Spiders Inspire Fear — Along With Novel Products That Could Change The World

Spiders, or at least caricatures of them, are out in full force this Halloween weekend. But next time you see the eight-legged creature carved into a pumpkin, or dropping from the ceiling of a haunted house, perhaps consider feeling more than just spooked. A little respect is also appropriate. Arachnids, as they’re scientifically known, could soon help you stay safer, warmer and healthier.

 

“They’re not here to scare us,” said Cheryl Hayashi, professor and vice chair of biology at University of California, Riverside. “There is lots of stuff we can learn from them.”

 
 

She and other scientists are discovering not only what spiders do and how they do it, but also how to mimic those unique capabilities in the development of new products and technologies, from gentler airbags and better bandages to biodegradable water bottles. And these are just a few examples of how the burgeoning field of biomimicry is benefitting the health of humans and the planet. By looking at nature — and all that life has refined and perfected in its 3.8 billion years on Earth — researchers are figuring out how to create color without chemical-based dyes, deter pests without pesticides, fend off bacteria without antibacterials that may drive antibiotic resistance, and make products that can be absorbed back into nature rather than spending hundreds of years in a landfill or a plastic garbage patch in the Pacific

 

In fact, some of these spider-inspired technologies are nearly ready for prime time. In an October press release, The North Face and Japan-based partners, Spiber and Goldwin, announced development of the first “successfully-produced synthetic spider silk material.” The material is incorporated into their Moon Parka which, they stated, is “headed for commercialization in 2016.”

 

Currently, most sports apparel is made from synthetic polymer materials (such as polyester, nylon, etc.) that require petroleum to produce, and production of these materials consumes massive amounts of energy and produces large amounts of greenhouse gases,” noted the press release.

 

The biomimicry potential of spiders goes beyond their ability to spin strong, slender and sticky webs of silk that outperform manmade materials. Spiders can also walk on water. They can carry life-sustaining air with them as they dive underwater. And the short, compact hairs on a spider’s surface naturally repel water.

 
 

“Spiders have been fine-tuning [their technology] over hundreds of millions of years,” added Hayashi. “Now those properties are available for us to try to replicate.”

 

Stronger than steel

 

Hayashi, an evolutionary biologist, has always been fascinated by spiders — their spun silk, in particular. Ounce for ounce, spider silk can be five times stronger than steel, and even stronger than the Kevlar used in bulletproof jackets. What’s more, spider silk fibers can actually increase in strength as they get finer. And the stuff is also incredibly stretchy and tough. It’s truly unlike any other material, manmade or natural, Hayashi and other experts emphasize.

 

Turns out, there’s not just one standard spider silk. A single species of spider can make one or even multiple types of silk, she explained. And there are more than 40,000 species of spiders, spanning a large variety of environments. Some silks are stretchier; some are stronger.

 

“By looking at the diversity of silks,” said Hayashi, “we can use those recipes as templates for new materials.”

 
 

Her lab is characterizing the genes and proteins involved in spider silk’s properties and production. Many types show “enormous potential” to help human and environmental health, she said. The silk could be incorporated into a medical implant that would be lightweight, durable and not elicit an immune response, for example. Or it could be used to create strong fishing nets that could biodegrade, and therefore not entangle whales and other marine life.

 

And it’s not just the finished products that might benefit humans and our environment. The manufacturing of the products could be cleaner and more energy-efficient. Spiders are part of nature, so they spin silks at ambient pressure and temperature conditions, unlike a typical chemical factory that produces nylon out of petrochemicals at high temperatures, explained Hayashi.

 

Still, replicating a spider’s mass production of silk is not easy. And that is perhaps the greatest roadblock to getting spider silk products onto store shelves or into hospitals. “It turns out to be quite challenging,” she said. “And that’s not surprising, since spiders have been at it a really long time. They’ve had a huge head start on how to do this economically.” 

 

Randy Lewis, an expert in spider silk at Utah State University, is making headway on that problem of cost-effectiveness and scalability. And the whole process, he added, is “pretty green.”

 

A spider spins its silk fibers from a water-based solution. But because they are naturally “territorial and cannibalistic,” he explained, spiders can’t simply be farmed. So instead, to produce the silk proteins, experts have transferred a spider’s silk-spinning genes into other organisms, such as silkworms, bacteria, alfalfa and goats. To then take those proteins and spin them into products, however, they’d previously resorted to a slow process involving harsh and expensive organic chemicals. Now, his team has figured out how to rapidly dissolve the proteins in a water-based solution by generating pressure and temperature in a sealed vial with short, repetitive bursts from a conventional microwave.

 
 

Lewis added that it may even be possible to use waste products from agriculture to, say, feed the silk-producing modified bacteria. “You could be converting waste into a real honest-to-goodness product,” said Lewis.

 

His team is also looking beyond fibers at coatings, adhesives, gels and films, which could have uses in automobiles, environmental sensors and medical devices. “So far we have not found anything we can’t glue together,” said Lewis, noting they’ve tried Teflon, silicone and even skin. 

 
 

Cost, of course, is also a challenge in the development of a novel technology such as spider silk. But Lewis expressed optimism. “We can drive the cost down,” he said. “It will not be as cheap as the cheapest materials. It’s just really cheap to make anything from petroleum products.”

 

Arachnids’ water-phobia

 

Again, silk’s astonishing properties are not the only source of inspiration scientists are gleaning from spiders. The hairy surface of a spider’s body is also yielding some water-repellent ideas that Lewis noted could prove “very, very useful.” 

 

Wolfgang Sigmund, a professor of materials science and engineering at the University of Florida, has been studying that layer of hair on a spider, which he said has special self-cleaning features that could be harnessed into products that may one day prevent corrosion, conserve water and package food without worry of leaching toxic chemicals.

 

While the leaves of some plants, such as the lotus, also naturally repel water and have provided another source of water-resistant biomimicry inspiration, Sigmund noted that spiders have at least one advantage over a plant: While the surface of foliage can’t recover from damage, a spider’s body hair regrows. 

 
 

His team has built materials that successfully mimic this pattern. On its surface, water stays “perfectly spherical” and “doesn’t stick,” he said. Since first coming out with that finding in 2010, the team has worked on making the structures stronger and less brittle, and therefore ready for real-world applications. They now have samples that won’t be damaged when touched or rubbed, while also refusing to get wet.

 

Among the products his group is developing is a water-repellent paint that doesn’t require clean water to keep clean. “You can spray muddy water on the building, and that would still take the dirt off,” said Sigmund. “And that can save water.” 

 

He expects his group to establish a start-up company or attract industry pick-up of their simulated spider skin in the near future. “We should see this introduced very soon for prototypes and, soon after, it should enter the market,” he said.

 

Meanwhile, The North Face’s Moon Parka will likely be entering the market within months, potentially ushering in this new generation of spider-mimicking products. “For the first time in history, we are harnessing the power of evolution in order to create high-performance, sustainable and exciting protein materials,” explains a Goldwin video that describes the Moon Parka technology. “This has endless applications and unlimited potential.”

