1/2 US Near Destitution + Acemoglu on Inequality

I don't spend much time in the precincts of the 1%, so it was no surprise to me to read back in the New York Times back in November that according the US Census figures, in 2010, 1 in 3 Americans, or around 100 million Americans, adults and children, were economically just above or already below the poverty line. The Times article focused on how an alternative measure of the US economic situation that adjusted for cost of living and included government benefits and income lost to taxes, health care and work expenses showed 17% now falling into the "near poor" category, as opposed to the 10% that the official government measures had identified (cf. the US Census Bureau). For these Americans, only a gossamer barrier--a paycheck or two, ill health, a shock of any sort--is keeping them from outright destitution.

Recent figures, however, suggest the situation is even more dire. NPR reported on Thursday that new measures of poverty, which account for "medical, commuting and other living costs" have pushed the number of those living in the near-poor to deep poor range to 146.4 million, or 48% per cent of the US population. To put it another way, nearly half the US population is right up against or in economic destitution, and despite the official economic indicators, which point to slow, modest economic growth and private job creation, half the country is still staggering through the Great Recession. As both the earlier and the current figures make clear, were it not for governmental programs, more people would be in the poor and deep-poor categories; even with them, millions of Americans are barely keeping food in their and their children's stomachs, roofs over their heads, gas in their cars or change in their pockets for public transportation.

These figures underline the fact that despite the White House's and Congress's conservative shift towards deficit reduction, the most pressing national and global problem is the economy, and a key element of the US's economic problems continues to be the unemployment crisis, especially for those trapped in long-term joblessness.  Persistent joblessness and underemployment are exacting a severe toll on Americans, especially children and people of color.  As the NPR segment notes, these dreadful economic figures represent as clear a picture as one might envision of the shrinking middle class. 30 years of wage stagnation for most working people, coupled with the 2008 global financial and economic crash, and the resultant Great Depression, have devastated the fortunes of a sizable chunk of America.  I would venture too that though the figure say little about those who are doing somewhat better, for many millions more out there making ends meet is more difficult than it has ever been.

The wage stagnation since 1980 for most workers, along with other factors including regressive federal individual and corporate taxation, job outsourcing, technological and structural changes, and the increased focus on short-term profits and rising stock prices, have led to the widening US income and wealth inequality gaps that the Occupy Together protests have brought to national and international attention. Yet I still do not see any move by those with the power to rectify things doing so. Instead, from the President and too many Democrats we get defensible but unimaginative plans that are watered down to nothing through "compromise," or as bad, "Grand Bargain" policies that will not address the problematic status quo; from the GOP we get intransigence and policies, when economically feasible at all, that will wreak even more social havoc.  One of the major aspects of the current economic crisis, the housing debacle, is still getting too little attention from

All over Europe, too, the Left has been supine, while conservatives have implemented policies that are bringing the Eurozone and individual economies, like the UK's, to the brink.  The push for fiscal austerity has been a shove towards contraction wherever it has been tried.  In Britain, Labour's leader, David Milliband, instead of challenging the demonstrated fiscal ineffectiveness of David Cameron's Conservative-Liberal Democratic coalition government's policies, offers only a tepid counterargument.

Yet it's not like other plans are nonexistent. There is The People's Budget, a truly progressive short-and-long-term plan that runs counter to the approaches of both major parties, as well as self-described "centrists" and their establishment media enablers, but it can barely get a hearing. Occupy Together protests are right to stay away from electoral politics, but if they can--if we, and we must--press a hearing on options other than the awful ones we have endlessly dangled before us, options like the People's Budget, and elect representatives to enact while also changing the structure of the system, as Senator Bernie Sanders is urging with his Constitutional Amendment to end corporate personhood, we will be on the road to preventing some of the most serious problems we now face.

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Daron Acemoglu, who won the American Economics Association's 2005 John Bates Clark Medal for the top economist under 40. and who is now the Elizabeth and James Killian Professor of Economics at MIT, recently participated in an interview, featured on the The Browser's website, in which he discusses US and global economic inequality.  The interview itself is too brief to provide much insight on the topic, but far more enlightening are what follow the interview questions: his recommendations and concise discussions of five books on inequality, each of which takes on a different facet of the topic.  Alongside Paul Krugman's New York Times blog and columns, and the discussions of the topic I've found in online posts by Dean Baker, Brad DeLong, and Felix Salmon, among others, it fills in some useful gaps.

