Sunday, July 04, 2021

Automation will not abolish work
Submitted by AWL on 29 June, 2021 - 4:59 Author: Bruce Robinson



Aaron Benanav’s book Automation and the Future of Work is aimed against what he calls the automation discourse. He defines this as a belief that high levels of technological unemployment will result from the introduction of new technology and that we will soon be faced with a largely automated economy. Such ideas can be found both on the left and right. Benanav rejects both their economic analysis and the political solutions such as Universal Basic Income (UBI) most commonly proposed to deal with the fallout from automation.

I welcome Benanav’s riposte to the recent flurry of predictions of a work-free utopia, but I am not convinced by the central argument he puts forward to support it.

The book is divided into two parts: firstly, Benanav presents an alternative explanation for what he, in common with the automation theorists, asserts is a large-scale lack of demand for labour; secondly, he looks at some of their proposed solutions and critiques both the utopian and reformist aspects of their theories, including the assumption that a socialist society would be without work.

Heavy on economics

Benanav’s own theory is entirely grounded in economics and has virtually nothing to say about the nature or implications of recent developments in technology, particularly in automation and artificial intelligence. This has the advantage that he is not seduced by the exaggerated claims made for new technologies or speculation about their future potential, often accompanied on the left with the view that they will somehow emerge from capitalism only to transcend it. However it also has disadvantages. For example, there is no discussion of the impact of their adoption on skills and thus the demand for labour. Similarly, there is nothing about how struggles in the workplace might affect employers’ readiness to adopt labour saving technologies.

Oddly, given his starting point, Benanav accepts many of the basic economic assertions of the automation theorists. He writes: “the question… is not whether new automation technologies will destroy additional jobs in the future (the answer is certainly yes).” And elsewhere: “technical change… does periodically result in sweeping job destruction in certain industries.” Benanav simply asserts that he has a better explanation for the same phenomena. “What automation theorists describe as the result of rising technological dynamism is actually the consequence of worsening economic stagnation, following on decades of manufacturing overcapacity and underinvestment.”

His own explanation is based on Robert Brenner’s 1998 analysis of post-war capitalism in The Economics of Global Turbulence which Benanav carries forward into the indefinite future. It is premised on the existence of overcapacity for manufactured goods in the post-war period which has persisted and led to low levels of growth in output and productivity. (Some of us have criticised Brenner’s scheme). Employment levels are then taken to be given by the difference in their relative rates of change. However one cannot read off the likely spread of technological innovations and their impact on employment simply by looking at historical trends of global economic variables.

There is also an overemphasis on manufacturing as against services, which is questionable as an explanation for labour demand given that the big majority of workers in advanced economies, and over 45% worldwide, are in “services”. Benanav admits that services can be susceptible to high productivity growth but sees that happening when they cease to be services and become provided through industrial goods such as washing machines. It is not always the case, however, that services are replaced by self-service. Human labour is filling in the gaps in the service sector where automation does not provide a total solution.

The question marks over Benanav’s argument does not mean one has to accept as an alternative the automation theorists’ view. The choice is not between everlasting stagnation and total transformation. More likely is that the new technologies will be adopted unevenly across different sectors and lead to both job losses and new jobs, though not necessarily at the same pace.

A call for Keynesianism

Following on from his economic analysis, Benanav takes up the most common reforms proposed to deal with the low demand for labour: a renewed Keynesian public investment program and Universal Basic Income. Advocates on right and left see UBI as a necessary response to large-scale long-term unemployment which breaks the link between work and income. For left advocates of the automation discourse it then provides the means to ensure that a post-scarcity society follows necessarily from automation.

For Benanav renewed Keynesianism and UBI right share the same basic flaw: that they leave investment decisions in the hands of capital so that these projects are liable to a capital strike. He counterposes to this a mass anti-capitalist movement, but does not suggest any transitional measures such as nationalisation of the banks which would enable encroachments on the prerogatives of capital.

The book ends with two positive statements. Firstly, in the impressive chapter “Necessity and Freedom” Benanav sketches a vision of a post-scarcity society, starting from premises opposed to those of the automation theorists: “Instead of presupposing a fully automated economy and imagining the possibilities for a better and freer world created out of it, we could begin from a world of generalised human dignity, and then consider the technical changes needed to realise that world.” This has the virtue of making technology the object of democratic development rather than something we just inherit from capitalism’s inevitable technological progress.

