Ireland Caves to Pressure and Signs on to Normalized Tax Rates for Multinationals

After intense debate, Ireland has signed on for the plan to make technology companies pay 15 per cent tax everywhere. The Organisation for Economic Co-operation and Development (OECD) is ready to finalize an implementation plan hoped to secure a share of revenue from digital multinationals. Irish tax rules have allowed Apple, Google, Amazon, Facebook, LinkedIn, Microsoft, and others to use an arrangement to considerably reduce their tax bills. Ireland did so as part of an investment attraction strategy, and it worked well, with Ireland hosting lots of European offices and garnering many jobs.

Others around the world did not appreciate this, and, often, little tax was paid in jurisdictions where consumers actually consume technology companies' products. Governments naturally felt they were being deprived of tax revenue. The Republic of Ireland has an attractive rate for corporations at 12.5% and had, until now, refused to join the plan. Different Irish governments had fiercely defended the low rate, arguing such a rate attracted businesses to the country's small economy. https://www.cnbc.com/2021/10/07/ireland-corporate-tax-rate-.html

The core goal of the Base Erosion and Profit Shifting Project is to create a global minimum effective corporation tax rate of 15 per cent for multinationals with revenues in excess of €750 million. As of August 2021, 140 nations had signed up to that plan. Finally, in October, Ireland has signed on, as well.

Read about the OECD project here...

When Billionaires Feud, We All Lose

When the richest men on the planet fight over bragging rights, and more, the gap between the top tier wealthy class and the rest of us is laid bare. 

Lately, law suits against the US government are a battleground in the modern space race. A race based on egoism as much as loftier goals. SpaceX ( Elon Musk) and Kuiper Systems (Jeff Bezos) are before the FCC over making room in low-earth orbit (LEO) for a class of mini satellites. These firms are deploying satellite constellations in to provide broadband internet access.

Amazon.com Inc.'s satellite subsidiary, Kuiper Systems LLC, filed a blistering brief with the Federal Communications Commission, accusing Musk and his companies of flouting regulations with a general attitude that "rules are for other people."

The dispute is similar to a conflict between SpaceX and Bezos's Blue Origin LLC space company over a NASA contract to build and demonstrate a human lander system for a planned return to the moon.

In the competition to provide space services, both men have injected their own egocentric characters into the mix. Jokes about phallic space ships, derision over altitude records, and other petty insults litter what has become a playground for the rich and famous to advance their own personal brands. 

A printed letter to the FCC mocked the opposition’s efforts by claiming one privileged white guy is getting more… privileges… than the other:

"Whether it is launching satellites with unlicensed antennas, launching rockets without approval, building an unapproved launch tower, or reopening a factory in violation of a shelter-in-place order, the conduct of SpaceX and other Musk-led companies makes their view plain: rules are for other people, and those who insist upon or even simply request compliance are deserving of derision and ad hominem attacks," Kuiper attorney C. Andrew Keisner wrote in a brief filed September 29, 2021.

We see other elite rich bickering:

https://www.forbes.com/sites/daviddawkins/2021/06/04/british-billionaire-family-feud-nears-an-amicable-end-as-sir-frederick-barclay-settles-ritz-hotel-bugging-scandal/

And of course Bill Gates vs Steve Jobs,

https://www.cnbc.com/2020/08/24/bill-gates-i-was-so-jealous-of-genius-steve-jobs.html

***

When Starbucks chief executive Howard Schultz dismissed Sen. Elizabeth Warren’s proposal for higher taxes on fortunes of $50 million or higher as “ridiculous,” we see how billionaires think about their place in society. Or when an audience at the World Economic Forum in Davos, Switzerland, laughed out loud at the suggestion that the super-rich should contribute more. As exemplified during a government shutdown, Commerce Secretary Wilbur Ross was baffled when federal workers went to food banks to feed their families. “I know they are, and I don’t understand why,” he said in a CNBC interview. Ross, friend of disgraced former President tRump, suggested furloughed workers take out short-term loans instead.

