When Robots Replace Workers

An article in the Harvard Business Review by William H. Davidow and Michael S. Malone suggests: “The “Second Economy” (the term used by economist Brian Arthur to describe the portion of the economy where computers transact business only with other computers) is upon us. It is, quite simply, the virtual economy, and one of its main byproducts is the replacement of workers with intelligent machines powered by sophisticated code. … This is why we will soon be looking at hordes of citizens of zero economic value. Figuring out how to deal with the impacts of this development will be the greatest challenge facing free market economies in this century. … Ultimately, we need a new, individualized, cultural, approach to the meaning of work and the purpose of life. Otherwise, people will find a solution — human beings always do — but it may not be the one for which we began this technological revolution.”

This follows the recent discussion of “Economists Say Newest AI Technology Destroys More Jobs Than It Creates” citing a NY Times article and other previous discussions like Humans Need Not Apply. What is most interesting to me about this HBR article is not the article itself so much as the fact that concerns about the economic implications of robotics, AI, and automation are now making it into the Harvard Business Review. These issues have been otherwise discussed by alternative economists for decades, such as in the Triple Revolution Memorandum from 1964 — even as those projections have been slow to play out, with automation’s initial effect being more to hold down wages and concentrate wealth rather than to displace most workers. However, they may be reaching the point where these effects have become hard to deny despite going against mainstream theory which assumes infinite demand and broad distribution of purchasing power via wages.

As to possible solutions, there is a mention in the HBR article of using government planning by creating public works like infrastructure investments to help address the issue. There is no mention in the article of expanding the “basic income” of Social Security currently only received by older people in the U.S., expanding the gift economy as represented by GNU/Linux, or improving local subsistence production using, say, 3D printing and gardening robots like Dewey of “Silent Running.” So, it seems like the mainstream economics profession is starting to accept the emerging reality of this increasingly urgent issue, but is still struggling to think outside an exchange-oriented box for socioeconomic solutions. A few years ago, I collected dozens of possible good and bad solutions related to this issue. Like Davidow and Malone, I’d agree that the particular mix we end up will be a reflection of our culture. Personally, I feel that if we are heading for a technological “singularity” of some sort, we would be better off improving various aspects of our society first, since our trajectory going out of any singularity may have a lot to do with our trajectory going into it.

New TISA leak: secret trade deal threatens privacy rights

By Santiago Carrion On December 19, 2014

Post image for New TISA leak: secret trade deal threatens privacy rights

A new leak exposes US attempts to boost mega-corporations by undermining privacy rights and internet freedoms through the top-secret TISA trade deal.

On Wednesday, the Associated Whistleblowing Press published a new leak revealing US attempts to undermine privacy rights, net neutrality and internet freedoms through top-secret negotiations over the little-known Trade in Services Agreement (TISA). Even a quick glance at the leaked document is already extremely revealing. At the top of its front page, in capital letters, the word CONFIDENTIAL is highlighted — and further down the full extent of the treaty’s secret nature is revealed: “Declassify on five years from entry into force of the TISA agreement.”

A full reading and understanding of the text, however, not only explains these harsh terms, but makes them necessary. Because what government would tell its citizens, explicitly, that they are opening the door for mega-corporations to take control of their public services? What company would clearly inform its customers that their private data will be handed over to foreign entities without any restrictions? In the case of TISA, when the players involved include the US, the EU and more than twenty other countries — together making up almost 70% of the world services market — the answers are painfully obvious.

As Rosa Pavanelli, General Secretary of Public Services International (a global federation of unions that represents over 200 million workers, and one of the most active voices against TISA) puts it: “the leaked documents confirm our worst fears: that TISA is being used to further the interests of some of the largest corporations on earth.” These interests, of course, are directly opposed to those of most of the world population.

Where did TISA come from?

To understand the nature of the treaty, we have to go back to 2001, when the Doha rounds of the World Trade Organization intended to tear down all barriers and limitations to global commerce. After the failure of these negotiations and other similar treaties — such as ALCA — the global powers began the process of signing bilateral and multilateral treaties to achieve their goals. The objective is always the same: to open up all possible services to international competition on a minimally regulated market.

The global financial crisis of 2008, however, forced a drastic change of plans, and there were even a couple of important voices that timidly spoke out against the deregulatory trend they believed had sparked the crisis. At this point, the big fish behind this trend of market liberalization — the United States, Canada, the European Union and Switzerland — conceded, if only for a while.

But now that the smoke has cleared these same countries and the powerful business lobbies behind them — who actually call themselves ‘Really Good Friends of Services’ and who claim that there is no connection between market deregulation and the global financial crisis — are planning to bypass public concerns through secrecy and completely liberalize up to 70% of all services worldwide, even those related to our personal privacy.

“The end of privacy as we know it”

All of this is why, for now, the little information we have about TISA has come to us through a set of carefully leaked documents. The first time the public caught a glimpse of what was happening between negotiators in Geneva was thanks toWikileaks, who published a chapter on finance last June, revealing that these global powers were well on their way to achieve their plans for further deregulation by the time public concern had diminished.

The new documents — technically referred to as the United States’ Proposal of New Provisions Applicable to All Services and the Annex of Professional Services — shed a whole new light on the scope of the treaty: legal services, private education, veterinary care, taxation services and even bookkeeping are all on the table, as well as technical services such as internet providers, electronic transactions, digital signatures and Big Data flow.

This last point, relating to the movement of information, is particularly serious. Article X.4 states that “no party may prevent a service supplier of another Party from transferring, accessing, processing or storing information, including personal information, within or outside the Party’s territory, where such activity is carried out in conduct of the service supplier’s business.” According to lawyerJosep Jover, an expert in intellectual property, this spells “the end of privacy as we know it,” as “the consumer becomes fuel for the services provider.”