Benanav bases his sketch of this society on the distinction between necessity and freedom — what is required to satisfy fundamental human needs and the realm which is subject to individual or collective choice. He traces this distinction through a historical line including Thomas More, Etienne Cabet, and Marx. This acknowledges that drudgery will always to some extent be with us, and that the extent and contents of labour necessary for our collective reproduction — and how that labour will be shared — needs to be determined collectively and democratically. He emphasises strongly that social relationships and needs must influence not just such decisions, but also individual decisions about how to spend the remaining free time. This contrasts with the individualism of some left automation theorists such as Aaron Bastani, with Benanav pointing out that full automation “can appear as both a dream and a nightmare… because it has no innate association with human dignity.”

A brief epilogue discusses who are the agents of change in the economic and political environment he describes. While acknowledging the value and scope of the broad social movements that have arisen in the last 20 years, Benanav concludes that “unless social struggles organise themselves around… the conquest of production, they will not break through to a new synthesis of what it means to be a human being… Without a massive social struggle, late capitalist visionaries will remain mere techno-utopian mystics.” He does not however pose any form of political organisation beyond that of the social movements.

The sections of the book which deal with the political and social questions are powerful and convincing. The economic analysis and the non-existent technological argument do not provide a satisfying alternative to the automation theorists.
'Nature and physics will not fall for it': 
Greta Thunberg rips Into climate theatrics 
of world leaders

Brett Wilkins, Common Dreams
July 03, 2021

Swedish climate activist Greta Thunberg spoke in an interview with AFP on the
 eve of her departure from North America, in Hampton, Virginia.
 (AFP / NICHOLAS KAMM)


In the wake of the latest failure by the G7 nations to take meaningful steps to combat the climate emergency and record-breaking heatwaves on multiple continents, Swedish campaigner Greta Thunberg on Friday accused world leaders of hypocrisy for persecuting climate activists while "pretending" to take the threat seriously.

"Young people all over this planet are no longer falling for your lies."
—Greta Thunberg to world leaders

Addressing the Austrian World Summit virtually, the 18-year-old Thunberg noted that "more and more people around the world have woken up to the climate and ecological crisis, putting more and more pressure on you, the people in power."
Chris Matthews talks to Raw Story: Who would you bet on in 2024, Trump or Kamala?

"Eventually the public pressure was too much," said the Fridays for Future founder. "You have the world's eyes on you, so you started to act. Not acting as in taking climate action, but acting as in role-playing. Playing politics, playing with words, and playing with our future. Pretending to take responsibility; acting as saviors as you try to convince us that things are being taken seriously."


"Meanwhile the gap between your rhetoric and reality keeps growing wider and wider," Thunberg continued. "And since the level of awareness is so low you almost get away with it."

"But let's be clear," she stressed, "what you are doing is not about climate action or responding to an emergency. It never was. This is communications tactics dressed as politics."



Thunberg accused leaders of high-income nations of "pretending to change and listen to young people," and in a thinly veiled criticism of U.S. President Joe Biden, by "pretending to take science seriously by saying 'science is back' while holding climate summits without even inviting one single climate scientist as speaker."

She also accused leaders of "pretending to wage war against fossil fuels, while opening up brand-new coal mines, oil fields, and pipelines."

"You don't only continue business as usual," said Thunberg, "in many cases you're even speeding up and scaling up the process, pretending to have the most ambitious climate policies while granting new oil licenses [and] exploring future oil fields."


In another swipe at Biden, Thunberg decried "pretending to 'build back better' after the pandemic even though astronomical sums of money have already been locked in, and not in green projects."

"And when your empty words are not enough, when the protests grow too loud, you respond by making the protests illegal."
—Thunberg

"The G7, as an example, is spending billions more on fossil fuels and fossil fuel infrastructure than on clean energy," she noted.

"And when your empty words are not enough, when the protests grow too loud, you respond by making the protests illegal," Thunberg charged. Her remarks came amid a wave of arrests of climate activists, including members of the youth-led Sunrise Movement in Washington, D.C. and Indigenous-led water protectors protesting the Line 3 tar sands pipeline in Minnesota and elsewhere in recent days and weeks.

