The UK Pensions Crisis – From Prophesy To Reality

Source - The UK Pensions Crisis - From Prophesy To Reality - TruePublica

Can you guess who recently said this? – “Oh, by the way, we’re also going to tax you even more because this Ponzi scheme that we’ve had in play for pensions and for healthcare and for social care for the past 30 years is about to collapse. So therefore we want you to work really, really hard, but when you get to 65, it’s not going to be there. Hands up who thinks that’s a really compelling narrative?”

It was Conservative Justice Minister Dr Phillip Lee who became yet another top Tory to have a go his own party as the annual Conservative conference descended into chaos this year. Lee was speaking at a meeting chaired by the Social Market Foundation, a pro-market think tank!

Lee is not wrong, when it comes to pensions. Since the financial collapse, caused by the banking industry, the pension deficit in the UK has now reached the point, for the first time in history, where it has become the biggest liability to the overall economy.

The decision to cut interest rates last August to their lowest ever is only an admission by the Bank of England that the country is still on a full artificial life support system.

HSBC’s head of European credit strategy Jamie Stuttard warned a year ago that Governor Mark Carney’s monetary policy move means:

“The pension issue is essentially kicked down the road for somebody else to sort out.”

If you have a pension and you’re still quite a few years from claiming it, you should be really worried. It is not an exaggeration to suggest that there is a very real threat to collecting that pension in any meaningful way. What then? The pension deficit is so serious that it has literally mutated from being nothing one year prior to the financial crisis to Britain’s biggest liability just a decade later.

The pension deficit has sprinted way passed the £430 billion mark, increasing at the rate of at least £40 billion a year and according to the Financial Times (paywall) “more than 85% of UK pension schemes are now in deficit.” In less than ten years, that deficit will climb to the point of implosion.

What happened was easy to understand. The banks blew up the system, the country is actually in recession, even though they say it isn’t, which is why it needs almost zero percent interest rates and hundreds of billions of funding in order to get the banks to lend, so they can make money and strengthen their destroyed balance sheets.

In the meantime, pension providers are unable to get returns on the money invested in them, who in reality need at least 5 or 6 percent just to tread water. The only way to get that type of return is to turn up the risk strategy. UK government gilts are providing no return as many have lost faith in the banks, which in turn drives down the rate of return, making matters even worse for the pension providers.

In 1950, there were 7.2 people aged 20–64 for every person of 65 or over in the OECD countries. By 1980, that ratio dropped to 5.1 and by 2010 it was 4.1. It is projected to reach just 2.1 by 2050. The average ratio for the EU projected to reach 1.8 by 2050.

According to a wikipedia entry on the pensions crisis – “Thousands of private funds have already been wound up (in the UK)”.

Add all the investing problems along with a decade of low interest rates to the fact that the pensioners themselves refuse to die at a financially convenient date for the pension providers – and there’s the catch 22 – and you’re in it. But the Bank of England chief Mark Carney is digging UK pensions deeper into a hole.  With loose monetary policy, Carney is currently acting in the hope of staving off an economic crash in the short term. In reality, all he is doing – as mentioned, is effectively kicking the can down the road for others to collect. All the while, the pensions crisis is getting worse every day and when that deficit is declared un-payable, which it technically is already, the ‘haircuts’ everyone will be taking will cause one almighty recession in its own right. By then, he’ll be back in Canada, shielded from the economic firestorm.

The only options with a crisis like is

A) all affected pension schemes offer big reductions to rebalance their liabilities,

B) the government borrows massive sums of money to shore up those liabilities, hugely increasing the national debt

C) the pension companies offer a one-time payoff or buyout to scheme members that cuts their long term liabilities, or

D) they collapse.

The most likely option you’ll be facing is option A or C as the government simply won’t have the money to bail out pensions after bailing out the banks, which they are still doing and D would cause mass protests or possibly worse.

Of course, the entire country could take the pain, allow artificially low interest rates to increase, which will save the pension companies. Then the scale of ‘zombie’ companies who go bust will become apparent, the stock market will fall, investor dividends will dry up, unemployment will rise causing a risky rise in ‘non-performing’ bank debt. It’s a tightrope as you can see.

Eoin Murray, head of investment at Hermes Investment Management agrees.

“QE and ultra-low rates have insulated many companies, and unwary investors, from the dangers that normally lurk; they are now treading a dangerous path. As interest rates begin to meaningfully rise, companies that have been able to borrow cheaply and roll over debt will be exposed. These are the zombie firms that in a normal rate cycle would no longer exist.” Murray went further with a dark warning for investors: “That would mean inefficient companies going bust, but investors also stand to share the pain. Back in 2009 only 2pc of loans issued were “cov-lite”, those which placed few restrictions on a company’s debts and so offered little protection for the investors buying those bonds. By 2013 that was 59pc and last year it hit 75pc, this means the debt markets could be a “powder keg”.

The cost of living and low wage performance has also stopped millions from contributing to pensions, which again, only makes matters worse. This is because ordinary people are already suffering today, let alone being able to invest in their future. One in four households (not individuals, entire households) have less than £95 saved. The savings gap between the wealthy and poor has widened by a huge 25 percent in just the last year. The IMF says this is because average household income is now falling faster than at any time in the last 40 years and according to the ONS is a record since records began back in the 1963.

The result of all this is that one in five have made no pension provision and many millions are facing big future cuts in pension payments or a total wipeout. The other alternative would be to bring in lots of young foreign labour but we have Brexit, and anyway, the new robotics revolution in our factories will only decrease the number of working age people able to contribute.

This problem will have very real consequences for the country and its people quite soon and the Bank of England is fanning the flames of an economic problem set to explode in our faces. Cowardly politicians unable to start the debate on what to do for fear of losing power in the resultant social scandal that should have been dealt with years ago do not help of course.

