[By Pierce Gordon]  

A packed house for Inequality for All screening, with Reich, Kornbluth, and Brady on the stage, fielding questions.

In a way, Robert Reich has been trying to do so for his entire career, as a Chancellor’s Professor of Public Policy, and previous secretary of labor in the Clinton Administration. His recent movie, Inequality for All, which was shown on February 5th, 2014, to a sold out crowd of 700 people in the Wheeler Hall Auditorium. The director Jacob Kornbluth, and the Dean of the Public Policy School, Henry Brady, moderated the after-movie discussion.

After the movie, the crowd asked Reich about many questions about the many different social intersections of economic inequality: racial inequality, the true potential impact of labor unions, the presence of inflation, and many other concepts. One thing was apparent during the question-and-answer portion of the night; even off the big screen, Reich can command a room, even one as large as Wheeler Auditorium.

Over his experienced profession, Reich has used many tools at his disposal to get out his message about fixing the American economy. If you visit his website, you’re instantly bombarded with his blog posts, his television appearances with the Colbert Report and the Daily Show, and his own personal explanatory videos about low wage workers, inequality, immigration reform, and many other topics.

The movie, which won both the Special Jury prize at the Sundance film festival and the Audience Award for the Best Documentary at the Traverse City film festival, deftly mixes Reich’s expert economic opinion about the current and historical state of the political economy, with the teaching of the Berkeley class, Inequality and Poverty, alongside aspects of his own personal memoir.

What’s the most artistic part of the movie? In fact, it’s the way these three seemingly unrelated topics come together to tell a whale of an economic tale. To the average movie goer, Inequality for All might contain more graphs, develop more relationships, and explain more about money, than any event they've seen. And yet, somehow the movie fits it all together using Reich’s natural stage presence and their constantly evolving storyline. These separate parts of the narrative become deeply ingrained cogs of an economic engine: economic inequality, labor unions, tax policy, globalization, technological development, and many other parts. Interestingly, the confluence of Reich’s experience, his life story, and his Berkeley course functions just as effortlessly.

Such quality, however, is not due to Reich’s life work and nimble delivery; for this, the genius of the director cannot be overstated. Though it seems to be a party where Reich is the master of ceremonies, if one looks deeper, one can find out how much influence the director had on the movie’s progression. Kornbluth explains his main motives on the Inequality for All website: “I decided my goal with this film, first and foremost, was to take a conceptual and abstract topic and find a way to tell an approachable and human story about it.” In his words, during the question portion, he stated "You have to believe in the messenger to believe in the message." That belief is necessary, then, to incite a movement to jump-start our economy.

Reich stated that he understands that economic change of which he advocates for requires conversation with, and motivation from, diverse communities. In the same breath, he goes from lecturing to his UC Berkeley course, to conversing with Republican laborers about the importance of worker lobbying, to chopping it up with venture capitalists. In a way, it’s a visual example of one particular thing; for our economy to work, we need buy-in from each of these disparate groups, to move forward towards common goals.

Even if one doesn’t agree with Reich’s suggestions, you must agree that inequality has become a massive issue in our society. Reich includes conversation about the passionate Occupy Wall Street and Tea Party protests, and adds such protests are symptoms of our communities being upset with inequality on large scales. Even President Obama recently stated in his recent State of the Union address, that 'Inequality is the defining issue and challenge of our time.' Needless to say, this isn’t an issue to take lightly.

The solutions to these issues, however, won't come as easy. He states: "The issue is at a point where there is a possibility...It can be tackled. It's not an easy answer; there has to be a movement..."

Well, one thing can be made for sure: whether Democrat, Republican, or otherwise, the points made in the new movie are hard to put down. Watching the movie, might be your first step.

Interested in learning more about Inequality for All? Check out the website here.

The views expressed here belong solely to the author of this entry and are not representative of the position of the Energy and Resources Group, UC Berkeley.

By Diego Ponce de Leon Barido

A first lesson, taken strictly from ecological economics and its use of thermodynamic laws, is very telling about the history of resource exploitation in Latin America and the Caribbean. Energy quality and energy surpluses often determine the development of social and cultural patterns, and the unidirectional character of energy can dictate the economic and social arrangements through which wealth accumulation occurs in society.^1,2

Consider the unidirectional flow of water (and energy) downstream. Historically, bulky raw materials such as grains, ores, and timber were ‘produced in the hinterland and sent downstream to river mouth cities where those raw materials were combined to produce more valuable goods’.^1,2 For this process of ‘upgrading’ matter into highly ordered thermodynamic structures, economic production is established, adding productive value to the economic cycle at each stage of thermodynamic progress.^3-5 Great accumulations of wealth occurred in downstream cities, but very rarely did this wealth find its way back upstream. Silver from Potosi (Peru) and Guanajuato (Mexico), gold from Ouro Preto and Minas Gerais (Brazil), sugar cane from Cuba, coffee from Colombia, precious woods (and later sugar) from the Caribbean, and bananas and fruit from the entire Western Hemisphere were sent to the United States and Europe. Resource wealth flowed in one direction, fostered industrial growth in the north, and created a Latin American and Caribbean dependence for technology and goods produced in the industrial north.^6-8

More recently it is rare earth metals, oil, and drugs that flow downstream.

The City of Potosi and Cerro Rico, Bolivia. Image Source: Andrea Marston.

Nothing has changed since the 1800’s, 1900’s, or the last two decades. Today, Chinese businessmen and Mexican drug cartels trade cash for iron ore in Michoacan, Mexico’s most violent state, to fuel industrial growth and quench demand for steel in China and elsewhere.^9,10 Mexican politicians undergo ‘reforms’, and change the constitution, to re-introduce American oil companies into the energy sector where the energy return on investment is increasingly lower, but the prices – higher.

