Month: January 2014 Page 2 of 3

Exactly 98.1% of Egyptians said yes to the new constitution in this week’s referendum. The outlawed Muslim brotherhood says it does not recognize the vote, which saw some 20 million, or over 38% of registered voters, participate.

Outlaw the most popular political party, get less than 40% turnout (and who knows if it was even that), and declare yourself winners? And have the Western press echo your propaganda?

98.1%? Could they at least try to pretend the vote was representative? This is USSR style “democracy”.

Helping the Most Discriminated Against

By Ian Welsh

On January 18, 2014

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There is no question, in the developed world in general, that men are better off than women; that whites are better off than people with melanin; and that straights are better off than non-straights. (Let alone the transgenders.) To give just one example, a black person will receive half the requests for interviews that a white person will with the exact same resume, and a white convict is more likely to be hired than a black non-convict.

I am unclear on how to deal with this type of discrimination at the current time. What I see is that we are rats, deliberately starved and set against each other. The plight of the female, non-CIS, non-white, non-standard-sexuality rats is worse (on average): But, we’re rats, and we have masters, and they have taken all the gains in productivity for 40 years now — and we’re fighting for scraps, because, goddamn it, we need them.

The reality for working class white males is that, while their lives are better than females/ethnics/etc., things have been getting worse for them since 1968 – 45 years now. That’s when their wages peaked. They are bitter and angry. Sure, things are worse for other people, but their pain is real, and being told that they are to blame does not fly with them, and it never, ever, will. You can scream until your faces are blue at them, and they will not believe they are to blame. (In the same way that most boomers will never admit they have any blame for how the US has turned out.)

If we have a tide that is raising all boats, these problems are easier to fix: the white CIS straight males get less of the increases, the more discriminated-against people get more of the increases — but everyone’s life is getting better. When it’s not a zero some game, when it’s a positive sum game, this problem becomes so much easier to fix.

When the rich are taking all of the economy’s winnings, and then some, we tear at each other like starved rats.

Agree that everyone will win (except the rich, who will lose), and that those who need more, who have suffered more, will get more.

Then turn our ire to the people who have taken everything they can.

Creating a Prosperous Society Where People Love Their Work

By Ian Welsh

On January 15, 2014

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Are you most productive doing what you love, or doing something you are indifferent to or hate? If you could try your hand at doing anything, would you be doing what you’re doing? Are you on track to eventually spend your life in the work of your dreams, or is it clear that will likely never happen?

There will always be lousy but necessary jobs that few people want to do. The garbage must be picked up, the toilets must be cleaned and the bed pans must be emptied. But a society is a better society when more people are doing what they love, or at least working for themselves, out from under close supervision. Almost no one likes being micromanaged, and normal jobs are called wage slavery for a reason.

We want people to stretch themselves, we want them to reach for their dreams, we want them to get up each morning looking forward to the day’s work. We want that for the cold hard calculated reason that such people are more productive, and we want it for the warm soft calculated reason that we’d rather live in a society with as many such people as possible because they’re a lot more enjoyable to spend time around than people who hate their jobs.

It’s not hard to create a society which makes it more likely that people can do what they want. It’s not hard to create an economy which encourages people to start new businesses or to launch new careers. But such a society cannot exist if we prefer to be mean, if we want to punish people for failure. It cannot exist if we see someone else’s success as our failure or if we allow envy to infect our public policy.

People fail to pursue their dreams because they fear failure or because the opportunities aren’t available. Fear of failure is rational: pour everything into a new business which fails, and many businesses fail, and you can be left with no money, no source of income, and lose everything. In a country without universal health care, you could even lose your life if you lose your insurance and become ill or have an accident.

So the first thing a society needs to do is have in place a basic social net: a basic income below which people cannot drop, so they will not become homeless if they fail. Universal health care so they can pursue their dreams without being chained to a health insurance premium. Bankruptcy laws which allow most debts to be wiped away in the event of failure, not just so that people don’t lose everything, but so they can try again. Many entrepreneurs fail more than once before they create a business which works, and we want that, we want bankruptcy. We also want bankruptcy because it is important that lenders do their due diligence and accept the real risk of lending, rather than insisting that the government act as their bill collector. It is not in the government’s interest for people to become impoverished, as impoverished people cannot contribute to society nearly as well.

