When local government meets high tech sovereigns

Sometimes I think city government is sleeping at the wheel when it comes to technology and capital flows. During its lucid moments, government will fall back on its 1960s playbook of economic development by announcing plans to bring back manufacturing jobs that pay better wages than the service sector jobs that replaced factory work and eviscerated wages. This narrative may have worked in a locality that was created to take advantage of proximity to a local natural resource where factories could then convert the resources into goods for local and other markets, but for a city like a 21st century Atlanta, that narrative is disingenuous.

Atlanta’s “natural resource” today is information. Workers who know how to find, extract, organize, and distribute information are going to be the one’s who obtain employment and the higher wages that come along with work in the information sector. This demand for an information-centric political economy, I believe, is being driven by the changing tastes of capital. Capital wants its goods and services delivered conveniently and its production customized.

Information technology allows capital to target funds directly to high-value driven information entrepreneurs that can deliver a product that was designed, manufactured, packaged in, and delivered from multiple jurisdictions. Capital has no love for mass appeal. Why deal with crowded banks, malls, car dealerships, or grocery stores when extra minutes of leisure can be carved out by the manufacturing and service delivery efficiencies provided by Tesla, Uber, Grubhub, and Insta-cart.

Along with these efficiencies in product manufacturing and delivery come smaller work forces or work forces outside of the jurisdiction of local governments. Local governments have been the front line defense of investor capital from disgruntled labor. They regulate labor union speech during strikes. Where there is violence they arrest the rowdy. However, in an information age where there are a greater number of tech shops employing smaller numbers of non-unionized information workers versus a handful of large factories employing thousands of unionized lower-skilled workers, there is less demand for the police powers of local government. Disgruntled employees at today’s tech shops simply take their information knowledge somewhere else or create their own firm.

Eventually government starts tossing and turning in its sleep. It sees its “labor clamp down” requests severely diminished. Higher incomes start translating into reduced need for government services from garbage removal to security. Higher income earning citizens may consider pooling resources to support campaigns of candidates who agree to reducing tax burdens are, too the extreme, support carving out or “leasing sovereignty” to higher income communities.

Question is, how will those with no capital react to the erection of this wall of individual sovereignty?

Is broadband access less about connectivity and more about individuality?

My sister recently experimented with Whole Foods‘ delivery service. As an Amazon Prime member, she could take advantage of no cost delivery to her home in the West End. This is a smart move on the part of Whole Foods to deliver to the West End, an area where the median household income is lower than the rest of Atlanta’s sectors. My observation has nothing to do with the wishful thinking that Whole Foods is practicing altruism, but the probability that Whole Foods is betting on the continued gentrification of the area; that it makes sense to plant a flag in the area so that when higher-income, cheap rent seeking young white couples move into the area, Whole Foods will be there to greet them. And while increasing the area’s investment value may not have been on the top of Whole Foods’ agenda, current property holders can at least tell their friends living in other areas of the city that they have not been left out of high-end food delivery options.

Going online and ordering your groceries is an example of what the long-term purpose of broadband connectivity is all about, especially for those with capital. If we accept the Facebook model of broadband and the internet, then we support the argument that broadband and the internet are about connecting people for the sake of creating a larger global community that leads to more democracy, peace, and understanding. This is one of the premises underlying net neutrality; the creation and maintenance of an open internet.  Two billion people connecting on Facebook may be deemed evidence that the globe is demanding this type of connectivity and community development on the world wide web, but such a view fails to account for the “politico-economic physics” of broadband and the internet. I believe the true value of broadband access lies in the empowerment that broadband access creates in the individual. The universe revolves around her and not the other way around.

The internet, at least for those with capital, is about bending the four-dimensional characteristics of space time and enhancing her sovereignty; creating a self-sufficient lifestyle for her. High value individuals don’t see the platforms upon which they move through space and time as flat or linear. The platform is geodesic; a curved line that provides the shortest distance between two points. In this case, between capital and the products and services that capital can acquire. The closer broadband technology brings her to sources of goods and services, the tighter her enclosure around her. She is not creating inclusiveness, or a bigger tent. In actuality, her tent becomes tighter, filled with other high value resources including friends and business associates. Creating a sovereignty blocks out the noise that the internet is becoming increasingly known for.

