Algorithms trade., Algorithms., Artificial Intelligence., Business and Economy, Capitalism, Capitalism and Greed, Distribution of wealth, Globalization, Inequility, Sovereign wealth fund, Technology, The Future of Mankind, Visions of the future., World aid commission
( A twenty-minute read)
The Internet is an incredibly spectacular thing, and only now — after so many years — we are understanding its power.
In spite (and many times because of) all the social media and internet news, we tend to have a skewed view of the world around us.
But there is one thing that is certain.
It has given rise to highly profitable digital platform monopolies, ‘superstar firms’ which are able to use aggregation and analysis of data to make supernormal profits which are disappearing into the cloud.
But what’s really happening in the global economy?
These multi-conglomerations dominate not just the current digital markets but future ones in artificial intelligence and machine learning, with workforces which are relatively small proportional to value-added, putting downward pressure on labour’s share of income.
It is becoming easier and cheaper to replace human work by increasingly
capable robots and artificial intelligence, this automation will accentuate existing trends in the capital and labour shares.
Whatever the future path of the global economy, with growing automation in
the economies of the world substituting capital for labour more and more
of the wealthiest fortunes are held almost exclusively in financial assets.
We’re not just entering into a period of severe distress with climate change
we are also entering a period of a new uneven distribution of capital
ownership that is now the driver of inequality.
It’s a “new, harsh reality”, ( from weapons of mass destruction, water crises, large-scale involuntary migration and severe energy price shock, extreme weather events, failure of climate change mitigation and adaptation, interstate conflict with regional consequences and major natural catastrophes) that the spending power of governments is dimensioning.
Most of us haven’t quite realized there is something extraordinary happening.
Isn’t it absurd that we, 7 billion of us living on the same planet, have grown further apart from each other? Everything is going through change and that most of us are unaware of that.
What sense does it make to turn your back on the thousands, maybe millions, of people living around you in the same city on the same planet in poverty?
You might be lead to believe that the Internet is taking down mass control and the small are no longer speechless. This might well be true when it comes to the rising failure of climate change mitigation and adaptation or if you look at the Arab Spring, Brexit, and the people’s climate revolution/ pollution.
But its not true when one looks at how and by whom the economy of the world that is driven by growth at all costs.
Because the natural resources industry is owned by sovereignty wealth funds with financial instability around the world as the net result.
But don’t panic.
With Climate change and Ai, and with all of us exchanging half-truths civilisation is in for a rough ride.
However, technological crises have yet to impact economies or securities in a systemic way.
Which panic button to press?
The only category not to feature in the above harsh realities is algorithm profit from profit technological that is spreading inequalities between individuals and families, between countries, generations and genders, as well as between people from different ethnicities and class backgrounds.
Normally revenue, as you know, is generated by profit/taxes but most revenue sources are already accounted for in government budgeting except the supernormal profits made by in no particular order – Apple, Google, Microsoft, Facebook, Cisco Systems, Intel, to mention just a few.
It’s sometimes hard to fathom the sheer scope of profits made by the world’s most profitable companies.
1. Saudi Aramco: $304.04 M daily – Earns $1 M in 4.7 minutes
2. Apple: $163.1 M daily – Earns $1 M in 8.8 minutes
3. Industrial & Commercial Bank of China: $123.29 M daily – Earns $1M in 11.7 minutes
4. Samsung Electronics: $109.3 M daily – Earns $1 M in 13.2 minutes
5. China Construction Bank: $105.48 M daily – Earns $1 M in 13.7 minutes
6. JPMorgan Chase & Co.: $88.97 M daily – Earns $1 M in 16.2 minutes
7. Alphabet: $84.21 M daily – Earns $1 M in 17.1 minutes
8. Agricultural Bank of China: $83.99 M daily – Earns $1 M in 17.1 minutes
9. Bank of America Corp.: $77.12 M daily – Earns $1 M in 18.7 minutes
10. Bank of China: $74.59 M daily – Earns $1 M in 19.3 minutes
and these are not Sovereign Wealth Funds.
They exist somewhere between the murky grey of return-maximizing, mega-cap asset managers, and clandestine government agencies quietly used to further sovereign agendas.
It is estimated that SWFs combined to hold more than $7.4 trillion in AUM, (Assets under management) representing approximately 6% of global assets under institutional management.
And you wonder with government print trillions to stimulate sagging economies why the world is and still is in a state of meltdown not just climate-wise but capitalistic wise.
We now have both the EU and the UK floating the idea of establishing Citizens wealth funds.
The trouble is that existing wealth funds have already bought up most of the world. Latecomers like THE UK/EU will have nothing to invest in other than technologies that produce profits.
The character of a sovereign wealth fund depends on its purpose and is shaped by how it is capitalised and governed, how it invests its funds and how returns are spent.
A Sovereign Wealth Fund is a state-owned investment vehicle established to channel balance of payments surpluses, official foreign currency operations, proceeds of privatizations, government transfer payments, fiscal surpluses, and/or receipts from resource exports, into global investments on behalf of sovereigns and in the advance of goals that are not transparent.
Economic theory wise, it is important to understand that SWFs form part of their respective country’s total national capital base, where total national capital is defined as the total combination of net financial assets, total physical capital stock (e.g., real estate, machines, infrastructure), unexploited environment, human capital, and unexploited natural resources.
Commodity SWFs are financed from the proceeds of non-renewable commodity exports (oil, gas, precious metals), which grow the AUM base in times of high prices but destabilize their source economies and budgets in times of low. Non-commodity funds, on the other hand, are typically financed from currency reserves or current account surpluses, driven by corporate or household saving rates.
They were once the mainstays of the global investment landscape.
Despite is name the era of neoliberalism was far from liberal.
We are now experiencing the political consequences of this great deception with the rise of popularism.
This blog has been suggesting for some time the setting up of a perpetual funded World Aid fund by applying a 0.05% commission on all profit for profit sake seeking financial activities. ( See previous posts)
All human comments appreciated. All like clicks and abuse chucked in the bin.