pulling a Johann, Foxconn edition

So US public radio put out a documentary in January featuring an imaginative fellow called John Daisey, who produced a hard hitting report on conditions at the Foxconn plants that make various Apple devices, among other things (for the record, the group of employees in Wuhan who threatened mass suicide recently were making Xbox 360s). Anyway, it turned out to be the most popular episode ever, went viral, inspired all sorts of activism, all that good stuff. But:

Daisey's interpreter Cathy also disputes two of the most dramatic moments in Daisey's story: that he met underage workers at Foxconn, and that a man with a mangled hand was injured at Foxconn making iPads (and that Daisey's iPad was the first one he ever saw in operation). Daisey says in his monologue:

He's never actually seen one on, this thing that took his hand. I turn it on, unlock the screen, and pass it to him. He takes it. The icons flare into view, and he strokes the screen with his ruined hand, and the icons slide back and forth. And he says something to Cathy, and Cathy says, "he says it's a kind of magic."

Cathy Lee tells Schmitz that nothing of the sort occurred.

This chap never appeared on film. Maybe it was because he thought the camera would steal his soul. I don’t think you need any more than an absolutely rudimentary awareness of China to find that incredible. By rudimentary, I mean knowing that it makes a huge proportion of the world’s gadgets or that it has massive levels of internet and mobile device penetration and is generally device crazy. Or that a culture in the throes of mass industrialization might in fact be quite materially aware. Above all, would you assume it was a credible assertion that someone on a production line would think their finished product was ‘a kind of magic’ if that production line was in Europe or the US?

The sad thing is that it’s probably this kind of mysticism that helped drive the appeal of the programme: people pretty much like us in most material particulars wanting to earn a decent living’ doesn’t seem to excite much in the way of solidarity. ‘Hands off the munchkins': that’s the way to go.

In fairness, the show has put out a detailed, almost grovelling retraction, which identifies failures in fact checking as the main cause of the problem. I'd say it was more a matter of assumption checking.

i never noticed them before they became infrastructure

“As you wonder (sic) between locations murmuring to your coworker about how your connection sucks and you can’t download/stream/tweet/instagram/check-in, you’ll notice strategically positioned individuals wearing “Homeless Hotspot” T-shirts. These are homeless individuals in the Case Management program at Front Steps Shelter. They’re carrying MiFi [short-range mobile wireless hotspots] devices…We’re believers that providing a digital service will earn these individuals more money than a print commodity,” wrote Saneel Radia, BBH Labs director of innovation.

The BBH is Bartle Bogle Hegarty, by the way: actually, Bartle Bogle Hegarty ‘Labs’. This ‘Lab’ employs people who can’t spell ‘wander’ to dream up the idea of using the homeless as human plug ins, paid a suggested eight dollars an hour pro-rata. I can just see some semi -autist saying ‘I only used 13 and a half minutes’ and calculating the exact sum owed. ‘I can’t give you any more. That would violate the terms of service’.

Aside from the specific humiliations involved in this for both transactors, it does point to a huge structural economic dysfunction: Chronic homelessness. Semi-illiterates employed in ‘Labs’ producing reams of bullshit. The second feeding off the first.

Perhaps relatedly, sandwich men still thrive, if that’s the term. These days they’re known as human directionals.

trying to find home

At the end of that war in 2006, I felt the cost of that more than I ever had. My marriage had fallen apart, I was away from my daughter, and I really didn't have a sense of having a home. And that was what was so important about being in Marjayoun and rebuilding the home. At its most elemental, it was about trying to find home, and in the end, I did.

From a very recent interview with the late Anthony Shadid, probably the best pure reporter of the 9/11 wars. Obituary here, along with an archive of his stories.

busty Dawn Raid says ‘i like it first thing’

But Kavanagh's lengthy column managed to avoid naming to the Sun's readers a potential offence among those being investigated – bribery of police officers.

