Air Date 1/31/2022
JAY TOMLINSON - HOST, BEST OF THE LEFT: Welcome to this episode of the award-winning Best of the Left podcast, in which we shall take a look at some of the nearly infinite ways in which our society, culture, and economy are infused from top to bottom with scam culture that's bleeding us dry, both financially and mentally.
Clips today are from Thought Slime, Illuminaughtii, theAnalysis.News, The Problem with Jon Stewart Podcast, Wisecrack, Ben Jordan, James O'Brien on LBC and Rebel HQ, with additional members-only clips from Second Thought and Big Think.
And stay tuned to the end where I'll suggest what the real core of the problem is.
The Grift Economy: Everything is a scam, always. - Thought Slime - Air Date 11-5-21
MILDRED - HOST, THOUGHT SLIME: Everything in the world is a scam.
Subscription services make no sense. They only exist to wring more money out of the consumer by offering upfront savings, offset by far greater costs over time.
$11 a [00:01:00] month, for example, feels like less money than $120, but if you use the service for 11 months, you've already spent more money.
It's not that the monthly subscription service is a business model I'm necessarily against. There are plenty of services where it makes perfect sense. A movie streaming service would charge a monthly fee. Of course it would, right? Every time I use that, I cost the company money in the form of server costs and licensing agreements. Plus, these services also tend to make it worth my while by constantly updating their library of content, not to mention they're usually cheaper than like buying even one of the movies I'd wanna watch on them anyway. So this is a pretty good deal.
But in the case of this teleprompter app, it, it's sure some bullshit. 'Cause this isn't a service. I'm expecting to roll out a ton of useful new features over time. And should they do that in the future and I want those features, I would expect to pay for them then. All they gotta do is let me download the fucking software; that's it. They're not streaming Ghoulies in 4K to me every day, like the [00:02:00] Full Moon app is, and there are plenty of programs with far more complex features, far greater download sizes, and far more utility that are one time purchases. I bought Clip Studio Paint, for example. That's just $60, not $5 a month in perpetuity. I bought it like five years ago. I still own it. When they update it, which they do regularly, I get access to the new shit too, which I will grant you is a luxury that smaller companies probably could not afford, in which case simply release new versions that I can also buy if I want those new features and additional support. You know, the way software has always worked.
There's so much shit like this that we've gotten entirely too comfortable with it. It no longer even registers as something that should piss us off. After all, Photoshop charges a monthly fee. Amazon Prime charges a monthly fee. The extended warranty on your fucking cellphone charges a monthly fee. Don't buy the extended warranty. And there are tons of other ways the shit just squeezes money out of [00:03:00] you. In small enough increments that you might not even notice it adding up over time.
If you buy a video game, you have to basically subscribe to it to get all the post-launch content. Sometimes the game just straight up charges you a monthly fee to play it. Sometimes, in addition to both the full price of the game and the fee you are already paying to your console manufacturer's online service.
Maybe that's not such a big deal. Video games, you don't need to be able to play a video game. And it's not even close to the most unethical thing video games do. But it acclimates us to the environment where you never truly own anything. You pay continuously and lose access if and when you stop paying. Or if they just decide to no longer give you access. In other words, you are renting everything.
And I don't mean to focus too much on video games specifically. But they provide very clear examples of this. Do you know how many games I have in my PlayStation that I would lose if I stopped paying Sony for PlayStation Plus? Which I do every [00:04:00] month, even though I haven't turned on my PlayStation since this summer simply out of fomo. Am I a sucker? Yes, obviously. But just because I and many people like me make bad decisions with our money, that doesn't let these companies off the hook for deliberately manipulating us into making those bad decisions. It's easy to say, just cancel your subscription. And it's easy for me to say, yes, obviously that's what I should do.
But what if I wanna play Metal Gear Solid Five later, or Neo? I'd have to pay full price. I'm never gonna play them, of course, but I simply can't risk it.
Now, sure, I'm a doo-doo dumb dumb. I grant you this. But is it okay for Sony and companies like them to prey upon my sunk cost fallacy? Do we want to live in a world where all doo-doo dumb dumbs just get charged money for being doo-doo dumb dumbs?
Furthermore, how many people signed up for this service and then completely forgot about it and ended up paying when they didn't even want to? And then you kind of have to wonder if they count on that a little, and maybe that's the reason that so many services, which charge a [00:05:00] monthly fee, will give you a free week or something, provided that you give your payment information upfront.
Don't worry! You can just cancel before the charges start, but will you? Will you remember to do that?
The tendency, I think, is to blame consumers for this. Why do we put up with it? Simply vote with your dollars. Choose to only spend on things with better business models. And yes, I suppose that might work in some one-to-one perfect sphere on a frictionless plain analogy level fantasy world, but we all know it's more complicated than that.
It shouldn't be up to random consumers to contend with and defeat multi-billion dollar corporations and their enormous marketing and customer retention departments.
Power and Corruption: The Devos Family - iilluminaughtii - Air Date 1-20-23
BLAIR ZON - HOST, IILUMINAUGHTII: In 1959, Rich DeVos, who Politico calls "a boundlessly charismatic man," which ironically is a descriptor used for dictators. He started the company as a tiny little soap business. He and his partner would soon grow the company into a multi-billion dollar conglomerate that relied on independent distributors to sell its products, which nowadays [00:06:00] ranges from pretty much anything from vitamins, makeup, energy drinks, basically anything you can think of, Amway probably sells a version of it. And that's right. We have somehow miraculously fallen into a two-for-one type episode, with multi-level marketing scams mixed in with some shady business dealings and horrific political practices. Yay for us.
But Amway isn't just your typical MLM. Rich DeVos and his business partner quickly turned it into a massive company that had nearly $7 billion in sales by 1989 and over 1 million distributors selling their products. As distributors spent their days attempting to make as many sales as possible to meet their financial goals against all odds, DeVos was chilling, making something off of every single little sale. Of course, their products were mostly just knockoffs sold under an Amway name, but who cares about that when you're making billions of dollars?
But again, when you are making that much money and have the sheer amount of distributors that Amway amassed, people are bound to take notice. And usually not the ones the company wants to be dealing with. [00:07:00] In Amway's case in particular, their notoriety came with some special attention from one of our all-time favorite entities, with just a hint of sarcasm there, but the FTC.
In 1975, the FTC accused Amway of being a pyramid scheme. Their accusations were pretty severe and ranged from Amway restricting distributors, sources and supplies, their advertising, and of course, misrepresenting the income. That all definitely sounds pretty par for the course in the world of MLMs.
However, after a lengthy four year investigation, the FTC found that Amway was in fact not a pyramid scheme by the skin of their teeth. According to the FTC, Amway differed in several ways from pyramid schemes that the commission had challenged. It did not charge an upfront headhunting or large investment fee from new recruits, nor did it promote inventory loading by requiring distributors to buy large volumes of non-returnable inventory.
Just because they weren't technically a pyramid scheme, though it definitely seemed to resemble the shape of a triangle, that doesn't mean the company didn't have new [00:08:00] rules that they would have to follow to avoid any legal repercussions in the future. They had to do a couple of things like Stop misrepresenting their profits, earnings and sales. They had to print a disclaimer on the suggested retail price and stop retail price fixing. So it wasn't all roses and butterflies for the company, but they came out looking a lot better than they could have and changed the face of the MLM world forever. As Jeff Babener put it, had Amway lost, MLM history after 1979 may have been non-existent. Amway's victory paved the way for hundreds of MLM companies that would follow.
So yeah, again, thank you so much Amway for paving the way for hundreds of thousands of shitty other fucking companies.
But of course, this would not mark the end of legal trouble for the company or for its founders. Only four years after this first big lawsuit, they were hit with another. This time it was for criminal tax fraud. In 1983, the Supreme Court of Ontario found the company guilty of criminal fraud and tax evasion after it was found that they had been making up fake and fictitious [00:09:00] invoices and a dummy corporation to build their wealth. They found that Amway had defrauded Canada of an astounding $28 million. As a response, they were slapped with a $25 million fine, the largest in Canadian history at that time.
