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Hubert Horan
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Not to dispute you main points but the Uber issues are much greater than implied, so don’t really fit the context here. A completely laissez-faire taxi system cannot function in a sustainably economic manner for a large number of reasons; every past attempt at taxi deregulation reduced both profits and service levels. The classic post-1920s regulatory regime kinda-sorta balanced the needs of suppliers, drivers and customers but began collapsing when population/demographic shifts (suburbanization, urban employment losses) worsened conditions for all forms of urban transport. The big shift you’ve attributed to Uber actually occurred in the 70s/80s when the regulatory system was changed to strongly favor taxi owners over drivers.(largely via forcing drivers to become “independent contractors”). In New York the shift to contracting increased fleet owner income per shift by 72% and reduced driver incomes by 23%. Many cities had taxi cooperatives but if you rig the industry structure so that returns go disproportionately to capital (relative to risk) than the fleet owner/independent contractor model will quickly become dominant. Uber takes this a bit further (drivers now provide the cars so ownership no longer actually provides the capital or takes risks but nonetheless demands a larger share of revenues) but the real Uber “innovation” is its $13 billion dollar investment base, expressly designed to fund the predatory competition needed to create a globally dominant company, despite the fact that Uber is much less efficient than the (not terribly good) taxi companies they have been driving out of business. This artificial market power isn’t designed to eliminate the competitive threat of co-ops (Co-ops have been uncompetitive for 40 years) but to eliminate the competitive threat from other groups of billionaires who might want to build their own exploitive, parasitic companies. Uber’s power does not stem from building a “powerful brand” that potential market entrants can’t match, but from its willingness to provide billions in subsidies for uneconomical fares and service levels. All of these Uber economics are laid out in detail in a law journal article of mine that will be published in the next couple weeks, and can be found at. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2933177 From Arse to Elbow’s comments clearly reflect a good understanding of Uber’s actual economics. Luis’ hypotheses about platform driven Uber efficiencies happens to be wrong. There is zero evidence that Uber achieves any significant gains in the revenue utilization of taxis over time. Uber does not use any of the methods other transport modes used to achieve these types of efficiency gains (such as improved airline load factors) and none of those gains had anything to do with platform network economies, or industry monopolization. If Luis was correct, Aeroflot (in USSR monopoly days) would have been the world’s most efficient airline.
Toggle Commented Aug 23, 2017 on A new capital? at Stumbling and Mumbling
A couple book recommendations for anyone who wants historical background on the links between Strauss and the neocons. First point is that conservatives spent decades of efforts trying to build a "political theory/philosophy" that would support/justify their political/ideological objectives. Nash's "The Conservative Intellectual Movement in America 1945-1970" is widely recognized by folks of various political persuasions as a solid work of history. Nash describes how this pursuit of a theoretical grounding for "conservatism" developed, and mentions how Strauss developed a wide following among these movement conservatives, although because the story ends in the 70s it doesn't describe how Strauss later became a subject of adoration among neocons. Although the points seem self-evident, Nash (and similar writers) never explicitly explain why conservatives ever thought their political movement could have a rigorous philosophical basis, given the yawning gap between "philosophy" and short-term partisan politics, given the variety of incompatible and changing political objectives of conservatives, and given that no one in the center of left side of the political spectrum (hard-core 1930's Marxists excepted) wasted time worrying about whether their political agenda was strongly linked to an underlying, immutable "theory". Gottfried's "Leo Strauss and the Conservative Movement in America" (2012) describes some of the post-1980 "cult of Strauss" among neocons, with competing schools based at Claremont (led by Harry Jaffa) and Chicago (led by Alan Bloom). Godfried (I think reasonably) defends Strauss against certain academic attempts (including Drury) to tie Strauss to views of Carl Schmidt that he didn't share, and explains Strauss' Israel-first Zionism as simply typical of Jewish intellectuals who had fled the Nazis. Gottfried fails to make the points as explicitly as his evidence allows, but many of the nasty stuff attributed to Strauss are the fault of his disciples, who simplified/misrepresented abstruse philosophical points to fit the neocon agenda of the 1990s and beyond.
The first mistake is defining the economic interest group behind austerity as "Finance". There are two main economic interest groups (1) large rent-extracting corporate interests dependent on specific anti-public interest policies carrying the day in Washington (i.e. extreme deregulation, regulatory capture, public option and military spending cuts off-limits) and (2) ultra-rich folks opposed to paying their current (much less any increased) share of the cost of government. There's a heavy overlap with "Finance" but it's not "Finance" per se. Finance is a major player in group one, but just one of many, and Finance interests alone would never be able to the carry the day here. Group two is a combination of the already rich (we've got ours, I don't need any public services, screw everyone else) and the extremely ideologically deluded. That covers some finance people, but not anyone who is still in the game, and has half a brain. The second mistake, as already noted in other comments, is to assume these interest groups believe any of the literal austerity arguments being made by politicians and paid advocates. Both of these interest groups clearly (and rationally) think they will be better off if Republicans (and Blue Dog/Lieberman type Dems) control Washington. All of this is theater in pursuit of power, and positioning to ensure that SS/unemployment beenfits/state government funding is the first to go when things start collapsing next next. The Obama-Emanuel strategy from day 1 was to do anything the rent-seeking group 1 lobbyists wanted(including the no-strings bank bailouts, but also the mega-concessions on health care, no military cuts, blocking Elizabeth Warren-type appointments and antitrust enforcement, etc. etc) in the hopes of peeling off a big chunk of K Street from the GOP so they would finance future rounds of Democratic congressional candidates. The complete failure of this strategy, and the complete alignment of these interest groups with the GOP has been evident from the first months of the Administration.
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Dec 8, 2010