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Dumb and Dumber Debating — Part II

Thank goodness the Republican House approved a budget compromise that lifted the debt ceiling for 2 years, and ignored the Republican Presidential debates. It was a compromise because Democrats were needed to get approval in both houses of Congress. In fact, retiring House Speaker John Boehner was only able to pass it because all 187 Democrats voted for it, and only 79 House Republicans–and the Senate approved it late last night.

 
 

The deal provides an extra $80 billion, divided evenly between the Pentagon and domestic agencies over the next two years, and extends the government’s authority to borrow to pay bills into March 2017, as President Obama’s successor settles into the White House. It also preserves our S&P AA+ bond rating (that once was AAA).

 
 

“Today we had a major victory in the House,” said California Rep. Nancy Pelosi, the chamber’s top Democrat. “It was a victory for bipartisanship. … We honored the full faith and credit of the United States of America.”

 
 

It tells us what the Republican debates have also told us. Repubs have become the ‘dumb-down’ party, with seemingly no clue how an economy works. Best example is the 10 percent flat tax that they have advocated forever. Steve Forbes made it part of his presidential run in 1996 and 2000, or Marco Rubio’s assertion in Wednesday’s Republican debate that $6 Trillion in tax cuts would pay for itself.

 
 

In fact, either would bankrupt government, which has to be their goal. Revenues would not even begin to cover expenses. It is certainly why the U.S. has the developed world’s greatest income inequality, which has led to the poorest social safety net, especially for children.

 
 

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Graph: The Spirit Level

 
 

Today’s tax revenues don’t cover current expenses either, but that’s because tax rates have been cut drastically and steadily since Ronald Reagan dropped the maximum rate from 70 to 40 percent. GW Bush’s Treasury Secretary Ron O’Neill famously warned that deficits do matter, but Veep Dick Cheney fired him one month later, rather than listen to such economic wisdom. And Republicans economic knowledge hasn’t improved, judging from the two presidential candidate debates held to date.

 
 

There is really only one way to reduce the current $19 Trillion federal debt, since Congress hasn’t been able to reduce government spending. It’s to raise revenues, with a combination of higher taxes as well as fewer tax loopholes. Most modern developed countries require their citizens pay enough taxes to cover what is being spent, and the wealthiest pay the most.

 
 

It’s a simple fact that most of our deficit is from past spending, such as the Wars on Terror, or the $835 billion spent via the American Recovery and Reinvestment Act that saved us from another Great Depression; or from revenue losses from the Bush tax cuts and the Great Recession. So the question is how do we make up the lost revenues?

 
 

Republicans have succeeded in crippling much of government with their no tax raise mantra. This budget compromise will help current programs. But it doesn’t cure the revenue problem. That can only be fixed with higher maximum income and inheritance tax rates, while rescinding some of the tax subsidies to the energy sector ($7 billion), or the “carried interest” loophole that taxes hedge fund profits at the current capital gains rate of 20 percent, rather than as ordinary income with its 39.6 percent maximum rate.

 
 

Eliminating the carried interest loophole would raise $21 billion in revenue over 10 years, according to the Congressional Budget Office. This is when the top 25 hedge fund managers earned some $24.3 billion in 2013.

 
 

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Graph: St Louis Fed

 
 

We were able to keep our deficits at a reasonable level when the U.S. had 70 to 90 percent maximum tax rates to support our growing economy, as the above graph shows–before 1980, that is. Now we have to find a way to dispel the myth that downsizing government helps anyone but the wealthiest among US.

 
 

Harlan Green © 2015

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Weekend Roundup: Protecting the Cloud — At the Bottom of the Ocean

This week, a new 21st century debate surfaced: How do we protect the data cloud we have all come to depend on when it is physically composed of cables running across the bottom of the ocean? The issue came to light after it was reported that Russian spy ships were operating near key cable routes.

 
 

Former NATO Supreme Allied Commander James Stavridis writes that, “Well over 95 percent of everything moving on the global Internet passes through 200 or so highly active cables, some as deep underwater as Mount Everest is tall.” Lixian Hantover offers a profile of what the undersea cloud looks like and what its vulnerabilities are. Carl Bildt, former Swedish prime minister and chair of the Global Commission on Internet Governance, calls for a new digital diplomacy to maintain the free flow of information across borders. “The solution to privacy concerns,” he writes, “lies not in data localization, but in the development of secure systems and the proper use of encryption. Data storage actually means the continuous transfer of data between users, with no regard for Westphalian borders. Security in the digital world is based on technology, not geography.”

 
 

In our continuing series on The Third Industrial Revolution, Jeremy Rifkin lays out the vast potential of the “Internet of Things” and “the zero marginal cost society.” Guy Verhofstadt, the former Belgian prime minister and a key EU parliamentarian, addresses the obstacles to creating a digital single market in Europe: “We need to end, once and for all, the European aberration in which markets of the past are given preference over markets of the future.” Nobel laureate Michael Spence sees great promise in the emergent “sharing economy.” Guy Standing worries that “cloud labor” — part-time, low-wage flexible work — is creating a new class, “the precariat.” Susan Lund acknowledges both the promise and perils of “free agent labor”on the cloud. Marking a distinct change in course, U.S. President Barack Obama writes about his reservations over the standardized testing he once championed.

 
 

The stakes in the strategic battle over whether the U.S. or China will dominate the South China Sea leapt to a new level this week as American warships passed through what China claims are its territorial waters. Writing from Sydney, Hugh White worries that the U.S. doesn’t get it: “Washington still expects Beijing to back off at the first faint sign of U.S. resolve,” he writes. “It doesn’t grasp that Xi Jinping may be at least as determined to change the Asian order as Barack Obama is to preserve it, and that he may believe he holds the better hand.” Euan Graham thinks China’s next move in response to what it considers a U.S. provocation may well be to “militarize” its island construction project. WorldPost China Correspondent Matt Sheehan reports from Beijing on the cute, cartoonish video that awkwardly seeks to catch the public’s attention ahead of the rollout of the new five-year plan by Chinese authorities. He also breaks down the top questions about China’s new two-child policy.

 
 

In the run up to the November 1 elections, Karabekir Akkoyunlu worries that Turkey is in danger of reprising the 1990s conflict between “the deep state” of the security apparatus and the Islamic-rooted AKP of President Recep Tayyip Erdogan. Stephen Schwartz looks at the complex interplay of competing political interests that have undermined AKP dominance and led the president to play the nationalist and anti-Kurd cards. “Erdogan has set a series of fires that will not be easy to put out,” he says.

 
 

Writing from Beirut, former MI6 operative Alastair Crooke argues that Syria is central to Putin’s effort to resurrect Russia as a world power, including offering a venue to demonstrate its modernized military technology. Writing from Paris, French philosopher Bernard-Henri Levy scores the “Party of Putin” emerging around Europe that buys into what he describes as the Russian leader’s intolerant, anti-cosmopolitan worldview. In an interview, Nataliya Rostova, a chronicler and critic of the Russian media, discusses Putin’s control of the press. Former top Iranian official Seyed Hossein Mousavian explains what’s at stake at the discussions on Syria in Vienna with regard to Iran and Saudi Arabia. “Rather than trying to constrain Iran and isolate it in its own region,” he writes, “the leaders of Saudi Arabia should acknowledge that Iran is their neighbor and that they can and should live in peace with each other.” In yet another reminder of the severity of the situation in Syria, WorldPost Middle East Correspondent Sophia Jones reports that two Syrian activists who documented the Islamic State’s crimes have been beheaded by the terror group.