"But as your acts continue, more and more of us are seeing through... your role-playing," Thunberg said. "The gap between your actions and words is becoming more impossible to ignore, while more and more extreme weather events are raging all around us. And as a result, young people all over this planet are no longer falling for your lies."

"You say we need to move slowly to bring the public along," Thunberg continued. "However, how do you honestly expect to bring the people along if you don't treat this crisis like a crisis? The climate crisis is today at best being treated only as a business opportunity to create new green jobs, new green businesses and technologies."

"Perhaps playing a role helps you sleep at night," Thunberg speculated. "But while you are busy working the stage, you seem to forget that the climate crisis is not something distant in the future. It is already taking so much from the most affected people in the most affected areas."

"This might just be a game to you, a game to win votes, popularity, points on the stock market, or your next highly paid position in a company or a lobbying firm," she said. "You can and will continue to pretend, but nature and physics will not fall for it."
Trump inadvertently reveals how he cons his supporters into believing his outrageous lies
Bob Brigham
July 03, 2021

President Donald Trump gestures in total shock during a campaign rally at the Giant Center. (Shutterstock)

Donald Trump's career has been defined by outrageous lies.

His first major lie was that he was a successful businessman, a role that he played on a reality-tv show.

He then moved into politics by pushing birtherism, the racist lie that President Barack Obama was serving illegitimately based on the smear that he wasn't born in America.

His next delusional lie was that Mexico would pay to build his border wall.

He went on to lie about the media, calling every negative story "fake news." And he lied about his ties to Russia, calling his first impeachment a "hoax."

And his response to the COVID-19 was essentially an endless series of lies about the pandemic.

Most infamous was his "Big Lie" about the 2020 election that incited the January 6th insurrection by his supporters seeking to overturn the election. And then he lied about his role in the insurrection during his second impeachment.


On Saturday, during a campaign speech in Florida, Trump inadvertently explained exactly how he was able to dupe so many of his supporters into believe his nonsense.

"There's a word: disinformation. If you say it enough and keep saying it — just keep saying it — and they'll start to believe you," Trump explained.









RT TRUMP TV
Trump Tells Florida Supporters Biden is Conducting ‘All-Out Assault’ on Everything Americans Value
US
Get short URL

WASHINGTON (Sputnik) - Former US President Donald Trump, at a Saturday "Save America" campaign-style rally in Sarasota, Florida, again critiqued the administration of US President Joe Biden and urged supporters to vote Republican in the 2022 midterm elections.

Trump started off by calling for "free and fair elections and strong borders" and wished everyone a happy 4th of July. He also sought a moment of silence to honor the Surfside building collapse victims.

"May we have a moment of silence for the victims and families of the horrible building collapse in Surfside, Florida," Trump said, calling it a "terrible, terrible" tragedy. The Surfside incident occurred last week as a 12-story residential building partially collapsed. The death toll stands at over 24, while at least 124 people are still missing.

Switching his attention to politics, Trump said that "in just five months the Biden administration has launched an all-out assault on everything we cherish and we value."

The former president stated that US streets were being taken over by criminals, and that the southern border is "being erased before our very eyes."

Trump again claimed that he had good relations with the leaders of Russia and China during his presidency, comparing his reign to that of the Biden administration.

"Our leaders are weakly bowing down to Russia, Iran, and communist China," Trump said to the Sarasota crowd.

Trump critiqued the Biden administration for its approach to dealing with the COVID-19 coronavirus and again blamed the pandemic on China, pronouncing that Beijing should be charged $10 trillion in reparations.

Trump also expressed the notion that it was "so unfair, so crazy" that men are allowed to play in women's sports.

© AP PHOTO / JASON BEHNKEN
Former President Donald Trump walks on stage during a rally at the Sarasota Fairgrounds Saturday, July 3, 2021, in Sarasota, Fla.

The former leader concluded his performance by saying that the US has "a truly sick election system."

"This country is in big trouble when an election cannot be open and free and fair and not stolen or rigged," Trump alleged, adding that the only way to "bring our country back" is with a Republican Congress. He promised more jobs and fair trade would come and free speech "which we don’t have" would be restored if Democrats are not in power. Trump declared that the Republicans need to win in next year’s midterm elections.