Credit and calculable law are needed for entrepreneurship. People must be secure in the title to their property so they can borrow against it. They must know that contracts are generally upheld and that basic physical safety is taken care of. Taxation must be calculable, though it doesn’t have to be low. Eras with top marginal income tax rates in from 80% to over 90% have had far more growth than our own low tax periods, and much higher corporate tax rates do not correlate with low economic growth either. After all, first you have to make a profit, or make so much money you’re in the top bracket. As the saying runs, it’s a good problem to have.

Credit in in the modern era is ultimately a product of government. Banks create money when they lend, they do not lend money they have on deposit, though the amount of money they can lend may be some multiple of what they have on deposit. Since the ability to create money is a government grant, and since a government grant is a grant from the people of a nation, the government has the right to influence or even set interest rates. This ability is already used, with central banks setting overnight rates, treasuries influencing bond rates at different durations, and so on. Mortgages in many countries will simply not be issued if they do not meet requirements set down by governments, and so on.

If we want people to do things, we have to make sure the money is available for them to do it. This can mean credit, or it can simply mean the government paying for or subsidizing what is needed. In many countries health care is provided out of taxes. At one time, post-secondary education was virtually free for those who qualified, because governments understood that educated people make more money, create more jobs and contribute more in general. With progressive taxation a government can easily provide free or very cheap education knowing that it will take a portion of every extra dollar earned as a result of that education. Rationing education is short-sighted and foolish, even on a pure cold-cash calculation.

A basic income is another thing governments do and can offer. In the modern day this is generally done through a complicated hodge-podge of systems, from welfare to unemployment insurance to student loans and tax breaks. This is vastly inefficient, and should be simplified. If we aren’t willing to let anyone go without basic lodging and food we should simply guarantee the necessary level of income to anyone over the age of 18 or whatever age children usually leave home. It is simple enough to do it in a way so that everyone is still better off working, it is vastly cheaper than paying an army of social workers to determine who is worthy, and it assumes the most basic tenet of liberty: that adults have the ability to know what they want to do. Nothing is more counter-productive than policies which, say, restrict welfare recipients from going to university, so they can’t improve themselves and have a better chance to contribute to society.

Knowing that they will always have enough to keep a roof over their head and food in their belly people are far more likely to pursue their dreams, to do the work they really want to and to start new businesses. It is true that some people will take advantage of such a system, it is also true that such a system will have much lower administrative costs than current systems. And since the basic income will not be a great income, but only basic, it will not be attractive to many.

It will also put pressure on businesses to treat their employees better. If a business cannot make a job more attractive than living at barely above subsistence then perhaps that job shouldn’t exist. Do all the fast food jobs really make our societies richer? If a job really needs to be done, like janitorial work or garbage collection or cleaning the bums of our parents and grandparents, then does it not deserve to be compensated well? If your CEO doesn’t show up for work, or if the janitor who cleans the toilets doesn’t show up, who do you miss most? And do you really want the person looking after your parents in an old-folks home or hospital to hate their job?

Most money from a basic income, assuming high progressive rates on the rich and the same corporate tax rates as were the norm in the 50s and 60s, will wind up back in the government coffers in any case, after it goes through multiple hands and supports many jobs.

These are the first two thing required to increase the number of people who do work they want to do, or at least don’t hate—freedom from fear of devastating loss and the availability of opportunities to gain the necessary skills, education and credit.

The third thing is to reform laws so people can do what they love.

Consider Silicon Valley in California, one of the greatest entrepreneurial hotspots in the world. New tech business after new tech business has been started there, from Hewlett Packard to Apple. Millions of jobs have spun out from Silicon Valley to the rest of the world. What made Silicon Valley possible? Well the first thing is government money, both to buy products like early computers and to support Stanford University, which histories of the Valley put at the heart of its culture. But another reason Silicon Valley happened in California and not in Massachussets, say, around MIT (though there is a tech corridor around MIT) is this: California law makes non-compete agreements illegal.

A non-compete agreement is a legal contract which states that someone can’t work in a business which competes with their current employer, generally for a few years. So if you have a great idea for a new product in the same line of business you can’t quit and go set up a new company.

Silicon Valley’s history is of startup after startup directly competing with the company the founders left. There would be no Silicon Valley as we know it if California allowed non-competes.

This is a general principle. If law does not allow people to do what they want, well then, they can’t do it. Barriers to entry, barriers to the creation of new businesses are too much to deal with in this article, but just note that what is good for a specific business is rarely good for business as a whole. If I own a business I don’t want my employees to leave and compete against me. That’s bad for me. But it’s good for whatever business I’m in for their to be more competitors and new products and it’s good for society as well.

