Brexit, the E.U. and the "Special Relationship" of the U.S./U.K.

Any clique in the E.U. that thinks the U.S. will sit idly by while they "punish" the U.K. had better recalibrate their core interests and the potential for blowback.

One constant in a fast-shifting global chess board is the special relationship between the United Kingdom and the United States. The term special relationship defines a close collaboration diplomatically, militarily and financially.

Some might go so far as to speak of an Anglo-American Empire in terms of finance.

Needless to say, this special relationship impacts the European Union and the longer term impacts of Brexit.

Alliances are as complex as marriages. Just as marriages unite families as well as individuals, so alliances and treaties bind various sectors and agencies of nations in different ways and with different degrees of bonding.

Ties between France and Britain, for example, go back to the Norman invasion of England in 1066. The two have been rivals, adversaries and allies.

Nations that share borders almost always have special relationships due to the histories that go with borders--trade, war, occupation, alliances, etc.

The U.S. also has special relationships with a variety of other nations, relationships that are not like the U.K./U.S. ties but unique and powerful nonetheless.

The U.S. and Russia go way back, to the era of Pacific imperial rivalries in the 19th century, U.S. backing of anti-Communist forces in Russia's civil war, an alliance in World War II, the rivalries of the Cold War and a number of critical cooperative advances such as the SALT limitations on nuclear weapons and the International Space Station (Russia has done the heavy lifting of resupply and provided cosmonauts since the beginning).

China and the U.S. also have a special relationship due to the size and interconnectedness of their economies and their mutual need for cooperation despite the jostling for Great Power influence.

Japan and the U.S. also have a special relationship, from mortal enemies in World War II to the occupation of Japan and the strong economic and diplomatic ties of the postwar era.

France and the Etats-Unis (United States) have long, deep and often fractious ties, stretching back to the French fleet's critical role in sealing the defeat of the British Army in the Revolutionary War (1781). Thousands of American soldiers killed defending France in World War I ("Lafayette, we are here!") and World War II are buried in French soil.

Germany and the U.S. also have a unique relationship due to the long presence of American troops on German soil to make good the U.S. pledge to defend West Germany against Soviet invasion. United Germany and the U.S. remain allies with core interests in maintaining peace and prosperity throughout Europe.

Special relationships are not necessarily harmonious or trouble-free; what they provide is a history of communication and an overlay of self-interest that drives a search for common ground or a level of disagreement that doesn't threaten the core interests of both nations.

Some observers have seen the U.K. as a broker between the E.U. and the U.S.Perhaps this was true in some cases, but I don't think the complexities of the special relationship and the even greater complexities of the E.U. can be distilled down to such a simplistic dynamic.

I think the reality is nobody's in a mood to take orders from anyone. The core interests of all players in the Brexit drama are being recalculated, and areas of common ground and regions of profound disagreement are being mapped out.

There's been some talk that the major E.U. powers will need to punish the U.K. to discourage any other escapes. I have no idea if this is mere talk or not, but I am confident that the U.S. will help its British cousins through any spot of bother.

Whatever problems that can be solved by creating a trillion dollars will be solved. It's worth recalling which central bank issued trillions in credit and swap lines to the major European banks in the 2008 global financial meltdown: yes, the Federal Reserve, which remains the central bank to the world, not just the U.S.

While some countries are selling pieces of national oil companies to raise desperately needed cash (Russia) and others are taking their oil to the global pawn shop to borrow desperately needed cash (Saudi Arabia), the U.S., for better or for worse, can borrow or print almost unlimited sums, and there will be ready buyers of the bonds and ready customers for the USD swap lines.

That's the benefit of owning a true reserve currency, something I've discussed many times in terms of Triffin's Paradox, the dual role of the USD in the domestic and global economies, and the value of USD hegemony:

Understanding the "Exorbitant Privilege" of the U.S. Dollar (November 19, 2012)

Why the Rising U.S. Dollar Could Destabilize the Global Financial System (November 13, 2014)

Could the U.S. Dollar Rise 50%? (January 12, 2011)

The Dollar and the Deep State (February 24, 2014)

The U.S. has a core interest in preserving British autonomy, but it also has a core interest in helping the European Union solve its many problems. The U.S. is not choosing between the U.K. and the E.U., except if it is forced to on specific issues by extremists in the E.U.