The One Trillion Dollar Consumer Auto Loan Bubble Is Beginning To Burst

Source- The One Trillion Dollar Consumer Auto Loan Bubble Is Beginning To Burst 6.9.2016

Do you remember the subprime mortgage meltdown from the last financial crisis? Well, this time around we are facing a subprime auto loan meltdown. In recent years, auto lenders have become more and more aggressive, and they have been increasingly willing to lend money to people that should not be borrowing money to buy a new vehicle under any circumstances. Just like with subprime mortgages, this strategy seemed to pay off at first, but now economic reality is beginning to be felt in a major way. Delinquency rates are up by double digit percentages, and major auto lenders are bracing for hundreds of millions of dollars of losses. We are a nation that is absolutely drowning in debt, and we are most definitely going to reap what we have sown.

The size of this market is larger than you may imagine. Earlier this year, the auto loan bubble surpassed the one trillion dollar mark for the first time ever…

Americans are borrowing more than ever for new and used vehicles, and 30- and 60-day delinquency rates rose in the second quarter, according to the automotive arm of one of the nation’s largest credit bureaus.
The total balance of all outstanding auto loans reached $1.027 trillion between April 1 and June 30, the second consecutive quarter that it surpassed the $1-trillion mark, reports Experian Automotive.

The average size of an auto loan is also at a record high. At $29,880, it is now just a shade under $30,000.

In order to try to help people afford the payments, auto lenders are now stretching loans out for six or even seven years. At this point it is almost like getting a mortgage.

But even with those stretched out loans, the average monthly auto loan payment is now up to a record 499 dollars.

That is the average loan size. To me, this is absolutely infuriating, because only a very small percentage of wealthy Americans are able to afford a $499 monthly payment on a single vehicle.

Many middle class American families are only bringing in three or four thousand dollars a month (before taxes). How in the world do they think that they can afford a five hundred dollar monthly auto loan payment on just one vehicle?

Just like with subprime mortgages, people are being taken advantage of severely, and the end result is going to be catastrophic for the U.S. financial system.

Already, auto loan delinquencies are rising to very frightening levels. In July, 60 day subprime loan delinquencies were up 13 percent on a month-over-month basis and were up 17 percent compared to the same month last year.

Prime delinquencies were up 12 percent on a month-over-month basis and were up21 percent compared to the same month last year.

We have a huge crisis on our hands, and major auto lenders are setting aside massive amounts of cash in order to try to cover these losses. The following comes from USA Today…

In a quarterly filing with the Securities and Exchange Commission, Ford reported in the first half of this year it allowed $449 millionfor credit losses, a 34% increase from the first half of 2015.
General Motors reported in a similar filing that it set aside $864 million for credit losses in that same period of 2016, up 14%from a year earlier.

Meanwhile, other big corporations are also alarmed about the economic health of average U.S. consumers. Just check out what Dollar General CEO Todd Vasos had to say about this just the other day…

I know that when we look at globally the overall U.S. population, it seems like things are getting better. But when you really start breaking it down and you look at that core consumer that we serve on the lower economic scale that’s out there, that demographic,things have not gotten any better for her, and arguably, they’re worse. And they’re worse, because rents are accelerating, healthcare is accelerating on her at a very, very rapid clip.

The stock market may seem to be saying that everything is fine (for the moment), but the hard economic numbers are telling a completely different story. What we are experiencing right now looks so similar to 2008, and this includes big institutions just dropping dead seemingly out of the blue. On Tuesday, we learned that ITT Technical Institute is immediately shutting down and permanently closing all locations. This is from a Los Angeles Times report…

The company that operates the for-profit chain, one of the country’s largest, announced that it was permanently closing all its campuses nationwide. It blamed the shutdown on the recent move by the U.S. Education Department to ban ITT from enrolling new students who use federal financial aid.
“Two quarters ago there were rumors about the school having problems, but they told us that anyone who was already a student would be allowed to finish,” said Wiggins, who works as the assistant manager for a family-run auto parts business and went to ITT to open new opportunities.
“Am I angry?” he said. “I’m like angry times 10 million.”

As a result of this shutdown, 35,000 students are suddenly left out in the cold and approximately 8,000 employees have lost their jobs.

This is what happens during a major economic downturn. Large institutions that may have been struggling under the surface for quite a while suddenly give up and drop a bomb on those that were depending on them. In the months ahead, there will be a lot more examples of this.

Already, some of the biggest corporate names in America have been laying offthousands of workers in 2016. Mass layoffs are usually an early warning sign that big trouble is ahead, so keep a close eye on those companies.

The pace of the economic decline has been a bit slower than many (including myself) originally anticipated, but without a doubt it has continued.

And it is undeniable that the stage is set for a crisis that will absolutely dwarf 2008. Our national debt has nearly doubled since the beginning of the last crisis, corporate debt has doubled, student loan debt has crossed the trillion dollar mark, auto loan debt has crossed the trillion dollar mark, and total household debt has crossed the 12 trillion dollar mark.

We are living in the greatest debt bubble in world history, and there are signs that this giant bubble is now starting to burst. And when it does, the pain is going to be greater than most people would dare to imagine.

Eco-Socialism and Decentralism

The Re-Development of Anarchism in the Ecology/Climate Justice Movement

Theorists of the climate-justice movement have been raising decentralist ideas as part of their programs for an ecologically-balanced society. This ecological program means more local democracy, workers’ management of industry, consumer coops, and federations of radically-democratic institutions. Such ideas revive the decentralist ideas of anarchism.

From conservatives and liberals to Marxists, there is faith in big machines, big industries, big corporations, big cities, big countries, big buildings, and big government—a belief in the necessity of centralized, bureaucratic, top-down, socially-alienated, institutions. This is not to say that most people like giant cities, big business, or big government; but they do not see any alternative. 

Instead, anarchists have advocated localism, face-to-face direct democracy, self-governing agricultural-industrial communes, workers’ self-management of industry, consumer cooperatives, appropriate technology, and federations and networks of such radically-democratic institutions. Many people reject anarchism because they believe such decentralism to be unrealistic.

