To Democratize Finance, We Must Take The Banks Away From The Bankers

02-18-2024 ~ Progressive economist Gerald Epstein explains how we can build a banking system that puts people over profit.

Our current banking and financial system has transformed politics in favor of the rich, debilitating democratic institutions, destroying the common good and hurting the poor in the process. In this context, the challenge we face is to end plutocracy and restore democracy.

It is this challenge that world-renowned progressive economist Gerald Epstein brilliantly elucidates in his pathbreaking book Busting the Bankers’ Club: Finance for the Rest of Us and which he discusses in this exclusive interview for Truthout.

One possible way to accomplish this dual feat is by creating an alternative banking system that democratizes finance. In fact, the movement for public banking — a system where banks are owned by the people rather than the wealthy elite — is gaining momentum in many parts of the country. Just this month, a blueprint for the implementation of a public bank in the state of New Jersey was submitted to Gov. Phil Murphy.

In the interview that follows, which builds on our previous conversations about how “SEC’s Approval of Bitcoin Markets May Set the Stage for Financial Disaster” and how “A Growing Number of Economists Are Joining the Fight to Rein In the Big Banks,” Epstein addresses the issue of democratic finance, including the advantages that it offers as well as the challenges that it faces in a society where money dominates politics. Epstein is a professor of economics and co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst.

C.J. Polychroniou: Jerry, in your recently published book Busting the Bankers’ Club you highlight the need for changes to the current financial system that go beyond regulation. As you write, “we need banks without bankers.” You propose public banking as the best way toward creating “a financial system that works for all of us.” What are the advantages of public banking, or having banks without bankers?

Gerald Epstein: There are numerous advantages to having more public banks in our financial ecosystem. But before I discuss these advantages, let me explain what I mean by public banking or “banks without bankers.” Many public banking advocates and activists define “public banks” as banks that are owned by governments — federal, regional, state or local — and that are tasked with serving a public mission.

This is a fine definition but when I use it, I mean something a bit broader: I include government-owned financial institutions, but I also include any financial institution for which maximizing profit is not the main goal. These banks must have a main mission that entails pursuing social goals such as community economic development, the promotion of environmental justice or promotion of cooperative economics. These banks might be purely government owned, but they might also be public-private partnerships. The key is that the “mission orientation,” not profit, has to be dominant.

As Thomas Marois has shown, there has been a resurgence in the creation and use of public banks around the world. There has also been a strong public banking movement in the United States, especially since the great financial crisis and the Occupy movement. As my former graduate student Esra Nur Ugurlu and I discovered when we did a survey of public banking activists, they pursue a number of goals in their attempts to establish public banking institutions: to provide affordable banking services to underserved communities, to invest in key social goods such as affordable housing, to provide more credit for cooperatives and small business, to promote environmental sustainability and fight against climate change.

The potential contributions of public banking to help solve these problems are many. First of all, private banks avoid making investments in these areas because they are perceived to be too risky or not profitable enough. It will largely take financial institutions with a public mission and mandate to make significant progress on many of these challenges.

Second, public banks can provide an alternative to overcharging, speculative mega banks such as JPMorgan Chase and Bank of America. This will help society and the government to be less dependent on these “too big to fail” institutions and, in fact, can make it somewhat easier to just let them go by the wayside.

Third, by leveraging the financial power of the state, and by avoiding having to pay high returns to shareholders or massive salaries to bankers, these public financial institutions can provide basic financial services more cheaply.

Finally, because these public financial institutions will typically not face pressures from shareholders and highly paid management and traders to pursue maximum profits and bonuses, these institutions will take on less speculative and risky investments and be a stabilizing force in financial markets. Further, the governance structures of public banks are typically much more democratic and broadly representative than that of private for-profit banks. Most public banking initiatives have stakeholder and community representation on their boards of directors and/or advisory boards.

What are the challenges facing public banking, and what progress has been made so far towards public banking and finance?

Public banks come in various sizes and locations, and have various structures, procedures and functions. Public banking activists Ugurlu and I interviewed described a number of challenges they faced in their attempts to set up public banks. But one thing they almost all have in common is that they face serious pushback from the major private banking institutions and their allies, that is, from theBankers’ Club.

The American Bankers Association (ABA) and local banking organizations routinely oppose legislation to establish public banks. The ABA position on public banks is as follows:

“The US has a healthy banking system with approximately 5,500 banks that offer a diversity of financial products and services to consumers, businesses and state and local governments. Creating a public bank would not only be redundant in the current marketplace, where financial offerings already efficiently meet customer needs, but potentially dangerous — placing taxpayer funds in institutions that may not have deposit insurance and whose business decisions will be driven by political priorities instead of sound risk management.

Numerous studies on the viability of public banks support the conclusion that they are not necessary, pose a significant risk to taxpayers, and would not provide an overall benefit to the state and local governments they are intended to serve.”

Virtually every sentence in this statement is false, but that does not prevent the ABA’s negative impact on the politics of public banking.

The private banks fear competition, and they fear a slippery slope movement to more public financial institutions and away from private, for-profit ones. There is also often a lack of understanding and interest among the public about the positive roles that public banking can play in their community.

In addition, increasing skepticism about government’s role in society can lead even critics of the big financial institutions to embrace private “solutions” such as cryptocurrency instead of public, community initiatives like public banking. Sometimes those in state government oppose the creation of public banks because they are worried about bank failure, or even the creation of financial institutions outside of their control.

Apart from these political and ideological obstacles, there are a number of rather specific logistical obstacles that public banks face. Ugurlu and I asked public banking activists to describe the major obstacles they faced. These included, first and foremost, acquiring the initial capital needed to start the bank; a continuous source of funds that they can use to lend to the target borrowers; a source of liquidity and financial backup, such as the Federal Reserve System might provide, that they could depend on in cases of unexpected adverse shocks; and community support for their activities.

There are some other factors that we thought would create challenges, but our interviewees did not mention them as important: These included skilled administrators with banking experience and employees who would be interested in working for the bank.