Any clique in the E.U. that thinks the U.S. will sit idly by while they "punish" the U.K. had better recalibrate their core interests and the potential for blowback. Choose your frenemies and allies wisely.

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Brexit, a Step in the Right Direction: The Optimistic View

Brexit can be constructively viewed as a systemic step towards solving existing scarcities.

In the conventional narrative, Brexit is about immigration, escaping the EU's bureaucrats of Brussels, class war or political theater. It may be about all of these, but beneath these surface issues lies a deeper dynamic: a recognition that the entire system is broken and a new arrangement of power, responsibility and risk is required.

In this view, Brexit is a positive step in the right direction, away from centralization and central planning and towards decentralized arrangements that enable more dynamic, localized solutions.

Longtime readers know that I focus on scarcity as the source of value creation: what's scarce generates value, profits and high wages, and what's abundant declines in value due to supply and demand.

Correspondent Ron G. views Brexit as a systemic step towards solving existing scarcities. Scarcity is not limited to goods and services; agency and autonomy can be scarce; responsibility that connects risk and return can be scarce; level playing fields can be scarce; rule of law can be scarce; opportunity can be scarce; entrepreneurial drive can be scarce; self-reliance can be scarce; social innovation can be scarce; social capital can be scarce, and the willingness to accept losses and the risks required to change the power structure can be scarce.

Political expediency can be over-abundant, as can protected privilege.

Ron submitted this photo and commentary on Brexit and scarcity:

Here are Ron's comments:

"Mankind’s fundamental quest is to survive and prosper by solving scarcity.

BREXIT is simply a modern example of an old pattern of behavior that seeks to resolve scarcity, (the shrinking pie of economic opportunity and ownership), through reconfiguration of relationships to reallocate resources to enable more equitable equilibrium in supply and demand.

As a prelude to BREXIT, housing in Britain, in particular, had become out of reach for those that have labored under the assumption that hard work, education, and a good job would lead to an ability to own a home, which many young Britons now find economically out of their reach; many Britons blame the government’s monetary policy of zero percent interest rates for inflation and unaffordable housing.

In another sign of frustration, a few years ago a graffiti sign expressed a sentiment of the youth in Britain, one of them posted at Bell Lane near Liverpool St. Station, it read: ‘Sorry, the lifestyle you ordered is out of stock.’

The Bank of England has continued policies that have contributed to the exasperation expressed through the referendum, this along with the burdens of having an open country and economy that increased labor supply which in turn increased demand for housing and available credit to driving the asset bubble.

This type of scarcity, being seen in Britain, is very common throughout history and is generally driven by the confluence of interests that connects and drives centralized, unified policies between bankers, merchants (in today’s world global corporations) and governments.

Turning back the clock a bit, I would like to include a couple of quotes by an amazingly brilliant and eloquent commentator in economics, Fredic Bastiat in his writings from 1850:

"I do not dispute their right to invent social combinations, to advertise them, to advocate them, and to try them upon themselves, at their own expense and risk. But I do dispute their right to impose these plans upon us by law – by force – and to compel us to pay for them with our taxes."

  “Self-preservation and self-development are common aspirations among all people. And if everyone enjoyed the unrestricted use of his faculties and the free disposition of the fruits of his labor, social progress would be ceaseless, uninterrupted, and unfailing. But there is also another tendency that is common among people. When they can, they wish to live and prosper at the expense of others.”

While old tools based in centralized control have held the power bases together, and have been useful to the management of empires, they have have become outdated and are an inadequate means of resolving the complexities of bringing equilibrium in supply and demand and the distribution of power.

New forms of social connection for production and consumption have emerged and are replacing centralized models; distributed models, even in formally centralized systems of energy and water, are coming online at a rapid pace.

These systems are fueled by the realization of democratic economy and autonomy, connected through a digital technology template; more distributed and socially self-aligning, this combination of digital conduits and marketplace opportunity fit lock and key into humanity's biological need for autonomy and dignity of choice.

To those like me who have been compelled to study foundations and dynamics in human systems as a means to understanding better choices, BREXIT is not a surprise but simply an the most recent public demand to bring about a more acceptable outcome.

BREXIT is a symptom of an inadequate system for meeting human needs, driven by many converging factors, factors shared by all modern economies: underlying complexities growing due to connections to a more globalized world, and an inability to resolve scarcities through centralized systems of management and control. This underlying complexity will only continue to grow.