On this issue, Rosa Pavanelli is once again crystal clear: “Negotiation of unrestricted data movement, internet neutrality and how electronic signatures can be used strike at the heart of individual rights … Negotiating provisions that potentially circumvent privacy laws in the interests of corporate profits is a scandal. The TISA negotiators have now lost the confidence of the public and can only regain it with the immediate release of all documents.”

Now that we know that this is probably just wishful thinking, we can only hope that the leaks keep on coming — and the public resistance to this highly secretive trade deal keeps on growing.

Santiago Carrion is co-founder, with Pedro Noel, of the Associated Whistleblowing Press (AWP). Follow AWP on Twitter @wbpress.

 

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The secret to the Uber economy is wealth inequality

uber-inequality

WRITTEN BY  Leo Mirani

Of the many attractions offered by my hometown, a west coast peninsula famed for its deep natural harbor, perhaps the most striking is that you never have to leave the house. With nothing more technologically advanced than a phone, you can arrange to have delivered to your doorstep, often in less than an hour, takeaway food, your weekly groceries, alcohol, cigarettes, drugs (over-the-counter, prescription, proscribed), books, newspapers, a dozen eggs, half a dozen eggs, a single egg. I once had a single bottle of Coke sent to my home at the same price I would have paid had I gone to shop myself.

The same goes for services. When I lived there, a man came around every morning to collect my clothes and bring them back crisply ironed the next day; he would have washed them, too, but I had a washing machine.
These luxuries are not new. I took advantage of them long before Uber became a verb, before the world saw the first iPhone in 2007, even before the first submarine fibre-optic cable landed on our shores in 1997. In my hometown of Mumbai, we have had many of these conveniences for at least as long as we have had landlines—and some even earlier than that.
It did not take technology to spur the on-demand economy. It took masses of poor people.

Silicon Valley catches on

In San Francisco, another peninsular city on another west coast on the other side of the world, a similar revolution of convenience is underway, spurred by the unstoppable rise of Uber, the on-demand taxi service, which went from offering services in 60 cities around the world at the end of last year to more than 200 today.

Uber’s success has sparked a revolution, covered in great detail this summer by Re/code, a tech blog, which ran a special series about “the new instant gratification economy.” As Re/code pointed out, after Uber showed how it’s done, nearly every pitch made by starry-eyed technologists “in Silicon Valley seemed to morph overnight into an ‘Uber for X’ startup.”
Various companies are described now as “Uber for massages,” “Uber for alcohol,” and “Uber for laundry and dry cleaning,” among many, many other things (“Uber for city permits”). So profound has been their cultural influence in 2014, one man wrote a poem about them for Quartz. (Nobody has yet written a poem dedicated to the other big cultural touchstone of 2014 for the business and economics crowd, French economist Thomas Piketty’s smash hit, Capital in the Twenty-First Century.)
The conventional narrative is this: enabled by smartphones, with their GPS chips and internet connections, enterprising young businesses are using technology to connect a vast market willing to pay for convenience with small businesses or people seeking flexible work.
This narrative ignores another vital ingredient, without which this new economy would fall apart: inequality.

The new middlemen

There are only two requirements for an on-demand service economy to work, and neither is an iPhone. First, the market being addressed needs to be big enough to scale—food, laundry, taxi rides. Without that, it’s just a concierge service for the rich rather than a disruptive paradigm shift, as a venture capitalist might say. Second, and perhaps more importantly, there needs to be a large enough labor class willing to work at wages that customers consider affordable and that the middlemen consider worthwhile for their profit margins.

Uber was founded in 2009, in the immediate aftermath of the worst financial crisis in a generation. As the ride-sharing app has risen, so too have income disparity and wealth inequality in the United States as a whole and in San Francisco in particular. Recent research by the Brookings Institution found that of any US city, San Francisco had the largest increase in inequality between 2007 and 2012. The disparity in San Francisco as of 2012, as measured (pdf) by a city agency, was in fact more pronounced than inequality in Mumbai (pdf).
Of course, there are huge differences between the two cities. Mumbai is a significantly poorer, dirtier, more miserable place to live and work. Half of its citizens lack access to sanitation or formal housing.
Another distinction, just as telling, lies in the opportunities the local economy affords to the army of on-demand delivery people it supports. In Mumbai, the man who delivers a bottle of rum to my doorstep can learn the ins and outs of the booze business from spending his days in a liquor store. If he scrapes together enough capital, he may one day be able to open his own shop and hire his own delivery boys.
His counterpart in San Francisco has no such access. The person who cleans your home in SoMa has little interaction with the mysterious forces behind the app that sends him or her to your door. The Uber driver who wants an audience with management can’t go to Uber headquarters; he or she must visit a separate “driver center.”

There is no denying the seductive nature of convenience—or the cold logic of businesses that create new jobs, whatever quality they may be. But the notion that brilliant young programmers are forging a newfangled “instant gratification” economy is a falsehood. Instead, it is a rerun of the oldest sort of business: middlemen insinuating themselves between buyers and sellers.

All that modern technology has done is make it easier, through omnipresent smartphones, to amass a fleet of increasingly desperate jobseekers eager to take whatever work they can get.

As Washington “Pivots” to Asia, China Does the Eurasian Pirouette

Go West, Young Han

trans-eurasian-corridor-300x150
 
By Pepe Escobar

November 18, 2014: it’s a day that should live forever in history. On that day, in the city of Yiwu in China’s Zhejiang province, 300 kilometers south of Shanghai, the first train carrying 82 containers of export goods weighing more than 1,000 tons left a massive warehouse complex heading for Madrid. It arrived on December 9th.

Welcome to the new trans-Eurasia choo-choo train.  At over 13,000 kilometers, it will regularly traverse the longest freight train route in the world, 40% farther than the legendary Trans-Siberian Railway. Its cargo will cross China from East to West, then Kazakhstan, Russia, Belarus, Poland, Germany, France, and finally Spain.