Just this month, the New Jersey Public Bank Implementation Board submitted a blueprint for the creation of a public bank to Gov. Phil Murphy. So, it seems that public banking efforts are indeed gaining momentum and clarity. But would these public banks help cities and state governments keep money away from Wall Street?

Yes, public banking activists are working in a significant number of states in the U.S. Public banking is also widespread in other parts of the globe. Many of these activists have proposed public banking institutions based on the model of the Bank of North Dakota, the only state bank in the U.S. (There is also a new public bank in Guam, with the motto: “The better-for-all-of-us bank: Reinvesting in the communities we serve.”)

The Bank of North Dakota, started by populist activists in 1919, operates on the partnership model: The bank does not take deposits from the public, but rather holds tax funds from the North Dakota Treasury; it does not typically lend directly to final borrowers, but rather lends to “partner” banking institutions who then on-lend to direct customers such as small businesses, housing developers, farm cooperatives, and the like.

The partnership model is being adopted by a number of public banking activist groups, including those in Massachusetts and New Jersey. This partnership model is designed to reduce competition with private financial institutions, with a focus on assuaging the concerns of smaller banks. Moreover, by lending cheaper credit to smaller community banks and helping to provide training for smaller, less experienced borrowers, some public banking models are able to help smaller community banks widen their customer base.

Still, these types of public banks, relatively small as they are, will not reduce these states’ reliance on Wall Street significantly, for example, as far as underwriting infrastructure bond issues and these kinds of financing needs are concerned. But they will help underserved borrowers and meet neglected community needs.

To really be able to compete with Wall Street and the big banks, public banks will have to become larger and more numerous. The Public Banking Act, a federal bill filed by Representatives Alexandria Ocasio-Cortez and Rashida Tlaib, would, if passed, provide a federal regulatory infrastructure, liquidity support, and other assistance for public banks, making the establishment and running of such banks easier and likely to be more successful.

But placing public banking on a more level playing field with the big Wall Street banks will take a lot more than this. After all, the federal government has been bailing out these mega institutions several times to the tune of trillions of dollars over the last 40 years or more. Public banks have some catching up to do.

In your book, you argue that the Federal Reserve can be seen as having the potential to act as a national bank and thus play an important role as an agent of economic development in an era of climate change. Is this a realistic expectation given the model of capitalism that prevails in the U.S. economy and the power of the Bankers’ Club? Indeed, can the Fed ever become more accountable and democratic when the political system itself is dominated by money and makes a mockery of democracy?

The Federal Reserve is the biggest and most powerful public bank we have. Indeed, it is probably the most powerful public bank in the world. Yet, for the most part, it is overly focused on supporting the private financial institutions and markets, including engaging in trillion-dollar bailouts of banks and other financial institutions on what seems to be an increasingly frequent basis.

The Fed should have a broadened mandate to play a role in promoting the transition to a green economy, directly or indirectly increasing capital for underserved communities, and supporting the growth and reach of public banking. The debate over the role of the Fed and a public bank more generally has been a staple of U.S. history, and it is time that we keep it going and increase our calls for a truly public Federal Reserve.

Activists have made some progress around the edges: They have successful broadened the representation on the Regional Federal Reserve’s boards of directors to include fewer bankers and more community members; and during the height of COVID-19 crisis, through their influence on members of Congress, they won concessions from the Fed to include some small business and community credit facilities in their emergency bailout activities.

Yet, as you say, as in previous periods, there is enormous opposition, especially from the Bankers’ Club, to altering the orientation of the Fed. Still, the Fed is a creature of Congress, and, in principle, Congress can change the Fed’s mandate and marching orders. But to succeed here would require more progressive control in Congress which, in turn, would require the protection and expansion of real democracy in the U.S.

The key here is to limit the role of money in politics, but, as political scientist Doug Amy describes on his enormously valuable website, Second-Rate Democracy, restoring democracy will require much more than that. And now, with the threat of fascist Trumpism, our democracy is even more endangered.

Reform or revolution? Which strategy would work best toward enhancing the prospect of radical financial and social restructuring?

In a sense we need both. Where to start? Some believe we need to wait for another great financial crisis to sufficiently shake up the system, to generate enough anger and disgust, to generate a revolutionary moment to transform the economy, with finance along with it. I point out in the last chapter of my book that this is a problematic strategy since we have many cases, some as recent as the great financial crisis, when crises move politics to the right, not just to the left.

I urge people to join up with one or more of the Club Buster groups around the country (or world), for example Americans for Financial Reform, or a public banking initiative, or anti-fossil fuel funding activism, or work for politicians who will fight fascism and protect democracy.

Winning these battles will weaken the Bankers’ Club, encourage reformers and activists, and enhance their power to change our economy in more comprehensive ways — even revolutionary ways. At least, this is my hope.

Copyright © Truthout. May not be reprinted without permission.

C.J. Polychroniou is a political scientist/political economist, author, and journalist who has taught and worked in numerous universities and research centers in Europe and the United States. Currently, his main research interests are in U.S. politics and the political economy of the United States, European economic integration, globalization, climate change and environmental economics, and the deconstruction of neoliberalism’s politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He has published scores of books and over 1,000 articles which have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into a multitude of different languages, including Arabic, Chinese, Croatian, Dutch, French, German, Greek, Italian, Japanese, Portuguese, Russian, Spanish and Turkish. His latest books are Optimism Over DespairNoam Chomsky On Capitalism, Empire, and Social Change (2017); Climate Crisis and the Global Green New DealThe Political Economy of Saving the Planet (with Noam Chomsky and Robert Pollin as primary authors, 2020); The PrecipiceNeoliberalism, the Pandemic, and the Urgent Need for Radical Change (an anthology of interviews with Noam Chomsky, 2021); and Economics and the LeftInterviews with Progressive Economists (2021).

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How Three New Museums Are Teaching The World About A Paradigm Shift In Our Understanding Of Human Origins

April M. Short

02-14-2024 ~ New findings and significant advances in research have scientists rethinking our origins, and museums around the world are working to catch the public up.