During a previous "Save America" rally in Ohio at the end of June, Trump called the Biden administration's performance a "catastrophe" and criticized the White House for a crime wave in major US cities, a migrant crisis at the southern US border and a dismal economic situation marred with high inflation.

Trump also criticized the Biden administration for what he called failures in foreign policy, including by suggesting that China and Russia are humiliating the United States, while continuing in a similar vein regarding a failure to prevent the construction of the Nord Stream 2 pipeline. Trump brought up the Nord Stream issue again on Saturday in Florida.

While some pundits have interpreted the Trump rallies as a signal he could run in the 2024 presidential election, others have said things are not clear cut. Trump previously indicated that he planned on running again, but now he says the decision depends on the state of affairs in the United States and on the Republican Party.

THE RIGHT TO BE LAZY ABOLISH WORK!
Some Chinese shun grueling careers for
 'low-desire life'
FROM FUEDALISM TO LATE CAPITALI$M IN 100 YEARS
People walk across an intersection during rush hour in Beijing. (AP)

Updated: 04 Jul 2021, 

Beijing needs skilled professionals to develop technology and other industries


BEIJING : Fed up with work stress, Guo Jianlong quit a newspaper job in Beijing and moved to China's mountain southwest to “lie flat."

Guo joined a small but visible handful of Chinese urban professionals who are rattling the ruling Communist Party by rejecting gruelling careers for a “low-desire life." That is clashing with the party's message of success and consumerism as its celebrates the 100th anniversary of its founding.

Guo, 44, became a freelance writer in Dali, a town in Yunnan province known for its traditional architecture and picturesque scenery. He married a woman he met there.

“Work was OK, but I didn't like it much," Guo said.

“What is wrong with doing your own thing, not just looking at the money?"

“Lying flat" is a “resistance movement" to a “cycle of horror" from high-pressure Chinese schools to jobs with seemingly endless work hours, novelist Liao Zenghu wrote in Caixin, the country's most prominent business magazine.

“In today's society, our every move is monitored and every action criticized," Liao wrote. “Is there any more rebellious act than to simply lie flat?'"

It isn't clear how many people have gone so far as to quit their jobs or move out of major cities. Judging by packed rush hour subways in Beijing and Shanghai, most young Chinese slog away at the best jobs they can get.



Still, the ruling party is trying to discourage the trend. Beijing needs skilled professionals to develop technology and other industries. China's population is getting older and the pool of working-age people has shrunk by about 5 per cent from its 2011 peak.

“Struggle itself is a kind of happiness," the newspaper Southern Daily, published by the party, said in a commentary. “Choosing to lie flat' in the face of pressure is not only unjust but also shameful."

The trend echoes similar ones in Japan and other countries where young people have embraced anti-materialist lifestyles in response to bleak job prospects and bruising competition for shrinking economic rewards.

Official data show China's economic output per person doubled over the past decade, but many complain the gains went mostly to a handful of tycoons and state-owned companies. Professionals say their incomes are failing to keep up with soaring housing, child care and other costs.

In a sign of the issue's political sensitivity, four professors who were quoted by the Chinese press talking about “lying flat" declined to discuss it with a foreign reporter.

Another possible sign of official displeasure: T-shirts, mobile phone cases and other “Lie Flat"-themed products are disappearing from online sales platforms.

Urban employees complain that work hours have swelled to “9 9 6," or 9 am to 9 pm, six days a week.

“We generally believe slavery has died away. In fact, it has only adapted to the new economic era," a woman who writes under the name Xia Bingbao, or Summer Hailstones, said on the Douban social media service.

Some elite graduates in their 20s who should have the best job prospects say they are worn out from the “exam hell" of high school and university. They see no point in making more sacrifices.

“Chasing fame and fortune does not attract me. I am so tired," said Zhai Xiangyu, a 25-year-old graduate student.

Some professionals are cutting short their careers, which removes their experience from the job pool.

Xu Zhunjiong, a human resources manager in Shanghai, said she is quitting at 45, a decade before the legal minimum retirement age for women, to move with her Croatian-born husband to his homeland.

“I want to retire early. I don't want to fight any more," Xu said. “I'm going to other places."