 
 

As the wave of violence continues in Jerusalem and the West Bank, Ronald Lauder, president of the World Jewish Congress, calls on Israeli and Palestinian leaders to re-launch negotiations on a two-state solution. Historian M.G.S Narayanan traces the recent controversy over beef-eating to a misinterpretation of Hinduism. “There is no Hindu ‘religion,'” he writes. “Unlike the Semitic religions of Judaism, Christianity and Islam, there is no one founder, sacred book and rules of conduct including procedure for conversion and excommunication applicable to Hindu society as a whole.”

 
 

C. Christine Fair takes aim at “The Drone Papers,” a recently published report from The Intercept, specifically disputing the claim that 90 percent of strikes killed people who were not targets.

 
 

As the influx of refugees and migrants continues to grow unabated in Europe, Lliana Bird reports on the worsening conditions and increasing desperation of people on the Greek island of Lesbos. A Greek islander tells HuffPost Greece, “It’s hard to live with death every day.” We also document the experience of rescued refugees on the island in photos and learn what motivated some members of MSF’s team on another Greek island — Kos — to help out. In a series of infographics, we look at where refugees are coming from in the Middle East and Africa and where they are going in Europe. World Reporter Nick Robins-Early explains how the refugee crisis is fueling the rise of Europe’s right. And in this week’s “Forgotten Fact,” we remind readers that despite the fact that winter is approaching, the number of refugees arriving in Europe keeps rising.

 
 

Writing from Hong Kong, Parag Khanna argues that we are entering a new Middle Ages of the future where, once again, cities will be more important than nation-states. In an inspiring video, we learn about the wonders of “biomimicry,” an approach to innovation that suggests solutions to some of our most pressing challenges already exist all around us. We also watch Chile’s Atacama desert bloom in a rare event and explore the beauty of the dry land that comprises the world’s deserts.

 
 

Our Singularity series this week looks at the new blockchain technology designed to prevent corruption in accounting ledgers of companies and countries alike. Finally, Fusion catches up with iconic actor Bill Murray in Morocco, where his new movie “Rock the Kasbah” was filmed.

 
 
 
 
 

WHO WE ARE

 
 

EDITORS: Nathan Gardels, Senior Advisor to the Berggruen Institute on Governance and the long-time editor of NPQ and the Global Viewpoint Network of the Los Angeles Times Syndicate/Tribune Media, is the Editor-in-Chief of The WorldPost. Farah Mohamed is the Managing Editor of The WorldPost. Kathleen Miles is the Senior Editor of The WorldPost. Alex Gardels and Peter Mellgard are the Associate Editors of The WorldPost. Katie Nelson is the National Editor at the Huffington Post, overseeing The WorldPost and HuffPost’s editorial coverage. Eline Gordts is HuffPost’s Senior World Editor. Charlotte Alfred and Nick Robins-Early are World Reporters. Rowaida Abdelaziz is Social Media Editor.

 
 

CORRESPONDENTS: Sophia Jones in Istanbul; Matt Sheehan in Beijing.

 
 

EDITORIAL BOARD: Nicolas Berggruen, Nathan Gardels, Arianna Huffington, Eric Schmidt (Google Inc.), Pierre Omidyar (First Look Media) Juan Luis Cebrian (El Pais/PRISA), Walter Isaacson (Aspen Institute/TIME-CNN), John Elkann (Corriere della Sera, La Stampa), Wadah Khanfar (Al Jazeera), Dileep Padgaonkar (Times of India) and Yoichi Funabashi (Asahi Shimbun).

 
 

VICE PRESIDENT OF OPERATIONS: Dawn Nakagawa.

 
 

CONTRIBUTING EDITORS: Moises Naim (former editor of Foreign Policy), Nayan Chanda (Yale/Global; Far Eastern Economic Review) and Katherine Keating (One-On-One). Sergio Munoz Bata and Parag Khanna are Contributing Editors-At-Large.

 
 

The Asia Society and its ChinaFile, edited by Orville Schell, is our primary partner on Asia coverage. Eric X. Li and the Chunqiu Institute/Fudan University in Shanghai and Guancha.cn also provide first person voices from China. We also draw on the content of China Digital Times. Seung-yoon Lee is The WorldPost link in South Korea.

 
 

Jared Cohen of Google Ideas provides regular commentary from young thinkers, leaders and activists around the globe. Bruce Mau provides regular columns from MassiveChangeNetwork.com on the “whole mind” way of thinking. Patrick Soon-Shiong is Contributing Editor for Health and Medicine.

 
 

ADVISORY COUNCIL: Members of the Berggruen Institute’s 21st Century Council and Council for the Future of Europe serve as the Advisory Council — as well as regular contributors — to the site. These include, Jacques Attali, Shaukat Aziz, Gordon Brown, Fernando Henrique Cardoso, Juan Luis Cebrian, Jack Dorsey, Mohamed El-Erian, Francis Fukuyama, Felipe Gonzalez, John Gray, Reid Hoffman, Fred Hu, Mo Ibrahim, Alexei Kudrin, Pascal Lamy, Kishore Mahbubani, Alain Minc, Dambisa Moyo, Laura Tyson, Elon Musk, Pierre Omidyar, Raghuram Rajan, Nouriel Roubini, Nicolas Sarkozy, Eric Schmidt, Gerhard Schroeder, Peter Schwartz, Amartya Sen, Jeff Skoll, Michael Spence, Joe Stiglitz, Larry Summers, Wu Jianmin, George Yeo, Fareed Zakaria, Ernesto Zedillo, Ahmed Zewail, and Zheng Bijian.

 
 

From the Europe group, these include: Marek Belka, Tony Blair, Jacques Delors, Niall Ferguson, Anthony Giddens, Otmar Issing, Mario Monti, Robert Mundell, Peter Sutherland and Guy Verhofstadt.

 
 

MISSION STATEMENT

 
 

The WorldPost is a global media bridge that seeks to connect the world and connect the dots. Gathering together top editors and first person contributors from all corners of the planet, we aspire to be the one publication where the whole world meets.

 
 

We not only deliver breaking news from the best sources with original reportage on the ground and user-generated content; we bring the best minds and most authoritative as well as fresh and new voices together to make sense of events from a global perspective looking around, not a national perspective looking out.

 
 

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Hip Coffee Chains Are Selling Out, And That’s OK

 

The hot beverage chain Peet’s Coffee and Tea announced Friday it will acquire a majority stake in the Chicago coffee roaster Intelligensia. This is the second acquisition for Peet’s this month. On Oct. 6 the California-based company announced its purchase of Portland’s Stumptown Coffee Roasters. 

 

For coffee lovers (or, er, snobs), this is a big deal: It’s about whether their favorite local, artisanal roasters will become the next Starbucks now that they’ve sold out. 

 

Both Intelligensia and Stumptown have cult followings. They have very few shops around the U.S. and are concentrated in the hip neighborhoods of urban areas. They are the darling brands of the third-wave coffee movement — the kinds of places where baristas are knowledgable craftspeople rather than teenagers pushing buttons to make a little extra money. 