Centralized control by any domain keeper are but a delusion, as I believe there will be no wresting back control from the decentralized solutions that are growing in a scale and complexity beyond their toolsets and bandwidth.

I believe we have entered a critical but wonderful age, the age of reemergence of decentralization and decentralized governance; may we preserve this opportunity for the gift that it is to life, liberty and property."

Thank you, Ron, for placing Brexit in a more expansive and insightful context.


A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

My new book is #14 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

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Brexit Is What Happens When the Pie Is Shrinking

This process of withdrawal into the relative safety of internally cohesive groups and group identities is intrinsically messy in globalized, multicultural societies.

A great many narratives are drifting around the Brexit pool: a return to sovereignty, class war, "controlled demolition," nothing-but-another-political-Kabuki- spectacle, end of the European Union, etc.

I think it boils down to something much simpler: the pie is shrinking, and the illusion that it's about to start growing has been shattered. For many communities in the developed world, the pie started shrinking in the 1970s, and has been shrinking (despite the narrative of "45 years of strong growth") since then.

Labor's share of the GDP has been declining for 45 years. Occasional blips higher during debt-fueled bubbles quickly fade when the bubble du jour pops, and the decline of labor's share of the economy resumes its trendline decline.

Since 2008, the only group who feels the pie is growing is the class that has benefited from the unparalleled expansion of debt and leverage, financialization, globalization and central planning--roughly 20% of the work force, with the top 5% gathering most of the gains in income and wealth, and the top .1% gathering most of the increase in wealth. (See chart below)

For seven long years, the citizenry has been told the economy is expanding and therefore they're "doing better." But this narrative is not supported by their actual lived experience. Inflation is woefully under-reported by official statistics, and the rosy "rising employment" narrative is based largely on part-time jobs in hospitality and food services (bartenders, waiters, etc.) that are highly contingent on the spending of the top 10%.

While supporters of the status quo are quick to deride supporters of Brexit, the cold reality is the economic pie is shrinking, and Brexit is a direct result of that reality.

A shrinking economic pie generates widespread insecurity that pressures every status quo arrangement as people circle the wagons in an attempt to protect their remaining slice of the pie from others' claims for a larger piece of the dwindling pie.

The general media line is that the Brexit vote arose out of anger with the status quo's inequalities and asymmetries of wealth and power. While this is largely self-evident, it isn't the most fundamental dynamic at work. I see Brexit as a reflection of our naturally-selected defensive response to insecurity and instability: circle the wagons.

By circle the wagons, I mean our tendency to withdraw into an internally cohesive group with defined membership and boundaries.

The largest such political group is the nation-state, and so it is natural for people with strong national identities to circle the wagons around their national identity.

We can also expect people to circle the wagons around ethnic, religious, localized and economic-social class identities. (Some people might feel more kinship with other fans of Manchester United than they do with any religion, ethnicity or state.)

As people identify themselves as members of the class that has not benefited from neoliberal/globalized crony capitalism, the ruling Elites become the "other," i.e. "foreigners" with whom we have little contact, people who "aren't like us"-- in effect, an "enemy class" that is inherently opposed to our self-interests.

This process of withdrawal into the relative safety of internally cohesive groups and group identities is intrinsically messy in globalized, multicultural societies.No wonder populations are dividing into camps of increasingly angry people with little interest in compromise. Our instinct is to seek clear delineations of "us" and "them" and to seek the relative comfort of "us," which in a multicultural nation, can contain quite a mixed bag of people who nonetheless feel a shared identity.

Much to the chagrin of political parties whose success is based solely on "identity politics," the emerging group identities are not conforming to the political classes' conventional fault lines. "Us" for many people includes everyone who isn't a protected insider of the status quo, and "the enemy" is any protected insider of the status quo.

That includes virtually the entire political class, the entire class of state nomenklatura/technocrats, the entire banking sector and the wealthy class that's benefited so handsomely from the globalized, debt-leverage bubbles and state / central bank support that characterize this era of neoliberal/globalized crony capitalism.

Nothing to see here--move along, folks--you're better off than ever before.

A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

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Understanding Brexit: The Powerless Press Their Thumb in the Eye of the Power Elite

The sense of having a real say, and possessing actual agency, is very empowering, and very rare, for members of the lower-middle class and the working class today.