A snippet of the interview:

In terms of the actual figures, how bad is inequality in the US and, say, the UK? 

Based on the work of Thomas Piketty and Emmanuel Saez, if you look from the 1950s up to the end of the 1970s, the share of total national income in the US earned by the richest 1% was about 10%. If you look at the 2000s, it’s well over 20%. It rose up to nearly 25% and then came down. In the UK it’s at about 15%, up from 7% or so. The trend towards inequality over the last 50 years has been very similar in the Anglo-Saxon economies, though it’s important to say that it’s not just an Anglo-Saxon phenomenon. There are similar trends in many economies, though there are a few that haven’t experienced it to any notable extent.

And an excerpt of his discussion of one of the recommended books, Unequal Democracy, by Larry Bartels, a political science professors at Vanderbilt University:

That’s what’s interesting about Occupy Wall Street. Its supporters aren’t just crazy lefties who don’t believe in free markets, but respected economists. 

I’m definitely in that camp. I do believe in markets. I passionately believe in the importance of property rights and private property. I think they are absolute sine qua nons for prosperity. But I also believe that these things are very political and the politics shouldn’t be one-sided. Gore Vidal said, “The United States has only one party – the property party. It’s the party of big corporations, the party of money. It has two right wings; one is Democrat and the other is Republican.” If that is true, that’s a real threat to a free market and a fair society. For that reason I think Occupy Wall Street is very important. It’s a grassroots movement that tries to stand up to this tendency of our political system.

Computer Genius Arrested for Unauthorized Downloads of Scholarly Articles

Michael F. McElroy, Zuma Press, Newscom

Is "information" and "knowledge" on the internet ever free? Should it be, and what are the real costs to users, to people creating the information and knowledge, and to the systems that distribute it? Mores specifically, should access to specialized, valuable information and knowledge, of the kind you'd find in a scholarly journal hosted on a system like JSTOR, be free to everyone and not just subscribing institutions? If it's free, how are these journals and the people behind them stay afloat and receive adequate compensation for their efforts creating this knowledge and information? Beside all of this, if someone accesses this essentially privatized, walled-off information without permission, ostensibly for research, non-profitable purposes, should there be any penalties and if so, what should they be? If they access it to distribute it without permission and freely to others, should there be penalties and how harsh should they be?

There are only a few of the many questions raised by the case of Aaron Swartz, a young computer genius and former fellow at Harvard University's Edmond J. Safra Center for Ethics, who, according to David Glenn's article in yesterday's Chronicle of Higher Education, is being investigated for having downloaded "4.8 million scholarly papers and other files from JSTOR." What complicates this issue, which might initially appear to be ethically complex depending upon your stance on "free internet/information" and "open culture" systems, is that Swartz allegedly downloaded the files via MIT's computer system, despite having no formal or informal affiliation with that institution. Swartz, who had access to JSTOR through his Harvard post, and who was arrested on January 6 of this year and could face 35 years imprisonment if convicted, allegedly entered MIT's Building 16 last fall and directly tapped into MIT's network via a wiring closet to access the articles. So heavy were his downloads, under the name "Gary Host" (i.e., GHost), that he tripped JSTOR's download monitor, eventually leading to a number of MIT IP addresses being blocked, and then, on October 9, to JSTOR's servers crashing because of the downloads' speed and volume. JSTOR subsequently cut off MIT's entire network for an unknown amount of time, before restoring it. Neither MIT nor JSTOR is giving specifics about this aspect of the case.