 

Some people are upset that these small, handcrafted-latte-kind-of-places are getting bought by bigger companies. “Please don’t lose your soul,” one Intelligensia fan tweeted Friday.

 

The fact is, though, coffee is a business, and the demand for quality is growing beyond the urban core. (As a self-proclaimed coffee snob, there’s nothing worse than traveling outside a major metro area and finding out the only coffee options are Dunkin Donuts and Starbucks.)

 

Just a few days ago, New York City-based reporter Ben Casselman tweeted that he was surprised to find Intelligensia in a relatively small Iowa city.

 
 
 

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There is a real question if great coffee like this can scale without sacrificing quality. People are starting to bet that it can. Back in June, before the two Peet’s acquisitions, another big third-wave coffee favorite, San Francisco’s Blue Bottle, announced it raised $70 million in venture funding.

 

On the other side of the coffee divide, Starbucks is trying to go high-end. It opened its first upscale cafe and roastery in Seattle last year.

 

The Peet’s money will help both Stumptown and Intelligensia compete with the venture-backed Blue Bottle, and try to stave off Starbucks.

 

Obviously, things go wrong at big corporations, and plenty could get diluted now that good coffee companies are selling out. But that is not the stated intention. In an interview with coffee culture site Sprudge on Friday, Intelligensia co-founder Doug Zell said Peet’s has promised to let the smaller company keep doing what it’s doing:

 
 

Nothing about what we do in terms of sourcing direct trade is going to change. As we grow we’re going to continue to buy great coffees from the best producers in the world. We’ll be able to cast a wider net with the muscle and resources of Peet’s.

 
 

Let’s hope that muscle is used as a force for good (coffee).

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Does Your Business Need Social Media?

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Does your business need social media? It depends on your answer to this question: Does your business have customers that are on social networks? If the answer is yes, then you need to be there with them. As best-selling author Jay Baer said in a September 2015 interview with Oracle, Hug Your Haters: A Conversation About Social Customer Service With Jay Baer, “It doesn’t matter whether you’re B2B [business to business] or B2C [business to consumer], you need to interact with your customers where they want to meet you.” It used to be the only requirements for a marketing plan were a listing in the phonebook and an ad with the local media. And some would argue that is still all you need. Let me think, who would that apply to? Um, no one. We have this thing called the internet now with a whole new playing field known as digital: Hello email! Call to action — click here! Like! Engagement, brand awareness and social customer service all rolled into one platform.

 
 

Six years ago the world of customer relations opened up to business owners in a form of media that was, well, social. In 2009 customers could become a Facebook fan of your company or brand. This became your opportunity to interact with them in an online community. Social media was free and easy. Advertising on Facebook and the other networks wasn’t available just yet. So what was the point of putting yourself out there in the cybersphere? As another way to connect with the customer. “Why do we need to ‘engage’ with our customers online?” business owners asked. “Can’t the conversation just take place here in the store while they’re shopping? Why do I have to add more work learning this Facebook thing and maintaining it everyday?” I can’t tell you how many times I’ve heard that. Fast forward to present day and it’s a given. By now almost all business owners have some familiarity with Facebook as well as the other key social networks and are on them, intentionally or not. Engagement is up. We are now multi-level conversers.

 
 

Brand awareness is perhaps the biggest buzzword in advertising. It’s not a trend because brands have always existed (think Coke.) But social media has added a new dimension. “What’s your story?” is a fun conversation opener. And why not? Personal stories are interesting. They bring people together, give credibility, create interaction, and most importantly for business, build loyalty. What’s the best way to get your story out there? Social media. From an Inc article by Peter Roesler from September 2014, 5 Benefits of Social Media Business Owners Need to Understand, “A website establishes that a brand exists, but a social media page establishes that the brand is active.” No one wants to sit through a dull story. You don’t just have a logo anymore, you have a brand. Make it big! (And at the very least, if your logo doesn’t fit in the Facebook avatar, update it!) Find the social networks that work for you and your customer and get out there. Keep your website current, post on your blog regularly, and move the conversation back to the heart of your online personality, which is your website, not your social media network. Think of social media as the brains of the operation, active, changing, informing, communicating, etc. Studies have shown that when people interact on social media, it boosts the pleasure zones in the brain. How’s that for creating loyalty?

 
 

The most important reason why your business needs social media is social customer service. I know, you’re thinking, “What? Another level of customer service? Isn’t that what those pesky review sites like Yelp and Trip Advisor are for?” And you may secretly be thinking that if disgruntled customers (plural because you will have more than one) can’t pick up the phone or come in to see you in person, you can’t be bothered to deal with them. Well, it doesn’t work that way anymore. Looking back, you probably should have hugged the brave soul who took the time out of her day to express a concern to you face to face. That just doesn’t happen anymore! Don’t let your customers “ghost” you! Believe it or not, social media is the saving grace of customer service. And this isn’t just a positive spin for a painful process. When embraced as the powerful marketing tool that it is, using social media to address customer feedback is the easiest way to get the most bang for your buck. It’s free, it has reach, it’s immediate, and it gets results. Once you’re able to let go of the outcome and be present as your authentic brand (a kinder way of saying step up, let go of your ego, address the problem, and be truthful) you will inevitably gain the trust, loyalty, and recognition you deserve for spending time on social media networks. From The only purpose of “customer service”… by Seth Godin, best selling author and marketing genius:

 
 

The customer who seeks out your help isn’t often looking to deplete your bank account. He is usually seeking validation, support and a path to feeling the way he felt before you let him down.

 
 

The best measurement of customer support is whether, after the interaction, the customer would recommend you to a friend. Time on the line, refunds given or the facts of the case are irrelevant. The feelings are all that matter, and changing feelings takes humanity and connection, not cash.

 
 

You won’t get this if you ignore your customers’ comments. You can pay a lot of money to advertise your brand and create a website, but without a social media presence you could miss your chance to make a connection.

 
 

And now for the statistics to back this up: I’m not going to quote any numbers. Trust me they’re out there. More important than data, the reason your business needs social media goes back to the basic business tenet that the customer is always right. Just like it says on Stew Leonard’s famous granite rock.

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Condom Maker’s Stock Slumps After China Abandons One-Child Policy

 

HONG KONG (AP) — Shares of companies that make diapers, baby strollers and infant formula got a boost Friday from China’s decision to scrap its one-child policy. But for the maker of a popular brand of condoms, it was not the brightest of days.

 

Investors are betting on a bump in sales for companies with baby or child-related businesses after China’s Communist leaders announced that all married couples would be allowed to have two children. The economic waves traveled as far afield as New Zealand, where the currency of the dairy exporting country surged.

 

Analysts at investment bank Credit Suisse estimated that the relaxed controls would result in an extra 3-6 million babies born annually in the five-year period starting in 2017. China, the world’s most populous country with nearly 1.4 billion people, has about 16.5 million births each year.

 
 

The one-child policy began in 1979 to curb a surging population at a time when extreme poverty was widespread in China.