Indeed. And I love the way the Guardian has stepped back from driving the hackgate revelations to keep the whole mery go round whirling with a few swift stiletto jabs. Anyway, as David Leigh makes clear it’s not a case of victims being treated like criminals, but of alleged criminals becoming victims of circumstances they did their best to help create.  Item:

The Sun has always stood for the freedom of the entrepreneur to do as he sees fit with his own companies. What the entrepreneur sees fit to do in this case is to make an example of what he wishes others to believe is a rogue operation within his company.

The Sun has also been a tool for its parent company’s wider business interests, whether expressed through its political ‘reporting’, its relentless cross-promotion of Sky or its attacks on the bosses competitors. It is now in the interests of the wider business to serve the Sun up on a plate.

The Sun has always stood for robust policing. Until, apparently, it was applied to its own hacks. Additionally, the Sun likes spectacular policing, of the kind that provides good copy and that demonstrates Something Is Being Done. Something like a multiple dawn raid pile in, for instance.

The Sun has always believed in the American alliance. Now it’s finding out in microvcosm the truth of Bismarck’s remark that every alliance consists of two partners: a stronger one and a weaker one.

The actual circumstances of the raid on the Sun’s hacks may be up for debate. I think they’re pretty standard for today’s exciting world of high profile send a message coppering, but that may be because I’m a bit too used to living in the kind of authoritarian pro-business society that the Sun has always campaigned for. This is also why I’m a bit baffled by the people who seem to think that we’ll ‘lose something’ when it goes. 'What will remain' is the problem.

More generally, it does look like the Sun is done for. Apart from the fact that if the arrests continue its going to have difficulty getting out a paper there’s also the fact that no public official will want to talk to the paper right now: it makes them look dodgy. And those channels are what it needs to influence policy. Without them, it’s just a shit sheet like the Star.

A Month In Spain That Didn’t Shake The World

Journalists are undoubtedly  having hard time following official economic policy in Spain at the moment. The core of the problem they face is that we have a hydra headed government which speaks with many tongues. In some ways the lack of coordination can be put down to simple newness and inexperience, although it should be noted that all the principal actors were in action the last time the PP was in office, as part of  the Aznar government. Continue reading

How to Spend It, and the economics of the useless

Swinging off this post at Unlearning Economics, I was motivated to write a long comment that really ought to be blogged.

The industrial economics of extreme wealth is an interesting subject. It’s often been observed that a lot of the spending of the rich goes into positional goods and investment assets like pink diamonds from Australia. A positional good is, in a sense, in fixed supply, or rather, position itself is in fixed supply. If more of a positional good is produced, its positional value decreases. More spending on them can only inflate their prices.

The quintessential positional good is land. A lot of land is useful in itself, but it is true everywhere that owning x amount of land gives you more positional utility than an equivalent position in cash or securities, and the most sought-after land by area isn’t farmland or building plots near a container terminal or an oil well, it’s billionaires’ row, whose value is entirely positional. Land is the classic case of economic rent, and that’s what I’m driving at.

Just as rent doesn’t reflect costs of production, but only a monopoly position, the price of positional goods reflects only their positional nature and the income of those competing for them. Let’s now switch to the economics of the firm; if the price of X is dominated by economic rent, an increase in the price is mostly an increase in profit. If profits rise in some sector, capital should be preferentially allocated to it.

Clearly, you can’t manufacture Hampstead or Palo Alto or the Prinzregentenstrasse, or only with great difficulty and the risk of destroying its positional quality. You can easily manufacture more iPhones, which therefore are gradually becoming less positional. You can manufacture Vertu phones by sticking diamonds on mid-2000s down-ticket Nokias, essentially creating purely positional items. Joseph Schumpeter would of course point out that it is the aim of all enterpreneurship to be able to claim the economic rents of monopoly.