Breakthrough anthropological and scientific findings have allowed researchers to better trace the outlines, and begin to fill in the blanks, of the human evolutionary story in recent decades. We’re now able to trace the long threads of the social and cultural processes that produced today’s world. Humanity has the potential to be stronger and more resilient as we use our history as a guide to understand ourselves and visualize the future.

The story of our roots as a species, it turns out, is much longer and more complex than experts previously imagined. The common narrative of our early cave-dwelling ancestors as dunderheaded brutes is out of date and inaccurate.

Several new museum exhibits around the world are working to fill in some of the gaps around the past and update the public on the many advances in what we now understand about our origins. One hope at the foundation of many of these new exhibits is that by helping people to understand the long past, we may better understand our current moment as a species, and navigate ways forward together.

Museo de la evolución humana – Burgos  Source:

Rethinking Our Origins in Burgos, Spain
The Museo de la Evolución Humana (Museum of Human Evolution) in Burgos, Spain, brings more than 40 years of research from excavations in the nearby archeological site of Sierra de Atapuerca to the public. Antonio José Mencía, director of communications for the museum, notes that more than 100 doctoral theses and 1,000 scientific articles have come out of the site, making the Atapuerca project an unparalleled reference in the field of human evolution. The museum serves as a means to share the breadth of insights and knowledge from the research with people in a way that is both accessible and educational.

“Having access to this data and the latest research allows us to build updated discourses aimed at visitors,” Mencía says. He shares that the museum opened its doors in 2010 at the behest of the co-directors of the Atapuerca Research Team. The researchers had been systematically studying humanity’s evolutionary origins for more than 30 years—with their discoveries published in magazines such as Nature and Science—and they had long desired to share what they were finding more widely with the public.

With support from the city council and community of Castilla and León, the museum opened with an entire floor dedicated to the main discoveries, showing original fossils from the surrounding region.

Mencía says that among the scientific studies carried out as part of the Atapuerca project in recent years, those focused on the first arrival of human groups to the Eurasian continent are particularly important, as they place these first arrivals at more than a million years ago.

“…[R]emains of a new species called Homo antecessor were located in 1994, breaking one of the paradigms about the first occupations of Europe being more than half a million years old,” he says. “Within the same mountain range, at another site called Sima del Elefante, researchers are currently working on a level dated to around 1.4 million years ago where part of the face of a hominid they called Pink [after Pink Floyd] was recently found [in 2022] whose species is yet to be determined.”

Pink is, to date, Europe’s oldest human fossil. Mencía shares that the study of other sites, such as the Sima de los Huesos cave, has made it possible to confirm concepts about the hominids known as “pre-Neanderthals”—including the fact that these ancient ancestors already had symbolic capacities.

“Very unique aspects have been worked on, such as the sequencing of mitochondrial and nuclear DNA in these populations that are around 400,000 years old,” he shares. “In the Galería de las Estatuas, DNA sampling has been carried out on the sediment itself to genetically sequence the Neanderthal populations.”

In other remarkable sites from different periods, such as Portalón de Cueva Mayor, which is located in the Atapuerca mountain range, researchers have been able to cite the establishment of some of the oldest agricultural and livestock productions in Western Europe, Mencía says.

In the museum, all the new information and research is adapted to educational formats and activities and is designed to reach the largest possible audiences, Mencía adds.

“Visitors who come to the Museo de la Evolución Humana have the opportunity to learn about these updates firsthand through different educational resources, such as ‘micro-explanations,’ provided in different areas of the museum by the educational care staff,” he says.

The museum adapts and updates the discourses presented to visitors as new research on human evolution emerges—something that has been happening at a relatively rapid pace over the last few decades. Online, visitors can explore the latest information in a detailed online archive as well as mini educational guides, which are free to download and are available in both Spanish and English.

Mencía shares that new technologies and social media networks have allowed the Museo de la Evolución Humana to reach a wider audience in recent years. The museum has put out a wide variety of educational video resources that are available on various platforms, such as YouTube, TikTok, Facebook, and Instagram. All of these educational resources were created using universal accessibility criteria, he says, noting that easy-to-read guides and the informaMEH project both provide options for sign language as well as subtitles.

Archaeology, biology, and paleontology are advancing at great speed, he notes, and surprising discoveries may emerge, but he urges patience, as “it will take time for the scientific community to approve them.”

“In our museum, we try to collect these advances in the form of conferences, exhibitions, etc. but we must be very cautious in implementing them definitively, as we are seeing that everything changes—from the arrival of the first sapiens in Europe or America to the appearance of some species still undetermined, or the origin of another,” he says. “We deal in figures and dates that range between tens of thousands of years. We must have patience not only for our origin but also for its understanding.”

Mencía says looking at the past may allow us, “to learn from the good and move away from our mistakes, although in our species it is very easy to make the same mistake twice.”

“Pride is almost part of the human condition—they say it will die after us—and that is why wars have not ended, and we fail to take seriously the problems that we see as distant, or for future generations,” he says. He adds that while we humans have a lot of experience with repeated mistakes, we also have the free capacity to rectify and change our ways.

Iziko South African Museum – Cape Town – Source:

Rewriting the Human Story in Cape Town, South Africa
The Humanity exhibit in the Iziko South African Museum, in Cape Town, is rewriting the human evolutionary story by asking visitors to consider their own role in the human collective.

The Iziko South African Museum initially opened in 1825, and like many museums of its era, for many years it told the story of human evolution from the point of view of primarily—perhaps exclusively—white, male explorers.

“We realized that the story of our origins was mostly only told from the point of view of the white explorer, making the content exclusionary for much of the South African public,” says Wendy Black, Chief Curator of Art and Social History at Iziko Museums of South Africa.

In her first few years as curator, Black says she realized the need for “telling the story of human evolution alongside the archaeological story.”

She stepped into her role at the museum after completing a PhD in bioarchaeology at the University of Cape Town in 2014, and she expanded on her research interests to encompass Indigenous rights and helped develop an active and transformed Archaeology Unit at the museum. As her role at the museum grew, she became a member of the board at the Human Evolution Research Institute (HERI).