You may not have the faintest idea where Yiwu is, but businessmen plying their trades across Eurasia, especially from the Arab world, are already hooked on the city “where amazing happens!” We’re talking about the largest wholesale center for small-sized consumer goods — from clothes to toys — possibly anywhere on Earth.

The Yiwu-Madrid route across Eurasia represents the beginning of a set of game-changing developments. It will be an efficient logistics channel of incredible length. It will represent geopolitics with a human touch, knitting together small traders and huge markets across a vast landmass. It’s already a graphic example of Eurasian integration on the go. And most of all, it’s the first building block on China’s “New Silk Road,” conceivably the project of the new century and undoubtedly the greatest trade story in the world for the next decade.

Go west, young Han. One day, if everything happens according to plan (and according to the dreams of China’s leaders), all this will be yours — via high-speed rail, no less.  The trip from China to Europe will be a two-day affair, not the 21 days of the present moment. In fact, as that freight train left Yiwu, the D8602 bullet train was leaving Urumqi in Xinjiang Province, heading for Hami in China’s far west. That’s the first high-speed railway built in Xinjiang, and more like it will be coming soon across China at what is likely to prove dizzying speed.

Today, 90% of the global container trade still travels by ocean, and that’s what Beijing plans to change.  Its embryonic, still relatively slow New Silk Road represents its first breakthrough in what is bound to be an overland trans-continental container trade revolution.

And with it will go a basket of future “win-win” deals, including lower transportation costs, the expansion of Chinese construction companies ever further into the Central Asian “stans,” as well as into Europe, an easier and faster way to move uranium and rare metals from Central Asia elsewhere, and the opening of myriad new markets harboring hundreds of millions of people.

So if Washington is intent on “pivoting to Asia,” China has its own plan in mind.  Think of it as a pirouette to Europe across Eurasia.

Defecting to the East?

The speed with which all of this is happening is staggering. Chinese President Xi Jinping launched the New Silk Road Economic Belt in Astana, Kazakhstan, in September 2013. One month later, while in Indonesia’s capital, Jakarta, he announced a twenty-first-century Maritime Silk Road. Beijing defines the overall concept behind its planning as “one road and one belt,” when what it’s actually thinking about is a boggling maze of prospective roads, rail lines, sea lanes, and belts.

We’re talking about a national strategy that aims to draw on the historical aura of the ancient Silk Road, which bridged and connected civilizations, east and west, while creating the basis for a vast set of interlocked pan-Eurasian economic cooperation zones.  Already the Chinese leadership has green-lighted a $40 billion infrastructure fund, overseen by the China Development Bank, to build roads, high-speed rail lines, and energy pipelines in assorted Chinese provinces. The fund will sooner or later expand to cover projects in South Asia, Southeast Asia, the Middle East, and parts of Europe. But Central Asia is the key immediate target.

Chinese companies will be investing in, and bidding for contracts in, dozens of countries along those planned silk roads. After three decades of development while sucking up foreign investment at breakneck speed, China’s strategy is now to let its own capital flow to its neighbors. It’s already clinched $30 billion in contracts with Kazakhstan and $15 billion with Uzbekistan. It has provided Turkmenistan with $8 billion in loans and a billion more has gone to Tajikistan.

In 2013, relations with Kyrgyzstan were upgraded to what the Chinese term “strategic level.” China is already the largest trading partner for all of them except Uzbekistan and, though the former Central Asian socialist republics of the Soviet Union are still tied to Russia’s network of energy pipelines, China is at work there, too, creating its own version of Pipelineistan, including anew gas pipeline to Turkmenistan, with more to come.

The competition among Chinese provinces for much of this business and the infrastructure that goes with it will be fierce. Xinjiang is already being reconfigured by Beijing as a key hub in its new Eurasian network. In early November 2014, Guangdong — the “factory of the world” — hosted the first international expo for the country’s Maritime Silk Road and representatives of no less than 42 countries attended the party.

President Xi himself is now enthusiastically selling his home province, Shaanxi, which once harbored the start of the historic Silk Road in Xian, as a twenty-first-century transportation hub. He’s made his New Silk Road pitch for it to, among others, Tajikistan, the Maldives, Sri Lanka, India, and Afghanistan.

Just like the historic Silk Road, the new one has to be thought of in the plural.  Imagine it as a future branching maze of roads, rail lines, and pipelines. A key stretch is going to run through Central Asia, Iran, and Turkey, with Istanbul as a crossroads site. Iran and Central Asia are alreadyactively promoting their own connections to it. Another key stretch will follow the Trans-Siberian Railway with Moscow as a key node. Once that trans-Siberian high-speed rail remix is completed, travel time between Beijing and Moscow will plunge from the current six and a half days to only 33 hours. In the end, Rotterdam, Duisburg, and Berlin could all be nodes on this future “highway” and German business execs are enthusiastic about the prospect.

The Maritime Silk Road will start in Guangdong province en route to the Malacca Strait, the Indian Ocean, the Horn of Africa, the Red Sea and the Mediterranean, ending essentially in Venice, which would be poetic justice indeed.  Think of it as Marco Polo in reverse.

All of this is slated to be completed by 2025, providing China with the kind of future “soft power” that it now sorely lacks. When President Xi hails the push to “break the connectivity bottleneck” across Asia, he’s also promising Chinese credit to a wide range of countries.

Now, mix the Silk Road strategy with heightened cooperation among the BRICS countries (Brazil, Russia, India, China, and South Africa), with accelerated cooperation among the members of the Shanghai Cooperation Organization (SCO), with a more influential Chinese role over the 120-member Non-Aligned Movement (NAM) — no wonder there’s the perception across the Global South that, while the U.S. remains embroiled in its endless wars, the world is defecting to the East.

New Banks and New Dreams

The recent Asia-Pacific Economic Cooperation (APEC) summit in Beijing was certainly a Chinese success story, but the bigger APEC story went virtually unreported in the United States.  Twenty-two Asian countries approved the creation of an Asian Infrastructure Investment Bank (AIIB) only one year after Xi initially proposed it. This is to be yet another bank, like the BRICS Development Bank, that will help finance projects in energy, telecommunications, and transportation.  Its initial capital will be $50 billion and China and India will be its main shareholders.