However, in our time there is a new development: writers and theorists of the ecology/environmental/climate-justice movement have been raising decentralist concepts as part of their programs. They include moderate liberals, radical ecologists, and even Marxists. Mostly they have no idea that they are redeveloping anarchism. I will examine this phenomenon.

Anarchist Decentralism

Of a cooperative, socialist (or communist), society, the anarchist Peter Kropotkin wrote in 1905, “True progress lies in the direction of decentralization, both territorial and functional, in the development of the spirit of local and personal initiative, and of free federation from the simple to the compound, in lieu of the present hierarchy from the center to the periphery.” (Kropotkin 2002; 286)

Paul Goodman put it this way: “Decentralization is not lack of order or planning, but a kind of coordination that relies on different motives from top-down direction….It is not ‘anarchy.’[Meaning: it is not ‘chaos.’—WP]…Most anarchists, like the anarcho-syndicalists or the community-anarchists, have not been ‘anarchists’ either, but decentralists.” (Goodman 1965; 6)

Capitalism by its nature is centralized. A tiny minority of the population dominates the whole society and all its institutions. The production system is one of exploitation; the minority of owners, and their managers, make all decisions, while the workers follow orders. The workers produce society’s wealth but receive only a fraction of it in payment, because the capitalists own the means of production (capital). 

Under the pressure of competition, capitalist enterprises grow ever larger. They are under the imperative to grow or die. The economy becomes dominated by semi-monopolies, which now span the world market. The giant corporations justify themselves by claiming to be more efficient in producing and distributing commodities. Sometimes this is true, but often it is not. Capitalism is motivated to produce greater profit (surplus value), not more useful goods (use value). Often the corporations grow for financial reasons which have nothing to do with productive efficiency. They may grow in order to better control the work force or for increased access to markets. Both to serve them and to control them (in the overall interests of the capitalist class), giant corporations require giant bureaucratic-military states. 

Revolutionary anarchist-socialists seek to abolish all rule by minorities, all exploitation, and all forms of oppression. They want a classless, oppressionless, society of participatory democracy. They want everyone to be involved in managing their own society, politically, economically, and culturally, at every level and in every way. This requires that institutions, at the daily, lived, level, be small enough for working people to understand and control them. It requires that small groups meet face-to-face to discuss and decide how they will deal with most issues—in the workplace or the neighborhood. It requires directly-democratic assemblies, in the work shop and the community. There ordinary people will decide on overall concerns, and—where necessary—elect people to do specialized tasks or to go to meetings with elected people from other assemblies (elected officials being subject to immediate recall, rotation in office, and the same standard of living as everyone else). Radical democracy requires reorganizing our cities, our industries, and our technology, to create a world without order-givers and order-takers. 

Anarchists recognize the need for a certain amount of centralization and big institutions. They believe that self-managing industries and communities should be embedded within regional, national, and international federations—associations of associations. Such bottom-up federations can coordinate exchanges of goods and can make decisions on world-wide concerns. But no matter how large they grow, they are still rooted in the face-to-face self-government of people’s daily lives. (This is different from today where people vote every few years for someone to go far away to “be political” for them—and then the voters return to their daily lives of taking orders from their bosses.) 

When everyone participates in governing, then there is no “government” (no bureaucratic-military state organization separate from and above the rest of society). There is just the self-organization of the people—of the (formerly) working class and oppressed people.

The anarchist rule is: As much decentralization as is practically possible; and only as much centralization as is necessary. “We are in a period of excessive centralization….In many functions this style is economically inefficient, technologically unnecessary, and humanly damaging. Therefore we might adopt a political maxim: to decentralize where, how, and how much [as] is expedient. But where, how, and how much are empirical questions.” (Goodman 1965; 27) 

Anarchists claim that productive technology could be used decentrally to create a society with sufficient goods for everyone and plenty of leisure for all. There is a great deal of evidence that technology can be modified and re-created to be consistent with a creative, self-managing, and decentralized socialist economy.—which does not deny that there would still be some large machines and factories, as well as networks of smaller devices—such as the Internet. (For decentralizing technology, see Carson 2010; McRobie 1981; Sclove1995.) 

Other Decentralists

There have also been non-anarchist and non-socialist decentralists, such as Catholic distributivists, students of Ralph Borsodi, cooperators, New Age theorists, “small-is-beautiful” technologists, and others. (See Loomis 1982.) Some were inspired by the tradition of Thomas Jefferson. Impressed by the New England town meetings, he wanted to promote a federation of local community “wards.” 

“Where every man is a sharer in the direction of his ward-republic…and feels that he is a participator in the government of affairs, not merely at an election one day in the year, but every day; when there shall not be a man in the State who will not be a member of some one of its councils, great or small, he will let the heart be torn out of his body sooner than his power be wrested from him by a Caesar or a Bonaparte.” (Jefferson 1957; 54)

Unfortunately, the concept of decentralized democracy has been abandoned by modern day liberals (John Dewey was one exception). Instead, the language of “state’s rights,” “federalism,” and “small government” have been monopolized by the right. They use it to justify oppression of People of Color, opposition to regulation of big business, and the cutting of government support for the working class and the environment. Meanwhile these supposed advocates of “small government” advocate expansion of the military, more power to the police, and laws limiting women’s reproductive rights. It is difficult for modern liberals to counter these false claims due to liberal statism and centralism. 

In this period, there has been an explosion of advocacy of worker-managed enterprises (producers’ cooperatives). This has been promoted by a range of theorists, from liberals to revolutionary Marxists. It has been experimented with—largely successfully. (For the discussions about worker-managed enterprises, see Price 2014.) 