The premier strategy for retaining power is to give the powerless a carefully managed illusion of decision-making and autonomy. Having a say over one's life and choices is called agency, and it is the illusion of agency that makes democracy such a powerful tool of control.

The second most effective means of maintaining power is to limit the choices offered the powerless. Offering the powerless false choices, i.e. the choice between two functionally equivalent options, provides the comforting illusion of agency while insuring that the status quo Power Elite remains in charge, regardless of the choice made by the powerless.

For example, give the powerless a choice between Tweedle-Dum (Republicans/Tories) and Tweedle-Dee (Democrats/Labour). Whomever they elect, the self-serving Power Elite of entrenched interests and wealth remains firmly in charge, for the Power Elite speaks with one voice through two mouths, one Establishment Democrat/Labour, the other Establishment Republican/Tory.

If the powerless get restless, make them fearful. This is easily managed via external threats and dramatic predictions of economic doom should the Power Elite be threatened.

If fear has lost its edge due to over-use, then whip up social controversies that divide and conquer the powerless. Divisive, hot-button social controversies are easily staged and media-managed; these serve to distract and fragment the powerless in endless culture wars.

The powerless get very few opportunities to express their dissatisfaction with their gradual impoverishment and powerlessness, and few opportunities to register their disapproval of the Power Elite. They know complaints go nowhere, petitions are ignored, and demonstrations accomplish nothing.

So when a rare chance to stick a thumb in the eye of the Power Elite comes along, they take it. The Brexit vote was just such an opportunity.

Though the benefits that flowed from membership in the European Union may well have been substantial, many people did not have any direct experience of those benefits, which largely flowed to a handful of privileged classes: young, well-educated workers in finance, people who bought housing in London before the huge run-up in valuations, and workers providing services to the wealthy foreigners and highly paid financial professionals.

Many households have seen their quality of life and living standards stagnate or decay during the U.K.'s membership in the E.U. The benefits touted by the Power Elite are either illusory or too modest to matter to these households, and their rage has only grown as the Power Elite tried to browbeat them into approving a membership that yielded no benefits to their households.

The Power Elite simply repeated what has worked well for 60+ years: tout the systemic benefits of E.U. membership, confident in the belief that some of these benefits have trickled down to the lower economic classes, and stoke fears of economic decline if the Powers That Be don't get their way.

Unfortunately for the Power Elite, the benefits of E.U. membership, financialization and globalization have been concentrated at the top of the pyramid: the already wealthy got wealthier, and the young, well-educated, mobile, entrepreneurial class had enhanced opportunities to generate private wealth or at least secure an excellent salary.

A third privileged (i.e. protected) class includes all those benefiting from direct E.U. subsidies.

Those outside these classes saw little if any benefit.

The slow decay of living standards and social mobility was crystallized into anger by the Brexit vote, which was intended to be yet another rigged, illusory choice. The masses were supposed to be persuaded by either the list of goodies that flowed from membership or from fear-mongering about the catastrophic consequences of Brexit.

But neither worked as planned: the benefits were too diffuse or too concentrated in the hands of a few to be persuasive in terms of self-interest, and the fear-mongering only increased awareness of how much the Power Elite wanted a Remain outcome.

Will Brexit hurt the classes that did not directly benefit from E.U. membership?Perhaps. Perhaps it was not in their self-interest to vote for Brexit. But the immeasurable pleasure in depriving the Power Elite of their "democracy" legitimacy was worth any potential sacrifice.

The sense of having a real say, and possessing actual agency, is very empowering, and very rare, for members of the lower-middle class and the working class today. the wealthy and powerful are accustomed to vetoing anything that impairs their wealth or power, and they're accustomed to either winning over or distracting the powerless.

Thus it was a shock when the powerless took the rare opportunity to stick a thumb in the eye of the Power Elite by depriving them of something they wanted.

is this childish, or self-defeating? Perhaps. But when the system erodes a citizenry's sense of agency, they have little to lose by relishing the chance to use the same power the wealthy constantly wield without any qualm or hesitancy: the power to say "no."

I am indebted to longtime correspondent G.F.B. for this topic suggestion.


A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

My new book is #14 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

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Please Don't Pop My Bubble!