 

The Credit Suisse report said that with the annual cost of raising a child estimated at 40,000 yuan ($6,330), the extra births would translate into an extra 120-240 billion yuan ($19-38 billion) in consumer spending a year, or 4-6 percent of China’s total retail sales.

 

One of the biggest winners in the financial markets was China Child Care Corp., which makes hair and skin care products for kids. Its shares ended 40 percent higher on Hong Kong’s stock exchange.

 

On the losing side, Japanese condom maker Okamoto Industries Inc., a favorite of Chinese visitors to Japan, slumped 10 percent in Tokyo.

 

Formula makers in Hong Kong and mainland China rose strongly, led by Beingmate Baby & Child Food Co., which jumped 10 percent on China’s smaller Shenzhen stock exchange.

 

Japanese companies were also among the beneficiaries. Baby bottle maker Pigeon Corp. surged 10.7 percent while diaper makers Unicharm Corp. and Kao Corp. both rose nearly 4 percent in Tokyo.

 

Japanese and other foreign brands are popular with Chinese buyers because they’re seen as being authentic and better quality. Those characteristics are prized in China following food and other product safety scandals involving domestic brands.

 

Some cautioned the increase in births may not be as big as predicted because of the expense of raising a second child and other factors.

 

“The rush for baby-related stocks may not necessarily bear fruit,” said IG analyst Bernard Aw in a report.

 

In New Zealand, the local dollar jumped as high as $0.6772, gaining nearly 1 percent from $0.6699 the day before. The country is a major dairy exporter and its milk powder and formula industry would likely benefit from a baby boomlet in China.

 

Some baby stocks started rising Thursday ahead of the official announcement on Chinese state media.

 

Goodbaby International, which makes strollers, car seats and cribs, rocketed 7.4 percent on Thursday and followed that up with a 2.3 percent gain Friday. Rumors had already been swirling in China that the policy would be adjusted at a meeting on China’s next five year plan that was held this week.

 

Also on HuffPost:

 
 

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Chasing Squirrels and Breaking the ’80/20′ Rule

Have you seen the movie Up? The movie has one of my favorite characters, Dug. I laughed so hard the first time Dug was introduced, when he started talking about how much he loved his new master and — squirrel! He gets distracted, as do the other talking dogs in the movie. I can relate to Dug, sometimes a little too much! With hundreds of new opportunities popping up every week, I can get distracted from the business at hand. We all do. However, I need to be dedicated to picking out the right squirrels to focus on, which ones to ignore, and which ones to kill.

 
 

Once you’ve removed all the distractions, it’s time to focus on the business side of things, on how to streamline the process and figure out what will make your business profitable.

 
 

One of the rules I would use daily is the 80/20 rule. If you’re in business, you know about the 80/20 rule, also known as Pareto Principle. For those that don’t, the Pareto Principle dates back to 1906 when Italian economist, Vilfredo Pareto, studied the patterns of money and wealth in Switzerland and discovered that 80 percent of the nation’s land was controlled by just 20 percent of the population. Upon further research, Pareto discovered that the same pattern occurred in other countries. Other economists paid attention to this, and started noticing similar unequal patterns. In business, we apply this as a general rule that the top 20 percent of your customers account for 80 percent of your revenue.

 
 

Hence, the 80/20 rule. It’s something that you and I often use to evaluate people, customers, tasks, and even ourselves.

 
 

As leaders, it’s our job to push our teams to the limit, exposing excuses and causing tension. Sometimes, the 80/20 rule can lead to excuses — like sales teams focusing on just the 20 percent and ignoring everyone else. I sat down to talk with Peter Philippi, CEO of Strategex, a business that focuses on creating customized growth strategies for mid-to-large B2B organizations. When it comes to the 80/20 rule, Peter has an interesting take on it — a take that has helped his team push past self-imposed limitations and excuses.

 
 

To understand Peter’s idea, grab a piece of paper and pencil. First, make a list of all of your customers from the last 12-month period. Organize the list in descending order of revenue. From there, split the list into four equal groups, with the top being the top 25 percent in terms of revenue, the bottom the bottom 25 percent and so on.

 
 

According to Peter, what you should see is that “the top 25 percent should account for 89 percent of your revenue; the second 25 percent accounts for 7 percent; 3 percent on the third; and 1 percent on the bottom.” An 89/7/3/1 is quite a bit different than Pareto’s 80/20 rule, and Peter is so sure of this that it’s printed on the back of his business card!

 
 

By breaking out your customers according to the 89/7/3/1 rule, you and your sales team should be focusing on the “whales” — the top 25 percent that bring in 89 percent of your revenue. That’s a more efficient way to target rather than the previous 80/20 model, don’t you think? Your “minnows,” the 7/3/1, should still receive attention of course, but more proportionate to the revenue you receive. The goal of the 89/7/3/1 rule is to help you and your team focus on the right business. However, according to what Peter told me, most businesses don’t do that. Why is that? I believe it comes down to one of three things:

 
 

Won’t Focus

 
 

There are some people who just don’t want to focus on what needs to get done. And it takes all kinds of people to keep the world spinning. But I don’t have time for these people, so I have nothing to say to them.

 
 

Can’t Focus

 
 

Thinking big and acting bigger can take time to adjust to. There are people who jump in feet first to the deep end, and others who take time to wade in from the shallow end. Whatever way they get to the deep end, at least they’re getting there. If your team is having trouble getting there due to lack of education or tools, it’s your job as a leader to give them what they need in order to achieve the goals you’ve set forth for your company.

 
 

However, sometimes people are too preoccupied with other things to focus. It’s up to them (and you) to help them realign their goals to meet yours. We all can be distracted squirrels, but it takes dedication to push past the distractions and focus on the big picture.

 
 

Don’t Want to Focus

 
 

Then, there are times when people simply don’t want to focus. It could be because they’re too close to the client that they’ll offer to do free work — even at the expense of paying clients. It could be that you’ve always used this specific product or service and refuse to look elsewhere, even when other products or services are obviously better. Whatever the reason, emotional attachment can cause people to not want to focus. That isn’t where your focus should be; your focus should be on your business and doing what it takes to make it the best. If clients, employees, or services are holding your business back – find a way to help them, and then let them go.

 
 

In the end, it’s up to you as the leader to focus your business, team, and even yourself on the business that matters. Remember Peter’s 89/7/3/1 rule to help keep your focus aligned on what’s best for business, and then go after it.

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Hillary Clinton Wants To ‘Ban The Box’ For Federal Government And Contractors

WASHINGTON — Hillary Clinton would take executive action as president to “ban the box” within the federal government and for federal contractors, preventing questions about criminal history in the early stages of the hiring process for most positions, the Democratic presidential candidate will announce Friday.

 

A Clinton aide said the former secretary of state would make the announcement at a rally in Atlanta, as she rolls out her criminal justice agenda over the next few days. 

 

President Barack Obama has called on employers to “ban the box” on job applications — a reference to the checkbox that sometimes appears on such forms next to a question like “Have you ever been convicted of a misdemeanor or a felony”? — but he hasn’t prevented federal contractors from asking about criminal history in the early stages of the hiring process.