Further complicating the issue is that Lawrence Lessig, a leading legal scholar, critic of restrictive intellectual property laws, advocate of "open culture," directs the Safra Center, and in 2002 had employed Swartz, then 15, to help in the programming of Lessig's Creative Commons project (used by this blog and millions of others) to simplify copyrights for online work. Glenn notes that just this April Lessig, in a speech in Switzerland, decried publishers' paywalls, and has regularly lodged critiques of the legal delimitation of intellectual property, which is to say information and knowledge. Lessig even cited JSTOR in his April talk, pointing to a tweet "from a scholar who called JSTOR 'morally offensive' for charging $20 for a six-page 1932 article from the California Historical Society Quarterly."  He is not, however, commenting on Swartz's case but other figures like Boston-based computer scientist and MIT alum Richard Stallman, one of the major proponents of Open Source systems, have rallied to Swartz's defense.

It's still unclear what Swartz, who has since quit his Harvard post, planned to do with the huge cache of files. Was he planning to use them, as some of his peers suggest, for a research database that would have benefitted from that volume of documents, and if so, would it have been reasonable or just unfeasible for him to request financial research support from Harvard and outside sources, and permission from JSTOR? Was he planning to upload the files to unauthorized online repositories--"free" libraries, as it were--of scholarly materials, or analogous filesharing systems? Or might he have been planning both the public database project, which he has undertaken in the past, and free sharing of the files? Then there is the matter with MIT, with which, as I said, Swartz has no affiliation.  Though quite open with some of its resources--such as its Open Course modules, which make available syllabi, taped class sessions, podcasts, and other material free of charge to anyone who visits its website--MIT is a élite private university which like most private institutions does not allow unauthorized access to its research and other facilities or physical plant, so is it not reasonable for it to have taken steps to investigate and then have the authorities arrest someone who had broken into not just its computer system, but its physical plant? What's baffling is that at some point the Secret Service was called into the picture. I also wonder, as some of the people cited in the article do, whether MIT officials, many of whom have exceptional computer skills, might not have investigated and addressed the situation themselves, before calling in the authorities. Or did they?  And if they did, given the nature and scope of the crime, were their actions excessive, if they were involved in contacting the Secret Service?

A month or so ago I posted a review of Jaron Lanier's You Are Not a Gadget (Knopf, 2010), which is quite critical of the "free information"/"open culture" approach, which the book suggests negatively affects many people's ability to earn a living, among other things.  If nobody is willing to pay will anyone but a very few get paid?  Lanier, if I read him correctly, isn't an advocate of commercialization or mass paywalls, but contra Lessig he does worry about the effects of not having even a modest or moderate system and structure of monetization online, which would ensure compensation for intellectual work. Last December, I posted about Harvard University Librarian and historian Robert Darnton's critique of the exorbitant costs imposed by the current journal publishing system and its damaging financial effects on libraries. If a ultrarich institution like Harvard has to struggle with paying for access, and if scholars themselves are questioning the unaffordable and unsustainable system of access to knowledge in certain formats, what about others at institutions that cannot afford to pay or those without university or other private institutioanl affiliation?

As for Swartz, the young wunderkind has stated in a 2008 manifesto entitled "Guerilla Open Access," "We need to take information, wherever it is stored, make our copies and share them with the world....We need to download scientific journals and upload them to file sharing networks." This seems to be a hacktivist cri de coeur, a utopian perspective and approach I fully grasp and understand. It is part of the continuum that includes both Limewire and Wikileaks.  But it's a approach that puts him and many who have undertaken similar actions squarely in the crosshairs of the US and other federal governments, as well as private corporations, including publishers, and institutions that zealously seek to protect certain types of information, especially if classified or under copyrights. We know the penalties meted out against groups and individuals involved in unauthorized sharing of documents and downloading commercial music and films, but as MIT professor Chris Capozzola--who is also acting associate dean of the institute's School of Humanities, Arts and Social Sciences--asks, was MIT response too much, and did it the Institute's "culture of breaking down barries"?  In the end between unauthorized filesharing with the threat of severe prosecution and rigid, unaffordable paywalls, aren't there other ways to proceed?

Lanier's arguments, like Darnton's articles and book on libraries, suggest there are, and perhaps the discussions around this particular case will lead to larger and more broadly engaged public discussions and debates that lead eventually to the development and implementation of alternate systems permitting both affordable monetization and the widest possible public access to the vital forms of knowledge contained in those articles Swartz downloaded. Meanwhile, Swartz's case continues.