Category: Economics, Business, & Work

America Has a Monopoly Problem—and It’s Huge | The Nation

Source: America Has a Monopoly Problem—and It’s Huge | The Nation, by Joseph E. Stiglitz

The Nobel Prize winner argues that an economy dominated by large corporations has failed the many and enriched the few.

This increase in market power helps explain simultaneously the slowdown in productivity growth, the sluggishness of the economy, and the growth of inequality—in short, the poor performance of the American economy in so many dimensions.

We should be concerned about this agglomeration of market power not just because of its economic consequences, but also because of its political consequences. An increase in economic inequality leads to an increase in political inequality, which can and has been used to create rules of the game that perpetuate economic inequality.

For a third of a century, the American economy has failed to enhance the well-being of a majority of its citizens. … There is no simple answer to problems as deep, longstanding, and pervasive as those I have discussed here. … What is required is a panoply of reforms—rewriting the rules of the American economy to make it more competitive and dynamic, fairer and more equal. … Much is at stake—not just the efficiency of our market economy, but the very nature of our democratic society.

Continue reading America Has a Monopoly Problem—and It’s Huge | The Nation

After the end of the startup era | TechCrunch

Source: After the end of the startup era | TechCrunch, by Jon Evans

because we’ve all lived through back-to-back massive worldwide hardware revolutions — the growth of the Internet, and the adoption of smartphones — we erroneously think another one is around the corner, and once again, a few kids in a garage can write a little software to take advantage of it.

But there is no such revolution en route. The web has been occupied and colonized by big business; everyone already has a smartphone, and big companies dominate the App Store; and, most of all, today’s new technologies are complicated, expensive, and favor organizations that have huge amounts of scale and capital already.

From here on in, the existing tech titans will accrue ever more power, and startups will be increasingly hard-pressed to compete. This is not a good thing. Big businesses already have too much power. … startups bring fresh approaches and thinking, while hidebound behemoths stagnate in their old ways of doing things. But for the next five to ten years, thanks to the nature of the new technologies coming down the pipe, those behemoths will just keep accruing ever more power — until, we can hope, the pendulum swings back again.

Preliminary Steps Toward a Universal Economic Dynamics for Monetary and Fiscal Policy | NECSI

Source: Preliminary Steps Toward a Universal Economic Dynamics for Monetary and Fiscal Policy | NECSI
Cite as:
Yaneer Bar-Yam, Jean Langlois-Meurinne, Mari Kawakatsu, Rodolfo Garcia, Preliminary steps toward a universal economic dynamics for monetary and fiscal policy, arXiv:1710.06285 (October 10, 2017).

We find that the current approach, which considers the overall supply of money to the economy, is insufficient to effectively regulate economic growth. While it can achieve some degree of control, optimizing growth also requires a fiscal policy balancing monetary injection between two dominant loop flows, the consumption and wages loop, and investment and returns loop. … We further show that empirical evidence is consistent with a transition in 1980 between two regimes—from an oversupply to the consumption and wages loop, to an oversupply of the investment and returns loop. … Our analysis supports advocates of greater income and / or government support for the poor who use a larger fraction of income for consumption. This promotes investment due to the growth in expenditures. Otherwise, investment has limited opportunities to gain returns above inflation so capital remains uninvested, and does not contribute to the growth of economic activity.

Since 1980 consumers have accumulated trillions of dollars of debt, and the wealthy have accumulated trillions of dollars of savings that is not invested because there is nothing to invest in that will give returns. … No matter how much money investors have, these so-called “job creators” do not create jobs when consumers don’t have money to buy products. Increased economic activity requires both investment and purchase power to pay for the things the investment will produce. … Reaganomics moved things too far toward the wealthy, so shifting the flow in the other direction has to be done in the right measure.

Fiat Is Effective

Source: Fiat money is very effective, a minitalk for the Silicon Valley Ethereum Meetup, by Steve Randy Waldman, 2017/10/08

For now, in my view, the fiat currencies of major economies beat every existing form of crypto hands down on effectiveness

  • We want a unit of account that helps us to solve the economic calculation problem, that helps us to reason about our future receipts and obligations
  • We want a unit of account and store of value that hedges our risk, inherent in the fact that our contractual obligations and the prices of goods and services we require may fluctuate over time and leave us unable to meet our obligations.
  • The unit of account that we choose will sometimes form the basis of our assets
    • we will hold or contract for claims on this unit
  • But it will frequently form the basis of our liabilities!
    • we will contract to make future payments in this unit
  • It will not be desirable for the value of this unit (in terms of actual goods and services) to unexpectedly collapse, as that inflation would devalue our assets
  • But it will also not be desirable for the value of that unit (in terms again of actual goods and services) to unexpectedly spike, as that deflation would cause the burden of our liabilities, our debts, to balloon!

Money is defined by the unit of account in which obligations payable into the future get denominated

Fiat prices are stable because they are actively managed to be stable.

  • Price stability is about managing valuation risk, and makes a money useful for economic calculation and hedging the risk humans face of finding themselves unable in the future to afford the real goods and services they require
  • Fiat money banking systems also enable effective means of managing counterparty risk. Most obviously, payments are often reversible.

The management of fiat provides state actors with incredibly powerful, ultimately discretionary, tools which significantly affect who wins and who loses and how equal or unequal a society is. Fiat money and associated banking systems are the technology that enables the finance of war on scales that would have been unimaginable a few centuries ago. Price stability, the primary advance fiat offers users over other forms of money, is often purchased at the expense of workers and the unemployed, on behalf of those who have the luxury of worrying about economic calculation for their businesses or hedging with their savings horde

To fix income inequality, we need more than UBI—we need Universal Basic Assets — Quartz

Source: To fix income inequality, we need more than UBI—we need Universal Basic Assets — Quartz

We call this solution Universal Basic Assets.

UBA identifies a fundamental set of resources every person needs access to—such as financial security, housing, health care, and education—in order to achieve economic security and prosperity. We focus on three broad classes of assets: private assets, like money, land, and housing; public assets, in the form of infrastructure and services such as education, health, and public utilities; and open assets, which are a growing category of mostly digital assets that are communally created and open to everyone, like Wikipedia and other open-source resources.

give people ownership of their data so it can be used as an asset which they—not platforms such as Google and Facebook—can leverage and capture economic value.