Despite the massive hit to their reputation and their pockets, the founders seemed relatively unfazed. In fact, on the same day that the decision was made, the two owners ran advertisements in over four different American news sources and sent letters to their distributors trying to explain the situation. But they didn't really do a good job of explaining it at all. Instead they just tried their best to make themselves look good. And oh my God, I have rerecorded this sentence so many times, I know, I'm like, whatever, whatever, cuz it's like the founders pleaded guilty, but I keep saying "the flounders" and I'm like, I don't know why I'm doing that today. The flounders, the Phish founders, they pleaded guilty to charges is the point I'm trying to get at.
The point is, these two pleaded guilty and then they sent out a bunch of letters and ads to make it look like the charges had been merely dropped when that's not the reality of the situation. They took [00:10:00] no public responsibility and instead they blamed the advice of corporate officers for the mixup with the law. Then they included this statement regarding the founder's decisions. "They chose to make a tremendous personal and financial sacrifice in order to end the ordeal and eliminate this impediment to the future growth and potential of the business. They chose to make this sacrifice by settling now and thus preserving the Amway business opportunity for millions of individuals."
And just like that, the company's PR made it seem like employees and distributors should be grateful to the very people who were committing criminal acts and defrauding millions of people.
I've read a lot of PR statements in my time, and this one has to be one of the best acts of reframing I've seen, ever. Like, "No, we didn't pay money because we're guilty. No way! We paid money to save the company. What a personal sacrifice."
Unsurprisingly, this worked. Amway was barely impacted by the massive scandal, and they just kept right on pushing. And today Amway's sales are still in the billions of dollars per year. This was just the beginning [00:11:00] of the DeVos fortune and despite every scandal, they continued to grow and gain more power.
Bill Black: The Best Way to Rob a Bank is to Own One - theAnalysis.news - Air Date 5-31-21
PAUL JAY - HOST, ANALYSIS.NEWS: For people that haven’t watched the other episodes, at any rate, a quick definition of predation.
BILL BLACK: OK, so predation in this context means that you’re deceiving people to massively overpay for homes and interest rates that you wouldn’t do to normal people under market terms. This is targeted overwhelmingly at Blacks and Latinx folks. So it has a discriminatory.
PAUL JAY - HOST, ANALYSIS.NEWS: And the motivation for someone to sign this is they probably wouldn’t otherwise qualify for the loan.
BILL BLACK: The transaction wouldn’t qualify. It’s not even so much they; that’s the focus on the borrower. But this is a multiple fraud scheme, right? One fraud scheme is the appraisal. [00:12:00] So they’re extorting -- when I say "they", the banks -- are incentivizing the loan brokers to extort the appraisers, to dramatically inflate the value of the home.
Now, the bigger the home value, a) that means you can approve transactions you would otherwise not approve, but also the bigger the value, the bigger the fee, in terms of the home price. And so this makes sense for all the thieves to inflate the appraisals.
It also makes the home look safer, and that’s part of the "art of the fraud" scheme, is making a loan that is almost certain to fail look incredibly safe. So if I inflate the appraisal, it looks like, wow, that’s a real deal, That home is worth four hundred thousand and they only borrowed three hundred and eighty thousand on it. It [00:13:00] must be safe.
PAUL JAY - HOST, ANALYSIS.NEWS: But what’s the motivation for the borrower? They must know that this house is appraised way higher than their neighbors.
BILL BLACK: No. Again, the reason you target vulnerable people is that they’re far less likely to understand what the true market value of their home is. Who of us goes and knows there’s an extortion racket by bankers to inflate the value of homes by extorting appraisers, and blackballing them if they’re honest? That wasn’t in the papers anywhere, which of us would have thought? Because we would think it’s crazy, right? Why would a lender -- a lender’s great protection against loss -- is an honest appraisal. Because these are secured loans, secured by the true market value of the home, not whatever the appraiser says. So an [00:14:00] honest banker would want a very conservative appraisal, not to massively inflate it. So no, normal people don’t think in this way at all. Normal folks and the people that are first-time home buyers, they’re the least likely to be able to go, "wait a minute, this home is massively overvalued."
So that’s one of the two kinds of frauds.
The other key underwriting fraud -- again, this is novel in 1990 and so the industry didn’t yet call it by the name that the industry would soon adopt behind closed doors -- they called them “liar's loans”. So people have heard that term and they assumed the borrower must be the liar. Right? No. The loan broker knows the magic ratios [00:15:00] that you have to hit to get the loan approved. The loan broker knows the magic ratios -- and I mean debt to income type ratios -- that also get you a bigger bonus – kickback paid by the bank – and those are kept secret on a term sheet that by contract, can’t be shown to the borrower. Not that the broker wanted to show and inform the borrower in any event. So the lies are put and this is confirmed by the state investigators. It’s the lenders and their agents who put the lies in "liar's loans."
Now, what’s a liar’s loan? It’s where you don’t verify the borrower’s income. And it is super simple to verify a borrower’s income, even if they’re self-employed, because the United States for decades, precisely to make [00:16:00] this easy, allows banks to get an agreement under which we authorize the bank to get what’s called a transcript of our taxes, and that just means an easily machine-readable. So for next to no bucks with virtually no delay, and they can charge us a fee if they want to even, the bank can get exactly how much income we reported on our tax returns. Here’s a key thing. How many of us inflate our income deliberately on our income tax returns? Not too many, for obvious reasons. So it’s a super reliable thing. So it’s absolute BS that liar’s loans were developed for self-employed people, where you couldn’t verify their income. That is a total lie about all of this.
So these two fraud mechanisms are [00:17:00] employed typically simultaneously by the loan broker. And again, if I inflate the borrower’s income and if we go forward in time, there will eventually be statistics on this, the average inflation was 60 percent or more of the borrower’s income.
PAUL JAY - HOST, ANALYSIS.NEWS: That’s crazy.
BILL BLACK: No, it’s not crazy, because it makes the loan look safer.
PAUL JAY - HOST, ANALYSIS.NEWS: All right. Let me remind people of something you told me about four times until it really sunk in my head, because everyone’s thinking, well, why would the banks do this? And your answer was, don’t think banks think the individual scooping up the fees because they don’t mind screwing their own banks.
BILL BLACK: Oh, no, indeed the famous article by two Nobel laureates in economics is “Looting the Economic Underworld of Bankruptcy for Profit”. You [00:18:00] bankrupt your bank as the CEO and it makes you a ton of money. If you want, I can explain why that works and why trying to do it by making good loans doesn’t work as a sure thing. You want that, OK?
PAUL JAY - HOST, ANALYSIS.NEWS: Yeah, sure. Let me just remind people about the title of your book. The Best Way to Rob a Bank is To Own One. Go ahead.
BILL BLACK: OK, so consider the counterfactual, what if we tried to do the same scam but by making good loans instead of incredibly crappy loans? How many people who have incredibly good credit are unable to borrow money in America? Yeah, comes pretty close to zero.
PAUL JAY - HOST, ANALYSIS.NEWS: OK, pretty close.
BILL BLACK: So if I want to expand -- remember the formula, the recipe, as we called it, this [00:19:00] fraud recipe -- the first element is grow like crazy, which means typically 50 percent or beyond, right? Literally, there were 300 fraudulent savings and loans growing at a minimum 50 percent annually. Now, the rule of thumb in the industry is 25 percent growth and you die, to give you an idea of how insane this is. So I want to grow really, really fast, over 50 percent annually. How do I get good loans? Say I’m making 500,000 loans and I want to grow 50 percent, I can make 750,000 loans. But I’m trying in this theory to make them good loans. But there aren’t these other 250,000 people who have great credit quality and everything else who have any difficulty getting loans. [00:20:00] So what do I have to do? I have to buy market share, as they call it in business. I have to reduce my price. My interest rate that I charge. Is that a very good way of maximizing profits? Not so much. Cut your price. But worse, what happens? What will my competitors do? They’ll do the same thing so they don’t lose their best customers. So at the end of the day, is this a great fraud strategy? No! All of us lose money under this strategy.