Consider its establishment a Sino-Indian response to the Asian Development Bank (ADB), founded in 1966 under the aegis of the World Bank and considered by most of the world as a stalking horse for the Washington consensus. When China and India insist that the new bank’s loans will be made on the basis of “justice, equity, and transparency,” they mean that to be in stark contrast to the ADB (which remains a U.S.-Japan affair with those two countries contributing 31% of its capital and holding 25% of its voting power) — and a sign of a coming new order in Asia.  In addition, at a purely practical level, the ADB won’t finance the real needs of the Asian infrastructure push that the Chinese leadership is dreaming about, which is why the AIIB is going to come in so handy.

Keep in mind that China is already the top trading partner for India, Pakistan, and Bangladesh.  It’s in second place when it comes to Sri Lanka and Nepal.  It’s number one again when it comes to virtually all the members of the Association of Southeast Asian Nations (ASEAN), despite China’s recent well-publicized conflicts over who controls waters rich in energy deposits in the region. We’re talking here about the compelling dream of a convergence of 600 million people in Southeast Asia, 1.3 billion in China, and 1.5 billion on the Indian subcontinent.

Only three APEC members — apart from the U.S. — did not vote to approve the new bank: Japan, South Korea, and Australia, all under immense pressure from the Obama administration. (Indonesia signed on a few days late.) And Australia is finding it increasingly difficult to resist the lure of what, these days, is being called “yuan diplomacy.”

In fact, whatever the overwhelming majority of Asian nations may think about China’s self-described “peaceful rise,” most are already shying away from or turning their backs on a Washington-and-NATO-dominated trade and commercial world and the set of pacts — from the Transatlantic Trade and Investment Partnership (TTIP) for Europe to the Trans-Pacific Partnership (TPP) for Asia — that would go with it.

When Dragon Embraces Bear

Russian President Vladimir Putin had a fabulous APEC. After his country and China clinched a massive $400 billion natural gas deal in May — around the Power of Siberia pipeline, whose construction began this year — they added a second agreement worth $325 billion around the Altai pipeline originating in western Siberia.

These two mega-energy deals don’t mean that Beijing will become Moscow-dependent when it comes to energy, though it’s estimated that they will provide 17% of China’s natural gas needs by 2020. (Gas, however, makes up only 10% per cent of China’s energy mix at present.)  But these deals signal where the wind is blowing in the heart of Eurasia. Though Chinese banks can’t replace those affected by Washington and EU sanctions against Russia, they are offering a Moscow battered by recent plummeting oil prices some relief in the form of access to Chinese credit.

On the military front, Russia and China are now committed to large-scale joint military exercises, while Russia’s advanced S-400 air defense missile system will soon enough be heading for Beijing.  In addition, for the first time in the post-Cold War era, Putin recently raised the old Soviet-era doctrine of “collective security” in Asia as a possible pillar for a new Sino-Russian strategic partnership.

Chinese President Xi has taken to calling all this the “evergreen tree of Chinese-Russian friendship” — or you could think of it as Putin’s strategic “pivot” to China.  In either case, Washington is not exactly thrilled to see Russia and China beginning to mesh their strengths: Russian excellence in aerospace, defense technology, and heavy equipment manufacturing matching Chinese excellence in agriculture, light industry, and information technology.

It’s also been clear for years that, across Eurasia, Russian, not Western, pipelines are likely to prevail. The latest spectacular Pipelineistan opera — Gazprom’s cancellation of the prospective South Stream pipeline that was to bring yet more Russian natural gas to Europe — will, in the end, only guarantee an even greater energy integration of both Turkey and Russia into the new Eurasia.

So Long to the Unipolar Moment 

All these interlocked developments suggest a geopolitical tectonic shift in Eurasia that the American media simply hasn’t begun to grasp. Which doesn’t mean that no one notices anything.  You can smell the incipient panic in the air in the Washington establishment.  The Council on Foreign Relations is already publishing laments about the possibility that the former sole superpower’s exceptionalist moment is “unraveling.” The U.S.-China Economic and Security Review Commission can only blame the Chinese leadership for being “disloyal,” adverse to “reform,” and an enemy of the “liberalization” of their own economy.

The usual suspects carp that upstart China is upsetting the “international order,” will doom “peace and prosperity” in Asia for all eternity, and may becreating a “new kind of Cold War” in the region. From Washington’s perspective, a rising China, of course, remains the major “threat” in Asia, if not the world, even as the Pentagon spends gigantic sums to keep its sprawling global empire of bases intact. Those Washington-based stories about the new China threat in the Pacific and Southeast Asia, however, never mention that China remains encircled by U.S. bases, while lacking a base of its own outside its territory.

Of course, China does face titanic problems, including the pressures being applied by the globe’s “sole superpower.” Among other things, Beijing fears threats to the security of its sea-borne energy supply from abroad, which helps explain its massive investment in helping create a welcoming Eurasian Pipelineistan from Central Asia to Siberia. Fears for its energy future also explain its urge to “escape from Malacca” by reaching for energy supplies in Africa and South America, and its much-discussed offensive to claim energy-rich areas of the East and South China seas, which Beijing is betting could become a “second Persian Gulf,” ultimately yielding 130 billion barrels of oil.

On the internal front, President Xi has outlined in detail his vision of a “results-oriented” path for his country over the next decade. As road maps go, China’s “must-do” list of reforms is nothing short of impressive. And worrying about keeping China’s economy, already the world’s number oneby size, rolling along at a feverish pitch, Xi is also turbo-charging the fight against corruption, graft, and waste, especially within the Communist Party itself.