So ride your bubble of choice up--stocks, bonds, housing, bat guano, take your pick--but it's best to keep your thumb on the sell button.

One person's bubble is another person's "fair market value." What is clearly an outrageously overvalued asset perched at nosebleed levels of central-bank fueled speculative euphoria is to the owner an asset at "fair market value."

But beneath the euphoric confidence that valuations can only drift higher forever and ever is the latent fear that something could stick a pin in "my bubble"-- that is, whatever bubblicious asset we happen to own and treasure as a source of our financial wealth could be popped, destroying not just our financial bubble but our psychological bubble of faith in permanent manias.

Consider housing prices, which are clearly in an echo-bubble of the Great Housing Bubble of 2000-2007. (Chart courtesy of Market Daily Briefing.)

The psychological underpinning of all bubbles and echo bubbles is on display here. In the first bubble, those benefiting from the stupendous price increases are not just euphoric at the surge in unearned wealth--they believe the hype with all their hearts and minds that the bubble is not a bubble at all, it's all just "fair market value" at work.

In other words, the massive increase in unearned personal wealth is not just temporary good fortune--it is permanent, rational and deserved.

Alas, all bubbles, no matter how euphoric or long-lasting, eventually pop. All the certainties that seemed so obviously true and timeless to the believers melt into air, and their touching faith that the bubble valuations were permanent, rational and deserved dissipates in a wrenchingly painful reconciliation with reality.

The agonized cries of those watching their bubble-wealth vanish do not fall on deaf ears. The same central bankers that inflated the bubble with super-low interest rates suddenly see their much-loved wealth effect (i.e. the bubble-generated psychological sense of wealth that emboldens people to borrow and spend money they shouldn't borrow and spend) imploding before their eyes.

In the panicky haste of blind expediency, central bankers drop interest rates to zero and unleash unlimited liquidity to save the bubbles they inflated. Instead of flushing the system of bad debt and speculative leverage and allowing the market to reprice impaired assets, central bankers push the perverse incentives that inflated the bubble to new highs.

Should lowering interest rates to zero fail to reflate the bubble, central bankers then start buying assets hand over fist, creating trillions of dollars, yuan, yen and euros out of thin air to boost asset prices with direct and indirect purchases.

The relief of those saved from financial destruction by the heroic efforts of central bankers is palpable. Rather than retrace to pre-bubble levels, valuations are caught in mid-air and pushed higher by central bank liquidity and asset purchases.

But the naive faith of asset owners cannot be restored to its pre-bubble virginal state. The nagging realization that all bubbles are temporary and irrational, and that bubblicious wealth is unearned and undeserved, lingers in the traumatized psyches of the former true believers.

Sensing their vulnerability, every asset owner demands: don't pop my bubble!Go pop somebody else's bubble, but please please please leave mine intact.

This knowledge that all bubbles pop sooner or later generates a skittishness that finds voice in sell-offs. Once the skittish owners of a bubblicious asset sense the nail is pushing against the bubble and the inevitable popping is nigh, they sell sell sell.

No wonder the stock market has sold off hard three times in the past 18 months. Every punter who's not a sucker knows that 1) stocks are overvalued, 2) every bubble eventually pops, and 3) the survivors are those who sell at the first whiff of trouble.

So ride your bubble of choice up--stocks, bonds, housing, bat guano, take your pick--but it's best to keep your thumb on the sell button and your mind attuned to the many needles and nails pressing against the thin membrane of the bubble.


A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

My new book is #11 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

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Where Are the Jobs? Mostly In Big Cities

Maintaining the status quo of red tape, high taxes, high junk fees and indifference to small business realities guarantees decline and failure.

It's well known that millions of the jobs counted in employment statistics are part-time or low-paying "gig economy" self-employment. Over 9 million self-employed workers make less than $10,000 per year, and 5.5 million earn less than $5,000 per year. Granted, many of these workers may have other employment, but the point is millions of jobs that are puffing up official job totals are not full-time or even close to full-time.

Endangered Species: The Self-Employed Middle Class

Nonetheless, employment and new small businesses are expanding in some locales. According to this new study, The New Map of Economic Growth and Recovery (eig.org), growth in jobs and new business has become increasingly concentrated in a handful of high-population metropolitan counties.