In order for capital to be reallocated to the positional sector, then, it’s necessary to invent new forms of positional competition, and ideally, ones which escape from the temptation to just be a good product that can be produced on a big scale like iPhones or VW Golfs or my trainers. And indeed, we see a sizeable economy devoted to just that. One way of achieving this is to dematerialise the product – Cory Doctorow once remarked that if they can’t define your job they can’t outsource it, and the greater the immaterial content, the more of it is concentrated in the mind of its creator and the place and time of its consumption. Therefore, it is harder to replicate. In that sense, it’s a form of economic growth that is light on resources, but it seems intuitively difficult to defend activity that is pointless, other-regarding, private, and directed to snobbery.

Another way is to increase the service content of the product. We noted that land confers more status than most goods. But servants are almost as good or better, and would you bet against slaves being better still? This is very interesting indeed, as it may well represent a deliberate reduction of productivity and therefore a net loss to society. Where wealth is used to display power over others, by deliberately wasting labour, perhaps we’re seeing something like the costly-signalling logic of the peacock’s tail, or a form of bourgeois potlatch.

I didn’t expect to end up at this conclusion, but then that sort of dépaysement what a good blog is for.

There are of course other options. In so far as positional spending is directed at public beauty, it is perhaps worth having – having your name prominently displayed as a benefactor of the Royal Academy, much as I find the place annoying and reactionary, is better than spending your money like Dennis Kozlowski on that giant ice sculpture of Michelangelo’s David, pissing vodka into your guests’ glasses. (Although to be honest, if anyone’s up for reconstructing the thing as an installation somewhere public, even I’d contribute to your Kozlowski Memorial Fund. Yes, I know he’s not dead yet.) And some bits of the positional industry have complex business models that rely on everyone else as much as they do on the super-rich – fashion couldn’t support its baroque R&D-and-advertising-and-French-heritage-project top end without the high-street and wouldn’t have any ideas without the low-street.

But then, if there’s a good reason to unlearn economics in the first place it’s to respect institutions and complexity and the notion that people’s motives ought to be taken seriously, not only when they are convenient.

The Rain In Spain Falls Mainly On The Journalists, It Seems

Things in Spain are never exactly what they seem to be. This is a painful lesson that even Angela Merkel must have learnt in recent days, especially since she put her credibility so much on the line in backing the country’s deficit reduction efforts. “Spain has really done its homework and I think it is on the right track,” is the message she has been trying to sell to the world.

Naturally then she will not have been amused to learn last Friday that rather than the 6% promised under the Spanish stability programme, the country’s deficit in 2011 is going to be something like 8%. Some sort of overshoot was long being anticipated, but such an overshoot? Naturally it isn’t (quite) Greek proportions, but it is still hardly evidence for a credible and praiseworthy effort. This is the thing about Spain, it obviously isn’t Greece, but still all isn’t quite what it should be. Add to this deficit result the fact that the Bank of Spain is reported to be frantically pressuring banks into revising the valuation of their property asssets following the publication by ratings agency Fitch of a report which claims they are currently on average 43% overvalued. And, of course, any major downward revaluation of the repossesed assets will give an entirely new reading for the balance sheets of many of the institutions involved (the Caja de Ahorros del Mediterraneo went from having a 50 million euro profit at the end of 2010 to 1.7 billion euros in losses in June 2011 following the application of just such a mark-to-market procedure – and the savings bank was finally sold to Banc Sabadell for the princely sum of one euro). Put two and two together here, and it is clear that the country’s bond spread may once more be in for a bumpy ride when investors finally recover from their yuletide hangovers. Continue reading

How Would You React To The News Your Local Central Bank Just Went Bust?

Well, it’s been more time than I care to remember since I posted anything on this site. In the interim many things have happened, especially on the European sovereign debt front. I think I now have plenty of stuff lined up to waffle about, but maybe one simple way to ease myself back in to the world of blogging would be to republish the lengthy interview I just gave to the website Barcelona International Network. The topics covered range from the debt crisis itself, to prospects for Spain under the new Partido Popular government of Mariano Rajoy, and to the kinds of tensions with might arise in the months and years to come between Catalonia and the rest of Spain, and, of course, how this relationship might itself in turn have an impact on the debt crisis itself. Continue reading

Science Fiction?