Economic efficiency is another crucial problem. Chinese state-owned enterprises are now investing a staggering $2.3 trillion a year — 43% of the country’s total investment — in infrastructure. Yet studies at Tsinghua University’s School of Management have shown that an array of investments in facilities ranging from steel mills to cement factories have only added to overcapacity and so actually undercut China’s productivity.

Xiaolu Wang and Yixiao Zhou, authors of the academic paper “Deepening Reform for China’s Long-term Growth and Development,” contend that it will be difficult for China to jump from middle-income to high-income status — a key requirement for a truly global power. For this, an avalanche of extra government funds would have to go into areas like social security/unemployment benefits and healthcare, which take up at present 9.8% and 15.1% of the 2014 budget — high for some Western countries but not high enough for China’s needs.

Still, anyone who has closely followed what China has accomplished over these past three decades knows that, whatever its problems, whatever the threats, it won’t fall apart. As a measure of the country’s ambitions for economically reconfiguring the commercial and power maps of the world, China’s leaders are also thinking about how, in the near future, relations with Europe, too, could be reshaped in ways that would be historic.

What About That “Harmonious Community”?

At the same moment that China is proposing a new Eurasian integration, Washington has opted for an “empire of chaos,” a dysfunctional global system now breeding mayhem and blowback across the Greater Middle East into Africa and even to the peripheries of Europe.

In this context, a “new Cold War” paranoia is on the rise in the U.S., Europe, and Russia.  Former Soviet leader Mikhail Gorbachev, who knows a thing or two about Cold Wars (having ended one), couldn’t be more alarmed. Washington’s agenda of “isolating” and arguably crippling Russia is ultimately dangerous, even if in the long run it may also be doomed to failure.

At the moment, whatever its weaknesses, Moscow remains the only power capable of negotiating a global strategic balance with Washington and putting some limits on its empire of chaos.  NATO nations still follow meekly in Washington’s wake and China as yet lacks the strategic clout.

Russia, like China, is betting on Eurasian integration.  No one, of course, knows how all this will end.  Only four years ago, Vladimir Putin was proposing “a harmonious economic community stretching from Lisbon to Vladivostok,” involving a trans-Eurasian free trade agreement. Yet today, with the U.S., NATO, and Russia locked in a Cold War-like battle in the shadows over Ukraine, and with the European Union incapable of disentangling itself from NATO, the most immediate new paradigm seems to be less total integration than war hysteria and fear of future chaos spreading to other parts of Eurasia.

Don’t rule out a change in the dynamics of the situation, however.  In the long run, it seems to be in the cards.  One day, Germany may lead parts of Europe away from NATO’s “logic,” since German business leaders and industrialists have an eye on their potentially lucrative commercial future in a new Eurasia. Strange as it might seem amid today’s war of words over Ukraine, the endgame could still prove to involve a Berlin-Moscow-Beijing alliance.

At present, the choice between the two available models on the planet seems stark indeed: Eurasian integration or a spreading empire of chaos. China and Russia know what they want, and so, it seems, does Washington.  The question is: What will the other moving parts of Eurasia choose to do?

Pepe Escobar is the roving correspondent for Asia Times/Hong Kong, an analyst for RT, and a TomDispatch regular. His latest book is Empire of Chaos (Nimble Books). Follow him on Facebook.

Copyright 2014 Pepe Escobar

 

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In 2009, the president promised nuclear disarmament. Five years later, our stockpile remains frightfully intact

Obama channels Dr. Stangelove: How the president learned to stop worrying and love the bomb

, TOMDISPATCH.COM

Obama channels Dr. Stangelove: How the president learned to stop worrying and love the bomb

This piece originally appeared on TomDispatch.

Mark these days. A long-dreaded transformation from hope to doom is taking place as the United States of America ushers the world onto the no-turning-back road of nuclear perdition. Once, we could believe there was another way to go. Indeed, we were invited to take that path by the man who is, even today, overseeing the blocking of it, probably forever.

It was one of the most stirring speeches an American president had ever given. The place was Prague; the year was 2009; the president was the recently sworn in Barack Obama. The promise made that day is worth recalling at length, especially since, by now, it is largely forgotten:

“As the only nuclear power to have used a nuclear weapon, the United States has a moral responsibility to act… So today, I state clearly and with conviction America’s commitment to seek the peace and security of a world without nuclear weapons. I’m not naive. This goal will not be reached quickly — perhaps not in my lifetime. It will take patience and persistence. But now, we, too, must ignore the voices who tell us that the world cannot change. We have to insist, ‘Yes, we can…’”

President Obama had been in office only three months when, boldly claiming his place on the world stage, he unequivocally committed himself and his country to a nuclear abolition movement that, until then, had at best existed somewhere on the distant fringes of power politics. “I know,” he added, “that there are some who will question whether we can act on such a broad agenda. There are those who doubt whether true international cooperation is possible… and there are those who hear talk of a world without nuclear weapons and doubt whether it’s worth setting a goal that seems impossible to achieve. But make no mistake. We know where that road leads.”

The simple existence of nuclear weapons, an American president declared, paved the road to perdition for humanity.

Obama as The Captain Ahab of Nuclear Weapons

At that moment, the foundations for an imagined abolitionist world were modest indeed, but not nonexistent.  The 1968 Nuclear Non-Proliferation Treaty (NPT) had, for instance, struck a bargain between nuclear haves and have-nots, under which a path to abolition was treated as real.  The dealseemed clear enough: the have-nots would promise to forego obtaining nukes and, in return, the world’s reigning nuclear powers would pledge to take, in the words of the treaty, “effective measures in the direction of nuclear disarmament.”



For decades before the Obama moment, however, the superpower arsenals of nuclear warheads continued to grow like so many mushrooms, while new nuclear states — Israel, Pakistan, India, North Korea — built their own impressive arsenals.  In those years, with the singular exception of South Africa, nuclear-weapons states simply ignored their half of the NPT bargain and the crucial clause mandating progress toward eventual disarmament was all but forgotten.

