You can get my latest book, The Surprising Design of Market Economies, at your local bookstore or from Amazon, Barnes & Noble, Google Play etc. In it, I describe the ways that government builds our economy and culture, and argue that these deep structures should be a more explicit part of our public, political conversations. You can read Op-Eds I have written that draw upon the book in The New York Times [How To Get Business To Pay Its Fair Share], and two from Bloomberg View [Capitalism & Government Are Friends and Health Care Will Become a Right, Just Like Water].
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Who creates corporations? Where do they come from? Who controls and sets their rights and responsibilities, and sets their very makeup?
I would like the usually astute Eduardo Porter to answer these questions, as he rereads his own essay, this essay from this morning’s New York Times. His essay is about corporations, and whether they can or should attempt to pay attention to anyone besides their shareholders and their quarterly profit statements. He concludes by essentially saying that while it sounds nice, we venture into murky territory in asking corporations to pay attention to anyone beside their shareholders. If want to have good things like more equitable pay for workers, we should turn to government.
This Times piece by Jad Mouawad , a very good one, about the rise of Dubai fascinates me because it illustrates something I talk about in all three of my books: that cities are political enterprises first. The are not “natural.” They don’t arise in some sort of organic way, a small group of settlers on the banks of a river engaging in a bit of trade and so forth. That’s a myth. The story of Dubai reminds me of the story of New Amsterdam (now a city called New York), which only existed in the mid 1600s because the Dutch West India Corporation decided to settle and invest in this money-losing operation for a half century because it decided, for strategic reasons, that it was worthwhile. Or of my native city of Norfolk, Va, which King Charles II commanded to be set up and have trade go through it, so the tobacco planters could less easily escape taxation. That Norfolk had a great natural harbor probably figured into Charles II’s decision, but it’s not like the city arose on its own there. It needed a king to command it into existence.
This is basically a book review, so get ready.
David Carr’s essay this week in the New York Times about the pleasures and problems of free music, and free everything else, brings to mind the new book by Jeremy Rifkin, which I got a review copy of recently. The book, The Zero Marginal Cost Society: The Internet of Things and Collaborative Commons, and the Eclipse of Capitalism (Palgrave 2014), posits that, as Carr grapples with, we are going to a society where many things can be free or close to free. Rifkin describes and identifies the big change, which is the technology that makes it essentially free to produce one more copy of so many things, whether that be music, a book, a newspaper or even things that aren’t media related. This is a game changer, in terms of conventional economics.
Ha-Joon Chang, the Cambridge economist who gave a great blurb for my last book which you can read on the back cover, has a new book out himself: Economics: The User’s Guide: A Pelican Introduction. With this book, Penguin revises a series of books on big subjects aimed at laymen. You can see a video of Ha-Joon introducing it here. Right now it’s not out yet in The United States, but it will be.
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I sit here typing, and on my body I have some nice wool pants with a hounds-tooth pattern, a charcoal gray sports jacket, and in my pockets various possessions, including my ever present Iphone, that I would prefer to keep. If someone challenged me on whether I “owned” these things, I would be hard pressed to prove it. I did not keep the receipts. Luckily, that is unlikely to happen.
As David Carr said so well in this essay a few weeks ago, television is now the opposite of a wasteland. It is instead a lovely Olmstedian park, filled with glorious wonders, shady reclines and scary but usually not too harmful caves and dark forests. It is a Golden Age, basically, for television.
In exploring this Golden Age, Carr and others usually focus on a few shows that are almost invariably “edgy.” They include the late, great The Wire, of which I am a bigger fan than anyone I wager, to lesser but still artfully done shows like Homeland, Justified, Game of Thrones, Boardwalk Empire and so on.
Okay, here’s number eight in my ongoing series, Nine Reasons Why The Free Market is a False Concept. Reason number eight is Water, and all it represents, which includes public works or infrastructure. If you keep reading, you’ll hear me say what it means to “define infrastructure upwards.”
Imagine yourself in New York City in 1835, the largest and most prosperous city in the country. But if you want a drink of water, you buy it, if you are rich, from a “tea man,” who fills your container from a barrel of water he ports around on the street. You probably don’t risk using a decrepit private water system of hollow logs under the streets. Most people use one of the few public wells, which are polluted, or draw water directly from a dirty stream or pond. There are no sewers, so when you use the toilet, your waste goes into the ground where it blends with the water you will later drink. Devastating epidemics happen every few years.
From my ongoing series.
Having hundred or thousands of uniformed men (mostly men), ready to stamp out crime or unruly behavior, makes it easy not to know or remember that this is a relatively recent thing. London, under minister Robert Peele, invented the first professional metropolitan police force in the 1820s. These men became known as “Bobbies,” a reference to the first name of their creator. New York City followed suit in the 1840s and 1850s, but not without debate. Badged, uniformed men walking among the citizens were seen as a thread to its status as a citizen’s republic, and at least once the police force was created and then disbanded. During one incarnation the men wore only badges, not uniform. Read more in Chapter 15, Police and Prisons, in my book The Surprising Design of Market Economies.
War is the original sin of markets. Because a political state is necessary for markets, and political states form themselves through war. At least I have great trouble thinking of one that didn’t. Norway may be an exception. It peacefully split off from Sweden at the beginning of the last century.
War, or said more politely Defense, is one of the nine reasons the Free Market is a false concept because it’s hard to buy and sell when the Huns or the Canadians are riding horses or tanks through your living room. More importantly, even if a free market existed, it would do a lousy job providing security. There is a market failure there. We enjoy security collectively. If we decided that everyone would be responsible for their own security, we would have a Hobbesian state of nature, not the ability to walk down the street without worrying about getting whacked.
We continue here, in my ongoing series, Nine Reasons Why The Free Market is a False Concept. I’m adding one reason a day. Here goes Reason Number Five.
In the Middle Ages, it was common when disputes arose or allegations of criminal offenses to do something called “The Ordeal.” Most were variations on this kind of thing: you grasped a red hot stone for a required length of time. Then if you were able to do that, your burned hand was bandaged up. In three days, it was unwrapped. If the wound was infected, you were guilty. If not, you were innocent or telling the truth.
Such was the law. But centuries passed, and the law progressed. Sort of.