Published on The Doomstead Diner on November 27, 2016
Discuss this article at the Economics Table inside the Diner
I was reading today an article about the economics of the Fishing industry around the Pacific ocean, specifically around Hawaii. Apparently according to an AP investigative report, aboard at least some of the Amerikan flagged vessels run by Amerikan companies, they have aboard undocumented workers who are not even allowed to leave the ship every 3 weeks or so when it docks in Hawaii or California to offload the latest cargo of frozen Ahi Tuna.
HONOLULU (AP) — Pier 17 doesn't even show up on most Honolulu maps. Cars whiz past it on their way to Waikiki's famous white sand beaches. Yet few locals, let alone passing tourists, are aware that just behind a guarded gate, another world exists: foreign fishermen confined to American boats for years at a time.
Hundreds of undocumented men are employed in this unique U.S. fishing fleet, due to a federal loophole that allows them to work but exempts them from most basic labor protections. Many come from impoverished Southeast Asian and Pacific nations to take the dangerous jobs, which can pay as little as 70 cents an hour.
With no legal standing on U.S. soil, the men are at the mercy of their American captains on American-flagged, American-owned vessels, catching prized swordfish and ahi tuna. Since they don't have visas, they are not allowed to set foot on shore. The entire system, which contradicts other state and federal laws, operates with the blessing of high-ranking U.S. lawmakers and officials, an Associated Press investigation found.
I'm not terrifically shocked by this, since exploitation of 3rd World people by international capitalists has been ongoing for a long time in many industries, just look at the child labor in Indian clothing factories for example. It is a bit surprising that they are flying under Amerikan flags though on these ships, I would have more expected them to flag the ship in Liberia or some other place in order to avoid this type of nasty publicity, but apparently whoever is running these companies feels invulnerable and simply doesn't care what the publicity is.
Now, 70 cents/hour may sound like a low wage to you and the fact these guys are confined to the ships for months if not years at a time may seem a bit like slavery (it is), but the reality is that most of these guys are probably glad to have this job. Recall that in many of the places they come from, they live on $2/day, and that includes their families. If they are on board the ship making $.70/hr and get paid for probably a 10 hour day, they are making $7/day! They also have room & board, no cost there so the entire amount can be sent home to family as remittances, improving the standard of living for their children. Essentially, they sacrifice their own lives to hopefully improve the chances for their children in the future.
This is the nature of Wage Arbitrage, and why the explicit slavery system was abandoned in the industrial era. It simply was not necessary as long as there were vast numbers of people globally not yet on the industrial bandwagon who could be fed for peanuts through the industrial Ag system, which could provide their food at a much cheaper price then they themselves could produce it for. In this way, the living of the subsistence farmer was undermined, and he HAD to join the industrial system in order to start getting the MONEY required to buy food from the industrial system.
In many cases after the "Green Revolution", food was simply GIVEN away to 3rd world nations as "Humanitarian Food Aid". What this served to do was to keep upping the population size and then commensurately devaluing the value of labor. Meanwhile, all the Perks of Industrial culture were being sold, like TVs and later I-phones, not to mention wiring up Electricity for your Village to power all those toys. Globally, virtually everyone got sucked into this paradigm this way.
I remember back to my own childhood, when during Halloween you could go "Trick or Treat for UNICEF, the UN Agency which supposedly is concerned with the humanitarian needs of children. Then there were the Ads on TV for the Christian Children's Fund, with pictures of some sad eyed child from Guatemala, and you were told that for jusT $1/day, you could sponsor that child and make a difference in her life. Tugs at your heart strings of course, and Lord Only Knows how many people signed up for a $30/month sponsorship of some child. Most of the money in the end got eaten up by the bureaucracy behind the CCF, or the Red Cross, or whatever Humanitarian Agency it was you made your tax deductible contribution to.
For the whole system to work, it was always in need of expansion, and always in need of a source of cheap labor of some type. In the beginning, this was explicit slavery, and the population of non-slaves got to live well on the backs of the population of slaves. With the advent of the Industrial Revolution, a whole NEW source of slavery was accessed, the energy of the 22 Billion Energy Slaves contained in all those barrels of Oil that have been pumped up and burned over the last century. Whoever "owned" this oil became far richer than any king or plantation owner in all the millenia before, and over time as more things became mechanized, more and more human labor became unnecessary. As we reach the end of this cycle, now Robotics is the next "great invention" that allows products to be made without the input of human labor, thus further depressing the wage a given person can earn. At the same time though, the population still continues to increase, and the now unemployed people cannot afford the cost of the products being made by the Robots! lol. So it's already not a real succesful economic paradigm because of that.
