rich person in America agrees that Social Security, the one government program running in the black, must be changed. The very plumpness of Social Security assets quietly returning dividends is an affront to rich people who can never have too large a slice of the pie.
What goes on here? Let me connect the dots. They mean to keep the tax, but take the revenues for themselves. Even better, every dumb company in America will be paying the tax, as the employers part, but the money collected, after being suitably laundered in Washington DC, will be given to no-bid contractors and other slimy Cheneyite creatures of the sort we became so familiar with under George Bush. Ba-da-BING! The oligarchy scores again!
The demands of the oligarchal warfare state have simply outstripped the ability of the nation to pay. If the oligarchs don't find something new to steal, and soon, they're finished. You can't cut the subsidies and military spending on the industries of the oligarchy, leaving only SS as a large asset to be looted. Whatever the question, the answer will be plain- end Social Security!
Monday, November 8, 2010
No Streetcar Suburbs Here
Seattle's young transit lovers cherish certain holy relics, occasionally removing them form their velvet wrappings to flash their glory upon us, and among these are "streetcar suburb", a reference to suburban development originally reached by streetcar. Seattle supposedly shows traces of this development, but it ain't necessarily so.
The early transportation in Puget Sound was by water. In other regions, railroads drove development, or rather, overdevelopment, that built a fine mesh of lines around every major city. In Seattle, and especially after the coming of the cable cars to Lake Washington and West Seattle, suburban commuting usually involved a boat. As a region, Puget Sound went directly from the ship to the automobile without a streetcar interregnum.
The areas which we perceive today to have been "streetcar suburbs" were actually infill, the original wave of suburbanization having passed early to the shores of Lake Washington. The Wallingford area is more convincingly of the "streetcar and land" developer mold, but no argument is made that development there would not have occurred if the streetcar had not been built.
They say "you can't miss what you ain't never had", but you could plainly see, driving around in Seattle 25 years ago, that Seattle was vitamin deficient, or even severely anemic, in the quality of buildings that weren't built on streetcar lines. The buildings built on the lines had that extra quality that person puts in the building when it is expected to last. They were the kind of building you want to see in your city.
On another level, planners today are still flying on instruments. Because water transport is so diffuse, and requires so little investment on the land side of the business, the change from the ship to the automobile left most of the region as small and very poorly connected communities. What to make of all this? Planners survey needs, whether perceived or projected, and then attempt to design routes that meet those needs.
In the case of the eastward extension of Link, the planners are trying to justify the route with references to daily boardings, and the easiest way to do that is to run the rails past the park'n'rides, and assume you collect all the riders from those buses. The rails become a tool, not for making communities work, but for making the park'n'ride system work.
But the park'n'rides are inherently sprawl inducing. They were built in low-density locations (to cut costs) and exist to serve people who use cars for the first part of their commute. In allowing the location of park'n'rides to determine the route, we lose a major opportunity to shape our community.
This loss, indeed, is not noticed, because the same thing happened the last time we changed transportation systems. For fifty years we've been building highways on the projections that people will come, and indeed they have come, but does anyone seriously believe they would have come if the roads had not been built? Leaving the pattern of this development to the random mutation of financial DNA among real estate developers had been a total disaster.
It may be too late to create an inspiring past, but there's still time left to create an inspiring future.
The early transportation in Puget Sound was by water. In other regions, railroads drove development, or rather, overdevelopment, that built a fine mesh of lines around every major city. In Seattle, and especially after the coming of the cable cars to Lake Washington and West Seattle, suburban commuting usually involved a boat. As a region, Puget Sound went directly from the ship to the automobile without a streetcar interregnum.
The areas which we perceive today to have been "streetcar suburbs" were actually infill, the original wave of suburbanization having passed early to the shores of Lake Washington. The Wallingford area is more convincingly of the "streetcar and land" developer mold, but no argument is made that development there would not have occurred if the streetcar had not been built.
They say "you can't miss what you ain't never had", but you could plainly see, driving around in Seattle 25 years ago, that Seattle was vitamin deficient, or even severely anemic, in the quality of buildings that weren't built on streetcar lines. The buildings built on the lines had that extra quality that person puts in the building when it is expected to last. They were the kind of building you want to see in your city.
On another level, planners today are still flying on instruments. Because water transport is so diffuse, and requires so little investment on the land side of the business, the change from the ship to the automobile left most of the region as small and very poorly connected communities. What to make of all this? Planners survey needs, whether perceived or projected, and then attempt to design routes that meet those needs.
In the case of the eastward extension of Link, the planners are trying to justify the route with references to daily boardings, and the easiest way to do that is to run the rails past the park'n'rides, and assume you collect all the riders from those buses. The rails become a tool, not for making communities work, but for making the park'n'ride system work.
But the park'n'rides are inherently sprawl inducing. They were built in low-density locations (to cut costs) and exist to serve people who use cars for the first part of their commute. In allowing the location of park'n'rides to determine the route, we lose a major opportunity to shape our community.
This loss, indeed, is not noticed, because the same thing happened the last time we changed transportation systems. For fifty years we've been building highways on the projections that people will come, and indeed they have come, but does anyone seriously believe they would have come if the roads had not been built? Leaving the pattern of this development to the random mutation of financial DNA among real estate developers had been a total disaster.
It may be too late to create an inspiring past, but there's still time left to create an inspiring future.
Tuesday, November 2, 2010
The Perfect Storm In Pakistan
Recent heavy flooding in Pakistan was intensified, or even created, by upstream timber poaching that denuded slopes. The sediment will raise the river bottoms, leading to more flooding. The money from the timber poaching will be used to buy government officials, quite literally buying bad government.
Our ability to assist the Pakistanis in this matter will be limited, not least by the resemblance of their system to ours. We have a few more bells and whistles, but basically business goes on as usual, with drearily predictable flooding and sedimentation following each rain event. Aid agencies that do not understand the basics of conservancy will be unable to demand the changes or improvements that are needed.
*Fortunately*, the increasing tempo of world development will reveal the needs in short order, as recently happened in Pakistan. Unfortunately, we have a lot less time than we thought.
Our ability to assist the Pakistanis in this matter will be limited, not least by the resemblance of their system to ours. We have a few more bells and whistles, but basically business goes on as usual, with drearily predictable flooding and sedimentation following each rain event. Aid agencies that do not understand the basics of conservancy will be unable to demand the changes or improvements that are needed.
*Fortunately*, the increasing tempo of world development will reveal the needs in short order, as recently happened in Pakistan. Unfortunately, we have a lot less time than we thought.
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