Conversely, I can grow 50 percent a year because there are tons of people, millions, tens of millions of people in a country the size of America that cannot repay their loans. I can charge them a premium rate of interest because they can’t get loans as easily and because statistically, they’re likely to [00:21:00] be less financially sophisticated than other people who already own homes and have much higher incomes and all those types of things.
So this is a great thing, as Akerlof and Romer, the two Nobel laureates agreed in this paper on looting. This kind of fraud is a sure thing, and you deliberately make terrible loans that you know are going to bankrupt the bank. But you, the CEO, are going to walk away wealthy and hundreds of thousands of others are going to walk away wealthy. All the loan brokers, all the officers along the way with that $2 trillion in fees generated by these scams.
Why FTX’s Crypto Scam Is A Tale As Old As Time - The Problem With Jon Stewart Podcast - Air Date 12-7-22
JON STEWART - HOST, THE PROBLEM: When I read about how these crypto exchanges and, uh, companies have been set up, it seems that the biggest mistake they've made is they are mirroring the worst [00:22:00] excesses of the actual stock market, but with a much more volatile commodity. It seems like they've centralized things. There's only a few, like, big crypto exchanges. All the conflict of interest and corruption inherent in our more standard markets, they seem to have mirrored and they've the lessons of, sort of, what this was supposed to be.
DAVID DAYEN: Yeah, I mean, I'd like to say that this is some sort of innovative and newfangled way to separate people from their money. But I think the real answer is it's the same schemes transported to something new with different acronyms. I mean, uh, you have here is you had two separate companies owned essentially by the same person. You had FTX and Alameda Research.
JON STEWART - HOST, THE PROBLEM: FTX was the exchange where people could go on and trade cryptocurrencies, while Alameda was [00:23:00] just kind of a simple hedge fund.
DAVID DAYEN: Yeah. So, and Alameda was a customer on FTX, so...
JON STEWART - HOST, THE PROBLEM: Well, that, that seems completely above board . Why would that be, why would that be something that would draw people's attention?
DAVID DAYEN: Well, not only that, but they didn't have to play by the rules that everybody else played by on FTX regarding, uh, margins and leverage.
JON STEWART - HOST, THE PROBLEM: Um, yes, apparently not.
DAVID DAYEN: Yeah. So, uh, you know, the exchange is supposed to make its money essentially through, you know, small fees on transactions, right? So, they are supposed to have, it's basically a bank. There are depositors, there are these entities that are trading on the exchange and they get a little bit of money from each trade, and that's how they sustain themselves. The number one thing you are not supposed to do, if you're a bank or a bank-like object, like an exchange, is take the customer money and gamble with it.
JON STEWART - HOST, THE PROBLEM: Okay. Hold on one second now. Now you've really [00:24:00] stepped into something.
DAVID DAYEN: I have. I apologize.
JON STEWART - HOST, THE PROBLEM: Because if I'm not mistaken, that is the foundation of American capitalism. That's, when they repealed Glass-Steagall, I'm pretty sure, if you looked at the fine print, it said, Oh, and by the way, if you wanna place like a really wild, long shot bet using these deposits on, let's say, subprime derivative bundles, knock yourself out.
DAVID DAYEN: Right. But I mean, the point you make is the correct one, that we solved this problem almost a hundred years ago. Uh, and, and we continue to fall into it over and over again. So, just like MF Global, just like, uh, you know, some of the mortgage derivatives that we saw.
JON STEWART - HOST, THE PROBLEM: The Savings and Loan scandals of the Keating Five.
DAVID DAYEN: Just like this S&L scandal. I saw an economic historian say it's like the South Seas Company from the 18th Century.
JON STEWART - HOST, THE PROBLEM: Oh my God.
DAVID DAYEN: This is just the same kind of thing. They took customer money, [00:25:00] they made a bunch of bets. They lost those bets, and the customers wanted their money back and they didn't have it. Whatever fun name that you want to put on it, it's the same damn thing that we've seen over and over again.
JON STEWART - HOST, THE PROBLEM: And the thing that I find most galling about all of this is the sort of, Well, crypto is so difficult to understand and that, you know, there's no way that we could have seen this, or foreseen it, it's this brand new world, as though, as we talked about earlier, the general tenets of the corruption that exists between our government and the markets and all these big players, you could substitute out Lehman, uh, you know, Ken Griffin at Citadel, I mean, how is this different than Ken Griffin running a hedge fund at Citadel and also being the most gigantic market maker that we have? And who's the biggest donor to all kinds of politicians? It's [00:26:00] Ken Griffin. I mean, the markings for corruption are all over our system, but they wanna point to this as it's an anomaly.
DAVID DAYEN: The conflicts of interest are very familiar and dull.
The Gig Economy Was Always A Scam - Wisecrack - Air Date 8-8-22
MICHAEL BURNS - HOST, WISECRACK: As Derek Thompson's recent piece in The Atlantic put it, "something beyond rising energy and labor costs is leading to sticker shock on once cheap urban amenities". Clearly, something has changed since Airbnb first hit the scene in 2008. This was the perfect moment for the gig economy to make its grand debut, as the US was reeling from the Great Recession. The unemployment rate had doubled and other workers faced furloughs and reduced hours. This made alternatives to classic employment seem quite appealing, like a potential safety net.
As economist Julia Shore writes in After the Gig, "In the years following 2008, people came to believe that digital technology could solve the problem of work". The thinking went that algorithms and crowdsourcing could do the work of bosses, while software could reorganize [00:27:00] economic activity into a person-to-person structure. In this way, she notes that "this empowers individuals to take control of their lives. Vast swaths of the economy, especially in service, are ripe for this transformation. This vision came to be called the sharing economy".
Note that we're gonna focus on the United States, and we're going by scholar Luigi Zingales' definition of the gig economy as "anytime you have a digital platform that coordinates a large amount of people doing a job. It's the case of Uber. It's the case of Lyft. It's the case of Airbnb. It's the case of Fiverr. It's the case of the Mechanical Turks on Amazon". And this model changed the very idea of what labor could be. It seemed to offer freedom and flexibility without compromising wages via the magic of part-time or gig-based work. For folks without spare rooms to rent out, Uber launched in 2009, followed by Fiverr in 2010, Rover in 2011, Instacart in 2012 and beyond. There was a gig for seemingly every skillset. Whether your [00:28:00] specialty was picking the ripest avocado, bagging the sh*t of a stranger's dog, or copy-editing somebody's novel. Plus, you could hypothetically make your own hours and be your own boss with your earning potential limited only by your willingness to work hard.
This caught on fast. By 2016, the Pew Research Center found that nearly 25% of American adults were making money from gig apps. And the startup founders behind the apps preached the gospel of Silicon Valley utopianism, promising staggering innovation.
Like Uber's grand plans for self-driving cars, or Amazon delivering your year's supply of floss by drone, it would be a brand new economy. At first, it seemed to be working. That is if you didn't follow the money. If you're paying $7 for that ride, how is your Uber driver making a living wage? Well, a) they probably weren't, and b) the baffling bankroll was thanks to venture capitalists who allowed gig economy apps to operate at a loss.
This was based on the [00:29:00] assumption that in the future, when they've cornered the market on, say, self-driving cars, that's when they'll really see a profit. In the meantime, people got used to the idea of $7 rides. As Thompson writes, "For the past decade, people like me young-ish, urban-ish, professional-ish got a sweetheart deal from Uber. The Uber for X clones that vaguely pretended to be tech companies. Almost each time you or I ordered a pizza or hailed a taxi, the company behind that app lost money. In effect, these startups backed by venture capital were paying us - the consumers - to buy their products.
But are those glory days over if consumers are no longer getting too good to be true prices? Because the gig economy has always run on underpaid labor. And to understand this, we need to contextualize where gig work as we know it came from. As Scholar Louis Hyman explains, "The decades following the New Deal witnessed the golden age of stable, long-term employment when union membership was skyrocketing, and [00:30:00] companies competing for top talent started offering things like generous wages and employer-based healthcare.
But after the economic boom in the 1950s, corporate structures started to change. At the top, short-term consultants started replacing executives. While at the bottom, union workers were replaced by cheaper day laborers. And while these moves helped businesses seem lean, and therefore more profitable, this also decreased job security.