When the Cold War ended in 1991 with the disappearance of the Soviet Union, and the next year Americans elected as president Bill Clinton, who was famously against the Vietnam War, it was at least possible to imagine that nukes might go the way of internationally banned chemical weapons. But Washington chose otherwise.  Despite a paucity of enemies anywhere on Earth, the Pentagon’s 1994 Nuclear Posture Review insisted on maintaining the American nuclear arsenal at Cold War levels as a “hedge,” an insurance policy, against an imagined return of Communism, fascism, or something terrible in Russia anyway — and Clinton accepted the Pentagon’s position.

Soon enough, however, even prominent hawks of the Cold War era began to worry that such a nuclear insurance policy could itself ignite a global fire. In 1999, a chief architect of the nuclear mindset, Paul Nitze, stepped away from a lifetime obsession with building up nuclear power to denounce nukes as “a threat mostly to ourselves” and to explicitly call for unilateral disarmament. Other former apostles of nuclear realpolitik also came to embrace the goal of abolition. In 2008, four high priests of the cult of nuclear normalcy — former Senator Sam Nunn, former Secretary of Defense William J. Perry, and former Secretaries of State George Schultz and Henry Kissinger — jointly issued a sacrilegious renunciation of their nuclear faith on the Wall Street Journal’s editorial page. “We endorse setting the goal of a world free of nuclear weapons,” they wrote, “and working energetically on the actions required to achieve that goal.”

Unfortunately, such figures had come to Jesus only after leaving office, when they were exempt from the responsibility of matching their high-flown rhetoric with the gritty work of making it real.

Obama in Prague was another matter.  He was at the start of what would become an eight-year presidency and his rejection of nuclear fatalism rang across the world. Only months later, he was awarded the Nobel Peace Prize, in large part because of this stunning commitment. A core hope of the post-World-War-II peace movement, always marginal, had at last been embraced in the seat of power. A year later, at Obama’s direction, the Pentagon, in its 2010 Nuclear Posture Review, actually advanced the president’s purpose, committing itself to “a multilateral effort to limit, reduce, and eventually eliminate all nuclear weapons worldwide.”

“The United States,” that document promised, “will not develop new nuclear warheads.” When it came to the future of the nuclear arsenal, a program of responsible maintenance was foreseen, but no new ground was to be broken. “Life Extension Programs,” the Pentagon promised, “will use only nuclear components based on previously tested designs, and will not support new military missions or provide new military capabilities.”

Obama’s timing in 2009 was critical. The weapons and delivery systems of the nuclear arsenal were aging fast. Many of the country’s missiles, warheads, strategic bombers, and nuclear-powered submarines dated back to the early Cold War era and were effectively approaching their radioactive sell-by dates. In other words, massive reductions in the arsenal had to begin before pressures to launch a program for the wholesale replacement of those weapons systems grew too strong to resist.  Such a program, in turn, would necessarily mean combining the latest technological innovations with ever greater lethality in a way guaranteed to reinvigorate the entire enterprise across the world — the polar opposite of “effective measures in the direction of nuclear disarmament.”

Obama, in other words, was presiding over a golden moment, but an apocalyptic deadline was bearing down. And sure enough, that deadline came crashing through when three things happened: Vladimir Putin resurfaced as an incipient fascist intent on returning Russia to great power status; extremist Republicans took Congress hostage; and Barack Obama found himself lashed, like Herman Melville’s Captain Ahab, to “the monomaniac incarnation of all those malicious agencies which some deep men feel eating in them, till they are left living on half a heart and half a lung.” Insiders often compare the Pentagon to Moby Dick, the Great White Whale, and Obama learned why. The peaceful intentions with which he began his presidency were slapped away by the flukes of the monster, like so many novice oarsmen in a whaling skiff.

Hence Obama’s course reversals in Iraq, Afghanistan, and Syria; hence the White House stumbles, including an unseemly succession of secretaries of defense, the fourth of whom, Ashton Carter, can reliably be counted on to advance the renewal of the nuclear force. The Pentagon’s “intangible malignity,” in Melville’s phrase, was steadily quickened by both Putin and the Republicans, but Obama’s half-devoured heart shows in nothing so much as his remarkably full-bore retreat, in both rhetoric and policy, from the goal of nuclear abolition.

recent piece by New York Times science correspondent William J. Broad made the president’s nuclear failure dramatic. Cuts to the U.S. nuclear stockpile initiated by George H.W. Bush and George W. Bush, he pointed out, totaled 14,801 weapons; Obama’s reductions so far: 507 weapons. In 2010, a new START treaty between Moscow and Washington capped future deployed nukes at 1,500. As of this October, the U.S. still deploys 1,642 of them and Russia 1,643; neither nation, that is, has achieved START levels, which only count deployed weapons. (Including stored but readily re-armed and targeted nukes, the U.S. arsenal today totals about 4,800 weapons.)

In order to get the votes of Senate Republicans to ratify the START treaty, Obama made what turned out to be a devil’s bargain.  He agreed to lay the groundwork for a vast “modernization” of the U.S. nuclear arsenal, which, in the name of updating an aged system, is already morphing into a full-blown reinvention of the arms cache at an estimated future cost of more than atrillion dollars. In the process, the Navy wants, and may get, 12 new strategic submarines; the Air Force wants, and may get, a new long-range strike bomber force. Bombers and submarines would, of course, both be outfitted with next-generation missiles, and we’d be off to the races. The arms races.

All of this unfolds as Vladimir Putin warms the hearts of nuclear enthusiasts everywhere not only by his aggressions in Ukraine, but also by undercutting the landmark 1987 Intermediate-Range Nuclear Forces Treaty by testing a new ground-launched cruise missile. Indeed, just this fall, Russia successfully launched a new intercontinental ballistic missile. It seems that Moscow, too, can modernize.

