Winners Take All: Modern philanthropy means that giving some away is more important than how you got it


#22

No, I’ll shut up. It’s clear that my views on my own field really aren’t wanted or needed by many here. Carry on.


#23

"I think it’s time we gave something back.”

— The Old Man in Robocop, explaining how tax cuts have been great for business, but have strangled the police department OCP now needs to reduce crime in Old Detroit (crime his second Dick Jones is managing and profiting off on the side) so the area is safe for workers to level the city and build a new one in its place, at a huge profit, so by “give something back” he means privatizing the police department, creating a “public-private partnership” that is truly the worst of both worlds, again at a huge profit, and filling the streets with giant killer robots manufactured by OCP, yet again at a huge profit, robots that don’t work, which will doubtless create another opportunity for OCP to “give something back."

Once again, Paul Verhoeven nailed this thirty years ago. The most cogent and prescient critique of modern neoliberal economics available to the average person came wrapped in a big, dumb, splattery action movie.


#24

This RSA Animate helped me begin to understand that using inequality and property rights as economic leverage over people only to offer the rents and wealth made off of that inequity as “charity” of the wealthy’s choice is highly amoral and that philanthropy was not necessarily an act of good will.


#25

Shipping ‘jobs to low-wage, low-regulation free trade zones’ is obviously a good thing; employment shifts to those who need it the most.


#26

#27


#28

Of course, to the workers in poorer countries, it’s a step up.


#29

Not necessarily, no.

Western investment distorts the economies and politics of the subject countries, often to the detriment of the locals.


#30

That’s not obvious at all. Labor arbitrage profits the arbitrageur at the expense of economies on both sides of the exchange. Paying market rates on the poor side and charging market prices on the rich side is extremely high-friction, by design.

On one hand, it hinders the poorer region’s ability to develop its own industries, because no local employer can afford to pay the marginally-higher foreign wages, so local businesses are starved for workers. The existence of a new relatively wealthy class of foreign-employed workers means local businesses could raise prices, but the foreigners won’t employ everybody, so to the extent these forces do drive local prices up, you haven’t done any net good to the newly wealthy foreign employees, and you’ve left the poor local workers that much worse off. If creating internal inequality, making whole regions dependent on foreign investment and stifling local business is good, then I guess that’s obviously good.

On the other hand, in the wealthy economy the price flexibility this arrangement offers the arbitrageur prevents effective competition by almost any other means. He can always undercut his rivals unless they follow the same strategy. Then 100% of the money spent in that market is extracted from the wealthier economy, whether as the discount wages paid to foreign laborers, or as the profit reaped by the middleman. The only money going back into the economy is what the rich middleman personally spends there, and that money often as not goes into the pockets of _other_middlemen and their respective foreign serfs. Nobody’s being paid rich-country wages to make a Widget, but those that can are paying rich-country prices to buy one, and the arbitrageur just has to hope that some other sucker is still willing to pay people rich-country wages so they can afford to buy Widgets.

This is totally unsustainable on either side. Over time the economies will tend towards averaging out, but at the same time, if they ever did completely, then there’d be no value in the arbitrage. Having made the poor region dependent on foreign money, the middlemen would just walk away and leave them holding the bag to find another “low-wage” region to exploit. Then on the wealthier side, the people not being employed to make things they themselves consume see their wages depressed and become more dependent on the likes of Wal-Mart to provide things they can afford, made by people earning what would be starvation wages for themselves. And of course the middlemen want to be masters of the wealthy economy, not the poor one anyway, so achieving equilibrium is not in their interests either, and thus even if you posit the equilibrium would be good (arguable either way), it isn’t the goal of the exercise and won’t ever happen. The goal is to extract wealth from other people’s labor. It’s purely parasitical.

It ultimately establishes an exact inversion of Kant’s categorical imperative: Kant suggests that if an act would be harmful if everyone did it all the time, then it isn’t ethical for anyone to do it at any time. This form of market economics forces the reverse: if anyone is willing to cross a particular line, then everyone else must cross the same line, regardless of their own qualms, or be ruined. Business types repeat this mantra all the time to excuse amoral acts, “if I don’t do it, somebody else will.” Except for the sociopath who is truly happy to profit from exploitation, everyone else is trapped in a system they didn’t make and don’t like, but unlike the guy who ends up with all the money, they can’t really afford not to participate in it.

This isn’t “obviously good” except in the alleged “win-win” sense that’s exactly what the linked article is debunking. It’s just attaching the flowery language of “good” to an ethos of cynical, amoral exploitation.


#32

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