This, as Hyman argues, was "indicative of a sea change and how corporations function. They went from primarily trying to minimize risk to primarily trying to maximize profits". It wasn't about keeping your family company running and making quality goods for decades. It was about making bank, today. And this was a whole new way of looking at business.
The risk taking entrepreneur thus became the capitalist ideal. And in pursuit of standalone, unabashed profits, short-term returns became the new goal. And one way to make [00:31:00] sure your quarterly ROI looks shiny and efficient is to hire flexible laborers who take up less of your operating costs overall.
The tech industry of the seventies and eighties relied on this business model. Short term investments partnered with flexible production to great growth and success. It also, as Hyman points out, relied upon the use of undocumented labor at an industrial scale, by the way of subcontractors who were paid on a per project basis. The rise of the internet would greatly influence how work is sourced and conducted, making it even easier to source temp workers via Craigslist or apps. No agency necessary. These workers would be known as independent contractors.
There are big benefits to digitally sourcing contractors as Jamie Woodcock and Mark Graham explained in their book, The Gig Economy. For one, it adds a layer of invisibility and isolation that obscures the people doing the work. It's hard to know how many colleagues you have at TaskRabbit, after all, if there is [00:32:00] no way to communicate with them. And for many of these apps, the sheer number of willing contractors has created an oversupply of labor. Woodcock and Graham write, "As a result of this oversupply, individual workers have very little power to negotiate wages or working conditions, which is why workers way back when started forming unions to begin with.
But unionizing is virtually impossible for today's gig workers, because to form a union, you have to be an employee, and people who work for Uber, Lyft, GrubHub, Airbnb, and so on are not actually employees. This may sound like a technicality, but it's essential to the way these companies function. Unsurprisingly, when faced with a 2020 California ballot initiative, Prop 22, which would exempt companies like Uber from a state law that would've required these companies to treat workers like formal employees, DoorDash, Lyft, Uber, Instacart, and Postmates spent $204 million on a publicity campaign supporting it.
See, if [00:33:00] somebody is your employee, you're obligated to provide things like overtime, bargaining rights, and healthcare. According to The Seattle Times, classifying your workforce as independent contractors instead can save companies 30% or more on labor costs. And for companies that were definitely not all making a profit, this would've made their tenuous situations even more slippery.
In the end, nearly 60% of voters agreed that all the bells and whistles of formal employment were unnecessary, especially if it jacked up prices on services they had come to rely on. The sheer amount of money poured into this campaign made Prop 22 the most expensive ballot initiative in US history. And arguably it paid off. Except, uh, except not for workers, though definitely didn't pay off for them.
In this way, we can see the gig economy as being emblematic of a bigger shift in the power of labor. As sociologists Alexandria Ravenelle concluded, "For all its app-enabled modernity, the gig economy resembles the early [00:34:00] Industrial Age. The sharing economy is truly a movement forward to the past. That is, a past before workers had all the protections they gained through striking and organizing since the 19th Century and through the protections of the New Deal.
Why Spotify Will Ultimately Fail - Benn Jordan - Air Date 1-9-23
BENN JORDAN - HOST, BENN JORDAN:
For years, for an exhaustive amount of time now, I've been collecting data from hundreds of independent musicians and small record labels, and I finally feel certain enough to tell you exactly how Spotify is, how do I put this, a grift. A hiest.
About two years ago when I made my last video on this topic, I looked at the data and I noticed that the amount of money streaming services paid artists was syncing by a whole lot, and I wondered to myself if they had pulled a massive bait and switch scheme with royalties. It wasn't until I got my hands on this, the entire contract agreement between Sony Music and Spotify, that I realized that it absolutely was a bait and switch, and major labels were completely aware of it. So much so that Sony Music got paid with huge [00:35:00] non-refundable advances from Spotify, and in every case I looked into, none of those advances went to the artists.
The initial contract with Sony in 2011 paid $25 million to Sony per year, plus $9 million in ad spots which Sony could then resell. Sony's advances were tied to market share and other variables on an annual basis, so they would keep rising year after year. Spotify knew that if they wanted you to become a Spotify customer and subscriber first, they needed to have the biggest names in music in their library right from the start, and to do this, they threw millions of venture capital dollars at the media conglomerates that own the licenses for the music on an annual basis, rather than just promising a fair royalty. So if you're an independent musician and if you ever wondered if Beyonce's label is getting more per stream than you are, the answer is such a complicated form of "of course", that you're better off just drinking whiskey until you fall asleep laughing maniacally at how unfair the world is.
So why would musicians sign up in the first place? Well, I [00:36:00] think there are a lot of reasons to start. Most musicians want to adapt to the next big thing and music streaming effectively made access in music so easy that music piracy started dropping, not unlike the effect Netflix had on movie piracy. But musicians couldn't just upload their music to Spotify. Spotify and iTunes couldn't be bothered to actually manage their own library that justifies their existence in the first place. They made independent musicians pay for the privilege for third party services like TuneCore or DistroKid. A little side note here, Spotify would actually buy a minority stake in DistroKid so they could monetize their own lack of functionality.
After a few years, if you wanted to be an independent musician and have your name alongside the bigger artist that Spotify was actually secretly paying up front for you didn't have any other option. And for someone like myself who came into Spotify having already been making a living as a professional musician, once the payments started coming in, it started making sense. I won't bore you with the details, I already did that in this video, but once Spotify and the other streaming services dominated every other form of music distribution, [00:37:00] including radio, take a wild guess what happened? Musicians got fucked.
Here's a way of putting it that tech investors might understand. This is how much Spotify paid independent musicians per stream on average over time. Without a doubt, it is a bait and switch, especially when Spotify subscriber growth looks like this. Now, when I pointed this out in a video two years ago, I got quite a bit of pushback from investors or day traders who I assume had some sort of stake in Spotify and I couldn't fathom how they weren't seeing this as a bad thing. It's actively squeezing the life out of the one thing that you're reselling. If Uber drivers were paid so low that they couldn't afford fuel, that would not be good news for investors.
I think a lot of people in the music industry have been completely blindsided by this because the modern Silicone Valley business model operates so differently. Most people would describe Spotify's business strategy as something called blitzscaling, and it's both clever and stupid at the same time. The goal is to grow at an absurdly rapid pace and get as high of a market valuation as quickly as possible, and then, after you've succeeded at [00:38:00] that, then you find out if the business can be profitable and how to make that work.
When a business is founded on blitzscaling or fast scaling, if growth slows down before a profitable business model is discovered, everything goes kaput. It's all or nothing, so the top priority above all other things is to keep growing. And in cases such as Movie Pass or Uber, the customer gets a slight lifestyle upgrade paid for by a pool of venture capital investments.
Now in Spotify's case, the venture capital allowed the initial membership fees to be low and the royalties to be relatively high, that way, more artists would get on board and keep their music there. But since Spotify wouldn't dare risk slower growth of subscribers, their immense losses are bandaged and subsidized from independent musicians, both by cutting their royalties and charging them for listing prioritization on things like the marquee program. Unfortunately, due to Spotify's market share and absolute dominance and presence on everybody's phones, as a result, the perceived value of music in general has dropped [00:39:00] to unsustainable levels. An extremely optimistic take would be saying that the music economy is at critical mass and not utterly irreparable.
One might ask is Spotify's business model functional without a profit? And the answer to that depends on who you ask and what you mean by functional. Do you remember earlier in this video when I told you about the major labels having backdoor agreements with Spotify? Well, a lot of that was huge amounts of stocks in Spotify being transferred to the record labels and almost all the labels dumped that stock right after it went public. The CEO is worth 5 billion, employees like Don Ostrov get about $7.5 million in salary. Third party companies like DistroKid that exists solely to charge you to put your music on Spotify have a billion dollar valuation, and Spotify's investors have made, well, about that.