I would argue further that as her capital and value grows the more space-time bends around her. She creates a gravitational pull attracting even more resources, income, and opportunities. Those who argue for equality and democracy on the internet overlook this important value element. High value, capital holding consumers on the internet bend space-time toward them and high value content and service deliverers will point their commercial starships in the direction of high value.

How should policy react? It can either acknowledge the individual’s use of broadband to create a sovereign individual while transmitting her consumer energy into her tight commercial space or it can regulate her relationship with the points of commercial light within her internet space and risk forcing her to engage with value deficient “black holes” that threaten to reduce her incentive to engage in e-commerce or change her engagement in such a way that the value she receives and transmits is reduced. Policy should opt for protecting her choice for engaging with the value providers of her choice.

The Caribbean as dumping ground for sovereign independents

Current residents of the #Caribbean should consider that the goal of those accepting citizenship by investment or pursuing policies of population reduction as a recovery policy post Hurricanes Irma y Maria may have as an end game the creation of independent jurisdictions that support sovereign individualism.

By combining cryptocurrency, renewable energy, and tax exempt jurisdiction schemes, such off-grid independence can be created for the wealthy. Declining liberal welfare nation-states such as the United States and the United Kingdom will serve as the dumping ground for Caribbean nationals who cannot push back against the onslaught of invading #capital entering the Caribbean under the initial disguise of “seeking a better life, diversity, and getting a deeper tan”, the bulwarks of gentrification.

Be mindful of the invader reciting the mantra peace, love, and soul as her agenda. Those were merely the closing words of a TV show. It is the nightmare of the horror movie of cultural usurpation that you should be concerned about…

What happens when the State abandons black Americans?

In their book, The Sovereign Individual: Mastering the Transition to the Information Age, James Dale Davidson and Lord William Rees-Mogg describe the demise of the welfare state with the political changes the information age will bring about. Those who can garner, manipulate, organize, distribute, and monetize information and use today’s digital technology to deploy this new capital from anywhere in the world will be able to achieve a level of individual sovereignty such that the protection services of the old nation-state will no longer be needed. The internet, cyberspace, will be their new jurisdiction, and with capital in the form of information, they will be able to carve out a minimized or tax-free environment in whatever physical jurisdiction they choose.

Information losers, according to Davidson and Rees-Mogg, won’t like this new world. This information-based economy will challenge their welfare state “employee” status. It is a welfare state employee status because in exchange for the “work” that they do at the polls i.e. their vote, information losers are awarded with transfer payments such as Medicaid, Medicare, food stamps, and low-income housing. As the hoarders of the new capital, information, choose lower tax jurisdictions, information losers are left holding the bag containing reduced benefits, the result of a lowered tax base.

The recent tax reform legislation passed by a GOP-led Congress and signed by President Donald Trump is a small indicator of the leverage the wealthy have, especially those who make their income as sole proprietors or partners in a business where they are now beneficiaries of a 20% reduction in the taxes they would normally pay on pass-through income. Congress and the President will now have to reduce or eliminate programs made infeasible by a $1.5 billion tax cut.

There is no guarantee that tax cut goody bags will be continually given out in the future. If the GOP loses both chambers of Congress in this year’s midterms, then Democrats will pursue a rewrite of the tax reform, or at least put on a good show effort.  I say a good show effort because the response by the wealthy will be, “Remember the two trillion dollars we have stashed overseas? How about we keep it there?”

Black Americans are not in the information age game even though blacks over-index on social media sites and, as a proportion of their population, own as many smartphones as whites and Latinos. Black Americans are under-indexed when it comes to employment in information technology. In an article for The Huffington Post, Jamal Simmons noted that black women may be able to scrape up $36,000 for a tech start-up, but white males scrape up on average $1.3 million in start-up funds.

And while blacks and Latinos continue to represent low single-digit proportions of actual STEM employees (technologists, mathematicians, engineers), there are plenty of black consumers of entertainment content on Facebook and Instagram. This content is low value. It differs from information which can be used as an input for production.

You may ask, “Don’t blacks have a right to consume entertainment?” My answer would be, “It’s not about rights to consumer content. It’s about channeling as much time and energy into mining and distributing information that creates knowledge that solves the deep well of problems in the black community.

Meanwhile, the State apparatus that blacks have disproportionately relied on for economic support and political protection is becoming bankrupt. Based on this recent tax reform, one would not sound too cynical in concluding that the GOP was in cahoots with the plot to blow it all up.  The information winners will not think twice about leaving information losers behind.