Thousands vented frustration online after the Communist Party's announcement in May that official birth limits would be eased to allow all couples to have three children instead of two.

The party has enforced birth restrictions since 1980 to restrain population growth but worries China, with economic output per person still below the global average, needs more young workers.

Minutes after the announcement, websites were flooded with complaints that the move did nothing to help parents cope with child care costs, long work hours, cramped housing, job discrimination against mothers and a need to look after elderly parents.

Xia writes that she moved to a valley in Zhejiang province, south of Shanghai, for a “low-desire life" after working in Hong Kong. She said despite a high-status job as an English-language reporter, her rent devoured 60% of her income and she had no money at the end of each month.

She rejects the argument that young people who “lie flat" are giving up economic success when that's already is out of reach for many in an economy with a growing gulf between a wealthy elite and the majority.

“When resources are focused more and more on the few people at the head and their relatives, the workforce is cheap and replaceable," she wrote on Douban. “Is it sensible to entrust your destiny to small handouts from others?"

  1. The Right To Be Lazy - SLP

    www.slp.org/pdf/others/lazy_pl.pdf · PDF file

    The Right To Be Lazy BEING A REPUDIATION OF THE “RIGHT TO WORK” OF 1848 By Paul Lafargue Translated and adapted from the French by Dr. Harriet Lothrop. Published by the INTERNATIONAL PUBLISHING CO., 23 Duane Street, New York 1898 PAUL LAFARGUE (1841–1911) AUTHOR’S PREFACE. In 1849, Thiers, as member of the Commission on Instruction in Elementary

    1. The Abolition of Work | The Anarchist Library

      https://theanarchistlibrary.org/library/bob-black-the-abolition-of-work

      2020-11-28 · The Abolition of Work No one should ever work. Work is the source of nearly all the misery in the world. Almost any evil you’d care to name comes …




Amazon doesn’t like FTC chair Lina Khan’s views, wants her off investigations

Sensing a changing antitrust landscape, Amazon fires a warning shot.


TIM DE CHANT - 6/30/2021

Enlarge / Lina M. Khan testifies during a Senate Commerce, Science, and Transportation Committee nomination hearing on Capitol Hill on April 21, 2021, in Washington, DC.

Amazon filed a 25-page petition today with the Federal Trade Commission asking that Chairwoman Lina Khan recuse herself from antitrust investigations into the company.

FURTHER READING

Khan, a frequent critic of Amazon and other Big Tech firms, was appointed FTC chair less than two weeks ago. Though there has been plenty of speculation about her first moves, her short tenure to date means she hasn’t had much opportunity to file lawsuits or announce investigations. Amazon’s petition shows that its legal team hasn’t sat idle since her nomination as commissioner and subsequent appointment as chair.

“Although Amazon profoundly disagrees with Chair Khan’s conclusions about the company,” Amazon wrote in the petition, “it does not dispute her right to have spoken provocatively and at great length about it in her prior roles. But given her long track record of detailed pronouncements about Amazon and her repeated proclamations that Amazon has violated the antitrust laws, a reasonable observer would conclude that she no longer can consider the company’s antitrust defenses with an open mind.”

Khan made a name for herself four years ago when she published a paper in a law journal. Titled “Amazon’s Antitrust Paradox,” the paper made the case that current antitrust laws have fallen short as tech platforms have risen to dominance. She argued that prices are a poor yardstick with which to measure anticompetitive behavior and market power, especially among platform companies like Amazon. The peculiar economics of platforms means that companies are happy to forgo profits in the name of growth, which leads to predatory pricing, she said. And because the very nature of platforms allows companies to control access to various products and services, it creates incentives for companies to favor their own products over rivals.

Since graduating from law school, Khan worked for the Open Markets Institute, which advocates for stronger antitrust laws and enforcement, and for the House Judiciary Committee, where she worked with Rep. David Cicilline (D-R.I.) to open a congressional inquiry into tech companies’ behavior.Advertisement


That Amazon has come out guns blazing suggests that the company thinks some of its behavior will likely reach the FTC’s inbox, if it hasn’t already. The FTC’s agenda isn’t necessarily set by the chair, Harvard Professor Shane Greenstein told Ars when Khan’s appointment was announced. Rather, it’s shaped by consumer complaints, merger proposals, and so on. The FTC would need a complaint to act on if it were to take action against Amazon.