There were decentralist elements in Marxism (the Marxism of Marx and Engels, anyway). Mostly these reflected the influence of pre-Marxist “utopian” socialists. These elements included positive comments about worker-run cooperatives; discussion of the radical democracy of the 1871 Paris Commune; prediction of the end, under communism, of the division between town and country—industry and agriculture—due to the widespread distribution of towns; and prediction of the end of the division between mental and manual labor (order giving and order carrying out). (See Engels 1954; Marx & Engels 1971.) However, such elements of decentralization were buried in other aspects of Marx’s program, such as advocating a new state which would nationalize and centralize all industry. Utopian, decentralist, aspects dropped out of post-Marx Marxism.

Decentralism in Current Ecological Politics

Bill McKibben has long been a leader of the climate justice movement. Politically he is a left-liberal, an endorser of Sanders for President. One of his books (2007) is subtitled, “The Wealth of Communities and the Durable Future.” He reviews the dangers of “nitrogen runoff, mercury contamination, rainforest destruction, species extinction, water shortage…[and] the overarching one: climate change.” (19) His main solution to these (and other) ills is decentralization: “more local economies, shorter supply lines, and reduced growth.” (180) “…Development…should look to the local far more than to the global. It should concentrate on creating and sustaining strong communities….” (197) “…The increased sense of community and heightened skill at democratic decision-making that a more local economy implies will not simply increase our levels of satisfaction with our lives, but will also increase our chances of survival….” (231)

A more extreme ecological perspective is raised by James H. Kunstler (2006)—although the author describes.himself as “a registered Democrat.” (324) In “The Long Emergency,” he advances evidence that our society will run out of fossil-fuel—although not necessarily in time to avoid climate change. (He would regard the current oil glut as temporary.) “…There will still be plenty of oil left in the ground…but it will be…deeper down, harder and costlier to extract, sitting under harsh and remote parts of the world…[and] contested by everyone.” (65) This will end globalized industrialism as we know it. 

To cope with this change ”…. Life…will become increasingly and intensely local and smaller in scale… All human enterprises will contract with the energy supply.” (238-9) “We will have to reestablish those local webs of economic relations and occupations that existed all over America until the last several decades of the both century, meaning local and regional distribution networks….” (259)

One of the most influential texts on global warming is Naomi Klein’s “This Changes Everything.” She declares, “There is a clear and essential role for national plans and policies….But…the actual implementation of a great many of these plans [should] be as decentralized as possible. Communities should be given new tools and powers….Worker-run co-ops have the capacity to play a huge role in an industrial transformation…. Neighborhoods [should be] planned democratically by their residents….Farming…can also become an expanded sector of decentralized self-sufficiency and poverty reduction.” (Klein, 2014; 133-134)

To refer to another authority: Pope Francis, in his 2015 “Encyclical on Climate Change and Inequality,” cites “the principle of subsidiarity.” (120) That is the principle that social functions should be as decentralized and localized as much as is realistically possible. “Civil authorities have the right and duty to adopt clear and firm measures in support of small producers and differentiated production.” (79-80) “In some places, cooperatives are being developed to exploit renewable sources of energy which ensure local self-sufficiency….” (109) “New forms of cooperation and community organization can be encouraged in order to defend the interests of small producers and preserve local ecosystems from destruction.” (111) 

Writers for the Marxist journal Monthly Review have argued that only an international socialist revolution will make it possible to prevent climate catastrophe. This much anarchists can agree with, but the Monthly Review’s trend has historically identified “socialism” with centralized Stalinism. Over the years, its editors and writers have supported Stalin’s Soviet Union, Maoist China, and (still) Castroite Cuba. 

However, one of their main writers is Fred Magdoff (a professor of plant and soil science). He wrote a visionary essay presenting “An Ecologically Sound and Socially Just Economy.” “Each community and region should strive, within reason, to be as self-sufficient as possible with respect to basic needs such as water, energy, food, and housing. This is not a call for absolute self-sufficiency but rather for an attempt to…lessen the need for long distance transport….Energy…[should be] used near where it was produced….Ecologically sound and productive agriculture…will take more people working smaller farms…to produce high yields per hectare….People will be encouraged to live near where they work….” (Magdoff, 2014; 30—31) Also, “Workplaces (including farms) will be controlled and managed by the workers and communities in which they are based.” (29)

Why Decentralism?

I could cite many more ecologically-minded activists and scholars. These theorists are not anarchists and (except for Magdoff) not socialists or revolutionaries. They come out of traditions of liberalism and/or Marxism which have historically been centralistic and statist. In the past, a frequent response to environmental and ecological problems was to advocate economic planning and state intervention. (Nor would anarchists deny the need for some degree of federalized economic coordination—but not by these bureaucratic-military-capitalist national states!) Yet here they are arguing for increased decentralization, localism, direct democracy, and worker management of industry! Without knowing it apparently, they are recreating anarchism (or aspects of anarchism) for ecological reasons. (For more on ecology and anarchism see Bookchin, 1980; Purchase 1994.)

These are ecological-environmental reasons for decentralism. If we are to cut back on energy consumption (and end carbon-based fuel use altogether), we need to decrease transpiration and travel. That in itself speaks to the need for local industry, consumption near production, and workplaces near housing—not necessarily in the immediate community, but at least in the region. Renewable energy sources tend to come in small packets, when using wind, solar power, geothermal, and water. Therefore small and local production and consumption makes sense, as opposed to giant factories and mega-cities. The same is true when using natural resources with the least side effects of destruction or pollution, so these effects may be easily cleaned up. Democratic economic planning is also easier to do on a local or regional level, if we want widespread participation. At the same time, the Internet and other media make coordination-from-below among vast regions easier than ever before. 

However, there is another reason for the spread of decentralist ideas (that is, essentially anarchism). The radical alternative to our capitalist society used to be Marxism. But Marxism has been discredited in the eyes of many people, with the collapse of the Soviet Union and the transformation of Maoist China. All of the quoted writers, except Magdoff, reject “socialism.” They identify it with government-owned, centralized, and top-down planned economies. (Historically, Magdoff’s co-thinkers have also identified “socialism” in this way—except that they were for it.) Yet today, the idea that we could solve fundamental problems by increased state action, centralization of industry, and totalitarian politics, does not appeal. But capitalism is barreling down the highway to its own destruction, and the destruction of humanity and the living world. So people are looking for a different approach. 