 

Two of Clinton’s rivals for the Democratic nomination, former Maryland Gov. Martin O’Malley and Sen. Bernie Sanders (I-Vt.), have supported “banning the box” to make it easier for formerly incarcerated people to find employment. O’Malley’s criminal justice plan says he would make the federal government “a model employer by adopting fair chance hiring policies for all federal contractors and agencies,” while Sanders signed a letter to Obama earlier this year pressing the administration to ban questions about convictions until later in the hiring process.

 
 

An aide to Clinton said her policy would have limited exceptions, and that it would be intended to allow people with a criminal history to show their qualifications without being eliminated in the early stages of the process.

 

Clinton will also discuss her desire to eliminate the disparity between crack and powder cocaine in federal sentencing guidelines and to have that change applied retroactively. She is also expected to speak about the need to ban law enforcement officers from relying on race when conducting spontaneous investigations.

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The End of an Era for American Carmakers — A Silicon Valley Perspective

2015-10-29-1446156798-3800374-iStock_000068857095_Medium.jpg

 
 

If you’ve worked in or around the American automotive industry, you already know about Bob Lutz. He has held major executive positions with the American Big Three — GM, Ford and Chrysler — as well as BMW and a host of other automotive-related companies. He’s seen as a maverick, a truth-teller and a pioneer among some automotive cognoscenti.

 
 

Recently, in an editorial Lutz wrote for Road and Track, titled “Is Tesla Doomed? — Bob Lutz thinks the writing is on the wall for the EV maker,” he argued that “Tesla’s showing all the signs of a company in trouble,” primarily because it sells cars direct to its customers without a dealer network.

 
 

Lutz recounts BMW’s failed direct-sales strategy, and rather than blaming his old employer for not running their operations efficiently, he argues that BMW’s failure also means Tesla’s direct-sales model will fail.

 
 

Lutz points to the fact that car dealerships need acres for the cars they keep in their inventory and also require a “big building with service bays, chargers and a trained sales force…”. “Under a traditional franchise arrangement, the factory never has to carry that burden,” he adds.

 
 

Then Lutz portrays dealerships as money pits that no manufacturer would want to burden themselves with. That’s a strange point of view for someone who spent an entire career relying on franchised dealer networks to sell their products and generate their revenue. On one hand, he basically says that dealers have gotten the short end of the stick from car makers (such as his own employers); and on the other hand he fails to mention Tesla’s highly efficient supply chain management and just-in-time inventory, or their customer centric sales model, or their remarkable sales successes, or their incredibly high overall customer satisfaction ratings.

 
 

I’d like to suggest a different viewpoint, seen from a Silicon Valley perspective rather than through Detroit’s old-school lens.

 
 

Tesla has not simply applied old business models and strategies to a new car — instead, they’ve invented an entirely new strategic approach for a truly revolutionary car packed with cutting edge technologies. From the car itself to the way it’s sold, serviced, and upgraded, Tesla owners — and I’m one of them — have made a giant leap ahead of the standard Detroit fare, experiencing new and cutting-edge performance, reliability, environmental impact and ownership experience.

 
 

Don’t get me wrong — Bob Lutz deserves a lot of respect for his past accomplishments as an automotive executive. But let’s be honest here. Lutz no longer represents the innovative edge of automotive thinking. He publicly denies climate science, he’s nowhere to be found on social media, and he is probably not the guy who will lead the next technology revolution for cars. Instead, Bob seems to want to keep playing the protectionist game and argue for the continuing ascendancy of the old ways of doing things. How many car executives from the traditional Detroit industries have bashed technology innovators, while allowing their own companies to stall, go sideways or go bankrupt?

 
 

As examples of my point, take a look at the comments Lutz has made about Apple as a potential car maker here, here and here.

 
 

I don’t mean to single out Mr. Lutz — he certainly isn’t alone among the tech-bashers in the traditional, legacy car industry. Unfortunately that’s how many executives, if not the majority, tend to react towards new technology.

 
 

Here is the critical fact: the automotive industry is changing at a rapid pace, and that frightens the old guard.

 
 

Companies like Apple, Google and Tesla have started to create a seismic reformation of how we view transportation technology and the people who run the Big Three (and the European and Japanese manufacturers too) need to wake up now and innovate — or they will rapidly disappear in the rear view mirror. The outcome of the new technology trend promises to be nothing short of catastrophic for the current leaders in the automotive industry.

 
 

Consider the following:

 
  • We don’t need to own cars. Instead, we need a convenient, inexpensive and efficient on-demand mode of transportation. So if self-driving cars — owned and managed by Uber, for example — are always on the road, and they cost me a fraction as much to use as owning a car, why would I still want to own my own car?
 
 
  • We typically utilize most of our cars 5-10 percent of the time, or about 1-2 hours per day. This means out of 253 million-plus cars in the U.S., 225 million-plus are sitting idle at any given moment. With self-driving cars and new shared-ownership models, we can probably get away with 80 percent fewer cars in the country or only about 50 million cars. This will reduce wasted capital on cars, the need for garages and parking, the constant maintenance and insurance costs, etc., etc.
 
 
 
 
  • Electric cars mean a MUCH, MUCH cleaner environment. If we want to leave a livable world for our children, we simply have to move away from burning fossil fuels to generate power and mobility. Oil has come to the end of its usefulness for the human race. That’s the future, and that’s the future current leaders in the car industry and in positions of political power should pursue. Cars as we know them have played a huge role in our civilization for over 100 years, but now is the time for us to graduate to the next level. If we don’t believe that will happen, we will wind up in the same position as horse and buggy owners did a hundred years ago.
 
 
  • Unfortunately — if they stick with the horse and buggy model — the existing car companies will fail and the future leaders of the industry will be massively successful technology companies. The innovators such as Apple, Google and Tesla; along with the smart logistics companies such as Uber and Lyft, will replace the automotive dinosaurs.
 
 

We are talking about a future when I will not have to own a car. I will use an app on my phone and an Uber self-driving Apple electric car will pick me up within minutes.

 
 

Once I’m in the car it will recognize my iPhone and will make my iTunes available, along with all my contacts and addresses. I will let Siri know where I’m going or who to call, and while I’m traveling there, safely and efficiently, I’ll be able to do business, chat with friends or just relax and enjoy the trip. We are talking about complete integration of my personal content, preferences, and devices. It’s hard for me to believe, given their lack of market dexterity, that current car companies are equipped with the leadership or the know-how to lead this next generation in transportation.

 
 

So here is my advice for the car companies, specially my favorite American car maker, Ford (which was the only major Detroit automobile manufacturer not facing bankruptcy during the last downturn). You cannot compete with Google, Apple and yes, Tesla. Let those Silicon Valley innovators own the technology, and focus on becoming the builder of their cars. That’s your core competency. On top of that, you could also become great logistics companies, and make a serious effort to compete with Uber or acquire Lyft. You can probably have them for $5B — less than 10 percent of your market cap!

 
 

That’s the best money you can spend now, while you can still afford them. That will put you in a leadership role amongst your traditional competitors and will bring the needed technology knowhow and talent so you can compete effectively and remain relevant in the next chapter of the automotive revolution. Do it now, and don’t say I didn’t warn you.

