The United States is typically a very self-absorbed nation. As the largest economy in the world, and separated by two oceans, US based news and the opinions it shapes have always been centered on domestic concerns projected out into the world. This has only been exacerbated by the a pathologically self-absorbed president.
Because of this problem, the simple fact that the world is fleeing away has escaped many Americans. What has been a growing practical reality as the US share of the world economy slips is becoming a necessity thanks to severe foreign policy mistakes, all of which cater to a domestic audience. “All politics is local” remains true, even though it clearly should not be.
The two biggest foreign policy areas, a trade war with China and sanctions against Iran, appear to be two different situations with the US at the center of both. They are not, and increasingly will become less and less about the US. This simple fact is going right past us, too – making our policies even more ridiculous and harmful to our own interests.
The process of the world coming together has been irregular at best. It seems reasonable that through it all there would be winners and losers, as we have seen. What is remarkable is how globalism, as a concept and a reality, has divided the developed world. Working people with less access not only feel left behind, in many cases their standard of living is actually slipping.
It seems as though there is a fundamental flaw in globalism. Yet the flaw may be in how we approach not just globalism, but the forces which created it in the first place. What if the process of the world coming together, driven by market forces, is fatally flawed because of our inadequate understanding of marketism?
In short, what if the transition from an industrial world to a market based world is not as seamless as we want to believe?
This piece, from 2015, is a good one to mark the 200th birthday of Karl Marx. His analysis of history, and where it appeared that we were going, was remarkable in many ways, mostly in how badly it was misinterpreted. As we move ahead to a market driven economy that is remarkably distinct from an industrial economy, an understanding of Marx (along with Adam Smith, John Maynard Keynes, and Milton Friedman) seems more essential every day – assuming it’s done properly, that is.
Imagine for a moment that you live in the most fair and equitable economy you can dream up. There are some very specific things that most people in the developed world, especially Americans, would think would be a part of this.
There would be upward mobility, where family circumstances do not determine the kids’ future. People could find their own way according to their own talents and choices as to what makes a good life. Money would rarely limit dreams, as a free-flowing capital market would provide funding for good ideas at reasonable rates. Most would own their own homes and have control over their own destiny. Workers would own the company they work for, banking their retirement at a reasonable age on the place that they helped build. Basics like food and access to health care would not be expensive.
Such a place is the embodiment of pieces of both the Democratic and Republican parties in odd turns. This place of the imagination has also been pretty close to the perfect state envisioned by Karl Marx, although it may be descending into an oligarchy (which I prefer to call “gangster state”).
American cities are booming, or at least some of them are. The process of re-invention has been difficult and uneven for the economy as a whole, and old industrial cities are no different. The keys to successful cities? Reinvention, inclusion, diversity, and education.
That is the conclusion of a report from the Brookings Institution entitled “Renewing America’s economic promise through older industrial cities.” An analysis of the legacy industrial base shows that some cities have been successful, others have not. The differences? In large part, a willingness to embrace change and diversity, giving it the space and tools they need to blossom.
The basis of any capitalist or free market system is risk analysis. Every investment, whether in time or capital or short-term inventory is made based on the potential reward for success and the potential risk of failure. Because these events happen in the future, confidence or anxiety often play a large role in the process.
Generally speaking, it’s all about the availability of the critical resource being invested. People with nothing left to lose often put their time into a project because their time is all they have. Capital markets flush with cash are often looking for places that will give them a big return. Yet in all of these cases, emotions eventually become important.
Lately, nerves are raw. Investment? You gotta be kidding.
Our world appears more chaotic by the day. Some people enjoy the chaos, especially those who are looking for cover for their own misdeeds. Others are horrified by it, as they rely on a stable world to manage their vulnerabilities and look after their family.
What has caused this chaos? In a certain sense, it’s globalism. A world closer together is a world with seven billion neighbors and a lot more complex than a small town of 10,000. But globalism, as a concept, is a big word which easily hides important details. It’s a cop-out, a big term that shades more than it illuminates.
I have come to believe that what causes chaos is the move to a genuine market-based world from an industrial world. Attempts at understanding and controlling the world using old industrial models are failing terribly. The move to marketism is not defined by globalism, as it was, but defines globalism and the increasing irrelevance of nations as we know them.
Good news! The economy added 313k jobs in February!
Like all news, we need some kind of reality check first. Did it really? The long and short of it is that, as always, the ADP employment report is less noisy and thus more accurate. It had a gain of 263k jobs in February, which is probably the right number. Still very good news all around.
But is good news actually bad news? Along with the jobs report we have the increase in wages, which stands at a modest 2.6% over the last year. Does that mean inflation is tamed? We will see what the markets think.