“It was important to have the museum participate [in HERI], to improve public awareness around human evolution, help with the school curriculum and train teachers on how to teach the topic, and help grow the discipline by mentoring future archaeologists and paleoanthropologists, particularly Black women,” she says.

She began to develop the Humanity exhibition, first through various iterations on paper, then through discussions with the HERI team, in what became a collaborative effort.

“Together we developed new ways of telling the origin story with a focus on you and how you fit into that story. It also focuses on why Africa is so important.”

The Humanity exhibition opened in September 2023, and largely focuses on human inclusivity.

Black shares that the exhibition asks an overarching question: how do you fit into the human evolution story, and can you see something of yourself in our deep past? Read more

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A Growing Number Of Economists Are Joining The Fight To Rein In The Big Banks

02-13-2024 ~ Big banks have captured the financial regulatory system and are driving inequality. We need to bust their club.

The fortunes of the five richest men in the world have “shot up by 114 percent since 2020,” according to a January 2024 Oxfam report on global inequality, while “nearly five billion people have been made poorer.”

This most recent gross increase in wealth and income inequality builds on global trends that took hold in the early 1980s, with the decades-long increase in inequality being particularly large in the United States compared to other developed nations. Wealth inequality is typically higher than income inequality, which in turn feeds higher future income inequality. Indeed, income inequality in the U.S. continues to rise, according to the latest report from the Congressional Budget Office, utilizing data through 2020.

At the same time, and quite unsurprisingly, the largest U.S. banks made record profits in 2023, with JPMorgan Chase reporting $49.6 billion in net income for the year. In the meantime, the Federal Reserve, which world-renowned progressive economist Gerald Epstein calls the “chairman” of the “Bankers’ Club” in his new and path-breaking book Busting the Banker’s Club: Finance for the Rest of Us, has announced that it will keep its benchmark interest rate unchanged following its January 30-31 meeting. The federal fund rates of 5.25-5.5 percent, the highest in 22 years, do not affect Wall Street, the wealthy or powerful corporations, who simply push prices higher to protect profits. Those most adversely affected by the Fed’s current monetary policy are low-wage workers and the poor.

But what exactly is the Bankers’ Club, how does it maintain such firm control of the U.S economy at the behest of the rich and powerful, and who are the “Club Busters” that Epstein talks about in his book? In this exclusive interview for Truthout, which builds on our previous conversation about how “SEC’s Approval of Bitcoin Markets May Set the Stage for Financial Disaster,” Epstein addresses these issues and contends that we can win the fight against plutocracy.

C.J. Polychroniou: Jerry, in your new book titled Busting the Bankers’ Club: Finance for the Rest of Us, which is highly critical of the current banking and financial system, you refer to a Bankers’ Club. Who are its members, what do they do, and how do their actions impact the U.S. economy and society?

Gerald Epstein: The Bankers’ Club is the powerful group of political allies that the finance industry cultivates in order to sustain and augment its economic and political power. Why does the finance industry need political allies? Because, as poll after poll shows, Americans really dislike banks and bankers. Another way to gauge popular sentiment about bankers is to survey Hollywood movies about banks. Every year I ask my students in my “Finance and Society” class to come up with a popular movie that paints a favorable portrait of the finance industry. The best they have come up with is It’s a Wonderful Life, and that is from 1946! Donald Trump in 2015-2016 ran a populist campaign railing against the banks and Hilary Clinton’s connections to them. Of course, as soon as Trump was elected, he became a loyal member of the Bankers’ Club.

Who’s in the Bankers’ Club? Well, first are the usual suspects: the banks and the politicians they pay off to support them — to pass bank-friendly legislation and appoint finance friendly regulators. But there are other members who might be more surprising. Take, for instance, the Federal Reserve. I call the Federal Reserve the chairman of the club: The Fed sees the world through finance-colored glasses. With its monetary policy tools, its regulations and its lender-of-last-resort actions, the Fed often puts the interests of finance ahead of those of society at large. We saw this with the financial bailouts after the global financial crisis of 2008; and we have seen that again in its recent high interest rate policies.

Other key members of the club include many financial regulatory agencies and lawyers that work for them or for the banks. Then, there’s the CEOs of non-financial corporations who often side with the banks. This differs from the Great Depression, when many turned against the banks. And there are all too many in my own profession — economists who fashion theories based on flimsy assumptions that rationalize financial deregulation while claiming that free markets are the best of all possible worlds.

This club, at the cost of millions of dollars, dismantled the New Deal financial regulations that were the foundation of a relatively stable and efficient (though highly discriminatory) post-World War II financial system (some called it “boring banking”). This deregulation ushered in our current system of “roaring banking.”

Some argue that these financial titans are so big and powerful because they provide such valuable services to our economy — that these bankers are, in other words, essential workers. But Busting the Bankers’ Club shows that these megabanks, private equity firms, hedge funds, etc. are actually — on balance — a net drain on our economy. This is because of their misallocation of human and financial resources, the frequent financial crises they cause, and the outsized profits and incomes they extract from society. (By the way, this analysis, and a lot of the underlying research in the book, comes from my joint research with excellent current and former graduate students from the University of Massachusetts Amherst economics department.)

In addition, “roaring banking” is a major engine of inequality in our society. The industry generates massive wealth for the CEOs, major investors and top management, while engaging in actions, such as those that led to the global financial crisis, that can strip Americans of their wealth.

You identify the Federal Reserve as the chairman of the Banker’s Club. What does the Federal Reserve actually do that would even make it a member of the Bankers’ Club?

The Federal Reserve has three major areas of action: setting monetary policy, including interest rates; regulating and supervising banks, including the megabanks such as Bank of America, Citigroup and JPMorgan Chase; and the so-called lender of last resort function, in other words: bailouts. All of these activities have a big impact on the banks and other financial institutions as well as on workers and the rest of us. Historically, for structural and institutional reasons, the Federal Reserve implements these policies primarily to support the banks and financial markets, rather than workers and communities.