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Free Markets Ideology Is Making Society Sick

2015-10-27-1445962893-9033176-3ofClubs_ShareholderValue.jpg

 

Source: 52 Shades of Greed. Artist: Jon Burgerman

 
 

Our society is infected by a disease we call “free market ideology”. Whatever the problem might be – climate change, poverty, educational reform – free markets are promoted as an answer. We are told that markets are the greatest anti-poverty program, that if we just leave things alone, companies will lift up the poor. Don’t worry, we are told, innovation will solve global warming if only we give entrepreneurs the right incentives. Trade agreements are promoted as the solution to spur economic growth both at home and abroad, and privatization will solve governmental inefficiencies. These arguments, however, are based on logical fallacies and a misunderstanding of both economics and history.

 
 

We are not arguing that markets are always pernicious – in fact, markets can be very useful. But, the observation that markets are good, in moderation, has been morphed into an extreme ideology that markets are beneficial always and everywhere and that regulating markets is bad. We also don’t assert that most people explicitly agree with free market ideology, in its purist form. But, the ideology has permeated public discourse in ways we are not even aware of implicitly influences most public policy. As Yuval Harari has noted, the capitalist myths are that “The answer to all problems,… is economic growth.” that “if you have any problem, on the personal level, the solution is to buy something.” These implicit beliefs have come to predominate public discourse and policy. That is the way that the disease of free market ideology is infecting us and harming our society.

 

 

Free market ideology has so pervaded our culture that we aren’t even aware of it. It is incorporated in the very language we use to discuss anything vaguely economic. Education is a good illustration. We used to “nurture” our children and prepare students to be responsible and productive participants in the democracy we claimed to be. Now we “invest” in them and prepare them for the workplace. Many people in the both established parties look to competitive models like charter schools and “choice” to fix everything – even though there’s no evidence these actually improve learning. Rather than looking for caring and capable teachers, we want to align their incentives and measure their value-added.

 
 

Our reliance on billionaires like Bill Gates or Mark Zuckerberg to reform education is another symptom of the problem. Market ideology has led to a reverence for billionaires on the theory that the ability to accumulate a large pile of dollars is a sign of expertise in all domains. Market ideology has also lead to a funding squeeze leaving public school systems willing to put themselves in the hands of any well-funded “savior” to come along, including McDonald’s, rather than raise taxes on the wealthy.

 
 

This is a bipartisan ailment. While the Republican party is perhaps more severely infected with free market ideology, the Democratic party is also suffering. President Obama is a strong advocate of a “free trade” agreements and charter schools, as are many other Democrats.

 
 

And it’s harmful. The free market ideology disease has harmed the country. Because of our diseased mindset, we tolerate poverty and starvation that could be eradicated, tearing apart the fabric of society. We are even destroying the environment to the cost of ourselves and our children.

 
 

What is free market ideology?

 
 

Free market ideology asserts that markets are always good and government regulation – or even government in general – is always bad. Exceptions are made for the military and the police, and free-market economists concede that there are environmental impacts and other side-effects of markets which they term “externalities”. But even then, they dismiss or ignore these imperfections, arguing that the side-effects could be fixed by defining property rights better, or building yet more markets. Only a small minority of people are true ideologues, but a fuzzier version of free market ideology is accepted broadly enough that our political discourse has been taken over. For instance, a market system called “Cap and Trade” is promoted to solve the market-created global warming crisis while concepts such as publicly-funded universal health insurance or increased social welfare programs are dismissed as “socialist.”

 
 
 

Several tenets underlie what we call Free Market Ideology:

 
 
    • Markets create a meritocracy where everyone has an equal opportunity.
 
    • Success goes to those producing the most value for society.
 
    • Given unlimited choice, people will act in their own best interests and to their ultimate benefit.
 
    • Individualistic choices will also maximize growth of the economy as a whole.
 
    • It’s good to promote business and growth because “a rising tide lifts all boats”
 
    • Selfishness is glorified, and companies are naturally expected to maximize profits.
 
    • To the extent things are not perfect today, or that growth is stagnant, it is because of government interference in markets.
 
 
 

As appealing as they may seem, these tenets are based on logical fallacies or misinterpretations of history. We’ll take on a few of them.

 
 

 

 

Indeed, there is ample evidence that opportunity in the modern U.S. is wildly unequal and that therefore, success is not a simple sign of merit. Just as one example, no one would claim that a student who attends a typical school in poor neighborhoods and whose family cannot afford to provide good nutrition has as much chance of being the “next Steve Jobs” as a graduate from an elite school in a wealthy district whose parents provide extra tutoring. If they did, why would parents seek to send their kids to elite schools and provide that extra tutoring? But, the fact that a few poor kids do succeed, against the odds, is taken as evidence that the system is working. The rest of the poor kids just need to be taught to have more grit and they, too, will succeed.

 
 

2015-10-27-1445965510-6828530-3ofclubsEfficientMarketHyp.jpg

 

Source: 52 Shades of Greed. Artist: Dobot

 
 
 

Let’s face it, the self-made billionaire is a myth. All successful people have benefited from both good fortune and support from society and government. Did Steve Jobs cleverly choose parents who lived in Mountain View, California where he would get good schooling and happen to run into the inventor of the Apple? Would his career have been equally successful if he had been born in Mountain View, Oklahoma? And how successful would he have been if the government and non-profit institutions had not collaborated to create the internet? Is the fact that Silicon Valley billionaires are almost all white men a sign that white men are more meritorious by nature, or is a more likely explanation that they get the opportunities to succeed where others don’t?

 
 

Also, let’s not confuse financial success with social value. While Steve Jobs arguably did benefit society – or at least helped create stuff we like – the value produced by most billionaires is much more ambiguous, at best. What societal contribution has David Koch made by mining dirty coal and oil? Is Jamie Dimon really contributing to society running a bank that has repeatedly admitted to legal misdeeds? How large a social benefit is Uber providing with their long-term strategy of replacing taxi drivers with a monopoly on automated taxis?

 
 

A large fraction of billionaires are hedge fund types. What is George Soros’s contribution to society? Should we thank John Paulson for betting on a crash in the housing market? And they are not the worst; there are truly predatory hedge fund “entrepreneurs” like Martin Shkreli who is price gouging seriously ill people or the “litigation finance” industry that is preying on women who have been harmed by unnecessary surgery and taking a large fraction of the settlements the women are due. Free market ideologues implicitly argue that all of these billionaires are contributing more to society than they are taking, or else they wouldn’t be making a profit, but it’s circular and flawed reasoning. In fact they are just leaches, sucking blood out of society.

 
 

Markets do not get us what we want.

 
 

Another fallacy is that our choices reliably get us what we want. In reality, our choices often lead us astray. The “invisible hand” only operates as desired under a specific set of conditions that are rarely true in real life. Tom Slee’s excellent book “No One Makes You Shop at Wal-Mart” describes the many circumstances in which everyone making the best individual choices for themselves end up leading to outcomes that are collectively undesirable (such as ending up with a Walmart on the outskirts of a town with a hollowed-out town center). One of the key assumptions is that one person’s choices don’t affect others, that we are but individuals voting independently with our shopping habits. It’s rarely true, however. Choosing to drive imposed both traffic congestion and pollution on others; clothing choices are influenced by fashions; housing decisions affect neighborhoods and schools and shopping at Wal-Mart can destroy small businesses and town character.