The problem of course now in the Wage Arbtrage model is that no matter how low the price of oil goes or how high, the people who consume the oil and all the products made from it can't afford them anymore. If the price of Oil keeps going down, then more jobs are lost, wages are depresssed, rinse and repeat until the banksters finally stop issuing credit to the extraction industry.
The only way to get money to the consumers to burn the oil now is to truly GIVE it away in true "Helicopter" fashion, but they'll never do that. Helicopter money is only for the corporations at the top of the pyramid. Even if they DID start handing out free money to everyone, all that would do is create Price Inflation, so no matter how much free money you got, it would never be enough to keep up with the rising prices.
The way credit flowed through the economy in the early years of the Industrial Revolution was through the growth and build out of the system designed to burn the first the coal, then the oil resource. The railroads were built, making possible new large cities in places in the interior of the FSoA not on large navigable rivers or coastlines. That took a lot of workers, and so credit to buy all the new products of industrialization flowed down to those workers in the form of wages. The development of the automobile and build out of the interstate road system opened up still more territory for still more growth, requiring still more workers. There was a steady downhill flow of the credit from the creation point of the International Banking Cartel to the end worker/consumer, and the economy chugged along fairly well, albeit with some credit collapses along the way, many during the "Free Banking" period in the post civil war 1800s, and then in the 1930s with the Great Depression.
What salvaged the industrial model after the Great Depression was WWII, with enormous amounts of credit issued out to all sides to fight this war, which really was a resource war for hegemony over the necessary commodity to make it all work, Oil. The War employed millions of men as soldiers, and millions of women back here as "Rosie the Riveters" in factories making the tools of modern warfare, the tanks, battleships, planes and aircraft carriers, and of course the gunz and bombz necessary to level as much destruction as possible on "the enemy".
Out of the ashes of that conflict, pretty much the entirety of Europe had to be rebuilt and a new Credit line was established for that, the Marshall Plan. Again you had the downhill flow of credit from its creation point to the end worker/consumer, and the industrial economy was humming once again. Right up through the 1970s the build out continued as now cheap oil was being pumped from the desert sands of Saudi Arabia into the voracious maw of capitalism.
By the end of the 70s, two things occured which began to slow down this machine. First, the FSoA turned from a net Oil exporter to a net Oil importer. The money circulating here to buy the energy for the factories no longer stayed inside the FSoA and recirculated, rather it began to flow outward toward other petroleum producing countries. As muh as we became addicted to Oil, all these countries became addicted to the constant inflow of dollars, which had to be created in some manner. So this required that the FSoA always run a trade deficit and keep expanding its credit balance sheet, partially on the books of the Federal Reserve, but mostly on the books of the TBTF Banks that own the Federal Reserve.
The other thing that occured is that for the most part, the original build out of the system was pretty complete in the FSoA by the late 70s early 80s. Sure new subdivisions kept popping up on the ring roads of the new cities, but the real money to be made for the capitalists at the top of the pyramid was to further build the system out into the 3rd world. Power Plants and electrical grids for EVERYBODY! Roads and Carz to drive on them for EVERYBODY! The whole WORLD could live the techno-cornucopian dream!
So the credit began to flow outward, not inside the FSoA for maintenance of what had already been built, but to new development and new mega-cities all over the world, from Mexico City to Delhi to Lagos, but most particularly to China, the Big Oyster ripe for development in the 1970s. A HUGE population of workers who would accept slave wages together with a corrupt Goobermint that could care less about any of the environmental problems that come along with industrial development that had already spawned the environmental movement here in the FSoA as such tragedies as Love Canal and then the Exxon Valdez began to reveal the hidden costs of "progress".
The FSoa turned from being an industrial economy into a financialized economy in the bizness of exporting dollars to the 3rd world for further development. Where the money was to be made here was in the interest charges on the dollars loaned to all these countries so they could pursue this type of development also. This worked for a while too, particularly well in China which EXPLODED producing cheap products for ever more poorly paid FSoA workers to keep buying, even as their inflation-adjusted wages decreased.