Eco-Socialism: Decentralism is Not Enough

But decentralization is not enough. All the theorists quoted above—with the exception of the Marxist Magdoff—are still essentially for capitalism. They want worker-managed enterprises and consumer cooperatives—to compete on a market with each other and with capitalist corporations. These corporations would still exist, even if with more rights for workers and consumers, smaller size, and more regulation by the government—but still functioning on the competitive market. 

In contrast, anarchist-socialists oppose profit-making firms and corporations and the market. they are eco-socialists. They advocate that self-managed, cooperative, enterprises network and federate with each other, to create a democratically planned economy from below. 

The market is not a democratic people-managed economy. It runs according to its own spontaneous laws, which it imposes on enterprises though competition. To repeat: it drives the economy toward accumulation, increasing growth, greater profits, and continual quantitative expansion. Its law is grow-or-die. 

This has at least three important effects. For one, an economy built on continuous growth must be in conflict with natural ecologies which require harmonious balance and dynamic stability. Capitalism treats nature as an endless mine, with natural resources as apparently free gifts. This is true whether the competitive enterprises are big or small.

A second effect is the inevitable tendency of smaller enterprises to grow into bigger ones. The drive to accumulate more than its competitors pushes each firm to grow as big as it can. So even if capitalism (or any other imagined competitive economy) were to magically be returned to its original state of small firms, it would once again grow into gigantic semi-monopolies. 

Third, through its drive to accumulate, capitalism produces a work force which must be exploited. If the working class got back all that it produced, then there would be no capitalist accumulation. Market-driven accumulation contradicts any goal of worker industrial democracy. 

However, the existing system of global semi-monopoly capitalism has created a larger international working class than ever before in history. (The relative “de-industrialization” of the U.S. goes together with “outsourcing,” which creates more industrial workers elsewhere.) Unfortunately, none of the authors cited above refer to the importance and potential power of that international working class. With its hands on the means of production and distribution and communication, the working class is a force which could end capitalism’s drive to ecological disaster. (Even Magdoff and his co-thinkers at Monthly Review are uncertain about the role of the working class.)

In short, capitalism should be replaced by a society which is decentralized but also cooperative, producing for use rather than profit, democratically self-managed in the workplace and the community, and federated together from the local level to national and international levels. This is eco-socialism in the form of eco-anarchism. 

---

References

Bookchin, Murray (1980). Toward an Ecological Society. Montreal-Buffalo: Black Rose Books.

Carson, Kevin A. (2010). The Homebrew Industrial Revolution; A Low-Overhead Manifesto. Booksurge.

Engels, Federick (1954). Anti-Duhring: Herr Eugen Duhring’s Revolution in Science. Moscow: Foreign Languages Publishing House.

(Pope) Francis (2015). Encyclical on Climate Change and Inequality; On Care for Our Common Home. Brooklyn/London: Melville House.

Goodman, Paul (1965). People or Personnel; Decentralizing and the Mixed System. NY: Random House.

Jefferson, Thomas (1954). The Living Thoughts of Thomas Jefferson (ed.: John Dewey). NY: Fawcett/Premier Books. 

Kropotkin, Peter (2002). Anarchism: A Collection of Revolutionary Writings (ed.: Roger Baldwin). Mineola NY: Dover.

Kunstler, James H. (2006). The Long Emergency: Surviving the End of Oil, Climate Change, and Other Coverging Catastrophes of the 21st Century.
NY: Grove Press.

Loomis, Mildred (1982). Alternate Americas. NY: Universe Books/Free Life Editions.

McKibben, Bill (2007). Deep Economy: The Wealth of Communities and the Durable Future. NY: Henry Holt/Times Books.

McRobie, George (1981). Small is Possible. NY: Harper & Row.

Magdoff, Fred (Sept. 2014). “Building an Ecologically Sound and Socially Just Society.” Monthly Review (v. 66; no. 4). Pp. 23—34.

Marx, Karl, & Engels, Frederick (1971). On the Paris Commune. Moscow: Progress Publishers.

Price, Wayne (April 2014). “Workers’ Self-Directed Enterprises.” Anarkismo.
http://www.anarkismo.net/article/26931?search_text=wayn...price

Purchase, Graham (1994). Anarchism and Environmental Survival. Tucson AZ: See Sharp Press.

Sclove, Richard E., (1995). Democracy and Technology. NY/London: Guilford Press.

*written for www.Anarkismo.net

Sources

Original in inglish: http://anarkismo.net/article/28974 11.1.2016

Translated to catalan: http://embat.info/ecosocialisme-i-descentralitzacio/ 14.2.2016

Translated to spanish: http://lapeste.org/2016/02/ecosocialismo-y-descentralizacion/ 21.2.2016,

Tarcoteca spanish version

Robin Hood is another way to Occupy Wall Street

Another way to deal with saves. Thanks to an algorithm pet "Parasite" this company can track the speculative investments operations and put the money just in the same values as they do, no matters which, earning the same rate.

It is not that is fair, is is not revolutionary, is just to use the economical weapons against edge found, risk inverstors, volture founds, market manipulators, banks and other crap. Then the members decided where to invest the recovered money. Just as Robin hood did.
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“Robin Hood is another way to Occupy Wall Street” – Robin Hood member, professor Luca Guzzetti, University of Genova

Robin Hood Minor Asset Management PROJECTS

Robin Hood Minor Asset Management WEB

What is Robin Hood Minor Assestment?