Likewise laws on protected works and intellectual monopolies in terms of copyrights and patent law can stifle the creation of new businesses. If a person or company is forbidden from creating a product or must pay overly high licensing fees, the business will not happen. There is a balance here, some protection for actual inventors and creators is needed, but in our current society we are very far from the correct balance, and much law that seems to protect creators in fact only creates intellectual rents, stifles the economy and inhibits competition. To cover intellectual properties properly would take another huge article, so I won’t go into it futther here. The basic principle is simple: if it’s illegal to start a business or engage in a career, or it costs too much to be worth it, people won’t. Every time we pass a law which protects incumbents from competition or which protects the work of the past, we ossify our economy and make it harder for people to do the work they want to do, sticking more and more of them in jobs they hate.

The more people who are both free and able to work in jobs they enjoy; who are able to start new businesses; who are able to pursue professions they prefer, the better off everyone will be. This is true both in pure economic terms and in softer terms: happy people are healthier and they are far more fun to be around than unhappy people.

In economies which are running cold, people turn mean. Seeing scarcity all around, they feel that they are in competition for scarce good jobs, scarce good education and scarce happiness. They start blocking other people and insisting that everyone pay upfront intead of behind. Bosses, knowing that there aren’t enough jobs, become mean as well, treating employees badly, knowing they have nowhere to go and confident that if they lose one, or a hundred, or a thousand employees to mistreatment, more will be ready to work, impelled by fear of hunger and poverty.

We can’t all be rich, but we can all be prosperous, and we become prosperous as a group, as a society, not blocking each other, but by opening up opportunity for all, treating everyone as adults, and understanding that other people’s success is our success in the broadest sense. It is certainly true that in a competitive market environment there will be losers and if your closest competitors win, you can lose as a result, but for everyone else in society, the success is beneficial so long as those who succeed to not shut the avenues to success behind them. And if failure does not mean disaster, if there are second and third and fourth acts in life and those who try are allowed to try again, then the fear that both stops people from trying and makes those who are successful try and stop those behind them is greatly reduced.

Societies are prosperous together. Individuals are rich separately. Let us remember this, and remember that fundamental economic success for societies requires generosity and kindness, not parsimony and cruelty.

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The problem of resistance to the oligarchy

By Ian Welsh

On January 12, 2014

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is how to hurt their interests at an acceptable cost to those doing the harm.

The traditional answer to this was solidarity and martyrdom. It is impossible to overstate how dangerous being a union activist right up to the middle of the 20th century was. You had to accept that you would be beaten, jailed and possibly killed. Violent confrontations with police and private cops were routine. Outright battles were not unknown, as when miners squared off against the military in a multi-day battle with over ten thousand casualties.

Nor did the early unions wring their hands about violence, even “criminal” violence. Clarence Darrow was a union lawyer for years. One of his most prominent cases was defending union members who set off explosives in a newspaper office, killing people in that office. The unions did not abandon those workers, who had clearly committed what we would call terrorism: they hired a star lawyer, one of the best in the country, to defend them.

The general strike, even more than the strike, was another answer: just shut the entire economy down. It was used because it inflicted real costs on employers: they still needed some workers. But a strike requires social solidarity: bringing in scabs must be socially unacceptable, either due to mores or because the scabs know they’ll have their kneecaps broken. A general strike requires enough workers to be willing to do it to shut down an entire city, region, or country.

The Gandhian resistance method is very similar to general strikes: it requires hundreds of thousands to millions of people to be willing to shut down the economy and dare the police or army to kill or imprison them all. When you have only a few hundred or thousand people, the police can deal with that easily enough: worst case they call in the national guard. Hundreds of thousands: not so much.

What all of these actions had in common is that they genuinely hurt the interests of the rich where it mattered, in the pocketbook.

You can also get change through making the lives of the rich unpleasant, or making them fear for their very lives. Social peace has often been bought by treating ordinary people better, when the rich genuinely feared the army and police couldn’t protect them.

But if the elites think that their security forces can protect them, and especially if they live in a bubble where they never have to face people whose lives they have made miserable, as is the case for most of our rich, who fly by private jet, travel about the city in helicopters or chauffered limos and live in gated enclaves; and if you can’t cost them any real money, why should they let you have any of the surplus of society beyond the bare minimum you need to remain useful to them? (Not to survive: as the cutting of food stamps in the US indicates, that’s not a priority for the oligarchy.)