Now, I'm no big city economist, but it seems to me that a blitzscaling strategy would work best with rock bottom interest rates. And if you haven't noticed, that parade came to a screeching [00:40:00] halt. When those rates were low, Spotify for a long time has had a lot of trouble finding a profit, but it's about to get a whole lot worse, and this isn't news to most investors. But the much bigger issue with the streaming platform business model that investors seem to be wildly ignoring is that none of these platforms own any of the assets that they're reselling. They don't even have a license for them for the next fiscal year.
Let's say that there was some sort of, I don't know, a viral Reddit post that created some sort of pseudo online musician union, or let's just say that Joe Rogan said something else completely insane that was the straw that broke the camel's back. If there was just some sort of small movement or occurrence where a few thousand independent artists with fan bases similar to mine decided to remove their music from Spotify today, it very well could create a snowball effect with subscribers. And of course, as a customer, if you put your AirPods in and picked up your phone, expecting to hear some artists that you're accustomed to listen to and all of a sudden weren't able to find them, you're not going to recite your loyalty to [00:41:00] Spotify, you'll just use a platform that has the artist you listen to.
The point is, this platform is extremely fragile and it is increasingly neglecting the only asset that it has. If you're an investor who has a stake in Spotify or music streaming platform and you think that there's a chance that they will stabilize and eventually make a profit or a steady long-term profit, I can tell you after spending years excruciatingly analyzing both the artist and business side of this micro economy, I am as certain as I could possibly be that you are wrong.
James O'Brien caller wrote his dissertation on 'incel' culture - LBC - Air Date 1-27-23
JAMES O'BRIAN - HOST, LBC: Alfie's in Liverpool. Alfie, what can you tell us?
ALFIE (CALLER): Uh, hi James. Um, just a bit of, uh, context for me. I'm a 22 year old guy who's just graduated from university this summer just gone. Um, and my dissertation was on, actually, it started on a discussion about social media, but I just ended up having to write it about sort of incel culture and how it develops and where comes from and what sort of solution is because once you do begin to read into it, you begin to realize there's much wider web of issues that all contribute to this sort of problem.
JAMES O'BRIAN - HOST, LBC: I'm sure.
ALFIE (CALLER): [00:42:00] Starting with, basically there's two sort of parts of it. One is, is how young men find themselves in a situation where they feel the feelings they themselves claim to sort of have as their sort of central motive. And then also where that turned into every young man at every single point in their life, you know, of any sort of, um, hatred, sort of feels those sort of insecurities, is how that turns into aggression and violence and just the nasty side of it afterwards. Cause there is a fundamental difference there. Um, it sort of starts with if you picture the sort of, um, life of a 13 year old, 14 year old, 15 year old, or even getting older, you know, I'm 23 and I remember social media when I was that age but nowhere near in the capacity that it's sort of involved in the lives of young people now.
It goes back to this classic, classic thing that sex sells and that sexualized content, and not necessarily sexual explicit, but on that sort of gray area content, is everywhere at the moment. And it's there, every single person in the world who's all over your phone screens, all over your mate's, phone screens all over your computer, on your iPad, on the YouTube content you're watching, on the TikTok you're watching. Everything is at least in some capacity sharing a sexually explicit level of content. It just means that [00:43:00] when you are at home by yourself in bed at 10 pm and you should be in bed for school tomorrow. And you flick into the TikTok and you just see, you know, I don't need to describe it, but sort of that content you feel, Well, yeah, why am I not part of this world? Why can't I be part of this world?
And then you tie that in with, you know, the insecurities that most young men feel anyway in school about their position in the social system, the social hierarchy and how sex plays into that. So all of a sudden you end up with a nation of young men who feel way, way more insecure about their sort of place in the sort of sexual hierarchy than they have done in generations as before.
JAMES O'BRIAN - HOST, LBC: And how do I then leap to hating women?
ALFIE (CALLER): So then another thing is when you're on Instagram and you spend about 15, 20 minutes on a fresh account and you're using it as I was at the time, as 22 year old man, it works out really, really quickly that I was 22 year old man. TikTok even better at it than Instagram. That's just two examples..
JAMES O'BRIAN - HOST, LBC: TikTok's infernal at it. Right. So they know what is going to push your buttons.
ALFIE (CALLER): They know exactly who you are, exactly. And cuz you push their buttons, right? Physically, and they can then push yours. So then all of a sudden, when you are someone who's liking lots of sexual content, because 17 year old lads just do that, and you [00:44:00] realize, okay, let's put all of this in front of you, oftentimes it's not surprising, this is how their algorithm works, there's a massive overlap between the people who want to access sexual content and the people who feel left out from it. Which means that when you've got an Andrew Tate repost account or whatever, the same people who are liking all the sexual stuff are also liking all the Andrew Tate stuff, which is saying that, well, you are, you're a young man. You deserve sex. You deserve to be involved in this culture. This culture is happening without you, there is a big sex party happening that you are not part of.
JAMES O'BRIAN - HOST, LBC: So again, it's the mythical conspiracy. It's the...
ALFIE (CALLER): Totally.
JAMES O'BRIAN - HOST, LBC: Ahhh okay. That's, that's it then.
ALFIE (CALLER): And it's, and the word is a "grifter", right? It's pretending that you're there to support the young men when actually you're there for a paycheck. And saying that, being able to provide the answer to an security that people have that's fundamentally founded on a myth is really, really profitable in the age of such vicious and successful algorithms that can identify you...
JAMES O'BRIAN - HOST, LBC: What would be the components of the incel myth, for example.
ALFIE (CALLER): Sure. So the fundamental idea is that, yeah, it's sort of as the last caller was saying, is that this is a women problem. It's that the problem isn't about [00:45:00] you being able to identify your own reality and identify the sort of parts of your personality that you might want to change if you want to change the output of your lifestyle. But it's actually more so that it's people are withholding this from you, that you deserve it and it's a right that belongs to you. Just like everyone is, just like you see all the influencers doing on the internet. You are, everyone to be like an influencer. And a big part of that is the lifestyle they permit. I also think that the other sort of proponents of this myth is that like, yeah, is that it's an entitlement thing.
JAMES O'BRIAN - HOST, LBC: Well, this is back to the days when women weren't allowed to say no.
ALFIE (CALLER): Exactly, exactly.
JAMES O'BRIAN - HOST, LBC: That's when it gets, that's the point at which it gets horrible.
ALFIE (CALLER): Which is where the sort of anti-feminism thing...
JAMES O'BRIAN - HOST, LBC: Well, let me read you something. Let me read you something. I'm gonna read you two things, one for reference and the second one, just whether or not as a result of your thesis, you can give any help to Steven in Dundee.
So the first one is anonymous. 'I have a best friend of 10 years who I met at university. He was once extremely liberal and lefty, like myself. However, after being single for many years, he's turned to Andrew Tate as a role model. Most recently he was telling me that women bear some responsibility [00:46:00] for being sexually assaulted or raped. As a rape and sexual assault victim, it broke me to hear this and resulted in me taking some time away from the friendship. He still today believes he was "canceled" by his best friends for this. It's terribly sad.'
That sounds like a textbook case of what you've been describing. And it escalates then of course, because the victimhood gets magnified by the reactions...
ALFIE (CALLER): ...and they become more isolated, and the person who's texted you wouldn't be the person to intervene in that life cause it's so difficult triggering for them. There's no one there then, they've isolated themselves.
JAMES O'BRIAN - HOST, LBC: Okay, and now this is where you might be able to help. I don't know. This is from Steve. This is, 'my 14 year old son's doing really well in school. He seems to have plenty of friends, girls seem to like him, he's sporty, all of which seems really positive, but he comes defensive and gets very moody when challenged even lightly on Andrew Tate and the views and teachings that he is showing to young boys. He believes he doesn't listen to the bad bits about women and sexism, but Andrew Tate is innocent and has done nothing wrong and is part of the inspiration for him going to the gym and getting himself fit. It's really difficult to counter, [00:47:00] James, as they watch it on social media and it slips past without even knowing it's going on. Hopefully he sees through it, but it's really concerning.'
That's textbook but much earlier in the case. What can he do? Can he do anything, do you think?
ALFIE (CALLER): Yeah, I think we can, right? I'm hopeful after my thesis. I wasn't gonna go into it, but there's a solution.