Take monetary policy. Because of political struggles by unions, pro-worker groups and legislators, the Federal Reserve has a dual mandate: high employment and stable prices. But, in practice, the Fed usually places primary emphasis on fighting inflation, even if that results in a high level of unemployment. My research with my graduate student, Aaron Medlin, shows that this policy has the effect of protecting the real wealth of the richest 1 percent of the population at the expense of the bottom 50 percent. The problem is that the Fed typically raises interest rates, which often increases unemployment and hurts workers and the poor. The wealthy, by contrast, get both higher returns on their wealth and lower inflation, which bolsters the real after-inflation value of their wealth holdings. Read more

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Sperm Whales Have Culture Too: Strong Evidence That Clans, Culture, And Dialects Are Not Unique To Humans

Hal Whitehead ~ Dalhousie University

02-13-2024 ~ The sperm whale is extreme.
They have the largest brains and the largest noses on Earth.

The sperm whale’s nose is a huge and sophisticated sonar device that produces the most powerful sounds of any animal––and we’re only just starting to understand their communication methods and the spectacular complexity of their modes of life.

The facts about sperm whales rival in some ways the extreme capacities and behaviors that until recently we thought were uniquely human.

The sperm whale, for example, has the greatest geographical division between the sexes: The females live in tropical and subtropical waters all around the world, while the mature males, reaching three times the mass of the females, are mostly found in or near the Arctic or Antarctic. Sperm whales, particularly the females and young, are extremely social. They live in permanent family units of about 10 animals who move together over huge swaths of ocean. The females and young males babysit the infants while mothers make dives of 40 minutes to depths of up to a kilometer to catch the deep-water squid, which is their staple food. Females also suckle each others’ infants, and families defend themselves against predators communally. The family units form groups with others, but only limit creating these groups with other families in the area.

In 2002, fellow scientist Luke Rendell and I made our big discovery as we looked at the different dialects of the sperm whale family units that we had been studying off the Galápagos Islands. The sperm whales do much of their communication using patterns of clicks called codas. We noticed that nearly all the families made codas with one or other of two motifs: Regular codas such as “click-click-click-click-click,” or Plus-one codas, “click-click-click-[pause]-click.” They were consistent: the Regular families nearly always made regular codas. The Plus-one families similarly stuck to making their codas. And, although both types of families can be found in the Galápagos waters and formed groups with other families, we had never seen them group with each other. We called the collections of families with the same repertoire, clans.

The clans differ by more than patterns of clicks and grouping choices. They also tend to travel through the ocean differently. As we followed groups of sperm whales around the Galápagos Islands in our boat, those groups made up of Regular families wiggled this way and that, while groups of the Plus-one clan typically travelled in straight lines, making them much easier to follow. Groups of the Regular clan tended to all dive together, while the Plus-one groups staggered their dives, a cultural adaption that may provide for better babysitting. There is no sign of difference between clans in the nuclear genes that might code for behavior, so the differences between the clans comes down to culture. A young sperm whale learns the culture of her clan from her mother and the other females in her family and clan.

Following the discovery of different clans off the Galápagos, pairs of clans were also discovered in the waters off Chile, Japan, Mauritius, Brazil and in the Caribbean. A 2022 study of sperm whale codas right across the Pacific found seven clans. One, the Short clan, was recorded in parts of the world ranging from Japan to Chile and from British Columbia to New Zealand. In contrast, the Plus-one was only recorded from our studies off the Galápagos and nearby waters off mainland Ecuador.

The clans have an average of about 20,000 members. These whales can tell, from dialects and other behavior, that they are clan mates. As far as I can tell, the most comparable large-scale societies are those of humans, our ethnicities and nations; each having their distinctive dialects, distinctive behavior, and social barriers. There are other parallels. Like nations, clans vary greatly in size—the Short clan likely has many more members than the Plus-one clan.

The clans in the Atlantic seem structured rather differently from those in the Pacific, with smaller ranges, less extensive movements, and different forms of dialect distinction.

Somewhat similarly, prehistoric and historic ethnicity and language varied considerably between humans on different continents. One of the most striking parallels between sperm whale clans and humans is symbolic marking. We use cultural artifacts, such as dialects, clothing, and art to symbolize our groups, and sometimes deliberately modify these symbols to distinguish groups. Different sports teams from the same city typically use contrasting colors. Previously, it was assumed that such symbolic marking was unique to humans. But the codas of sperm whale clans from the Pacific are more different if the clans overlap than if their core ranges are in different parts of the ocean.

These parallels between sperm whale clans and human societies can help us as we think about, and try to study, both sperm whales and humans. The extraordinary picture of human social evolution that archaeologists, anthropologists, and historians have built up over more than a century of study can indicate not only the patterns we might find in sperm whale clans but also how variable those patterns might be.

The parallels between these two unrelated species living in quite different environments suggest common environmental drivers for large-scale social structures.

This suggests that our ethnicities and nations, as well as sperm whale clans, may have risen due to large brains, cooperative care of the young, wide-scale movements, or the capacity for culture. In contrast, attributes that are unique to humans such as fire and complex tools, and those that are unique to sperm whales, like the eating of deep-water squid, seem less likely to be important.

These discoveries and parallels help emphasize the need to protect sperm whales. The global population is heavily reduced by massive whaling and is struggling to survive in the face of new threats, including plastic pollution, fishing gear, and ocean noise. For the sperm whale clans to survive, human groups need to change our behavior.

By Hal Whitehead

Author Bio:
Hal Whitehead has been studying sperm whales for 40 years, tracking their groups at sea from a 40-foot sailing boat and trying to understand their social and cultural lives. He is a professor at Dalhousie University in Canada.

Source: Human Bridges

Credit Line: This article was produced by Human Bridges.


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PVV Blog 4 ~ The Dutch Parliament, Allegedly Created By The Threat Of Islam

02-12-2024 ~ At the time of writing this episode of the series, the formation of a new Dutch government is in a sad state.