“What do I think about the legacy of Atatürk, General? Let it go. I don’t care. The age of Atatürk is over.”
Guests stiffen around the table, breath subtly indrawn; social gasps. This is heresy. People have been shot down in the streets of Istanbul for less. Adnan commands every eye.
“Atatürk was father of the nation, unquestionably. No Atatürk, no Turkey. But, at some point every child has to leave his father. You have to stand on your own two feet and find out if you’re a man. We’re like the kids that go on about how great their dads are; my dad’s the strongest, the best wrestler, the fastest driver, the biggest moustache. And when someone squares up to us, or calls us a name or even looks at us squinty, we run back shouting ‘I’ll get my dad, I’ll get my dad!’ At some point; we have to grow up. If you’ll pardon the expression, the balls have to drop. We talk the talk mighty fine; great nation, proud people, global union of the noble Turkic races, all that stuff. There’s no one like us for talking ourselves up. And then the EU says, All right, prove it. The door’s open, in you come; sit down, be one of us. Move out of the family home; move in with the other guys. Step out from the shadow of the Father of the Nation.
“And do you know what the European Union shows us about ourselves? We’re all those things we say we are. They weren’t lies, they weren’t boasts. We’re good. We’re big. We’re a powerhouse. We’ve got an economy that goes all the way to the South China Sea. We’ve got energy and ideas and talent – look at the stuff that’s coming out of those tin-shed business parks in the nano sector and the synthetic biology start-ups. Turkish. All Turkish. That’s the legacy of Atatürk. It doesn’t matter if the Kurds have their own Parliament or the French make everyone stand in Taksim Square and apologize to the Armenians. We’re the legacy of Atatürk. Turkey is the people. Atatürk’s done his job. He can crumble into dust now. The kid’s come right. The kid’s come very right. That’s why I believe the EU’s the best thing that’s ever happened to us because it’s finally taught us how to be Turks.”

The Dervish House by Ian McDonald, pp. 175-76

Jesus, Mary and Joseph

From the BBC

In 1971 Manoli [Pagador], who was 23 at the time and not long married, gave birth to what she was told was a healthy baby boy, but he was immediately taken away for what were called routine tests.

Nine interminable hours passed. “Then, a nun, who was also a nurse, coldly informed me that my baby had died,” she says.

They would not let her have her son’s body, nor would they tell her when the funeral would be.

Did she not think to question the hospital staff?

“Doctors, nuns?” she says, almost in horror. “I couldn’t accuse them of lying. This was Franco’s Spain. A dictatorship. …”

“The scale of the baby trafficking was unknown until this year, when two men – Antonio Barroso and Juan Luis Moreno, childhood friends from a seaside town near Barcelona – discovered that they had been bought from a nun. “

The scandal is closely linked to the Catholic Church, which under Franco assumed a prominent role in Spain’s social services including hospitals, schools and children’s homes.

Nuns and priests compiled waiting lists of would-be adoptive parents, while doctors were said to have lied to mothers about the fate of their children.

The name of one doctor, Dr Eduardo Vela, has come up in a number of victim investigations.

In 1981, Civil Registry sources indicate that 70% of births at Dr Vela’s San Ramon clinic in Madrid were registered as “mother unknown”.

He refused to give the BBC an interview. But, by coincidence, I had recently given birth at a clinic he founded, so I was able to book an appointment with him.

We met at his private practice in his home in Madrid. The man painted as a monster in the Spanish media was old and smiley, but his smile soon disappeared when I confessed to being a journalist.

Dr Vela grabbed a metal crucifix which had been standing on his desk. He moved towards me brandishing it in my face. “Do you know what this is, Katya?” he said. “I have always acted in his name. Always for the good of the children and to protect the mothers. Enough.”

Babies’ graves have been dug up across the country for DNA-testing. Some have revealed nothing but a pile of stones, while others have contained adult remains.

Are these crimes limited to Spain?