This is a syndicated repost published with the permission of oftwominds-Charles Hugh Smith. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.
Quality, quality of life, and well-being are not easily quantified, so they are ignored.
I often write about the Tyranny of Price, the rarely examined assumption that lower prices are all that matters.
Thanks to the Tyranny of Price, the quality of many goods has plummeted. Obsolescence is either planned or the result of inferior components that fail, crippling the entire product. As correspondent Mark G. has observed, the poor quality we now accept as a global standard wasn’t available at any price in the 1960s– such poor quality goods were simply not manufactured and sold.
There is another even more pernicious consequence of the Tyranny of Price: globalization, which makes two promises to participants: 1) lower prices everywhere and 2) manufacturing work that will raise millions of poor people in developing economies out of poverty.
Globalization is presented as a win-win solution: the developed countries get cheaper goods and the developing world get the benefits of industrialization.
But now a new study, Poorer Than Their Parents? Flat or Falling Incomes in Advanced Economies, finds that globalization has been a bad deal for 80% of the people in developed economies, as their income and wealth has stagnated or declined.
The McKinsey report focuses on the 540 million residents of developed nations who have lost ground in the era of globalization. But if we look at the terrible pollution in China, we find that rapid industrialization hasn’t been as win-win for developing nations as advertised.
The mainstream cheerleaders of globalization have been forced to accept that globalization exacerbates wealth/income inequalities by boosting the rewards for the 20% who benefit from global markets and capital-friendly central bank policies (zero interest rates and quantitative easing) that have pushed asset valuations to incredible bubble heights around the world.
Domestically, the American ruling class and the mainstream punditry are struggling to square the circle, that is, defend the globalization of the U.S. economy that has greatly enriched corporations, the wealthy and the top 5% of the work force but also alleviate the stagnation in the incomes and wealth of the bottom 80%.
Correspondent Graham R. summed up the situation very succinctly in a recent email:
“Focusing on the minimum wage is a false flag. The society as a whole is now stressed at every level because Globalism has promised us cheaper prices at the cost of destroying societal structures and their meaning for its members.”
Graham identifies a key consequence of globalization that the mainstream media has ignored: the erosion of social/economic structures that supported communities and provided purpose, meaning and stability to their residents.
When price is all that matters, factories and offices are closed overnight and the work is shipped elsewhere. When production costs go up, the production is moved to another locale.
In this environment, employees are competing with workers globally, which suppresses wages everywhere. Since global corporations have gained political power in globalization, they can buy lobbying and political influence that raises the cost of commerce for small businesses–a process known as regulatory capture that erects walls that stifle competition.
Regulatory capture is the inevitable result of globalization’s rewarding of capital and erosion of labor.
Price is not the sole absolute good. Price is only one kind of information. Since price is easily quantified and converted into any currency, it has achieved total dominance in markets and mindspace. Quality, quality of life, and well-being are not easily quantified, so they are ignored. Stagnation, insecurity and a loss of social cohesion are the inevitable result once price is all that counts.
This essay was drawn from Musings Report 29. The weekly Musings Reports are emailed exclusively to subscribers and major contributors ($5/month or $50 annually).
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Mark Blyth on the Brexit vote
4:17 min
The Blyth interview is excerpted in the article below:
http://www.counterpunch.org/2016/07/18/donald-trump-and-the-revolt-of-the-proles/
Western elites were shocked by Brexit, shocked that all their fear mongering and finger-wagging amounted to nothing. The same is true in the US, where the media’s daily attacks on Trump have failed to erode his base of support at all, in fact, they may have added to it.
Why is that? Why has the media’s repudiation of Trump only increased his popularity and strengthened the resolve of his supporters? Has the media lost its power to influence or is something else going on?
The media hasn’t lost its power, it’s just that personal experience is more powerful than propaganda. What personal experience are we talking about?
Economic insecurity. Brexit was about economic insecurity. The Trump phenom is about economic insecurity. The rise of left and right-wing groups across Europe and the US is about economic insecurity. This isn’t about ideology, it’s about reality; the reality of not knowing if you’re ever going to be able to retire or put your kids through school or make your house payment or scrape by until payday. The reality of muddling by in an economy where the prospects for survival look worse with every passing day. That’s the reality that made Trump possible, and that’s what this election is about, economic insecurity.
http://www.counterpunch.org/2016/07/18/donald-trump-and-the-revolt-of-the-proles/