At the same time that there was deflation in these products, from cameras to walkmans to TVs and Laptops, there was at the time vast inflation in housing prices, education prices for college, basically anything "made in Amerika" necessary for living and succeeding in this economy became ever more expensive. Increase in prices in these areas counteracted any gains made from cheaper products being imported from overseas. In addition, with the exception of the financial economy, any job you might take from manufaturing to teaching saw a stagnation in wages, and overall the purchasing power for the Amerikan consumer began to decrease steadily. This was compensated for by offering up still more credit to the consumer in the form of Credit Cards, LIAR Loans for carz and sub-prime mortgages. An accident waiting to happen, and happen it did in 2008.
The last decade has seen one spit, duct tape and bailing wire fix to this clusterfuck after another, from every Central Bank on the globe from Da Fed to the ECB to the BoJ to the BoE to the PBoC and beyond, to the International Banking Cartel organs of the IMF, the World Bank and the Bank for International Settlements, the "Central Bank of Central Banks". If you have not noticed, nothing these folks have done over the last decade has done Jack Shit to improve the Global Economy, we sink further down the toilet every day. On the way to a Tipping Point that will occur eventually, one that make 2008 look like a Sunday Picnic.
What is not grasped or talked about in public discussion for the most part is that the Techno-Cornucopian dream is just that, a DREAM. All the great expansion of the Capitalist-Industrial system to the 3rd World did was to exhaust the resource on which it depends, OIL, that much faster. So a resource which was SUPPOSED to laat 500 years from textbooks I read in 3rd grade got burned up inside around 30 as the population expanded exponentially and the quantity of energy needed to support such an expanding population also increased exponentially. In 1900 the amount of energy required to keep the average Amerikan alive was a fraction of that required to do the same thing today, and there are many more Amerikans now than in 1900. The same is true all through Europe, and all over the world really. We depend on this stuff to run all the systems we created, and it becomes ever more expensive to dig up by the day. At some point you reach an inflexion on the global level, and by all measures, we appear to have reached that inflexion point now.
The question now is just how we will manage this spin down and move our way back to a lower per capita energy future, and a lower population of Homo Saps running around the planet? On the grand scale, at the moment things do not look too good in this regard. There are Wars and Rumours of Wars just about everywhere. Conflicts pop up daily like Mushrooms on a cold damp morning in Kennett Square, PA. Leadership everywhere are clowns who all buy into further "growth". The Chinese and Ruskies want to build a "New Silk Road" across the vast expanse of the Eurasian Continent. It is not going to happen, the cheap energy to do such a thing is long gone already.
The only future for Homo Sap now is one which is much smaller, with less Hubris that we can not just rule the world and transform the planet to our desires but also populate the Universe wih our species in Interstellar Travel. This dream began in Sci-Fi with folks like H.G. Wells and Jules Verne in text, and moved into the video era with narratives like Star Trek and Star Wars, and now we get this same narrative coming from people in Industry like Elon Musk, and even theoretical scientists like Stephen Hawking. This is all BULLSHIT, and we must recognize it as so. Our future if there is to be one is much smaller, and we must re-learn the means and methods to provide for ourselves more locally on this planet, the only home we have or ever will have, for so long as it lasts in such a form that it can support higher level eukaryotic organisms like Homo Sap.
This can be DONE. It can be done equitably as well, it does not require international war and nuclear weapons because resource constraints will take their toll everywhere, and civil wars will take down the population as they always have. Pestilence and Disease will take down the population also. Famine, Hunger and Drought also will be a feature of the coming tomorrow. The Four Horsemen of the Apocalypse are coming on here now, for sure. We do not need to help them with Nuclear Weapons, destroying our one and only home in this universe.
Humanity is much more than the things we have created from fossil fuels. Humanity is the thoughts and ideas that all have, the observation of beauty in nature and beauty in thought and writing annd ideas. This is SENTIENCE, which insofar as we know exists here and only here at this time in this universe. At some point, this Bright Light of sentience here on this planet will be extinguished, that is a guarantee just as the death of all living things is a guarantee. But it does not have to be TOMORROW, or even the day after tomorrow when this occurs. We can hold on a bit longer, if we try, if we work together, if we do not QUIT.
Know in your heart that Death is inevitable for all living things. You are destined for death and so is planet Earth. All you can ever do is the best you can to extend the timeline between birth and death. Fight the Good Fight with SUN☼, and make it last just as long as you can.