A recent article in the journal Science, highlighted that beyond the obvious impacts of drug related violence and crime, deforestation rates in the Central American Isthmus exploded at the beginning of 2006-07 – as Mexico began waging a violent, yet largely unsuccessful, war against the drug cartels.¹¹  It is true that throughout the Isthmus, forest loss has historically been a product of weak governance, conflicting property regimes, poverty, climate change, illegal logging, and infrastructure megaprojects and agribusiness expansion. Recent evidence, however, shows that the high growth rates of new ‘deforestation patches’ can be attributed to cocaine growth (> 5 hectares), as they overlap in both space and time with drug trafficking nodes. As cartels cut roads and landing strips for their operations, they intensify preexisting pressures on forests by weakening governance structures and narco-capitalizing other trafficking agents to pillage, often at the expense of indigenous small-land holders.

Amazing places and reserves such as the ‘Rio Platano Biosphere Reserve’ (Honduras), el Petén (Mexico), and Laguna del Tigre (Guatemala) have recently been recording annual forest losses as high as 5%.

A Drug Landing Strip in Honduras. Is it be possible that scientists at Oklahoma State University can analyze drug related deforestation using Moderate-resolution Imaging Spectroradiometer (MODIS) data, yet, governments cannot locate and capture drug king pins, their money, and operations?
Image Source: Science.¹¹ Text: Author.

This way of doing businesses has been forced upon us. A few people have decided, mainly the financial, political, and academic elites, that all wealth can be expressed using money; and that endless growth is indeed, not only desirable, but possible. Is exponential, infinite wealth creation really possible? Nobel Prize-winning Chemist Frederick Soddy (1921) would suggest otherwise – compound interest does not create wealth, but endless debt.^12,13 We live in a world dominated by the economics of debt, which is nothing but a mathematical construct, and like the U.S economy would suggest, debts need nothing but higher ceilings. Wealth, on the other hand, has an irreducible physical dimension, it grows and rots. It has limits.

For businessmen, politicians, and drug cartels, the dollar cost of extracting an energy carrier, a mineral, or a drug from the crust and face of the earth can be useful. However, many would argue that the real cost can be given only in matter of energy units – and this exercise is hardly ever done.^14,15 The energy embedded in the extraction, purification, removal, transportation, construction, decommissioning, and operations of an energy carrier (plus many other matter types) minus the total useful energy delivered is the energy value of the carrier. ^14,15 Consider the polluted water of a shale gas site (for example, Oklahoma), the radioactive pollution left from uranium mines (for example, Navajo lands), transportation and energy generation related emissions in cities (for example, China), and deforestation in a ravaged forest (for example, Honduras). The only thing accruing here is physical debt – not wealth. This debt is being paid by many of us through pollution, crime, and inequality, while the creditors are syphoning the wealth away.

Protests abound in the world today.

Will it, how will it, and when will it end?

Obama, Peña Nieto, and Stephen Harper in Mexico at a recent NAFTA ‘Free Trade’ talk in Toluca.

Nothing useful came out of the meeting. Earlier, when in California, Obama golfed for hours with Big Tech Company CEOs while the state endured the most serious drought it has ever seen (golf courses can consume up to 3.8 Million liters of water/day). ¹⁶
Image Source: washingtonpost.com, Text: Author.

On a recent trip to Indonesia, U.S Secretary of State John Kerry announced to the world that Climate Change was the modern day equivalent of Weapons of Mass Destruction (WMDs). At home, however, he has yet to forbid the construction of the contentious Keystone XL project. American Style consumption levels, not Climate Change, are the WMDs. Climate Change is simply the mushroom cloud.
Images: Adbusters.org, Text and Image Composition: Author.

Sources

1. Cottrell, W.F. Energy and Society. McGraw-Hill. New York. 1955.

2. Cottrell, W.F. Technology, Man, and Progress. Merrill, Columbus, OH 1955.
3. Cleveland, Cutler J., Costanza, Robert, Hall, A.S, Charles et al. Energy and the U.S Economy: A Biophyscal Perspective. Science. 225 (4665); 1984.
4. Georgescu-Roegen, Nicholas. Energy and Economic Myths. Southern Economic Journal. 41 (3); 1975.

5. C Roberts. Energy and value. Energy Policy. 10 (3); 1982.
6. Galeano, Eduardo. Las Venas Abiertas de America Latina. Siglo XX1. Mexico City. First 1971.
7. Gunder Frank, Andre. Capitalism and Underdevelopment in Latin America, New York, 1967.
8. Furtado, Celso. La economia latinoamericana desde la Conquista iberica hasta la Revolucion Cubana, Santiago de Chile, 1969; Mexico, 1969.
9. CNN Report
10. Reuters Report: Chineseiron trade fuels port clash with Mexican drug cartel.
11. McSweeney, Kendra, Nielsen A. Erik, Taylor J. Matthew et al. Drug Policy as Conservation Policy: Narco-Deforestation. Science. Vol. 343 no. 6170 pp. 489-490.
12. Soddy, Frederick. Wealth, VirtualWealth and Debt The Solution of the Economic Paradox.
13. NY Times: Mr.Soddy’s Ecological Economy.
14. Manfred, Max-Neef, B. Smith, Philip. Economics Unmasked. Gree Books. Cambridge. 2011.
15. Lasn, Kalle (Editor). MEME Wars: The creative destruction of Neoclassical Economics. Adubsters. 2013.
16. Time: Obama Plays Water-Guzzling Desert Golf CoursesAmid California Drought.

Crosspost from dleonb.com.

The views expressed here belong solely to the author of this entry and are not representative of the position of the Energy and Resources Group, UC Berkeley.