We established Robin Hood in June 2012 in the middle of the financial crisis and crisis of Europe. The lesson from the background analysis was clear: The financialization of economy is a fact. Precarization is not a passing phenomenon, but becoming the normal way of the organization of labor. Financial market has nothing to do with free competition. The number of banks in the world has decreased in the last 30 year by 40%. Only 10 big investment banks control over 90% of the entire derivative market whose size is estimated to be around 1200-1400 million billion dollars (over 20 times the entire world GNP). During the first three months of 2013 alone, the profit of Goldman Sachs was over 2,26 billion dollars, of HSBC 6,35 billion dollars, JP Morgan 6,53 billion dollars – this in just three months. It is a very lucrative business. And we know about the scams, lies, manipulations and unbelievable bonus systems. The employees and leaders have confessed the manipulation interests rates and exploitation of clients for making profit. The power to create money is in the hands of the financial market, but we have no access to it. Our money is obliged to take part in the market, but we never profit from it. We just carry the risks. There is a deep asymmetry between those who are able to create money by transforming it into financial capital (income not tied to the necessity to work) and those whose only access to money is to work (possibly at any cost) – or first take debt, and then work.

Could we bend the financialization of economy into the advantage of precarious workers? Could we challenge the debt mechanism of control, the command to submit to any work, the limited options we have for financing our living? Could we think of sharing the means of creating capital financial market has in its use, of putting them to work also for all of us? Could we think of a relation to money, not as binding us with debt and to capital relation, but as a means of freedom, escape, and increase of independence? Could we think of profanation of finance, of returning its space to common use and play? Could we reappropriate the power of money, not only as a means of payment and exchange but as a power to command the future?

We think we can. Robin Hood is a counter-investment cooperative of the precariat. We operate a massive data mining algorithm – we call it the “Parasite” – which logs into the brains of the bankers at Wall Street and they don’t even know it. We know who are the best players. We know exactly what they do and when. Robin Hood is our means to share this knowledge. In the first year, the value of our portfolio rose 30,74%. With this result we were the third best hedge fund in the world. Now, after the second year, we are up 40,15% and have about $0,6M assets under management.

Robin Hood’s business is minor asset management. It means sharing and democratizing the power of finance: building on its basis a possibility for basic income, for production of commonfare, for radical project funding, no interest loans for financing one’s studies or life, in a form of an investment cooperative. We call it minor asset management, a possibility of political operation of building from our minor assets financial out-onomy in cooperation.

We are looking for new members.

How does it work?

We follow transactions at the U.S. stock exchanges, make databanks of market actors, deconstruct them from individuals into dividuals to extract their most important knowledge and capabilities, and to put them to work for us.

We operate a massive dynamic data-mining algorithm – we call it the ‘Parasite’ – which logs into the brains of the bankers on Wall Street, and they don’t even know it. We know exactly what they do and when. We know who can make money consistently with certain instruments and who cannot. Robin Hood is our means to share this knowledge. In the first year, the value of our portfolio rose 30.74%. With this result we were the third best hedge fund in the world. Now, after the second year, we are up 40.15%.

Robin Hood operates exactly like the hedge funds and not like a ‘retail fund’ of a bank. Robin Hood owns stock in other companies as the only asset, and operates with greater flexibility than banks. The investments of members are open ended and withdrawals are allowed only at certain moments of the fiscal year. The value is calculated as a share of the net asset value (NAV), which means that the increases and decreases in the value of a cooperative's investment assets and expenses are directly reflected in the amount a member can later withdraw. This is exactly what hedge funds do too, but what Robin Hood hedges, is precarity: we take a position in the financial market to offset and balance risk adopted by assuming a position at a contrary market, the precarious labor market, where so far people have just been paying the bills of financialization by letting it use our capability to assume debt, pay taxes and worsen social rights as the main raw material for accumulation of financial assets.

Handbook: There is Alternative to banks!!!

Spanish version

Why we need to be defence from banks

Who has the money has the Power. Recovering our capacity of decision

Bank's Power is absolute: political, economic and social. Not much to discuss, our dependence is total. Easy and safe services for costumers. All payment done or data collected by a bank is recorded, share and sell. Taxes payment is automatic. Monitoring and control over each person is absolute.

Instead is imposible to access to the bank companies accounts keep as a proffesional secret, audits are performed by government out of the public eye and in case of faults they pay ridiculus bills. Government access to any bank request as they think they move the economy thanks to the invest they do founding companies. Just one problem, this companies use the money in their own profit, working as one as sharing the same interests. Their financial activities provoques huge changes arround the world. Economy is exchange of goods and services, and there are many ways to get it without to use bank services.

This is just an absurd bank system. There is no real found for citizens.

Another Bank is possible, but not redy at the moment

If we recover our money we recover our capacity to do things, independence and decision. As the financial system is full developed everything we do is in our bennefit. We can start now.

Protect against Crisis and contingences

In our day to day, to live without banks means to be protected from the economical manouvers that use to happend in the world. In september 2014 Sterling Pound fell becouse scotthis referendum, december 2014 rublo fell 60% due to oil, in febrery 2015 euro fell 20% due to Swiss Franc. An economical inestability created by banks. Normal economy is abnormal, the life savings can evaporate in one single bad day. Things can change really fast and we need and can be protect from this situations.

We need another kind of financial services

All we need financial suppor and financial institutions, but there are may ways to do banking, and all are far from the nowaday practices. We need to be protect from this out of control companies.

In this video a discussion about our dependence on banks, also light.

https://www.youtube.com/watch?v=vUuAy_5CyeI [es]

Banks Mean Threats

Macroeconomy

Quantitive Expansion QE- conducted by central banks all over the warld, including UK, USA, UE, Japan, Venezuela, Nigeria... Quick explain: suposse poors have 1 pd and rich 1pd, rate 1:1, 50%, but there is no money to invest. Now government via central banks introduce 1 pd just to invest, and set the conditions to give it to the richs because they are the only people in the universe capable to invest. The rate is now 1:2, 33%, evident lost of purchasing power. we poors are double poor, but keep the same money, £ 1, so government and banks can say we have the same adquisitive power.

