Archive for May, 2007|Monthly archive page

Intellectual Property and the New Trade Agreements

The Democrats “shrewdly” are agreeing with Bush on new trade agreements.  Just like in NAFTA days they have made the adminsitration agree to strong (read toothless) protection for the environment and labor rights — much stronger however are the demands for Intellectual Property Rights.

“Our recent free-trade agreement with South Korea is a good example. Most of the deal is concerned with lowering tariffs, opening markets to competition, and the like, but an important chunk has nothing to do with free trade at all. Instead, it requires South Korea to rewrite its rules on intellectual property, or I.P.—the rules that deal with patents, copyright, and so on. South Korea will now have to adopt the U.S. and E.U. definition of copyright—extending it to seventy years after the death of the author. South Korea will also have to change its rules on patents, and may have to change its national-health-care policy of reimbursing patients only for certain drugs. All these changes will give current patent and copyright holders stronger protection for longer. Recent free-trade agreements with Peru and Colombia insisted on much the same terms. And CAFTA—a free-trade agreement with countries in Central America and the Caribbean—included not just longer copyright and trademark protection but also a dramatic revision in those countries’ patent policies.”…

The Decline of Journalism/Outsourcing Everywhere

Pham, Alex. 2007. “Local News Reporting Outsourced to India.” Los Angeles Times (11 May).

“James Macpherson, editor and publisher of the Pasadena Now website, hired two reporters last weekend to cover the Pasadena City Council. One lives in Mumbai and will be paid $12,000 a year. The other will work in Bangalore for $7,200. The council broadcasts its meetings on the Web. From nearly 9,000 miles away, the outsourced journalists plan to watch, then write their stories while their boss sleeps — India is 12.5 hours ahead of Pacific Standard Time.” Continue reading

Redwoods Suck Up Pollution

Bowman, Chris. 2007. “Redwood Tops At Sucking Up Exhaust.” Sacramento Bee (8 May).

“The California redwood, known for capturing much of its water supply from coastal fog, also appears to excel at scrubbing vehicle soot from the air, according to a University of California, Davis, scientist. Preliminary results from a wind tunnel experiment show the flat needles of the coast redwood removing 75 percent to 95 percent of the most harmful tailpipe exhaust particles, Thomas Cahill said Monday in a presentation to the Sacramento area chapter of the nonprofit Breathe California. “It’s an extremely efficient way to reduce air pollution,” said Cahill, a retired atmospheric physicist who has conducted several pioneering studies of particle pollution around the world.”

“While other studies have shown trees to be effective at suppressing dust along unpaved roads, the latest UCD study is perhaps the first to examine the effectiveness of trees in reducing the “very fine” and “ultra fine” particles of burnt motor fuel and oil, said Greg McPherson, director of the federal Center for Urban Forest Research at UCD.”

“Such particles are small enough to bypass the body’s defenses and lodge deep in the lungs, and have been linked in many studies to deaths of people with heart and breathing problems. The UCD study found redwood trees to be most effective of three species at removing particle pollutants, followed by the longer needled deodar cedar and the broad-leaf live oak.”

Great Carbon Offset System

All you need to do is to click in your car, how many miles your drive, a credit card,
and voila you are carbon neutral.

Private Equity, Intellectual Property, and Tax Manipulation

Private equity supposedly companies make their fortune with their deep insight into unlocking hidden value. In the case of Sears, this value is taking trademarks, shifting them abroad to tax havens, and then reducing taxes. Somehow, we should applaud this great feat of capitalist brilliance. Here is the story: Continue reading

The Closing of the University Commons

I gave a short talk at a conference in Berkeley last Saturday on the corporatization of the University.

There are probably a few glitches in the text.  I was revisining just before my presentation.

The closing of the university commons should come as no surprise. Instead, we might do better to consider the brief opening in the 1960s as a dramatic break with a less pleasant, but long standing tradition — one in which higher education in the United States displayed a long history of intolerance rather than openness. Historically, the controlling forces of colleges and education were first the church and then wealthy individuals. Under their watch, dissent was effectively snuffed out. Universities were largely the domain of well-to-do students, often even in the Land Grant colleges, which were initially supposed to train people for the agrarian sector.