Sad for the Party for Freedom, because with NSC (New Social Contract party) leader Pieter Omtzigt leaving the negotiating table, the Party for Freedom is still empty-handed. Obviously, not all is lost for Geert Wilders’ party, but a right-wing majority cabinet with the liberal party VVD, the farmers’ party BBB and NSC is not possible.
This development is particularly unfortunate because, according to the brand-new Party for Freedom parliamentary chairman Martin Bosma, the Dutch parliament was established at the time in response to the threat of Islam. This episode of the series explains in more detail how that line of reasoning goes.

The Dutch Parliament not a fake parliament after all
During his fight and victory for the chairmanship of the House of Representatives after the November 2023 elections, Party for Freedom parliamentarian Martin Bosma said, when asked, that the Dutch parliament is not a fake parliament, a claim that contradicts what party leader Wilders stated at the time (in 2015). I understood well why Martin Bosma made this statement, contradicting his leader in a certain sense, and that is because, in his view, the history of the Dutch parliament has everything to do with Islam. In his book The False Elite of the Counterfeiters (in Dutch),  which was published in 2010, he writes: ‘The States General (= formal name of the Dutch parliament) was founded to combat Islam’. In the Epilogue of his book he states that our National Assembly was created because ‘our founder, Philip the Good, in response to the fall of Constantinople in 1453 (where the Islamic Turks managed to conquer this last stronghold of the Christian Byzantine Empire ) swears the Oath by the Pheasant, the solemn agreement to put an end to Islam and liberate the city from the yoke of Islam’. According to Bosma, Philip called together the most important citizens of his states and at the first meeting of the States General in Bruges in 1464 the defensive war against Islam was discussed. And with the arrival of the Party for Freedom in the Dutch parliament in 2005, according to Bosma, ‘the fight against Islam is after centuries back at the heart of the States General’.

As far as Philip the Good is concerned, historian Han van der Horst writes in his book The Netherlands. The national history from prehistory to the present (in Dutch) that he indeed openly dreamed about a crusade against the Turks who were advancing in the Balkans. But first and foremost he was a monarch who, navigating between the great powers France, England and the German monarchs, strove to expand his Burgundian empire with countries such as Holland and Zeeland, to bring peace, to provide them with a central government and to bring prosperity. Something he has, according to Van der Horst, succeeded quite well in.
Moreover, the great powers England and France in particular were still busy with each other in the aftermath of the 100 Years War and had little interest in going on a crusade again. Van der Horst concludes that Philip’s crusade plans can hardly be taken seriously. They were more of a dream than a hard political goal.

The DNA of parliament: the fight against Islam
There will be few people who know and share the ‘Islamic view’ of the Dutch parliament. But the Party for Freedom does see the parliament as such. And we will continue to notice this in the coming years. The Party for Freedom, whether it is in the opposition or it having government power, will always view all debates and legislation based on its belief that parliament was established at the time because of the need to fight Islam. After all, that is the core business of the parliament.
And given the party’s vision on parliament, as expressed by Chairman Bosma, we will see that vision of Islam directly and perhaps especially indirectly back in any eventual government policy in the coming years. Party leader Wilders confirmed this in the election campaign when he said: ‘Islam will never leave our DNA.’ (in Dutch – Paywall) He added that in the coming period of government the priority ‘lies on other matters’, but DNA determines a person’s essence and that is why the ‘old parliamentary Islam agenda’ will assert itself in the future despite claims otherwise.

The history of Philip the Good teaches us that nothing came of his fight against the Muslim Turks; but at that time they were in the distant Balkans and now (the same Muslim) Turks and other Muslims live in our own country. Moreover, the Party for Freedom can now count on like-minded parties, especially in Germany, the Alternative für Deutschland, and France, the Rassemblement National. The new crusade against Islam could well be more successful than that of Philip the Good. I am holding my breath.

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SEC’s Approval Of Bitcoin Markets May Set The Stage For Financial Disaster

01-10-2024 ~ Irresponsible banking and deregulation are putting the world economy at risk.

Over the past several decades, there have been rapid and fundamental changes in the finance and banking sectors. The banking reforms of the New Deal, which endured up until about 1980 and provided a relative degree of banking and financial stability, were reversed by the neoliberal counterrevolution with an eye toward increasing profits and shredding social responsibility. A new book by world-renowned progressive economist Gerald Epstein, Busting the Bankers’ Club: Finance for the Rest of Us, shows us the result: a financial system dominated by megabanks and shadow financial institutions prone to instability and crises that at the same time rely on government bailouts.

The neoliberal financial system, controlled by what Epstein calls “The Bankers’ Club,” benefits exclusively powerful people and institutions, is linked to the growing inequality of wealth and income, and is a net drain to the U.S. economy. Nonetheless, bankers not only see themselves as “essential workers,” a view that Epstein shreds into pieces, but as former Goldman Sachs Chief Executive Lloyd Blankfein claimed, many think they do “God’s work.”

The latest development in the evolution of the modern financial system is the Securities and Exchange Commission’s approval of bitcoin exchange-traded funds last month, concluding a decade-long fight and marking a turning point for cryptocurrency. This may be a game changer for the global money system but could also very well lead us to another financial crisis.

In this first of a three-part exclusive interview for Truthout, Epstein discusses the ascendence of financialization, the dangers of cryptocurrency and his pathbreaking book Busting the Bankers’ Club. Epstein is professor of economics and co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst.

C. J. Polychroniou: Financialization, a process by which financial markets and financial incentive increasingly become the predominant forces in domestic and international economies, dates back to the early 20th century but has intensified over the past five decades. Your new book, Busting the Bankers’ Club, explores virtually all the major features and aspects of financialization, divulges the staying power of finance while exposing at the same time the failures of the current banking and financial system, and offers concrete pathways toward building a system of finance that works for the average people. Let’s start by asking you to talk about your description of the financial system as having a Jekyll-Hyde personality. What is good and what is bad about the financial system?