It’s clear these rich white men benefit from income inequality, tax cuts and special interests. Perhaps these feuds and tone deaf mutterings of the new landed gentry are really a drag in the rest of us? Is it undemocratic for the richest 1 percent in this country to control 40 percent of the nation’s wealth.m? In the 1950s, the average chief executive made 20 times more than their employees; now, chief executives earn 361 times more — about $13 million per year at the country’s top corporations. Those 2017 tax cuts? The primary benefits went to those who were already rich. And this is in one of the richest countries on the planet. Gross stratification will lead to further strife, as  resentment increases about the richest people and corporations getting fatter bank accounts while most working class people are just a  missed paycheck away from needing to rely on a food bank. This argument is not about marginal tax rates or an unregulated free market. It is the perspective that the game of life is rigged, and the middle  class is losing. 

Are billionaires contributing their fair share? That question is obscured by the playground antics of men with planetary sized egos. Nothing new … the Bezos - Musk conflict is storied; read more on this decade-long “pissing contest”:

https://www.businessinsider.com/jeff-bezos-elon-musk-rivalry-history-timeline-2020-7

The Federal Reserve - Competitor to BitCoin?

As America's Central Bank asks for public comments on issuing its own digital currency, will we see the US become a player in the crypto-currency world? "Technological advances are driving rapid change in the global payments landscape," says a spokesperson for the U.S. federal reserve, the country's central banking system. They announced this week that they're "studying these developments" and exploring ways that the central bank "might refine its role as a core payment services provider and as the issuing authority for U.S. currency."

We read over at Engadget:

"...took a step toward developing a digital currency as it announced plans to publish a research paper on the subject," seeking public comment on its pros and cons for payments, financial inclusion, data privacy, and information security. But the Federal Reserve emphasizes that "before making any decision on whether and how to move forward with a U.S. central bank digital currency," their paper "represents the beginning of what will be a thoughtful and deliberative process" that has more than one possible outcome. "Irrespective of the conclusion we ultimately reach, we expect to play a leading role in developing international standards for central bank digital currencies, engaging actively with central banks in other jurisdictions as well as regulators and supervisors here in the United States throughout that process."

Their announcement notes America's central bank has already been exploring the benefits and risks of issuing a digital currency "for the past several years," but emphasizes they're exploring it "as a complement to, and not a replacement of" current systems. And the Reserve also state pointedly that "To date, cryptocurrencies have not served as a convenient way to make payments, given, among other factors, their swings in value," before the announcement switches its attention to stablecoins pegged to the value of a non-virtual currency. But even there, the interest seems to be as much regulatory as it is monetary. "As stablecoins' use increases, so must our attention to the appropriate regulatory and oversight framework. 

"This includes paying attention to private-sector payments innovators who are currently not within the traditional regulatory arrangements applied to banks, investment firms, and other financial intermediaries."

UBI? How about “GBI”?

Guaranteed Basic Income might be a better alternative to Universal Basic income. It is the guaranteeing of an income sufficient enough to cover basic needs. It can be in various forms, such as a negative income tax (NIT), an unconditional basic income (UBI), or even a guaranteed minimum income (GMI).

First proposed by philosophers in the 16th century, the idea of an income delivered directly by the state has been seen in many quarters as a balm for all kinds of social ills. Progressives argue that a guaranteed minimum income has the potential to lift communities out of poverty. Some conservatives and libertarians, meanwhile, see universal basic income as a cost-effective alternative to existing social welfare systems. 

In the United States, proponents of guaranteed income as a matter of economic justice have included the Black Panthers and Martin Luther King Jr., while the libertarian economist Milton Friedman advocated it as a form of negative income tax. Even President Richard Nixon proposed providing cash directly to families, without conditions. His plan—produced after 1,000 economists urged it in an open letter—twice passed the House, but got rejected by the Senate.

Read more... As it turned out, what made the difference wasn't more research but a global pandemic. In the face of the recession caused by the pandemic, relief packages were suddenly seen as necessary to jump-start the American economy. The success of the $1,400 stimulus checks make it more likely now than ever before that that guaranteed income could soon become a permanent fixture of federal policy.