Be clear that distribution of goods and money in an economy is almost entirely unrelated to any ethical idea of merit or deservedness. The bankers, amongst the best paid people in the world economy, destroyed far more money than they earned in the 00s, and yet are still paid billions of dollars in bonuses every year. They receive the money they do because they had the power to make the government make them whole after they lost everything, then the power to make the government make them even richer than before. They control a bundle of valuable rights from the state: the right to borrow at prime, the right to value assets to model (fantasy); the right to huge leverage; and the right lend, which is how money is actually created in our economy (aka. they can print money.)

This is why they’re rich: not because they produce net value: they destroy value; but because they have the power to make the government do what they want it to do and to make it not prosecute them when they break the laws, and even to change the laws so they can take even more money.

Distribution in an economy is based, virtually entirely, on power. A group receives goods and money because it can force others to give it to them. The libertarian fantasy of free markets and free choice is exactly that. They don’t exist today, they have rarely existed in the past, and to the extent they have existed they owe their existence entirely to government making sure they exist. As soon as any group gains enough power to take over government, they do, and free markets cease to exist because they make the government give them special rights,whether those are rights to print money, borrow low and lend high, or so-called intellectual property rights that let them continue to profit from ideas created 80 years ago.

Power, power is all that matters. Even distribution, or something close to it, happens only when there is relatively equality between groups in society or there is an existential threat to society which requires the willing participation of all parts of society.

If you ever want to see raises for ordinary people again, you must figure out how they will become powerful: and power means “what can they do to hurt people who cross them, hurt them really, really badly.”

Peace is the result of everyone knowing and believing in their hearts that if they break the conditions of the peace, others will react with overwhelming force. When it becomes clear that there is no cost for taking more of the pie, people will do so, and yes, did do so.

So: how do we punish the rich for what they have done? How do we force them (not convince, force) to give up more of the surplus crated by society?

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Ariel Sharon

By Ian Welsh

On January 11, 2014

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just to note the obvious: he was a war criminal, and a butcher who killed women and children and encouraged that plus rape, in Lebanon. He was largely responsible for the Israeli settlement policy, which will doom Israel either to fully ethnically cleansing the Palestinians, or losing their Jewish identity. (Which Israel should, in any case. A state which classifies residents by their religious ethnicity is an abomination)

The inability of the vast majority of newspapers to state that Sharon was a war criminal plainly is what is wrong with them. Controversial doesn’t cover it.

Sharon was bad for Israel, and will be seen as one of the architects of its demise in the future. He was a monster to non-Israelis.

We Don’t Want an Economy Which Produces Lots of Money

By Ian Welsh

On January 10, 2014

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Money is one of the hardest things to talk about, because we make it into something concrete, which it isn’t, and hasn’t been for a long time, in most countries. Even gold money wasn’t particularly concrete, because gold has no organic relation to a society’s overall production. Currencies like the Japanese Koku, based on grain, were concrete, and in a rural society had a significant relationship to actual economic productivity. In our society, money is an abstraction.

What we want is not an economy which produces a lot of money (whatever that is, as money is an accounting identity). What we want is an economy which produces a lot of good stuff: good products and services.

By good, I mean “products which make our lives better.” Food which makes us sick, beyond keeping us alive, is not what we should be seeking to produce, no matter how many people it makes rich or how convenient it may be. A suburban lifestyle which discourages walking and social ties is not good for us: It contributes to obesity, depression, and powerlessness, and that powerlessness leads to inequality. Jobs which we hate, but do so we can buy food which makes us sick and live in communities which isolate us and make us fat and unfit, are not what we should be aiming for.

Money is very useful: It provides feedback as to how much demand there is if you live in a functioning market, it provides liquidity so we can trade with people without having to set up barter operations, and it provides an accounting mechanism by which we can turn present effort into future right to consume. But how much money we have, total, as a society, is unimportant. What matters is our actual productive capacity.

Consider someone who works and saves money, then retires. A retiree lives in today’s economy. Their butt gets wiped by people working today, their doctor is working today, their food is produced by people working today. If the economy collapses, all their money is meaningless, and they can only buy what people who are working today want to sell.

Ultimately, what matters is how much and what type of goods and services our society is producing. This doesn’t include just food, housing, and clothing. It includes philosophy, art, music, TV, computer games, and education. Money’s purpose is to facilitate the creation of all those good things; to help create a society which produces art, food, and education which are good for those who consume them. If money stops helping create those things, if money is used to restrict access to good food, housing, and education, then money is actually harmful and creating more of it is harmful.