Gerald Epstein: In the first chapter of Busting the Bankers’ Club I refer back to the old Robert Louis Stevenson story, Strange Case of Dr. Jekyll and Mr. Hyde. In this tale Dr. Jekyll, an upstanding member of the community, also contains within himself a hidden other: the murderous criminal Mr. Hyde. Jekyll is sometimes tempted to turn himself into Hyde to indulge his perverse pleasures, but sometimes wants to resist the evil urges of the Hyde side of his personality in order to remain on the right side of society and the law. This is a good metaphor for finance. On the one hand, finance is a positive and even necessary force in our society: It facilitates the payment system so we can sell and buy things; it provides a safe place to hold and augment our savings; financial institutions can lend us money to enable us to buy important big-ticket items, like houses and educations, or to open businesses; and financial institutions provide us with insurance against accidents, health disasters and other life traumas. But the Hyde face of finance is always lurking in the background, driven by capitalist greed and excess. And if it is unchecked by laws and regulations (and, perhaps, moral fortitude), reckless and destructive finance can dominate our financial system, and at times, our economy. We saw the havoc that finance could create with the great financial crisis of 2008-2009. But such finance can also undermine our economy on a daily basis: overcharging for basic financial services like asset management and payments services; excluding some groups from financial services altogether; and perhaps most dangerously, engaging in high-risk speculative ventures that, if they crash, the top financiers will expect to get bailed out by the government.

Over the course of time, the world has witnessed virtually countless financial and banking crises, but there also have been periods with no such crises. For instance, you point out in your book that there was “a long period of financial tranquility” in the U.S. economy between World War II and 1980. What was different in the operations of the financial system during this period, and does the absence of financial and banking crises mean that the system had no failings and was in no need of reform?

In the U.S., the big banks and highly speculative financial institutions were widely perceived as having greatly contributed to, if not caused, the Great Depression of the 1930s. The Roosevelt administration implemented a set of New Deal financial regulations that greatly helped to stabilize the U.S. financial system for more than 30 years. Since the U.S. economy was the biggest economy in the world following WWII, these — along with the Bretton Woods Institutions created in 1944 and other factors — helped stabilize the global economy as well. The New Deal financial reforms focused on cutting the financial institutions down to manageable sizes (the Glass-Steagall Act separated investment from commercial banking); limiting bank runs by implanting deposit insurance; restricting speculation and predation by limiting leverage and what assets financial institutions could buy and sell (including limiting obscure products such as complex derivatives); and imposing social missions on various segments of finance — e.g. commercial banks would take deposits and make short-term loans to business, savings and loans would offer mortgages, investment banks would underwrite securities for businesses and state and local governments, etc.

The financial structure has often been called a system of “boring banking.”

Of course, these regulations were not perfect. Far from it. The financial structure formally and informally embedded the highly discriminatory aspects of U.S. society. The financial system excluded people of color, especially Black Americans, from getting mortgages and other financial services; women were dependent on their husbands or fathers to obtain financial services; and the poor and working class were generally underserved by these financial institutions or charged exorbitant prices. Still, this New Deal financial structure was relatively stable and did provide credit for businesses and some households, and did facilitate the economic growth of the early post-World War II period.

The postwar financial regulatory regime, which had been created during the 1930s under the New Deal, begins to break down between the late 1960s and early 1970s. What caused the breakdown of the New Deal financial structure, and why do we end up with the full liberalization of the financial and banking system instead of improvements to the regulatory framework?

The breakdown of the post-WWII New Deal monetary regime was due to both domestic and global financial, economic and political factors. Worldwide, there was increasing globalization and the revival of major economic and financial competitors to U.S. dominance, including Japan and some countries in Europe. U.S. banks and financial institutions wanted to break out of the strictures of the New Deal regulatory regime, including limitations on asset portfolios and on interest rates they could pay on deposits, in order to compete with foreign rivals, especially with respect to providing business services for U.S. and other multinational corporations. Second was the increasing inflation caused first by increased U.S. spending on the Vietnam War and military buildup connected with the Cold War and then by the OPEC oil price increases in the 1970s. This inflation harmed U.S. banks, which could not sufficiently increase interest rates on deposits to compete with new unregulated financial institutions like money market funds created by asset managers like Fidelity. In the face of these structural problems, the New Deal system had to be reformed in order to provide more flexibility for the banks subject to their strictures. It is very likely that such reforms could have been implemented. But the big banks such as Citibank, Bank of America and Chase Manhattan Bank used these disruptions as an opportunity to gather together their allies, both inside and outside of government, to push regulators, the Federal Reserve and Congress to destroy the old New Deal System entirely. I call this group “The Bankers’ Club.”

You point out in the book that the changes that were brought about allowed the banks to create a new business model, which you label “roaring banking.” How does roaring banking work, and who are the primary beneficiaries of this new business model?

The current financial system is dominated by huge “universal” banks that combine deposit taking, lending, bond and derivatives trading, underwriting and even commodities trading. Banks like Citigroup, JPMorgan Chase, Bank of America, Goldman Sachs, etc. have virtually no financial boundaries and are so huge that if they get into serious trouble, they are too big to rescue, and their failures, like that of Lehman Brothers, might create a major panic. We saw these concerns in Spring of 2023 when even medium-sized banks were teetering. Their major business model is to use high levels of leverage to take risky bets on speculative assets of all kinds; and to use their quasi-monopoly power to intersperse themselves in order to capture business by municipalities, federal governments, companies, pension funds and households to take a slice of a huge percentage of financial transactions not only in the U.S. but also throughout much of the world.

But in addition to these behemoths are massive asset managers such as BlackRock and State Street. Then there are huge hedge funds, which “are alternative investments that use various methods such as leveraged derivatives, short-selling, and other speculative strategies to earn a return that outperforms the broader market,” according to Investopedia. The biggest of these include Citadel, Bridgewater Associates and D.E. Shaw. Also key players in the world of “roaring banking” are increasingly powerful private equity firms, which, according to the brilliant work of Eileen Appelbaum and Rosemary Batt, employ enormous amounts of debt to take over important companies in retail, medical, real estate and nursing home industries, among others, as well as impose draconian work conditions on employees and saddle the companies with debt, so that the key owners of these private equity (PE) firms can extract maximum short-term profits. These PE firms include Blackstone; KKR, an infamous leveraged buyout company from the 1990s; and the Carlyle Group.