On a Twenty-First Century Road to Perdition

Responding to the early Obama vision of “effective measures” toward nuclear disarmament, and following up on that 2010 Nuclear Posture Review, senior Pentagon officials pursued serious discussions about practical measures to reduce the nuclear arsenal. Leading experts advocated a shift away from the Cold War’s orgasmic strike targeting doctrine that still necessitates an arsenal of weapons counted in the thousands.

In fact, in response to budget constraints, legal obligations under a jeopardized non-proliferation treaty, and the most urgent moral mandate facing the country, America’s nuclear strategy could shift without wrenching difficulty, at the very least, to one of “minimal deterrence.” Hardcore national security mavens tell us this. Such a shift would involve a reduction in both the deployed and stored nuclear arsenal to something like 500 warheads. Even if that goal were pursued unilaterally, it would leave more than enough weaponry to deter any conceivable state-based nuclear threat, including Russia’s, no matter what Putin may do.

Five hundred is, of course, a long way from zero and so from the president’s 2009 goal of abolition, and yet opposition even to that level would be fierce in Washington. Though disarming and disposing of thousands of nukes would cost far less than replacement, it would still be expensive, and you can count on one thing: Pentagon nuclearists would find firm allies among congressional Republicans, who would be loathe to fund such a retreat from virtue’s Armageddon. Meanwhile, confronting such cuts, the defense industry’s samurai lobbyists would unsheathe their swords.

But if a passionate Obama could make a compelling case for a nuclear-free world from Prague in 2009, why not go directly to the American people and make the case today? There is, of course, no sign that the president intends to do such a thing any longer, but if a commander-in-chief were to order nuclear reductions into the hundreds, the result might actually be a transformation of the American political conscience. In the process, the global dream of a nuclear-free world could be resuscitated and the commitment of non-nuclear states (including Iran) to refrain from nuclear-weapons development could be rescued. Most crucially, there would no longer be any rationale for the large-scale reinvention of the American nuclear arsenal, a deadly project this nation is even now preparing to launch. At the very least, a vocal rededication to an ultimate disarmament, to the actual abolition of nuclear weapons, would keep that road open for a future president to re-embark upon.

Alas, Pentagon advocates of “minimal deterrence” have already been overridden. The president’s once fiercely held conviction is now a mere shadow of itself. As happened with Ahab’s wrecked whaling ship, tumultuous seas are closing over the hope that once seized the world’s attention. Take it for granted that, in retirement and out of power, ex-president Obama will rediscover his one-time commitment to a world freed from the nuclear nightmare. He will feel the special responsibility proper to a citizen of “the only nuclear power to have used a nuclear weapon.” The then-former president’s speeches on the subject will be riveting and his philanthropy will be sharply targeted. All for naught.

Because of decisions likely to be taken this year and next, no American president will ever again be able to embrace this purpose as Obama once did. Nuclear weapons will instead become a normalized and permanent part of the twenty-first century American arsenal, and therefore of the arsenals of many other nations; nuclear weapons, that is, will have become an essential element of the human future — as long as that future lasts.

So yes, mark these days down. Nuclear abolition itself is being abolished. Meanwhile, let us acknowledge, as that hopeful young president once asked us to, that we know where this road leads.

James Carroll is the bestselling author of the National Book Award-winning memoir “An American Requiem,” “Constantine’s Sword,” a history of Christian anti-Semitism and 10 novels. His latest book is “Jerusalem, Jerusalem: How the Ancient City Ignited Our Modern World.” He lectures widely on war and peace and on Jewish-Christian-Muslim reconciliation. He lives in Boston.

DIGITAL MUSIC NEWS

Attorneys In Apple Antitrust Lawsuit

Must Find New Plaintiff By Tuesday

 

Justice      After slogging through years of legal tussles, the antitrust class action lawsuit against Apple Inc. encountered another hiccup this week when the presiding judge removed the last remaining “named plaintiff” from the suit. U.S. District Judge Yvonne Gonzalez Rogers scolded Marianna Rosen and her attorneys on Monday (Dec. 8) for not providing more complete information about the iPods Rosen had purchased. That move came after Apple lawyers successfully argued that the devices Rosen bought were not among those affected by the lawsuit.

Judge Rogers also quickly rejected Apple’s argument that the case should be dismissed because it’s too late to name a new plaintiff. She ordered the attorneys suing Apple to identify a new lead plaintiff by Tuesday (Dec. 16).

As reported by Billboard, a class-action suit must identify at least one person as a “named plaintiff” who suffered the losses or injuries alleged in the case. Rosen had previously said she purchased several iPods that qualified, but Apple attorneys produced evidence that those devices either had the wrong software or were purchased outside the time frame of the lawsuit. Rosen and her attorneys said she had purchased two other iPods in 2008, but Apple lawyers were able to produce records that showed they were purchased with a credit card issued to her husband’s law firm. Apple attorney William Isaacson argued that meant she was not legally the purchaser. A series of pretrial rulings had narrowed the case to covering just 19 months between September 2006 and March 2009.

Both sides estimate 8 million people bought iPods that were potentially covered by the lawsuit. The plaintiffs claim Apple used restrictive software that prevented iPods from playing music purchased from competitors of Apple’s iTunes store, and maintain that amounted to unfair competition. Apple was able to sell iPods at inflated prices because the software froze makers of competing devices out of the market, plaintiffs’ attorneys argue. They also say Apple is liable for $350 million, an amount that would be tripled if a jury finds the company violated federal antitrust rules. 

Lawyers: Apple Secretly Deleted

Competitors’ Downloads From iPods

 

     Before the antitrust suit against Apple was delayed while attorneys search for a new lead plaintiff (see story, above), lawyers presented evidence that the company deleted music that some iPod owners had downloaded from competing music services without telling them. According to the Wall Street Journal, when a user who had downloaded music from a rival service in the period between 2007 and 2009 tried to sync an iPod to the user’s iTunes library, Apple would display an error message and instruct the user to restore the factory settings. Attorney Patrick Coughlin said that, when the user restored the settings, the music from rival services would disappear.