Addressing Anonymity with Electronic Currencies

With the surge in online shopping and the need for less contact, electronic payments have increased significantly during this pandemic. We do know that both the Ethereum and Bitcoin blockchains are open and -- while they are theoretically anonymous -- as soon as any crypto account touches a bank account tied to your identity, you are in direct contact with the pool, which could be recording your IP address and associating it to your cryptocurrency account. 

Many might recall that the cryptocurrency industry was initially portrayed as "anonymous digital cash." While experts were quick to point out that this was not exactly the case, Bitcoin (BTC) found initial popularity in darknet markets such as Silk Road, where merchants sold illegal goods ranging from light drugs to, allegedly, hitman services. Founded in 2011, Silk Road thrived for the next two years until the Federal Bureau of Investigation shut it down in 2013. Authorities later revealed that completely free blockchain explorers aided their investigative efforts.

Some cryptocurrencies (such as Zcash and Monero) are explicitly designed to address traceability concerns, incorporating several security mechanisms, including:

Ring Signatures, which allow signed messages to be attributable to “a set of possible signers without revealing which member actually produced the signature” ...

Stealth Addresses, which refer to methods for key management in which public keys are derived separately from private keys for the purpose of obscuring the public keys, and

Confidential Transactions, which use Pedersen commitment schemes to restrict disclosing the amounts transacted to anyone other than the transacting parties.

Some are thinking up ways to successfully implemented privacy-enabling cryptocurrency, so that metadata associated with transactions would be hidden. Online, data flows or the ledger would not reveal relationships among transactions or any information about the transacting parties.

As more central banks consider how to embrace the digital economy, new ideas will flourish. Unlike traditional money, cryptocurrencies aren’t issued by countries or central banks. On the contrary, one of the hallmarks of these products is the lack of regulation and oversight by a central authority. Most US banks have been slow to introduce software that allow peer-to-peer payments for things like splitting the bill on a meal. In some scenarios, central banks could directly issue digital currencies into users’ online wallets without involving banks and other middlemen. Americans could also potentially hold accounts at the Federal Reserve for making transactions using a digital dollar, simplifying the process and lowering the cost of exchanging payments.

See this for more information...

Ireland - From Developing Country to One of the Richest in 100 Years

After hundreds of years of being under the thumb of the imperialist/colonialist neighbor,  Ireland in 1957 shifted from a proto-communist model to a property capitalistic model. Once the "sick man of Europe," the Tallaght Strategy changed the country's economic trajectory. 

Fast forward to just a few years ago, the Republic of Ireland is an unlikely pick for an EU economic and political maverick. A nation of fewer than 5 million people, it was one of the hardest hit by the 2008 global financial crisis. But the country has managed to grow its economy at rates well above the EU average (and on par with the People's Republic of China, in some areas) and went through several landmark cultural transformations that brought it closer to its European neighbors. So, how did Ireland do it?

Will Diversity Become Part of Corporate Governance?

In the USA, the Nasdaq asked the Securities and Exchange Commission if it can require all 3,300+ companies that trade on its exchange to (a) publicly disclose diversity statistics about their boards of directors, and (b) retain at least two diverse directors (one woman, one who identifies as an underrepresented minority and/or LGBTQ).

If the SEC gives the nod, boards will have two years to bring on at least one diverse director and two+ years to hire the second. If companies miss the deadline and fail to provide a sufficient explanation of why they missed it, they could get delisted.  

As of now, 75% of Nasdaq-listed companies would not meet that benchmark. We know corporate America has made slow progress improving diversity at the top. In 2018, women held less than 1/4 of Fortune 500 board seats. From 2010–2018, seats held by Black directors increased just one percentage point to 9%.

This would mark the first time a major exchange would impose such requirements, but it's not alone in pushing for board diversity. California requires at least one diverse director for companies headquartered in the state, and Goldman Sachs does as well to underwrite an IPO. 