FURTHER READING

Of course, Khan likely has plenty of complaints to choose from on that front. Earlier this year, an independent bookstore in suburban Chicago filed a class-action lawsuit against Amazon, alleging that the company had colluded with five major book publishers to fix prices and stifle competition among sellers. Last month, the District of Columbia sued Amazon, saying that its most-favored-nation clauses prevented companies from selling their products for less on others sites. The high fees Amazon imposes on third-party sellers “impose an artificially high price floor” that affects prices on other sites.

And then there’s Amazon’s proposed acquisition of MGM Studios, which Sen. Elizabeth Warren (D-Mass.) asked the FTC to investigate. “This $8.45 billion deal would ostensibly help Amazon attract consumers to its subscription streaming services. But because this service is tied to a wide range of additional Amazon products and services that affect broad sectors of our economy, this transaction requires meticulous antitrust scrutiny,” Warren wrote to the FTC in an argument that plugs neatly into Khan’s “Antitrust Paradox” thesis.

Khan said during her confirmation hearing that in cases where recusal questions arise, she would consult with FTC ethics officials. How they’ll advise her is unclear, but they are surely aware that political appointees seldom come into government as blank slates, wholly lacking in opinions related to the thing they’re going to oversee.

Amazon isn’t the first company to attempt to push an FTC commissioner off of an investigation. For decades, companies have argued that commissioners have conflicts that require recusal, ranging from potentially biased statements to previous employment at law firms that represented the company or a competitor—and even employment at the company requesting the recusal. The tactic can work, though not every time.


TIM DE CHANTis a journalist and editor who covers tech policy for Ars Technica. He is a lecturer in MIT’s Graduate Program in Science Writing and has written for The Wire China, the Chicago Tribune, NOVA Next, and Wired magazine, among others. De Chant was awarded a Knight Science Journalism Fellowship at MIT in 2018, and he received his doctorate in environmental science, policy, and management from the University of California, Berkeley, and his bachelor’s degree in environmental studies, English, and biology from St. Olaf College.
Lord of the Rings: Amazon Calls Unsafe Workplace Allegations "Completely Inaccurate"


By AARON PERINE
July 3, 2021 
NZ

Amazon is calling the allegations of an unsafe workplace during the production of their Lord of the Rings series “completely inaccurate.” The company issued a statement about the allegations in the New Zealand Herald this weekend. In their report, a number of stunt workers have been seriously injured. Two of the workers in question are reported to be getting surgeries that were reported to WorkSafe ahead of time. (WorkSafe is New Zealand’s health and safety regulator in the workplace.) That Lord of the Rings series is costing the commerce giant over $465 million to produce. Amazon Studios told Variety that their safety protocols match up with the country’s safety standards.

“Amazon Studios takes the health, physical and emotional welfare of our cast and crew extremely seriously,” an Amazon Studios spokesperson said. “As a top priority, the production team continues to be in full compliance with the mandated WorkSafe New Zealand Safety and Security government regulations. Any allegation or report that activities on set are unsafe or outside of regulations are completely inaccurate.”

In that case, a stunt performer named Dayna Grant had a head injury that was said to cause a concussion. WorkSafe regulations are the law of the land in New Zealand productions. However, a “notifiable event” determines what’s is considered a violation.

“A notifiable event is any of the following events that arise from work: a death, a notifiable illness or injury or a notifiable incident. Only serious events are intended to be notified. These trigger requirements to preserve the site, notify the regulator and keep records. The notifiable incident, illness, injury or death must arise out of the conduct of the businesses or undertaking. It could be due to the condition of the work site, the way the work activity is organized, or the way equipment or substances are used.”

“Notifiable events may occur inside or outside the actual work site. Deaths, injuries or illness that are unrelated to work are not notifiable events eg: a diabetic worker slipping into a coma at work, a worker being injured driving to work in his or her private care when the driving is not done as a part of their work, injuries to patients or rest home residents that are triggered by a medical reason (for example injuries from a fall caused by a stroke), a worker fainting from a non-work related cause.”
Vale strike at Canadian mine strains battery nickel supply

Mariana Durao and Yvonne Yue Li,
 Bloomberg News Jun 29, 2021

A strike at Vale SA’s Sudbury operations in Canada is taxing a nickel market that’s key to powering electric vehicles.