“You guys decided to give them the worst possible experience and blow up” a user’s music library, Coughlin said in U.S. District Court in Oakland.

Apple insists the moves were legitimate security measures, and Apple security director Augustin Farrugia testified the company did not offer a more detailed explanation because, “We don’t need to give users too much information. We don’t want to confuse users.” Farrugia told the court that hackers with names like “DVD Jon” and “Requiem” made Apple “very paranoid” about protecting iTunes. Updates that deleted non-Apple music files were intended to protect consumers from those system break-ins, he said, explaining, “The system was totally hacked.”

Apple declined to comment to the Journal outside of the court testimony. 

Time Spent Listening To Pure-Play

Streams Increases While AM/FM Slips

 

     Satisfaction and time-spent with digital streaming of broadcast (AM/FM) radio is slipping and soon could be overtaken by such on-demand pure-play companies as Pandora, Spotify, and iTunes. That’s the word from Bridge Ratings President Dave Van Dyke, who said in a LinkedIn post that time spent with broadcast simulcast online streams five years ago (2009) was 2-1/2 half hours a day, while pure-play time spent was just under 1-1/2 hours. Furthermore, until 2012 broadcast online listening and pure-play listening continued to increase.

That all changed in 2013, Van Dyke says, as time spent per day with online broadcast streaming dropped while pure-play time spent continued to increase. “At Bridge Ratings, our first thought was that this could be an anomaly,” he observes. “The perception was that all internet streaming behavior was increasing. [But] trends do not support this thinking.”

In fact, a new year-end analysis from Bridge Ratings suggests that, since 2012, broadcast radio online daily time spent listening (TSL) has fallen 9.4% (2.65 to 2.40 hours per day) while pure-play online listening has increased 65% (1.7 to 2.35 hours per day). “By this time next year, online pure play time spent will have surpassed broadcast radio’s online simulcast TSL,” Van Dyke says. “And if broadcast radio streaming content remains more or less the same as it is, we project this trend will continue on out to at least 2017 with a large gap favoring pure play internet listening.” 

Grooveshark Offers New Digital

Music App In Plan to “Go Legit”

 

     After suffering a string of legal setbacks over the last few years, Grooveshark has developed a new app designed to set the company on a legitimate path to digital music streaming. As CNET reports, the new Broadcasts app lets users create customized radio stations without running afoul of the record companies. The app, expected to launch next month, lets customers build and access custom radio stations and text fellow users as they listen to music. Designed for iOS and Android users, the app will cost 99 cents a month and be commercial-free. The online stations will be developed directly by users rather than generated by Grooveshark.

One of the primary objectives behind the new app is to create a business model that will keep the company out of the court system. Grooveshark currently offers websites both for PCs and mobile devices in which users can search for and stream an unlimited number of songs produced by major record labels. That system led several record labels to sue the company, arguing Grooveshark lacked the necessary rights to upload the copyrighted songs. Back in September a federal judge in New York ruled that Grooveshark’s co-founders had uploaded almost 6,000 songs for which they had no licenses, and subsequently destroyed evidence of the uploads.

Since then, Grooveshark has created dedicated iOS and Android apps for its streaming service, but both of those apps were taken down following complaints from the record labels. The new Broadcasts app means Grooveshark will pay government-mandated performance fees set by the Copyright Royalty Board rather than negotiate directly with the recorded music companies. 

Pandora Releases New User

Interface For Mobile Listening

 

Pandora Mobile      Pandora this week released a beta version of a refreshed mobile user interface that includes new station personalization features and functionality. According to a company statement, the update currently is available to only 3% of iPhone and Android smartphone users, but will roll out to all mobile and tablet listeners over the coming months.

“For more than a decade, our engineering team has worked to perfect the personalized radio listening experience and unleash the infinite power of music for our listeners,” Pandora Chief Technology Officer Chris Martin said in standard PR-speak. “With our users logging more than 1.65 billion listening hours in September alone, we were extremely mindful in the way we made adjustments to the [user interface] so as to enhance and simplify the experience.”

Major changes include enhanced station personalization capabilities and improved artist discovery. The redesigned interface also is reported to be simpler to use and clearer to the ear. “Listeners are given a different sense of place and navigation with the new transitions from the ‘station list’ to the ‘now playing’ screen, and can view comprehensive thumb history and adjust thumb feedback for old tracks listened to,” the company said. [Read more: Company statement]

 

 

A publication of Bunzel Media Resources © 2014

Neglecting the Lessons of Cypherpunk History

 

Over the course of the Snowden revelations there have been a number of high profile figures who’ve praised the merits of encryption as a remedy to the quandary of mass interception. Companies like Google and Apple have been quick to publicize their adoption of cryptographic countermeasures in an effort to maintain quarterly earnings. This marketing campaign has even convinced less credulous onlookers like Glenn Greenwald. For example, in a recent Intercept piece, Greenwald claimed:

“It is well-established that, prior to the Snowden reporting, Silicon Valley companies were secret, eager and vital participants in the growing Surveillance State. Once their role was revealed, and they perceived those disclosures threatening to their future profit-making, they instantly adopted a PR tactic of presenting themselves as Guardians of Privacy. Much of that is simply self-serving re-branding, but some of it, as I described last week, are genuine improvements in the technological means of protecting user privacy, such as the encryption products now being offered by Apple and Google, motivated by the belief that, post-Snowden, parading around as privacy protectors is necessary to stay competitive.”

So, while he concedes the role of public relations in the ongoing cyber security push, Greenwald concurrently believes encryption is a “genuine” countermeasure. In other words, what we’re seeing is mostly marketing hype… except for the part about strong encryption.

With regard to the promise of encryption as a privacy cure-all, history tells a markedly different story. Guarantees of security through encryption have often proven illusory, a magic act. Seeking refuge in a technical quick fix can be hazardous for a number of reasons.