JAMES O'BRIAN - HOST, LBC: Well, that's good to know.
ALFIE (CALLER): Totally. I think, I mean, no one will be surprised to hear that this is the answer from my perspective, but I think you just need to talk to your kids and sort of, from a much younger age, I think we have a big issue in this country particularly, but also around the world, and this is changing over time, where we're beginning to learn that having conversations with kids about sort of sexual health and sexual wellbeing is really important from a young age. It's just making sure that young men, when they're like, not after they've already been presented with the Andrew Tate stuff, cuz then talking to them... the big thing about Andrew Tate is he says that anyone who tries to tell you otherwise is part of the machine or the Matrix or whatever.
JAMES O'BRIAN - HOST, LBC: Yeah, of course.
ALFIE (CALLER): So it's not about dealing with it once they've already began on that slide. It's about making sure that from... this is why I've been in such a good position to sort of understand this from an objective perspective is that my parents made this effort with me when I was very young. Just understand that when you poised [00:48:00] with those ideas, as intoxicating as they can be and as much as they sound right and they answer all your questions, you actually just have to look at it bit critically and try to understand why that person might be, and again, just this would solve our Brexit problem, it would solve our Tory problem, it would solve our misogyny problem. Addressing it at a young age with men and being like, look, we need to talk about these things before it becomes a problem in their lives. It means that then we have a generation of men who are... you'll start to say that this is the baseline of what we're aiming for... but generation of men who are critical thinkers, and women, and whoever. But specific to this conversation...
JAMES O'BRIAN - HOST, LBC: It's susceptibility to grifters, I mean, this is why you just gave us the litany, the list of grifts. That's really helpful. It's great that you are more optimistic than you were going in, but the problem is getting bigger, right? At the moment? Or do you think that the exposure of Tate now in a much more mainstream way will actually diffuse some of his...
ALFIE (CALLER): Tate being the biggest thing in the world at the moment is a good thing for the culture and for the conversation, but Andrew Tate isn't the first person to have been doing this. There's been a line of people exactly like him, some worse, some not quite as severe, behind him and there's a line queueing up behind [00:49:00] him. Cause now, cause back in the day when it wasn't even that profitable to be like this, just to have the internet clout alone was reason to do it. And now all of a sudden you've got a massive paycheck at the end of the line as other people. There was a huge, huge, huge queue of people looking to be the Andrew Tate role model in kids' lives. We've gotta make sure that there's people and there's people putting our output into the world. We are good young role models for young men who can access... it's like I was saying, that person who became so isolated because all their friends just didn't wanna associate with them anymore, all of a sudden who is there in their life to tell and challenge them? There's no one. So then they're just free falling through this rabbit hole. And as you know, as the callers have said before, and as we know with every, with all forms of extremism, once you're in and there's no one there to challenge it, it is an absolute free fall and you find yourself at the bottom very quickly.
TikToker Exposes New A.I. Scam That Is Absolutely TERRIFYING - Rebel HQ - Air Date 1-13-23
BENNO56: Tonight my parents got scammed for $21,000. And here is how: The scammers used AI to create a voice that sounds like me. They used social media to come up with enough information about me to convince them they were speaking to me. Obviously it wasn't.
I suggest that you speak to [00:50:00] your family immediately about creating or instituting a password that must be disclosed before any transfer of money occur. Because even if they are speaking to you, from their point of view it's not.
MAX BURNS - HOST, REBEL HQ: The future is here and it is terrifying. That was TikTok user Benno56 sharing the story of how his parents were scammed out of tens of thousands of dollars by fraudsters who used AI to clone their son's voice. That may seem like something out of science fiction. But the technology is already here and it's already hurting the vulnerable.
BENNO56: And AI has more than enough capability, and social media discloses more than enough about you, to convince anybody that it is you. Prevent this from happening. It cost my parents $21,000.
MAX BURNS - HOST, REBEL HQ: With AI technology advancing faster than ever, a growing number of fraud victims are realizing just how much information is out there for [00:51:00] bots to feed on, and how scary accurate those machines become after digesting the contents of your social media.
For older generations who may not fully understand how advanced AI has become, this latest evolution poses a real threat. And the scammer who defrauded this TikToker's parents wasn't done. He called back the next day and did his best to keep the money flowing.
BENNO56: So a simple followup to the scam is that the next day, which was yesterday, my parents received a call from the scammer who continued the story. He said that he needed more money for specific reasons, and my parents finally said, okay, we know it's a scam. We've been scammed. And immediately he dropped his facade and he said, what gave it away? My dad was stunned by this. My mom went hysterical.
MAX BURNS - HOST, REBEL HQ: There's a brazen impunity to this whole grift. And as we've seen in videos of other, less technologically-advanced [00:52:00] scams, most scammers don't fear getting caught. So it's no surprise that this scammer dropped the act right away and had the audacity to ask the victim's parents what he could do to stop from being caught in the future.
BENNO56: My dad said, well, my son called us that evening and he said we never spoke to him and it is what it is. My mom said, why do you do this? And he said, it's a job. My dad said, what did you make? He said, I made a thousand bucks. The reality behind this is it's well funded and it's a day job. Just make a password. Believe me or not, make a password. It's not a big ask.
MAX BURNS - HOST, REBEL HQ: It can be hard to believe that scamming innocent people is just a job, but that's the case for so many who are involved in the dark world of fraud. And it isn't just the tech illiterate or the elderly who are at risk. These new AI-enabled fraudsters are using their technology to commit crimes on a scale we're simply not prepared for.
Take this story from [00:53:00] 2019, when a UK-based CEO was scammed out of almost $250,000 after falling victim to an AI generated deep fake. Those calls were so accurate, they convinced the CEO he was actually talking to his boss, even down to the conversational flow of his boss's casual style. Those scammers were never apprehended.
Or take this story from 2021, when an organized crime racket used AI voice cloning to pull off a $35 million bank heist that stretched from Hong Kong to Dubai. Again, voice cloning was good enough to fool senior executives into thinking they were speaking to someone they knew very well. In fact, they were talking to fraudsters.
Creating artificial voices is now easier than ever, enabling what experts call "quick fakes." These are deep fakes that don't take much time or effort, but sound just like the real thing. And with the newest voice synthesis models, it only takes a few moments of real speech [00:54:00] to accurately model your voice.
Scammers are now able to steal your voice with something as simple as a fake wrong number call. In fact, we know exactly how long it takes for a scammer to steal your voice. If they're using something similar to Microsoft's latest technology, it will only take them three seconds.
That's right. Watch this.
RAJANMANICKAM ANTONIMUTHU: Microsoft released an artificial intelligence tool named as Valley that can replicate people's voices just by listening three seconds' audio of their speech.
MAX BURNS - HOST, REBEL HQ: And it's really good too. Take a listen to just a few of the quick captures Microsoft used to prove their model.
AI VOICE 1: We were more interested in the technical condition of the station than in the commercial part.
AI VOICE 2: We were more interested in the technical condition of the station than in the commercial part.
MAX BURNS - HOST, REBEL HQ: If our government wants to keep up with advances in deep fake technology, well they're falling dangerously behind the times. Not only are there no laws regarding technologies like this; most [00:55:00] members of Congress don't even know voice cloning is a thing that exists, and they're up against some of the most sophisticated tech scammers in the world. That's bad news.
There is one step you can take to protect yourself from being the victim of deep fake fraud: Set up a password with your family that should be used whenever anyone has doubts about who's on the other end of that call. That simple approach would've protected all of the victims in this video. And it may well protect you in the future.
Mark Rober's Prank And The Truth About Scammers And Capitalism - Second Thought - Air Date 6-17-22
JT CHAPMAN - HOST, SECOND THOUGHT: Why does everyone you know have a bad experience with bureaucracy? I thought bureaucracy was supposed to be over in our advanced neoliberal capitalist society. At least that's what I've always been told.
MILTON FRIEDMAN: Wherever government bureaucracy takes over, costs go up and quality goes down. That's no less true of the post office than it is of the schooling system. It's no less true of garbage collection than it is of the schooling system.