Finalcial markets- banks has many kind of products that exchange between them in their own markets, far from the sight of the public. Popular items are CDS, stock options, currency exchange, FRAs, deposit transfer, investment fund, interbank loans... beyond any excuse all these practices are all speculative and serve only to inflate the economical bubble around the world as the one in 2008 that starts with the widespread cuts here in England and have not finish yet.

Macroeconomy- Credit, loans and mortages

All we need financial support, money that we dont have to start our projects. This is use as a wepon by banks as they only grant at their own interest, far away from the public interest. That means that if you are no suitable for a credit, 0 hours contract, chronic disease, disability, you will never have a house, a business or the choice to change your destiny. This practice have to change.

World alternative to banks

There are many places in the world where banks do not have as much power as they have in northamerica or europe. 60% of the South American population or 80% of the African population lives without banks with their own financial services. This fact is linked to underdevelopment as capitalist understand. These economies do not grow as fast as neoliberal economies. Their economies are focus in the local resorces consumption, 5-10 times less tham our, wich make them more resilet to periodic crisis and helps to protect the enviroment.

Credit, Loans and mortages are made through local credit institutions. We can find examples in Peru, the "Cámaras de Crédito Local" Local Credit Council. This video is tricky but show how works the Credit Unions system in US.

https://www.youtube.com/watch?v=ecCurwhTo6o

Pros and cons of bank services substitution

The most important caracteristic is the Mix of Services requiered to provide the hole pack of services that banks dispose.

There are clear advantages.

- Absolute control of finances- from the begining to the end of the process, knowing that your savings will not be harmful for you, investing your own money in the companies that explode you as weapons industry, nueclear electricity companies, big pharma or volture founds.

- Less goverment control, that means that you can pay the duties (fees, tax, bills) in terms and conditions adecuated to your situation and no so mandatory.

- Decentralization- the money is easier invested in local goods and services.

- Resilence- Mix of services allows that in case of any problem happend just a part of the services are stop, carry on with the others. Ie when a debit card is not working you can not use any of the others bank services.

The downside

- Less availability of services- not all the services are avaliable as easily as banks do.

- Complexity- the mix of services and companies increase the time studying options and services. The choices can not be clear.

- Incertitude- the set of checkings and control for the regular client are strong in banks and insurence in contingency. At the moment some of the alternative services, do not have the required quality, giving problems difficult to solve at times.

Banks Services and substitution

Living without banks means to study its service portfolio and use the alternatives, many of them traditionals. All banking operations can be done without banks. Virtually all banking activities can be replaced by the use of cash, or "0 fee bank accounts".

England is one of the cheapest countries for banking. Even so using alternative services can make you save between £ 200 and 500 per year, maybe more! Bet you did not know. It is called scam.

We recommand and see an important need for a "B account" beside the Current Account: contributions in cash or other products not subject to taxes or bank manipulation. Good luck!

Banks- Transfers Commission: £ 0-20 each at a different bank account

No banks

- Direct Payment on account at the office branch. If monthly payments £ 0-200 annual savings are evident.

Minimizing

- Temporary or paypal accounts. To transfer only the deposited money. The bank can not take extra fee in case there is.

- online Banking. Many services require no commissions.

Essential for the payment of certain bills, tickets or banknotes.

Bank- Commision credit/debit cards. £ 0-10 per month.

No banks

- Use Cash

- Use of prepaid cards and payment

Minimizing

-Use Debit cards keeping the “account to £ 0”.

Banks- Checks Commission by depositing.

Very variable. Very difficult to overcome. The positive is that you can cash it in full in cash without opening account. Payment of fines and fees. Commission on overdrafts and debts. When the balance is negative.

No banks

- Use cash. Direct revenue account.

Minimizing

- Maintain the count to £ 0, remove the fiat money within minutes, rather seconds, that a payment is made. Stay tuned.

Banks- Commission for cash withdrawal. £ 0-5 per operation

No banks

- Use cash.

Minimizing

Many of the payments we have are mandatory bank transfers, as salaries, so the use of banks is essential, what can we do.

- Remove all the cash at once to pay only one time and keep “account at 0”

- Withdraw cash at ATMs without commission.

Banks-study and opening of credit Commission: £ 500-1500 per operation.

No banks

- Use of cash. Cameras local credit

Minimizing

- Micro-patronage / crowfounding / bonds

- Contributions from members

- Contributions from subscribers

All these activities will also pay taxes, so the only way to avoid this is to pay in cash.

Not valid on purchase of personal property such as a house.

Never ever go to fund or hire-purchase in shops (computers, cars, forniture)! It is a simple trap!

The Cryptocurrency can mitigate the effect of taxes.

Banks- Currency exchange Commission. £ 0-5, and 2-5% per operation

Minimizing

- Exchange office. Are companies very commun. You have just to find the better offer.

- Criptocurrency. With only reliability of a fair, reliable, and delocalized electronic currency, barely exchange fees.

System: install the manager app and open an account, buy Cryptocurrency , you travel to other country and exchange the Cryptocurrency for local currency in a branch office.

- Online Transfer- exchange companies settled in differents contries that are able to bounce the money from one to othe in the way you paid up to 90% less commission that in banks. Ie Transferwise.com

- Gold. System: Purchasing gold for the value to be transferred, make the trip and change when arrival. Surely you come out winning. 1 oz, 31.1 g, a miserable coin is exchanged for £ 799,59.

Problems with availability of offices and payment fees.

Banks- New commissions.

The imagination of bank to make money grow is incredible. Some of this are: extra Paper statements 1pd each, Copy of issued statements 1pd each, Automatic transfer facility £ 7-25 each, Bank Drafts: Original request for a Bank Draft 20pd, Cancelling a Bank Draft 10pd, Posting a warning on a lost or stolen Bank Draft £ 20; Electronic Payments into your account £ 0-30 each, Electronic Payments from your account £ 0-30 each...