A series of fortuitous events disturbed this equilibrium. First, the Great Depression undermined faith in the market, while planning during World War II suggested an alternative to laissez-faire. Then the G.I. Bill opened up the universities to ordinary people to an unprecedented extent. Soon afterwards, universities were growing rapidly to accommodate a huge influx of baby boomers. Finally, the discrediting of McCarthyism briefly subdued the frequent witch hunts that traditionally maintained ideological purity on campus. A relative shortage of candidates for teaching positions made universities less careful about the political leanings of those whom they hired.

The early decades of the postwar period enjoyed one of the most prosperous periods in U.S. history — so much so that economists typically refer to this time as the Golden Age. Profits were very high even though unemployment was low and union power was at its peak. Finally, vigorous economic activity meant that governments could afford to be relatively generous to higher education — often in the name of national security.

These happy circumstances were not destined to last. By the late 1960s, the usually high profit rate was beginning to sag, marking the end of the Golden age. Activism seemed to be reaching epidemic proportions.

People in high places were beginning to panic. In 1974 and 1975, the Conference Board held a series of meetings for CEOs, which gave a window into the corporate mindset of the time. The participants expressed grave fears for the future of capitalism in the United States. One warned: “The American capitalist system is confronting its darkest hour” (Vogel and Silk 1976, p. 71). The participants voiced their skepticism for democratic solutions. One executive warned that “the dolts have taken over the power structure and the capacity of the nation in the US” (Vogel and Silk 1976, p. 189). Another asked, “Can we still afford one man, one vote? We are tumbling on the brink.” Still another warned: “One man, one vote has undermined the power of business in all capitalist countries since World War II” (Vogel and Silk 1976, p. 75). Ominously, a number of the assembled executives spoke vaguely of the need for “war-time discipline” and “a more controlled society” (Vogel and Silk 1976, p. 76).

The most effective call to arms came from Lewis Powell, then a little-known corporate attorney, who was destined to be nominated for a Supreme Court position a few months later. Powell’s famous memo helped to spark the erection of a complex network of activist think tanks and pro-corporate legal groups, which were central to the right-wing revolution that was to follow.

Interestingly, much of Powell’s polemic was directed toward Ralph Nader, whom he regarded as the greatest threat to democracy, at least as Powell imagined it.

Powell’s memo was brief in discussing the campuses, but it was also very clear. He complained: “The campuses from which much of the criticism emanates are supported by (i) tax funds generated largely from American business, and (ii) contributions from capital funds controlled or generated by American business. The boards of trustees of our universities overwhelmingly are composed of men and women who are leaders in the system.” Powell expected these men and women to act more decisively in supporting their class interests.

Powell and his followers knew that tightening the financial screws on the universities would serve to make the higher education fall into line. This tactic dovetailed with another major goal of the right wing: lowering taxes, which became especially pressing since market forces were not offering much hope for returning profit rates back to their Golden Age peaks.

By the late 1960s, business became alarmed by the fact that the United States was running a deficit in its balance of trade for the first time since World War I.

Here intellectual property came into play. Since United States business presumably had an insurmountable lead in intellectual property, domestic business could gain significant advantages relative to the rest of world.

Since the late 19th century, corporations have regularly turned to the strengthening of intellectual property whenever market forces created crises.

The recent episode of ratcheting up of intellectual property came at a time when universities were strapped for funds. Large universities with cutting-edge science were quick to realize that intellectual property represented a source of money that could help to substitute for rapidly shrinking state support. Areas of study that promise to bring in corporate money prosper, while other areas suffer neglect. You can see the effect of this emphasis on intellectual property by walking up a few blocks to the campus to compare the facilities of the BioScience Library with those of the Public Health Library.

Alas, today we are left with a highly corporatized form of higher education. Administrators now operate their colleges and universities in terms of fiscal results, leaving the academic mission to wither, except in so far as they serve the needs of the corporations to have the appropriately trained personnel. For example, higher tuition may serve fiscal purposes by bringing in more money but it threatens to exclude many deserving potential students or undermine their education by making them work too many hours to effectively follow their studies.

In this environment, administrations reflexively take care to weed out critical voices — not only those who might have radical ideas, but also those whose research questions the value of particular corporate objectives, such as the production of genetically modified crops. Had this administrative mindset been in place a few decades ago, the University of California might not have played as important a role in shining a bright light on the tobacco industry.