For diversity as a success story, just turn to Europe: EU companies and others are successful in bringing more women into the top ranks of business. Norway was the first to introduce quotas for women in 2003. Iceland, Spain, and France followed with 40% targets. In 2015, Germany became the largest economy to impose a quota, mandating 30% of supervisory board seats be filled by women. Across Europe, the number of women on boards is climbing, although from a low base. The number of women board members at 734 large publicly traded companies across the Europe in 2016 was 23%, up from 11% in 2007, according to EU data. In countries with quotas in place, it’s higher: 44% in Iceland, 39% in Norway, 36% in France and 26% in Germany (2016 numbers).

                

Another Test of Universal Basic Income

This month approximately 100 or so Germans will receive a form of universal basic income every month for three years.

Germany is about to become the latest country to trial a universal basic income, starting a three-year study of how it affects the economy and recipients' well-being. As part of the study, 120 people will receive 1,200 euros, or about $1,430, each month for three years -- an amount just above Germany's poverty line -- and researchers will compare their experiences with another group of 1,380 people who will not receive the payments. 

Read more about the study at Business Insider. It is being conducted by the German Institute for Economic Research, and has been funded by 140,000 private donations. All participants will be asked to complete questionnaires about their lives, work, and emotional state to see whether a basic income has had a significant impact. A pro-basic-income lobbying group called Mein Grundeinkommen is funding the experiment. The group has used donations from its supporters to fund monthly 1,000-euro payments for 668 people since 2014.

Another Tool to Help Address the Housing Crisis

Most believe renters "throw away" money because they don’t build equity over time. But new startups are hoping to offer  a different approach. For example, when someone rents an apartment in a new complex in Columbus, Ohio, they can now also get a financial stake in the building.

Companies such as Rhove offer the security of ownership with the flexibility of renting. Rhove extends “renterships” to tenants in Rhove-partnered apartment complexes. The arrangements give tenants a stake in the building -- and their assets grow with the property’s value.

Rhove acts as an investor in the property by paying a lump sum to the owners. Tenants earn returns as property owners collect rent from the whole building, and as the property appreciates, the value of the shares increases. Another start-up, Nico, offers a similar concept, launching in the Los Angeles neighborhood of Echo Park, where gentrification threatened to push out some long-time residents. By purchasing rent-stabilized buildings and registering them in a financial trust, Nico offers portfolio shares to residents. This provides an opportunity keep their homes. Such ideas are not new: a real estate investment trust (REIT) is a closed-end investment company that owns assets related to real estate such as buildings, land and real estate securities. REITs sell on the major stock market exchanges just like common stock.

According to Hotpads, a young person will spend $200k+ in rent over the course of his or her lifetime. With many Americans spending a third of their income on rent, it can be difficult to save money to eventually buy a home. And renters generally don’t have the same opportunities to accrue wealth as homeowners. This Harvard study found wide wealth gaps between older homeowners and renters, even when their incomes are similar.

Read more here…

Can We Move Past a Materialistic, Consumption-Driven Economy?

One important question that arises, during this difficult time, is, can we move past a materialistic, consumption-driven economy?

Most present economic models result in rising inequality, impacting income, wealth, education, health, and social perceptions.

"... [a] materialistic social contract rests on philosopher and economist Adam Smith’s principle of the invisible hand, whereby people pursuing their own self-interest in free markets are led—as if by an invisible hand—to make everyone in society as well off as possible. The popular appeal of capitalist economies relies heavily on this principle, since people usually support capitalism because it is alleged to deliver higher living standards and more economic freedom than alternative economic systems."

The underlying assumption is that human needs can be satisfied through material prosperity and that decentralized, self-interested market decisions tend to generate such material prosperity more efficiently than more centralized, coordinated approaches. Too often, assessments of capitalism aim to focus on so-called "triumph" over socialism. Be real -- there is no such thing as a pure capitalist system. Humans embrace many different forms of capitalist economies; since money was invented about 5,000 years ago, people understand that trading improves both parties' position.