Minimizing

-”account with £ 0”. Open up an account at the receiving entity maintaining 0pd and using it just to do payments. Savings of between £ 0 and 100 per year.

Take care, some banks retain legally the money some days to verified the operation wich could redirect your money and loose it.

As we have seen almost all daily activities of banks can be made through alternative, implying a change of habits. If we stopped smoking, drinking and eating junk food we can stop destroying our future just leaving banks.

There are still important points to resolve in terms of the banks that have not yet been adequately resolved: Credit financing.

Alternatives to banks

Cash. OK

Advantage

The advantage is clear, the cash is managed personally and use unique and exclusively in our transaction without paying extra fees or other charges. That represent a proffit between 120 and 500 pd per year. It may not seem like much, but it's almost a monthlys salary for many families.

We all lived like this before 1975 when the 1st credit card and Cash Machines was introduced.

Issues

Problems with contingencies.

Discomfort in displacement to do payments. Ideal if you do not plan to travel.

Problems of availability and access to bank branches. The current trend in banks is to close branches and replace it all for Cash machines or online banking, becoming a serious problem in some localities.

There are home deposit problems, having to rely on unwieldy amounts of cash at home.

To face the cash payments we recommend taking one day a month to deal with the payments all together and thus reduce the wear and cost of travels.

Online only-payment-accounts. OK

Virtually you can buy now everything you want on the internet, so it is very useful for online payment. What is not helpful are the charges or control over person. There are only-payment-accounts, no deposit accounts, such as Pay pal, Neteller, Skrill ... a lot. It is a bit cumbersome but is streamlined with a little practice.

https://help.bwin.com/es/general-information/payments/payment-methods

Alternative monetary reserves. OK

If you need to have a deposit, for example in case of contingency or to invest in a home or business, the best option is a mixed solution: Social Currency, Cryptocurrency, natural money (gold, silver, platinum, time, seeds...). Use current currency is a counterproductive error.

Prepaid debit cards. OK

They work just like mobile cards. Shopping card that is associated with a password. Pay and you get access to card payment and online banking. It's that simple.The difference with the debit card is that you do not need a to have a bank account or contract and you not pay commissions for maintenance.

Although is not a very requested service is available in all banks and other companies.

The “account to 0 or Zero account”. OK with reservations

Open an account in the bank, you will need a minimun money. Remove it an keep 0. You just make the income immediately before use. So that the maintenance costs is 0 and you prevents the bank take money for fines and overdraft by not giving time to execute the commands. Some times the bank retain the money. Be aware of wich situations. Bank keeps control and monitoring the movement of person.

Standing orders- Cancel it and do it manually. You can save £ 10-20 per month.

Negotiate Commissions- The use of bank accounts can be useful in certain circumstances, but the collection of fees is abusive. Sometimes you can negotiate with the bank dependent commissions. No matter what they tell you, before signing, the £ 0.00 charges has to be specified in the contract. Study it or they will piss you off.

Even with 0 charges is convenience to have a cash balance of £ 0.

It is better to be frighten because you have to make a payment, such as a tax, tham because of the bank has already done it for you and you have no money for other contingencies, such as food, gas or electricity.

Problems of Availability- sometimes you need to do physical cash entry into your bank account to do some payments.

Online Banking. OK with reservations

All banks offer online banking service. This is generally crages less commissions, but is not entirely free. Although useful for payments is recommended as in previous situations the account to 0 to avoid shocks ath the end of month.

Business Transfer national and international "money". OK

Again, we repeat: in real life no money is transferred, currencies are exchanged through encryption. Transporting money in a bag and go to an exchange office does not seem a good idea since electronic transfers have advanced, minimized the collection of fees and now are in a good position in the market:

http://trucoslondres.com/transferencias-internacionales-gratis/

Financial Products: X Discarded

Without further.

Stock market: X Discarded

The Stock Market is the most manipulated of all times Institution. Your bets are controlled by computers. Their prices manipulated by larger groups. Think for a moment to have a stock is little more than investing in toilet paper with the difference that you do not end up with an ulcer. It is not a place for beginers and weekend investors.

http://www.tradingdefuturos.com/como-funciona-la-manipulacion-profesional-en-la-bolsa/

Investment funds: X Discarded

Leave the money to a satrap of the HSBC, Lloyds, Santander, Barclays or any of the other banks is little more than remove yourself the health, education, justice and social services at once. It's say they are right and you give them money for their lobbies make laws and hunter politicians to bring it to the Parliament an made them more rich. Is to participate in the creation of economic bubbles that will send you to ruin. Just do'nt do it.

Foreign currency: X Discarded

Maybe in the past diversify our money in different currencies could be an option. A combo of coins could make us keep purchasing power. But in modern times, the currency war, fall oil prices, deflaction, overproduction, paralysis of the global economy, bet your saves in other crazy countries with their crazy statements and no less crazy central banks is little more than throwing money down the drain. The coins are strong or weak compared to each other, but behind there is an economic solvency. In times of crisis such as this, is a Russian roulette.

Art / collecting: X Discarded

Art investment is to invest in fashion, which involves speculating and generally ruin. Fashions change with the wind and needs someone to appreciate it. In times of famine fuck off bourgeois art. Having a collector's item is an investment in future. Generally supposed to keep the object still for long awaiting to be revalued. We still remember in 90s the bubble marvel comics! What a world.

Properties: X Discarded

Having the energy invested in property / land is a big problem. With a great value are hardly interchangeable rigged and carry large tax burdens indicating that the property is not yours, it belongs the State.

Profit is only obtained if property provides a service or holds any economical activity.

It is hardly convertible. It is fully controlled by the state.

It is not known why economists consider property as an asset, ie a private possession that can be exchanged for money at any time, when in fact it is a passive, belongs to the banks and the state and are paying taxes for it all lifetime. Solution: squat.