This nexus of financial behemoths has very little regulation and is able to extract enormous wealth from customers and employees. With favorable tax treatment and bailouts from government, it is able to garner such enormous wealth that they help generate the most unequal income and wealth distribution the U.S. has had since 1929.

Bailouts have become the norm under the deregulatory financial and banking regime. Who should get bailed out and why?

Government bailouts are one of the main forces that keeps this system of roaring banking going. The Dodd-Frank Financial Reform Act passed in 2010 and signed into law by President Obama was touted by the administration as ending “too big to fail” and bailouts. But in fact, the bailout problem has remained and possibly gotten worse. As we saw from the near-global financial market meltdown in March of 2020 when the World Health Organization declared the COVID pandemic, the Federal Reserve and the U.S. Treasury (as well as other major central banks) poured trillions of dollars into the financial markets to stabilize them, and even took measures to bail out some hedge funds and other non-bank institutions. And when Silicon Valley Bank went bankrupt and several other medium-sized banks trembled in the spring of 2023, again the Federal Reserve intervened to virtually guarantee the entire U.S. system of bank deposits. By doing this, a major run on the financial system was avoided, but the episode pointed to enormous regulatory problems still facing our financial system.

There are three major problems with these kinds of bailouts. One is that they eliminate the incentives for the financiers to stop taking excessive risks because these risks pay off for them, if not for the rest of us. Second, they keep the same elites in power, undermining chances for more democratic control of our economy. And third, people understand that these bailouts are unfair and undemocratic. It makes them angry and helps them fall prey to demagogues such as Donald Trump.

Should there ever be bailouts? And if so, of whom? Good question. The late economic historian Charles Kindleberger surveyed hundreds of years of capitalist financial markets and pointed out that lender of last resort actions, i.e. bailouts, were endemic and frequent. I tell my students: Even if we sometimes need to bailout the banks, we do not need to bailout the bankers. I think this is the important point. Sometimes we need to maintain the viability of institutions that by their nature are subject to risks. But we do not want to reward the bad behavior of those who will exploit them and us to keep their lofty status in the class hierarchy.

During the COVID pandemic, we heard a lot about essential workers. Are bankers essential workers?

Well, many of the top bankers think they are. Lloyd Blankfein, former chief executive of Goldman Sachs, famously said after Goldman helped crash the economy in 2009 and received massive government bailouts that, “We’re very important. We help companies to grow by helping them to raise capital.… This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle.” In fact, he told The Times of London that as a banker, he is doing “God’s work.”

But as my former graduate student Juan Antonio Montecino and I show in Busting the Bankers’ Club, “roaring banking” is a net drain on the U.S. economy, compared to what a modern system of boring banking would be. Far from being essential workers, these mega bankers, hedge fund operators and private equity executives are reducing the rate of economic growth and extracting wealth from the majority of people in the economy.

The Securities and Exchange Commission (SEC) recently gave a stamp of approval to bitcoin exchanged-traded funds. How significant is this development?

This approval could be quite significant, especially if it sets legal and/or regulatory precedents that lubricate the downward slope of integrating crypto assets into that traditional financial architecture. In some ways, this event gives me a “déjà vu all over again” feeling, reminding me of some of the early decisions on deregulating derivatives and credit default swaps in incremental ways in the run-up to the Great Financial Crisis. A number of these dangers were highlighted in a detailed and passionate dissent to the decision written by SEC Commissioner Caroline A. Crenshaw. The core of Crenshaw’s critique is that these bitcoin exchange-traded funds are based on bitcoin assets, which themselves are largely unregulated and traded on dark platforms in many parts of the world. There is little transparency as to what determines the prices of bitcoins and there is a lot of evidence that they are manipulated and subject to fraudulent practices, often without recourse. This provides many opportunities for illegal activity such as money laundering as well as arms and drug financing and trade. The basic critique is that, like with predatory subprime mortgages and problematic asset-backed securities, you can dress them up with fancy packaging and complicated bells and whistles, but the underlying garbage still stinks. Crenshaw knows how precedents get set in the regulatory business. And just as derivatives and other complex securities were slowly but surely allowed to be sold in the run-up to the financial crisis by incremental nose-under-the-tent procedures (“Well, this new thing is just like the old thing that you already approved”) Crenshaw and other critics, such as those at Americans for Financial Reform and Better Markets, are rightly worried that once again we are headed down a slippery slope. Crenshaw rightly asks: “When FTX [Sam Bankman-Fried’s company] imploded … many of us breathed a sigh of relief that the downfall of one of the most central players in the crypto market had little impact on global markets more broadly. Will approval of today’s products provide the previously attenuated nexus to traditional markets [that is, break down the previous barriers] that allows crises in largely non-compliant crypto markets to spill over? These questions are not considered in today’s Order.”

Copyright © Truthout. May not be reprinted without permission.

C.J. Polychroniou is a political scientist/political economist, author, and journalist who has taught and worked in numerous universities and research centers in Europe and the United States. Currently, his main research interests are in U.S. politics and the political economy of the United States, European economic integration, globalization, climate change and environmental economics, and the deconstruction of neoliberalism’s politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He has published scores of books and over 1,000 articles which have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into a multitude of different languages, including Arabic, Chinese, Croatian, Dutch, French, German, Greek, Italian, Japanese, Portuguese, Russian, Spanish and Turkish. His latest books are Optimism Over DespairNoam Chomsky On Capitalism, Empire, and Social Change (2017); Climate Crisis and the Global Green New DealThe Political Economy of Saving the Planet (with Noam Chomsky and Robert Pollin as primary authors, 2020); The PrecipiceNeoliberalism, the Pandemic, and the Urgent Need for Radical Change (an anthology of interviews with Noam Chomsky, 2021); and Economics and the LeftInterviews with Progressive Economists (2021).

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