In the process, academic research into science and technology has become narrower, targeted to serve short-term fiscal objectives. The consequences of this concentration on applied research result are an inadequate attention to more basic research — the kind of science that does not pay dividends for several decades. Yet basic research is just the kind of science that eventually made possible the sort of breakthroughs in applied research we have seen in recent years. Already, alarming signs of the consequences of this shift in emphasis are appearing. For example, patent applications are citing university research less frequently — and not because of an upsurge in corporate research.

The emphasis on intellectual property also creates an atmosphere of secrecy, which creates a further barrier to future technological and scientific progress.

The corrosive effects of the shortsighted restructuring of higher education have largely gone unnoticed. Administrators compete with each other in bidding away academic stars, building huge edifices, and padding each other’s pockets.

Another Bush Coverup

I hope I don’t sound too conspiratorial, but I found this in today’s Wall Street Journal. It sounds strange. The Inspector Generals seem to have been doing a relatively good job in blowing the whistle on some of the nefarious Bush dealings. The Justice Department is coming under scrutiny. Could this be a way of shutting down part of the investigation?

“U.S. Commerce Department Inspector General Johnnie Frazier joins list of IGs under fire. Whistle-blowers say he inappropriately mixed personal and business travel — including trips to Boston and Atlantic City — and wasted money on office renovations. In memo to IG workers, Frazier says, “I have every confidence in the eventual outcome of these inquiries and look forward to their speedy resolution.”

Larry Summers Critiques Carbon Trading & Then Supports the Imperial Powers


Summers, Lawrence. 2007. “We Need To Bring Climate Idealism Down To Earth.” Financial Times (30 April): p. 13.

“There is a very real danger that the global cap and trade approach directed at achieving the rapid emissions reductions enshrined in the Kyoto protocol — now favoured by most European governments — could be ineffective or even counterpoductive by substituting for more realistic approaches to the problem. Kyoto is now the only game in town for those who do not want to be ostriches with respect to global climate change and so one has to hope for its ultimate success. But it is surely useful to try to be clear about the potential pitfalls, as I am in this column, and as a matter of prudence to consider alternative approaches if the Kyoto approach does not succeed.”

“First, the Kyoto approach depends on the questionable premise that nations will, in fact, be bound by binding targets or penalties for not meeting them. It is instructive in this regard to consider the history of the Maastricht Treaty within the European Union. It addressed fiscal targets directly under the control of governments over the relatively short term within a group of countries that had already achieved a high degree of cohesion. It broke down almost immediately when it looked like the targets would not be binding for big countries, with the goals abandoned and no payment of even the modest penalties.”

“Second, carbon markets are invitations to engage in pork-barrel corporate subsidy politics on a massive scale. If greenhouse gas emissions are to be substantially reduced, the value of the associated emissions rights will be in the tens of billions of dollars. While in principle emission permits could be auctioned, in practice they are always allocated administratively. It should not be surprising that businesses that can pass on carbon costs to their consumers are excited about schemes that compensate for these costs by allocating them permits related to their existing emissions levels. As investigations by this newspaper have highlighted, the clean development mechanism has resulted in substantial payments for emissions reductions that would have occurred anyway or could have been achieved at negligible cost. There is even reason to think that certain industrial gas emissions may have been increased so that credit could be claimed for their abatement.”

“The truth about climate change policy is that developing countries are where most of the future action has to be. They will account for 75 per cent of the increase in emissions over the next quarter century and are now making the infrastructure investments that will shape their future economies.”

The Wall Street Journal Worries About Excessive Leverage

The paper offers a perspective on the buildup of wild speculation with little potential for governmental regulation — a recipe for disaster.Smith, Randall and Susan Pulliam. 2007. “As Funds Leverage Up, Fears of Reckoning Rise.” Wall Street Journal (30 April): p. A 1

“Estimates by analysts of leverage at major securities firms, borrowing by hedge funds and margin loans to individuals added up to $4.9 trillion in 2006, compared with $1.8 trillion in 2002. Hedge-fund borrowing and other financing tools were valued at $1.46 trillion last year, up from $177 billion in 2002, according to estimates by Bridgewater Associates Inc., a Westport, Conn., hedge-fund company.” Continue reading