The current institutional capitalism and corporatism represents one of many different versions. And, around the globe, there are many iterations of capitalism right now. Singapore, for example, is the fourth richest country in the world in terms of per-capita GDP with an unemployment rate of 2.2 percent or lower since 2009. Who doesn't regard this city-state as one of the most free and open, pro-business economies in the world? Yet the government in Singapore routinely guides investment policy, and government-linked firms dominate telecommunications, media, and finance. Such intertwining would be unthinkable in America, Norway, Japan, or Canada. Like Singapore, many countries’ form of capitalism is steered not by that unseen hand — but by defined policy.

Human-centered capitalism: Utilizing market forces (capitalism) to benefit society, measured in gross national well-being instead of domestic product (human-centered)

What activities add up what might be considered a "normal life," one that is well-rounded? Could our model for consumption and interaction be more accommodating to a lifestyle where care of each other, of personal character development, can be fostered? We all benefit from lifestyles influencing community in a positive way, infused with personal creativity and work-life balance.Economics enables us to explore why people sometimes make irrational decisions, and why and how their behavior does not follow the predictions of so-called experts. Humans are emotional, oft times making decisions that are not in their self-interest. We should aspire to get away from viewing capitalism as some cold, numbers-only thing or a zero sum game that pits business profits against government taxes or capitalist bosses vs socialist workers.

https://www.brookings.edu/research/toward-human-centered-capitalism/

Digital Crypto Currency from... the US Central Bank?!

Over at SlashDot, we read:

America's lawmakers and Federal Reserve officials "are so concerned about Facebook's plans to launch a new digital currency," reports Politico's financial services reporter, "that they're contemplating a novel response -- having the central bank create a competitor."
Momentum is building for an idea that was once considered outlandish -- a U.S. government-run virtual currency that would replace physical cash, a dramatic move that could discourage major companies like Facebook from creating their own digital coins. Facebook's proposed currency, Libra, has forced the Fed to consider the issue because of a fear that private companies could establish their own currencies and take control over the global payments system. Some Fed officials share the concern about a new balkanized currency system outside government control that Facebook has threatened to unleash. "Libra bust this way out into the open," said Karen Petrou, a managing partner at Federal Financial Analytics who advises executives on coming policy shifts. 

But it's not just Facebook. The matter is also taking on urgency as other countries consider creating their own digital currencies -- another potential challenge to the primacy of the U.S. dollar. The head of the Bank of England has floated the idea that central banks could create a network of digital currencies to replace the dollar as the world's reserve currency... The Bank for International Settlements, which represents the world's central banks, said early this year that most were conducting research into central bank digital currencies and many were progressing from conceptual work into experimentation and proofs-of-concept...

The details of a possible [U.S.] Fed-developed digital currency are still vague. But advocates and experts say such an instrument could give consumers a new way to make payments without having to rely on banks and without incurring fees when they transfer money. The digital currency would likely take some inspiration from the technology that underpins other cryptocurrencies such as Bitcoin. The discussions are informal at this point. Members of Congress from both sides of the aisle have written to the central bank asking officials to consider how they might approach a digital currency, and some Fed officials have begun to acknowledge the government might someday play a role. "It is inevitable," Federal Reserve Bank of Philadelphia President Patrick Harker said at a recent conference, according to Reuters. "I think it is better for us to start getting our hands around it."

Read more here and here...

Boeing Wins at the WTO against Airbus

The World Trade Organization (WTO) found in favor of Boeing and the U.S. in retaliation for the unlawful EU subsidization of Airbus. The October 2, 2019, $7.5 billion annual award is the largest made, and comes after almost 15 years of litigation at the WTO. The U.S. successfully argued that the EU / four of its member states conferred more than $18 billion to Airbus in subsidized financing.

This entitles the U.S. to impose an additional 10 percent duty (tariff) on airplanes from France, Germany, Spain, and the United Kingdom, as well as an additional 25 percent duty on certain goods including single malt Irish and Scotch whiskies, coffee from Germany, cheeses from several countries, and certain garments from the United Kingdom.

EU officials claim to have little interest for mutual imposition of countermeasures. They have emphasized that such countermeasures strain transatlantic trade relations and inflict damage on citizens and businesses. The timing of the new tariffs is politically sensitive given the recent global imposition of national security tariffs by the U.S. on steel and aluminum, as well as the potential addition of global national security tariffs on automobiles and parts.