 
 

That’s not to say that markets never work: they can, but they only work if there is a reasonable balance of power between economic actors. If one party to a transaction has less information, doesn’t understand what they are buying, or is in desperate need of something, the purchase can hardly be considered a free choice. Such unfair circumstances are increasingly prevalent and “the market” assures that corporations will exploit them. Financial products are intentionally complexified to make them seem more attractive when they are actually booby-traps, as we learned with mortgage-backed securities. Someone who needs a car to get to work, or needs an operation can be exploited because they have little choice but to engage in the transaction, an observation that has led to an entire industry of predatory auto loans.

 
 

And that is assuming everyone is making good choices. In fact, there is lots of evidence that people do not make good choices. More choice can interfere with good decision-making. Our choices are heavily influenced by advertising and high-pressure or predatory selling. And, the poor are under such stress that they routinely make poor decisions. They are so focused on dealing with the present crisis that they will sacrifice the future, and corporations are happy to profit on their circumstances.

 
 

Another presumption implicit in the pro-market argument is that “a rising tide lifts all boats”. The 1950s and ’60s were a period of growth which was widely shared. This rising tide did help most Americans. Wages grew at a reasonable clip and poverty declined. Markets were part of the story but so was government, the New Deal, and for that matter, labor union power. Income was taxed at rates up to 90%. The banking system was very heavily regulated.

 
 

Then, the free market ideologues began to make political inroads. In the 1970s and increasingly in the ’80s and ’90s, banks and other industries were deregulated and taxes, particularly taxes on capital, were decreased. Ronald Reagan famously broke union power. What happened? As you can see in the graph below, there was no improvement in economic growth as shown by productivity (output per hour worked). But, even worse, wage growth completely stagnated. So, lower taxes and bank deregulation did nothing for economic growth. But they did allow the 1% to grab virtually all of the growth that did occur. And, the situation of the poorest has become, if anything, more dire. Since 1975, the rising tide has been lifting a few boats but has been drowning the rest.

 
 

2015-10-27-1445961695-7098988-ProductivityvWage.jpg

 

Source: It’s Our Economy: People before profits

 
 

Free markets have not been responsible for economic growth. Actually, free markets have never existed.

 
 

Here is an example of the logical slight-of-hand used by free market ideologues. Markets have been part of the story underlying economic growth. But just because a partially-market-based system has been good it is wrongheaded to conclude that a fully market based system would do even better. Ironically, one of the most famous illustrations of what is wrong with this logic is the “Laffer Curve” promoted by libertarian economist Arthur Laffer that shows the obvious fact that neither 0% nor 100% is an ideal tax rate. Somewhere in between is surely better than either extreme. This applies generally and, just as a 100% tax rate is unproductive, so is a 100% market system. When markets predominate, their disadvantages greatly outweigh their advantages.

 
 

A good example of this fallacy is the example of China. Free market ideologues give “the market” credit for the fact that hundreds of millions of Chinese have moved from poverty to somewhat better conditions in the past decades. Moving from a Maoist regime to some economic liberalization has, indeed, been beneficial. So moving from a totalitarian system to a freer one is good, but that doesn’t imply that the US economy, already market-driven, should become even more so.

 
 

Actually, the whole idea of a free market is a myth. We have never seen one. The US during its greatest periods of economic prosperity was a protected economy favoring domestic producers and provided significant government support. The government has also made significant contributions to economic growth by funding scientific research or as a result of military projects, the space program and other programs. This was also true of other countries that have become economic powerhouses such as Japan, Korea and Taiwan. And if you think about it, there’s a broad inconsistency here as well: most advocates of free markets, Donald Trump being an example, are very much against free movement of labor – otherwise known as migration.

 
 

We need to care for each other

 
 

Free market ideology claims we will all be best of if each of us acts selfishly. Corporations are told that their sole objective is to maximize profits. This has so glorified selfishness that the crowd at a presidential debate cheered the idea of letting someone without health insurance die on the street.

 
 

The truth is, we need better government, not less government. Of course, free market ideologues recognize that things are far from perfect and arguably getting worse. They can’t credibly claim that Ronald Reagan and George W. Bush’s “Ownership Society” have brought us to the promised land. But, they argue that the problems that persist are because we have not sufficiently followed their prescription. As Reagan famous said “Government is not the solution, government is the problem.”

 
 

Actually, many of these problems result from the advancement of free market ideology. The Supreme Court has enshrined principles such as corporate personhood and the claim that spending is free speech into our political process. Even Democratic administrations have drawn many officials out of mega corporations on the belief that these people have unique insights. So, free market ideology is creating the problems that free market ideologues use to advance their goals. As with other cults, the internal logic is perfect – perfectly circular.

 
 

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Source: 52 Shades of Greed. Artist: Dobot

 
 

Of course, government is far from perfect. And so, free market ideologues gain credibility by pointing to all the many ways that government does act stupidly or the many cases of crony capitalism where politicians and regulators act against the public interest. We should definitely work to stop such abuse. But, governmental problems are generally the result of crony capitalism where large corporations or the 1% have captured or bought the government. The people need to regain control of government and fix it.

 
 

Is there a cure for this disease?

 
 

There are various symptoms of the free market ideology disease, but some of the most important are the underfunding of government and privatization of public functions, the runaway destruction of the environment and other “externalities,” and widespread disdain for the poor combined with reverence for the wealthy. We are suffering all of these symptoms so clearly we have an advanced case of this disease.

 
 

There is a cure, however. As we will discuss in the next essay, we only became infected by it recently. Less than a century ago, our president, FDR, considered the essential freedoms to include freedom from want and freedom from fear. These goals were mainstream enough that they were promoted by Normal Rockwell and the Saturday Evening Post. A basic income guarantee and health-care-for-all would take us a long way toward cure. They would also remove the most extreme threats to people that lead into crushing debt and compels people to accept starvation wages. Achieving these goals would address some of the principle symptoms of the free market ideology disease.

 
 

We need to restore the cultural assumption that humans are valued for who they are, not what they produce. We need to recognize that the goal of society should be human flourishing in a sustainable way, not increases in the amount of stuff we produce and waste. We need to restore democracy and civic engagement. We need to break the stranglehold that mega-corporations and the rich have on our government. Justice needs to be restored to the judicial system, instead of the current two-class system of haves and have-nots. Executives of companies that tolerate unsafe, fraudulent and predatory practices must be punished, and on the flip side debtors prisons must be abolished.

 
 

When we think about the future, we readily acknowledge that humanity faces both risks and opportunities. One of the biggest risks is the impacts of climate change, and yet there are also opportunities for a better world. Improvements in technology have the prospect of allowing us, or machines, to fulfill our basic needs with much less labor, but of course that could go either way – where the owners of capital hoard the resources, or where we develop a system that shares it. It’s up to us.

 
 

Most fundamentally, we need to care for all people and truly take to heart Mahatma Gandhi’s prescription that “A nation’s greatness is measured by how it treats is weakest members.”

 
 

This is the first in a series of essays coming out of discussions about markets, trade and the future of work.at the OWS Alternative Banking Group’s weekly meetings.

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