During the 80s, 90s, and 00s, giving money to rich people through tax cuts increased the rate at which jobs were off-shored. During the post-war period, the more money was spent on food production in the US, the cheaper food became — but also the fatter and sicker Americans became. The feedback loop was “more fat and sugar and carbs = more sales,” so they slathered all of that on.

As I’ve noted before, money is permission. It is the right of people to tell other people what to do. But giving money to someone, especially giving a lot of money to someone, more than the standard return in an economy says “DO THIS. DO MORE OF IT.” So if the most highly-rewarded people in the economy are Wall Street scam artists and people financing building McMansions, well, you’re going to get more of that.

It is right-wing ideology that the government shouldn’t pick winners and losers. They’re right when it comes to individuals, but dead wrong when it comes to groups. We don’t want people winning by polluting, by producing shitty food, by committing fraud. We do want people winning who are doing basic science, educating children well, helping sick people, and creating products and services which make people healthier, fitter, and happier. If we see a large group of people getting more money by doing bad, then we need to shut that down, and fast, because the longer we leave it, the longer we say “whatever, it doesn’t matter,” not only are they doing harm at a faster and faster rate as money and people move into an arena where they earn greater returns, but their money turns into power, allowing them to buy up other people to ensure that they can continue making money doing harm.

Money is permission, money is power, and money goes to the highest returns. If the highest returns are doing harm, our society will become toxic faster than you can say, “I’m getting trickled on.”

So watch where money is going, and make sure the people getting it are doing good, not harm.

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The Power Parable

By Ian Welsh

On January 9, 2014

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“The strong do what they will and the weak suffer what they must ” – Thucydides

Imagine that you have crawled out of the desert. You have not drunk in days, and if you do not have water soon you will die. Only one man has water, but he will not give it to you for free, he wants to be paid.

What is that water worth? To put it another way, what is your life worth?

One answer is that your life is worth everything you will ever earn, minus the cost of subsistence. The water-seller might say “if you die, you will never earn anything again. Therefore everything you earn is because I gave you water. So this water is worth your life’s income.”

Now you might not find life worth living under these circumstances, which amount to slavery. If the water-seller had many possible customers crawling out of the desert, he might find that too many people would rather die than pay, and might reduce his price somewhat to maximize his profit. If one quarter of people would rather die than pay, he might reduce the price to two-thirds of his customers life earnings, and see if most of them were willing to pay that.

Over time he might find that, knowing he’d take two-thirds, once saved his customers wouldn’t work very hard: just enough for subsistence and some alcohol, perhaps. So he might continue to experiment—how much could he take to maximize his profits?

But there is another possibility, back at the original bargain “your earnings, or your life?” What if you decide to take the water whether the water-seller wants you to have it or not? What if you’re willing to use violence? You’re weak, you might not win and if you lose you’re dead, but you might win and if you do you don’t have to pay anything. And if you win, you could start selling water yourself.

The water-seller has to take this into account. Which means he either has to reduce the price he charges so it’s not worth people trying to kill him, or he has to spend some of his profits on security. Thugs, pretty much.

But why pay for his own thugs? Why not pay government, and use its thugs? Everybody chips in some money, the government creates police and an army, and they make sure that customers don’t just take the water. They also solve another problem we hadn’t mentioned, making sure that people keep paying up later once they are no longer dying for thirst. The government enforces the water-seller’s contracts.

It should be pointed out that the water-payer is getting a lot more out of the governments thugs than most ordinary people are. Even if we assume the new police enforce all contracts and stop violence against everyone (as best they can), this guy has a lot more enforcement needs and a lot more people who want to kill him than an ordinary person. So even if everyone pays, say, 10% of income for the police, our water-seller is doing well out of this.

But why should the water-seller pay 10%? If the government has politicians whose money is separate from the government’s money, who can’t just use it as their purse, why not give them personally, say, 2% in gifts. That’s enough money to make them, personally, filthy rich. And they can lower water-seller taxes (after all, he saves lives and is a lynchpin of the economy) and raise them on other people. With a bit of work he might not pay any direct taxes, only gifts, and the rest of the population will pay for the enforcement of his contract rights. Yes, that reduces the post-subsistence money he gets from the people whose lives he saved, but for every dollar spent on enforcement he would have only gotten two-thirds anyway.

This is power pricing in a parable.

Back in the eighties I was very poor and did not have a phone. Ever try to get a job without a phone? It limits you to a set of very menial, low paying jobs. How much is a phone worth if you need it to get a better job? In the modern world, where job-hunting is done through the internet, how much is it worth to have email?