JT CHAPMAN - HOST, SECOND THOUGHT: That lint covered lollipop giving a speech is [00:56:00] Milton Friedman. You might have heard that name before, because for over 50 years, he's been the guy when it comes to hating bureaucracy, and it just so happens that he's also the guy that has shaped our modern economy probably more than anyone else, specifically by attacking bureaucracy, which he believed the government had created a safe space for.
This guy hated bureaucracy like I hate coming up with an analogy. Just listen to him, explain it in an article with a title that pretty much gives you his whole vibe, Why Government is the Problem. "Government has become a self-generating monstrosity. Abraham Lincoln talked about a government of the people, by the people, for the people. What we have now is a government of the people, by the bureaucrats, including the legislators who have become bureaucrats, for the bureaucrats." You get the idea. Governments are bad because of bureaucracy, therefore, get rid of governments as much as possible and you'll get rid of bureaucracy and in the process solve all sorts of problems.
This matters because even though he died over a decade ago, Milton Friedman is the cultural [00:57:00] mainstay for those who promote so-called free market policies, and who constantly call for smaller governments, staffed with fewer bureaucrats. The kind of people who believe that the state's responsibility is to completely abandon social projects, and instead devote all its energy to making sure markets are profitable.
Milton influenced guys like the Libertarian Party presidential candidate, Gary Johnson, who you might remember from clips like these.
NEWS ANCHOR: Governors, could you name three federal departments or agencies that you would eliminate.
GARY JOHNSON: Education, the Department of Commerce, and Housing and Urban Development? How's that for starters?
NEWS ANCHOR: And would, would any of their functions still be performed by the federal government?
GARY JOHNSON: Oh gosh. You'd have to assume that they were doing something that was of value. And yeah, if they are doing something of value, yes, we would. We would be looking to continue those operations.
NEWS ANCHOR: Those departments all do a lot of stuff. You can't identify any specific things they do?
GARY JOHNSON: You're asking three departments and I'm giving them to you.
NEWS ANCHOR: Right, but then you're... [00:58:00]
GARY JOHNSON: Well, let's just take the assumption that they should be eliminated.
JT CHAPMAN - HOST, SECOND THOUGHT: As dumb as Gary looks here, that same philosophy he inherited from Milton Friedman is everywhere on the right. Rush Limbaugh tells his listeners that Milton Friedman should be the Bible for young people or anybody trying to understand capitalism and free markets. Charlie Kirk, founder of Turning Point USA, celebrates Hayek and Friedman in his book, while Ben Shapiro holds up Friedman as a conservative icon in National Review. People on the right and more generally, all the politicians that advocate for a more expansive capitalism, smaller governments, and all sorts of free market policies, owe their support for this economic model to the guy who made it extremely popular.
How'd it get so popular? Well, Milton got big because constantly talking about how much you hate bureaucracy always works—everyone hates bureaucrats. But it worked especially well in America a half century ago. That's because right next to the US there was a country that Americans really didn't like and that had a lot of bureaucracy. No, not [00:59:00] that one. No, not that one either, silly. I bet you forgot about Alaska Didn. No, the country Americans hated touching tips with was the Soviet Union. In the American mind, it was the epitome of what a bureaucratic government could get you, and it was bad, so it was pretty easy for all Millie Frieds and all his buddies to dunk on the American government by likening it to the Soviets. Americans really hated the Soviet Union, so anything that made their government seem anything like it was a super effective way to promote capitalist economics.
And at the core of this discourse was the promise that capitalism would solve the problem of bureaucracy, and in the process most everything else. This video's number two Mark, Mark Fisher, talks about this very kind of logic in his book, Capitalist Realism, except he uses fancy academic words to say the same thing I said, but better. So now you're gonna get a quote. "In making their case against socialism, neoliberal ideologues often excoriated the top-down bureaucracy, which supposedly led to institutional sclerosis and inefficiency in command [01:00:00] economies. With the triumph of neoliberalism, bureaucracy was supposed to have been made obsolete, a relic of an unlimited Stalinist past. Yet, this is at odds with the experiences of most people working and living in late capitalism, for whom bureaucracy remains very much a part of everyday life. Instead of disappearing, bureaucracy has changed its form, and this new decentralized form has allowed it to proliferate."
Look around you. Look at where we are. We're in Milton's world. It's like Disney World, except, well, actually it's a lot like Disney World. If you're an adult and you're really into it, maybe it's time to sit down and think about that for a while. Milton was an advisor to Ronald Reagan and Margaret Thatcher, who are most responsible for implementing the neoliberal capitalism we live in today. He was lead architect of our modern society, but surprise, surprise, bureaucracy is a bigger part of our lives today than it ever was. Here's Fisher again, talking about this,
"As a consumer in late capitalism, you increasingly exist in two distinct [01:01:00] realities. The one in which the services are provided without hitch, and another reality entirely. The crazed Kafka-esque labyrinth of call centers. Anger can only be a matter of venting. It is aggression in a vacuum directed at someone who is a fellow victim of the system, but with whom there is no possibility of communality. Just as the anger has no proper object, it will have no effect. In this experience of a system that is unresponsive, impersonal, centerless, abstract and fragmentary, you are as close as you can be to confronting the artificial stupidity of capital in itself."
Capitalists will constantly tell us we live in this seamless, efficient, optimized reality, but love to ignore the horrible bureaucracy it all rests on that fundamentally contradicts it. You can think of all this bureaucracy like an iceberg. At the top, you have the bureaucracy that is immediately visible to all of us, things like call centers, of which scam callers are nothing more than an offshoot. But below there's so much more. The logic of bureaucracy permeates capitalism to its [01:02:00] very core.
Is all money just a ponzi scheme? | Vicki Robin - Big Think - Air Date 7-22-18
There's so many ways in which we project onto money the ability to not only make us happy, but to make us better or better than other people, or safe, or so many deep, gut-level emotional feelings are playing themselves out in our relationship with money. Fine, I'm not saying it shouldn't happen. Like, "we will be very conscious and we will not have any emotions in our relationship with money". No, I'm not saying that. I'm just saying the more aware you are of what you're projecting onto money in terms of meeting emotional and psychological, and even spiritual needs, the clearer you're gonna be in those daily transactions.
In fact, that's part of why once you start to become consciousness of the flow of money and stuff in your life this way, you stop spending so much money. But around that is the cultural narrative, the rules of the game of our economy. The financial system in so many ways, governs, [01:03:00] not just our daily lives, but who wins and who loses; who has power, who does not have power; who gets to say what the game is; who gets to play by the rules and break the rules. This is a cultural context, it has nothing to do particularly with what's going on in our individual traumas and histories, it has to do with a longer historical moment in time.
And the basic meme of the financial system is growth. It's really, in a way, it's a very long con Ponzi scheme, because it has to keep growing in order to keep meeting its obligations. Money is produced, the actual piece of paper and metal, the credit that you have isn't just like you go to a job and somebody gives you some pieces of paper, money is loaned into being by banks. Banks have the authorization to create money, but it's not like they have to have $1,000 in the vault in order to lend you $1,000. No, they have to have [01:04:00] $100 in the vault to lend you $1,000, and then they lend you the $1,000 with interest.
In the world of money, everything has to grow. Everything has to keep growing or it's game over, which is a difficulty for us now because of the capacity of the planet to support this ideology. So that's that construct of money, which is fascinating. People study economics and the financial system. We're mesmerized by how people have played this system to the detriment of many people except for themselves.
But what we say is that outside of that whole thing, those are all stories, what we actually know for sure as individual human beings, we know that we have a body, we know that we're alive and that we invest some of the minutes of our lives, some of the vital force of our lives, in a process that produces money for us. However it produces it. Like whatever it [01:05:00] is, we invest some of our precious life energy in this thing called "getting money". So money for us is your life energy. The value of money to you is how much of you you invested in getting it. And once you understand that, once you understand that money is something that's abstract and seems unlimited, like if I go into debt, it doesn't matter, I'll just keep having jobs and I'll keep paying it off, it's just an endless stumbling process.