Read more here...

Republic of Ireland Workers Have the Highest Productivity

In 2017, Irish workers crossed the line to becoime the most productive in the world, adding an average of $99.50 (€87) to the value of the economy every hour they work, according to the Organisation for Economic Co-operation and Development (OECD).


Read More... https://www.irishtimes.com/business/economy/irish-workers-now-ranked-as-most-productive-in-world-1.3783173

Dislocation of the Workforce Known for Decades

Knowledge workers can work wherever is needed, as the communication infrastructure and information management systems support the workforce. Working from home (wherever that might be) is not limited to only when the weather kills your commute. With today’s internet, ever-evolving collaboration tools, and forward-thinking leaders, remote work is becoming the norm.

See this interview with the head of Intel, from 1981.

Productivity is enhanced. From a 2014 study, in which the travel website CTrip enabled a subset of  workers to work remotely on a regular basis, they then compared productivity to office-bound counterparts. With all other factors being equal, the remote workers ended up making 13.5 percent more calls than their comparable office workers. According to a 2016 survey of American remote workers, about 91 percent of people who work from home feel that they’re more productive than when they’re in an office.

Working remotely can make a worker more productive; according to studies, as long as the job is one that can be performed in such an environment, most people are more productive. Of course, raw productivity isn’t the only benefit. Having employees work from home can save businesses thousands of dollars per month (per employee) depending on office expenses, and could also raise employee morale, improving retention and collaboration. On top of that, remote workers take fewer sick days and less vacation time, giving them more work days overall.

UBI Could Work... with Tweaks

From SlashDot,
...the idea of universal basic income. Many in the tech elites tout it as the answer to job losses caused by automation, if only people would give it a chance. The idea is that all citizens receive a set amount of money from the government to cover food, housing, and clothing, without regard to income or employment status. This minimum stipend can be supplemented with wages from work. Advocates say it will help fight poverty by giving people the flexibility to find work and strengthen their safety net, or that it offers a way to support people who might be negatively affected by automation. "Basic income could work -- if you do it Canada style." We talked to the people on the ground getting the checks in Ontario's 4,000-person test and saw how it was changing the community. Then, just two months later, it was announced that the program is ending in the new year rather than running for three years. The last checks will be delivered to participants in March 2019. 
The article complains that in addition, Finland's test program ended this year after its initial trial period, while Y Combinator's experiment "has also faced more delays, pushing the experiment into 2019," saying these programs illustrate the three basic issues faced by basic income tests. First, there's political disagreements. ("The Ontario program was shut down by the province's newly installed Conservative government.") Then there's also concerns about funding -- "As you might imagine, giving away free money is expensive" -- and also fears about disrupting existing benefits "To avoid that, they've had to work with municipal and state agencies to get waivers for pilot recipients. But getting those waivers takes a lot of time and bureaucracy...."The only way the idea can ever be embraced on any sort of large-scale, meaningful level is with more data and bigger tests. Without that, no matter how much support it gets from Silicon Valley, it seems unlikely that the public, at least in the US, will ever come around."And MIT has more, as well...

Flexibility is key in the "gig" economy

Employees want more flexibility --

PwC, one of the so-called Big Four accountancy giants, said that it decided to embrace the gig economy after a study it carried out showed that almost 46% of 2,000 respondents prioritised flexible working hours and a good work-life balance the most when choosing a job.

Read more at the BBC

Take the Middle Man Out of More Transactions

Uber and AirBnB are in the vanguard of the P2P marketplace model -- their gradual but ultimately huge success of is opening up breakout growth, heralding an explosion in startups with similar models: Taskrabbit, Fivver and others. Marketplace startups are unique because they aren’t just serving one base of customers. These enterprises connect buyers and sellers, service providers and consumers. Their models work when they ensure users are having a good experience with each other, as well as with the respective companies.

Can you tell I am a big fan of P2P exchange-based marketplaces? Companies like AirBnB and Uber have their detractors — some very legitimate: there are some serious issues around discrimination, harassment and worse that these companies have to continue to address. But they also continue to battle against unfair regulations. Laws need to catch up to this new model, not hinder growth and progress.