For years I didn’t have a credit card. I eventually got one because I needed to travel, and only the lowest grade of hotels will let you stay if you don’t have a credit card. Likewise you can’t rent a car without a credit card. How much is not having bedbugs and having blackout drapes and a good mattress worth to you? How much is being able to drive worth to you?

Let us say you live far from where you work, and there is no public transportation. How much can you be charged for gas before you refuse to pay? Probably just slightly less than the difference between your current job and the best paying job near where you live, minus whatever price you put on the annoyance of having to drive a long ways.

What if there aren’t any jobs near where you live that you can find because the economy is in a prolonged slump? How much can they charge you for gas, and repairs, and car insurance and driver’s license fees then? You have to have a car, you can’t make a living without it. Everyone who sells you something related to cars knows that.

There are two answers to these what-ifs. There’s the free market answer, and there’s the government-for-the-people answer.

The free market answer is that if it is easy for new suppliers of gas, or repairs, or insurance, to start a new business, if the current suppliers charge more than the cost of getting into the business, someone will start a new business and undercut them. The threat of that, and the actual occasional reality of that, will keep current suppliers from gouging you. If there are a lot of people selling, even without new people coming into the business, one of them may “betray” the others and sell for cheaper, so long as they can still make a profit (or to drive people out of the business they might sell for a loss, so they can later charge the full “power price”.)

The second answer is that the government says “that’s not fair” or “it is not in our interest to let you take such high profits, because it reduces economic activity and thus our tax base” and simply doesn’t allow businesses to take maximum profits.

If the government doesn’t stop it, and if the market doesn’t stop it, however, profit maximization will occur.

“What this is really worth to you is just slightly less than every dollar this will earn you or save you. And that’s what we’re going to charge.”

In the real world, of course, there are multiple demands on each consumer – food, water, housing, transportation, education, healthcare, entertainment. So even if in one field there is no government or market reason not to gouge, there is a limit to how much a business can gouge because there are so many businesses trying to do so.

But notice something about that list: food, water, housing, transportation, education, healthcare, entertainment—every one of those things, except entertainment, you either need to survive, or you need to maximize your income. You pretty much must have those things, so anyone who is in a position to take them away is in a position to profit maximize. Now, let us say that in many of those fields the businesses are constrained either by the market or the government so they can’t take almost all of the value of what they offer. In such a case, the field or fields which isn’t constrained is going to make much higher profits. So if water companies are not subject to the possibility of new competition, nor are they regulated that field is going to be making much higher profits than housing, food, education, healthcare and so on.

So every business wants other industries to be subject to regulation, and to be a free market, but they want themselves to be free of regulation and free of real competition. A small number of other firms in the industry, all of whom do business the same way, and none of whom seriously undercut each other is acceptable to profit maximizers, but if it is easy to enter their business, then there is a free market and that’s not good for profit maximization.

Whenever you see an industry where profits are routinely higher than the norm for the society there is a good chance it is neither properly regulated nor a free market.

Because ordinary citizens do not have market power, because they cannot individually break a major firm, they must take prices. If the phone company, or the water company sets a price, you pay, or you don’t have a phone, or water.

Now consumers do have power as a group. If large numbers of consumers move together they can destroy or make a company. However it’s hard for consumers to do this when there is collusion between companies. If they’re all basically the same, if the product and the service is the same, consumer revolts are unlikely, especially for any must-have products. You must have water, you must have food. If you want a good job you must have a phone and internet, and any place without good public transit, you must have a car.

Consumers have power as consumers in markets that are actually free, where there is actual competition. Citizens also have power to the extent that they have power in government, and thus can use government to control industry, either to make sure there are actual free markets, or to ensure that if there aren’t, they are regulated.

To go back to our initial example, if you come crawling out of the desert and anyone can give you water, not just one person or a few people colluding, you’ll probably get it for little more than it usually costs. Indeed, a good samaritan may give you wate for free. If the government is responsive to ordinary citizens sense of outrage and morality “that’s not fair!” then even if there is only one water-seller, the government won’t let him charge you more than anyone else.

Individual consumers are in a weak position. As consumers they have very little power. It is as citizens that they have power, and it is in actual free markets that the producers do not have enough power to take advantage of consumer weakness. Free markets, however, are very fragile things, and usually only exist if government makes sure they do, which comes back to consumers being weak, but citizens having power through government. Citizens who treat politics as consumption, however, will lose both power and prosperity.

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