In the high-growth early 1990s, half of all new businesses sprouted in 125 counties nationwide. In 2002-2006, the number of counties that were home to half of all new enterprises fell to 64. In the "recovery" years of 2010-2014, half of all new firms arose in a mere 20 counties nationally--an astonishing concentration.

We can see the asymmetry in this chart. Where counties with 1 million or more residents were home to 13% of new businesses in the 1990s, now 58% of business creation occurs in populous urban counties.

Here are the counties with the largest increases in employment (I'm listing only those with a 9% growth rate or higher).

1. Los Angeles CA 9.9%
2. Harris (Houston) TX 14.7%
3. New York NY 11.2%
4. Orange County CA 11.7%
5. Dallas TX 10.6%
6. Miami-Dade FL 14.7%
7.Santa Clara (San Jose) CA 13.7%
8. San Diego CA 9.2%
9. King (Seattle) WA 9.8%
10. Hennepin (Minneapolis) MN 11.4%
11. Tarrant (Dallas) TX 12.5%
12. San Francisco CA 16.8%
13. Oakland County (Detroit) MI 13.2%
14. Travis (Austin) TX 15.6%
15. Kings (Brooklyn) NY 15.0%
16. Orange County (Orlando) FL 11.7%
17. Hillsborough (Tampa) FL 13.9%
18. Mecklenburg (Charlotte) NC 13.2%

Not all of the jobs created in these urban centers are high-paying, of course.Some regions have more low-paying service jobs, and others have relatively more high-paying jobs.

Some of these locales have insanely high costs of living, which skews wage comparisons between regions.

Other than the welcome leap in jobs in Detroit, the big urban centers of growth are congregated on the Left and Right coasts and Texas (Minneapolis benefits from a concentration of corporate headquarters, universities and R&D--a mix that characterizes many of the job centers.)

The authors of the report reach some sobering conclusions about this geographic concentration of new businesses and new employment:

The geographically uneven nature of the decline in new business starts implies that large swathes of the country will soon contend with a missing generation of firms — ones that should be providing employment opportunities and new foundations for economic growth in the years ahead.

The uneven geography of new business formation tracks very closely with that of access to capital — particularly venture and other forms of risk capital. Addressing the former challenge will surely involve tackling the latter. Without mitigating these disparities, the trend towards increasing concentration documented here may even accelerate, given that today’s largest economic centers are the few remaining places producing tomorrow’s new businesses.

The new map of growth and recovery points to very different futures for American communities. These findings suggest that the gains from growth have and will continue to consolidate in the largest and most dynamic counties and leave other areas searching for their place in the emerging economic landscape.

The good news is that smaller cities have some advantages (much lower costs, for example) and they can generate meaningful, stable expansion of jobs and new businesses if they organize their efforts to maximize those advantages--and if they welcome new enterprises with an uncluttered, low-cost pathway to starting up.

There are a variety of messages buried in this data. One is: the more dynamic the business environment, the greater the opportunities to build networks, disrupt vested interests and find niches for small enterprises.

Cities that think luring one big corporation to locate a factory or office park in their area is the answer are deluded; that one big employer can decide to relocate or shut down operations in a heartbeat.

Maintaining the status quo of red tape, high taxes, high junk fees and indifference to small business realities guarantees decline and failure. The motto of the most dynamic elements of our economy is: trust the network, not the corporation or the state.

The local government can help by eliminating statutes and requirements that serve to protect sclerotic vested interests (forcing people such as florists to get absurdly unnecessary professional licenses, for example) or it can hinder it by looking on small business as tax donkeys who should be grateful for a chance to open a biz in town.

Guess what, folks--the tax donkeys can go elsewhere, to places where they are either welcomed or celebrated.

It's all about networks and network effects: this may sound high-tech, but it's just as true for a bakery as it is for a software company.

All About Network Effects (85-slide presentation)

The author of the recent book The Geography of Genius: A Search for the World's Most Creative Places from Ancient Athens to Silicon Valley concluded that creative places share three essential characteristics: disorder, diversity and discernment.

In other words, the exact opposite of places designed to preserve the privileges of vested interests and a sclerotic status quo.


A Radically Beneficial World: Automation, Technology and Creating Jobs for All is now available as an Audible audio book.

My new book is #11 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

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NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Donald C. ($50), for your magnificently generous contribution to this site-- I am greatly honored by your support and readership.

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