But you understand that your life is limited. We've got, I'm gonna say 85 years on the planet, because now I'm 73, so I don't say 75 anymore. So we've got a certain limited time on the planet. We're gonna spend a third of it sleeping, we're gonna spend another third of it commuting and showering and and sitting at a desk and doing somebody else's bidding.
Yeah, that's not a lot of life. So you think I got [01:06:00] a third, I have a third of my waking hours are mine to do whatever I want. Who am I? So it's like it, it then sends it into an existential question, "who am I? What do I care about? What do I want the impact of my actions to be? What do I wanna learn? What do I wanna understand? What do I wanna feel, taste, touch? What do I want?" in what Mary Oliver calls my "one wild and precious life."
Response to the Stolen Children episode - Nick From California
VOICEMAILER: NICK FROM CALIFORNIA: Your episode about abducted children needs a trigger warning buddy, or a content warning. I know it said in title, but I don't look, I just clicked the next episode. I don't think I'll be listening to this one. I'm on like clip three, I don't think I can get any further. Wow.
Final comments on radical criticism of the true sources of Scam Culture and other ails of our society
JAY TOMLINSON - HOST, BEST OF THE LEFT: We've just heard clips today starting with Thought Slime on YouTube, breaking down the manipulative psychology of subscription software. iilluminaughtii explained the birth of multi-level marketing. TheAnalysis.News spoke with [01:07:00] Bill Black about the institutionalized scams in the home financing business. The Problem with John Stewart Podcast talked about how the biggest problems with crypto are actually scams that are at least a hundred years old. Wisecrack broke down the scam behind the gig economy. Benn Jordan explained the unsustainable and unethical economics of Spotify. James O'Brien on LBC spoke with a collar about the grift that is the red-pilling economy of the manosphere preying on the incel community and insecure men and boys everywhere. And Rebel HQ from TYT explained just one of the scams enabled by next generation AI voice cloning.
That's what everybody heard, but members also heard bonus clips from Second Thought explaining the big scam of neoliberal economics itself, the promise to rid us of bureaucracy, and Big Think took on the biggest scam of all, our conception of [01:08:00] money.
To hear that and have all of our bonus contents delivered seamlessly to the new members-only podcast feed that you'll receive, sign up to support the show at bestoftheleft.com/support or shoot me an email requesting a financial hardship membership because we don't let a lack of funds stand in the way of hearing more information.
And now we'll hear, briefly, from you.
VOICEMAILER: NICK FROM CALIFORNIA: Your episode about abducted children needs a trigger warning buddy, or a content warning. I know it says in title, but I don't look, I just clicked the next episode. I don't think I'll be, I don't think I'll be listening to this one. I'm on like clip three, I don't think I can get any further. Wow.
JAY TOMLINSON - HOST, BEST OF THE LEFT: Now, that caller is talking about episode 1539 titled Stolen Children is Stolen History, Heritage, and Culture, and that point is very well taken. He's absolutely right that I should have explained a bit more about what was coming in the show, and not just to give a warning about what people [01:09:00] may have trouble handling, but also the second half of the show that I really, really hope people won't miss. So I've already rerecorded and republished the introduction of that episode, but in the original version, I somehow managed to forget to talk about the discussion of the Indian Child Welfare Act, which dominates the second half of the show.
So, If there's anyone else out there who was turned off by either the description or the first few clips of that episode the way the caller was, I really encourage you to at least listen to the second half to get an understanding of what is at stake for Native sovereignty with the Indian Child Welfare Act being challenged before the Supreme Court. I think the historical context given in the beginning of the episode is important, but the case under review right now described in the second half is critical.
And finally today to wrap up on this conversation about scam culture, I have a couple more deep [01:10:00] cuts that I think we may have only discussed on bonus episodes and may not have made their way to the big show.
The first is the French philosopher, whose name I'm going to butcher, Jean Baudrillard. Like Marx, he was a critic of capitalism, but he was also a critic of Marx himself. And to explain, this is from an article titled John Baudrillard: Marx and Alienation. And this is from CeaseFireMagazine.co.uk.
"Baudrillard criticizes Marxism for ignoring the underlying level at which people are constructed as workers. He argues that categories of labor and production actually capture and repress desire, particularly when applied to non-capitalist societies. Instead of a primary dispute between workers and bosses about the exploitation of labor power, [01:11:00] Baudrillard sees a primary divide between conformity inside the system and subversion by those outside. The truly radical class struggle is the struggle against being enclosed as labor."
So in short, Marx focuses entirely on giving power to labor, an admirable cause, but in doing so, fails to recognize that it isn't only the exploitation from capitalists that is the problem, but that framing people as sources of labor power, as capitalists do, is dehumanizing in and of itself. And so maintaining and continuing that frame doesn't help break out of the system. It's not a truly radical struggle against being enclosed and confined and [01:12:00] defined as labor. So keep that in your mind.
And then my second deep cut reference is from the book of the Dawn of Everything by David Graber. This is a passage quoting a debate between a French colonist and a native of the Wendat nation in North America debating the relative qualities of their societies around the turn of the 18th century. And the Frenchmen had argued that it's their institutions, things like judges and institutional punishment that make the French a better society because they can punish the wicked and keep order. And the Native explains his perspective that it's not people who are wicked and are in need of punishment, but it's actually money that makes them that way.
So this is the native Kondiaronk who says, "I have spent six years reflecting on the state of European society, and I still can't think of a [01:13:00] single way they act that's not inhuman. And I genuinely think this can only be the case as long as you stick to your distinctions of 'mine' and 'thine'. I affirm that what you call money is the devil of devils; the tyrant of the French, the source of all evils; the bane of souls and slaughterhouse of the living. To imagine one can live in the country of money and preserve one's soul is like imagining one could preserve one's life at the bottom of a lake. Money is the father of luxury, lasciviousness, intrigues, trickery, lies, betrayal, insincerity—of all the world's worst behavior, fathers sell their children, husbands their wives, wives betray their husbands, brothers kill each other, friends are false, and all because of money. In light of all this, tell me that we Wendat are not right in refusing to touch, or even so much as look at silver."[01:14:00]
In essence, quoting from the authors of the Dawn of Everything summarizing this idea, "the whole apparatus of trying to force people to behave well would be unnecessary if France did not also maintain a contrary apparatus that encourages people to behave badly. That apparatus consisted of money, property rights, and the resultant pursuit of material self." And I couldn't help but think of these two criticisms that go far beyond the scope that we're generally used to when putting together this episode on scam culture, because I don't think that turning all of today's examples of scam companies into worker owned cooperatives would get rid of all the scams, not as long as we maintain the notions of "mine" and "thine" and value ourselves as sources of labor.
For members who want more on this check out bonus episode 246 for more on [01:15:00] Baudrillard's criticism of Marxism, and bonus episode 252 for more from the Native Wendat Kondiaronk and his criticism of money in general, among other things. As always, keep the comments coming in. You can leave us a voicemail or text message, whatsApp, or Signal message, all with the same number (202) 999-3991, or keep it old school by emailing me to [email protected]
That is going to be it for today. Thanks to everyone for listening. Thanks to Deon Clark and Erin Clayton for their research work for the show, and participation in our bonus episodes. Thanks to the Monosyllabic Transcriptionist Trio, Ben, Ken and Brian for their volunteer work, helping put our transcripts together. Thanks to Amanda Hoffman for all of her work on our social media outlets, activism segments, graphic designing, web mastering, and bonus show co-hosting. And thanks to those who support the show by becoming a member or purchasing gift memberships at bestoftheleft.com/support, through our Patreon [01:16:00] page, or from right inside the Apple Podcast app. Membership is how you get instant access, to our incredibly good bonus episodes, which include the episodes I just referenced, number 246 and 252, in addition to there being extra content, no ads and chapter markers in all of our regular episodes, all through your regular podcast player. And to continue the discussion, join our Discord community to talk about the show or the news, other shows, anything, a link to join is in the show notes.
So coming to you from far outside the conventional wisdom of Washington, DC, my name is Jay, and this has been the Best of the Left Podcast coming to you twice weekly. Thanks entirely to the members and donors to the show from bestoftheleft.com.
Showing 1 reaction
Sign in with