Obviously, there is growing interest in services like ride-sharing and short-term rentals, where demand is not easily met by traditional means due to capital investment constraints. These new enterprises are simply too big and popular to be pressured to shut down. Nor should they — each new generation reveals in a new world order with new economic realities. Robot cars (and more disruptive, robot trucks) are *ahem* around the corner. Even money (in the form of crypto-currencies, traditionally controlled by governments, is throwing off the shackles of authoritarian overreach.

Universal Basic Income Experiment in Finland

UBI is gaining test environments.

UBI advocates argue that many jobs don’t pay enough to even make rent and buy groceries: people can work full-time and still be below the poverty line. It’s easy to understand why people on the left would advocate for a guaranteed income, but a version of this concept is also popular among libertarians, who see UBI as a way to shrink the welfare state. For example, you could take away food stamps, medicare, and housing subsidies, and replace all of it with this one flat sum.

Read more...

It's not really a UBI experiment, it's more of an unemployment benefit experiment in disguise. Here's the NYT article referenced which essentially deconstructs the entire experiment...

Are Worker-Owned Cooperatives an Economic Panacea?

Perhaps more employee ownership would improve the performance of companies?

Shareholder value maximization has many issues but the most important one is that it “drains” a large part of the profits from companies both because shareholders control the board of Directors and thereby dictate how the profits are redistributed (to their advantage), and also in a desperate attempt to retain shareholder. Given the ever increasing free flow of capitals, investors can shift their capital allocations continuously to seek the highest return on investment at the lowest risk. This “free market” environment encourages a “race to the bottom” and a skewed allocation of profits between dividend payouts, investments inside the company, and investment in human capital (working conditions, wages…) In an economic system which relies heavily on consumption as the main driver of growth, squeezing human capital investments is tantamount to suicide (and no, credit is no substitute for a decent pay).

Read the whole concept here...

UBI vs the Robots

With advances in artificial intelligence and robotics, many people's jobs will be up for grabs. And we are entirely unprepared as exponential advances, most notably in form of artificial intelligence, will eat away employment as humans' primary source of income. There may be an answer, in the form of a direct payment to each of us.

Universal basic income (UBI) is gaining momentum worldwide. Switzerland held a referendum on the introduction of a nationwide UBI (which it rejected) in 2016,1 Finland is currently testing it for some people, and India is considering replacing its welfare state with a UBI.2 The UBI is an unconditional cash payment that flows monthly from the state budget to everybody. It is transferred from public to private accounts throughout an entire lifetime, from birth to death, without any application or preconditions to be fulfilled by the beneficiary. It is supposed to cover the socio-cultural subsistence minimum. However, the determination of this minimum level of subsistence is a political and not an economic decision.

Some suggest work can be divided into a few categories: routine and nonroutine, cognitive and manual. Routine work is the same stuff day in and day out, while nonroutine work varies. Within these two varieties, is the work that requires mostly our brains (cognitive) and the work that requires mostly our bodies (manual). Routine work started to stagnate at the end of the last millennium because some of that work is easily handled by machines.

One approach to machine intelligence is with neural networks, a tool of artificial intelligence. This provides a means for machine learning that can leverage big data -- the data sets being created and standardized. Everything we do is generating data, and lots of data is exactly what machines need in order to learn to learn.When computer code is wrong, it is self-corrected, further improving error detection and expanding the capabilities of the particular a.i. Bigger data sets speed such learning, and lower the error rates. No, this isn't SkyNet: think of robots as technologies, such as machine learning algorithms running on purpose-built computer platforms, that have been trained to perform discrete tasks that currently require humans to perform.

As others have written, "During the Obama administration, a report of the president was published (no longer available at whitehouse.gov) that included a very dire prediction: "There is an 83% chance that workers who earn $20 an hour or less could have their jobs replaced by robots in the next five years. Those in the $40 an hour pay range face a 31% chance of having their jobs taken over by the machines." Clearly, the robots are coming."

Read more here... and here...