Sudbury is one of the world’s few producers of nickel pellet, a form used to produce alloys for aerospace, electronic and nuclear industries. Production at Vale’s northeast Ontario operation halted when unionized workers went on strike on June 1. The disruption is driving consumers to tap battery-grade nickel briquette as an alternative.

That shift is increasing competition for briquette, pushing up North American premiums, or extra charges consumers pay on top of nickel prices on the London Metal Exchange, as stockpiles of the metal dwindle. Inventories of briquette, the main form of nickel stored at LME warehouses, have fallen 9 per cent since a peak in April and are now at the lowest in more than a year.

“Given the challenges at a number of Class 1 nickel operations over 2021 to date, availability of material for end customer purchases is more limited that might have been thought,” said Colin Hamilton, an analyst at BMO Capital Markets.

Battery-grade nickel is a key ingredient in rechargeable batteries for electric vehicles, helping pack more energy into cells and allowing producers to reduce use of cobalt, a more costly metal that typically has a less transparent supply chain. The market for such nickel is expected to be in a tight balance in the next two to three years and could slip into a deficit as early as 2024, according to energy data and analysis firm Bloomberg NEF.

Since the Vale strike began, the premium on briquette has risen 24 per cent and U.S. prices on June 22 hit their highest level since November 2019, according to Fastmarkets data. Nickel for three-month delivery posted an 8 per cent weekly gain last week on the LME, the biggest since August 2019.

“The strike is not the main driver of nickel price increase, but it will be the main driver on the North American nickel premium increase,” said Adrian Gardner, principal analyst for nickel markets at research firm Wood Mackenzie.

Gardner said he isn’t optimistic about a solution to the Vale strike and anticipates the labor dispute could extend for many months. Vale faced a yearlong strike in Canada back in 2009 and 2010. Striking workers represented by United Steelworkers Local 6500 have twice rejected a wage offer presented by the Brazilian mining giant this year


GREENWASHING CAPITALI$M
Emboldened ESG activists savor next round of boardroom showdowns


Jeff Green and Saijel Kishan, Bloomberg News  June 30,2021

The Open Canadian energy companies getting better at communicating greener initiatives: Middlefield's Lauzon

Rob Lauzon, managing director and deputy chief investment officer at Middlefield Capital Corporation, joins BNN Bloomberg to weigh in on declining investor interest in the Canadian energy sector. He hasn't shunned the sector, but he's not overweight on these energy companies. At the same time, he believes that Canadian energy companies are getting better at communicating their greener initiatives.



8:23 Canadian energy companies getting better at communicating greener...




11:00 Canada’s path to a low-carbon economy


Mention Engine No. 1’s victory over Exxon Mobil Corp. last month to the socially conscious investing crowd and they’ll rattle off a wish list of targets that have so-far resisted calls to reform their social practices.

The possibilities include Twitter Inc., Facebook Inc., Netflix Inc. and private prisons, to name a few. The question, though, is whether the tactics Engine No. 1 used to gain three seats on the oil giant’s board are a viable method for other small activist investors to replicate against companies where they’d like faster change.

Most activist investors say: not exactly. But, inspired by Engine No 1., they are getting more aggressive. Some say they’ll use the threat of targeting the board to get companies to engage in their proposals. Eli Kasargod-Staub, co-founder of Majority Action, a non-profit that pushes for corporate accountability, plans to ramp up “just vote no” campaigns against undesirable directors. Others are suggesting specific board candidates that favor social change, and some are lobbying Engine No. 1 to find its next Exxon.

James McRitchie, an activist investor who over decades has sponsored hundreds of proxy proposals about social and governance issues, emailed Engine No. 1 to suggest they look at Netflix. Investors have approved several proposals that would make it easier to replace Netflix directors, but the streaming giant has not agreed to the changes.

Engine No. 1 wouldn’t comment on its next possible targets, though it owns stakes in Square Inc., Microsoft Corp., Shopify Inc., Zendesk Inc., and Penumbra Inc. Netflix said in its proxy statement this year that it is taking steps to be responsive to ESG concerns from investors.

“A more collaborative approach would be ideal,’’ Renaye Manley, deputy director at the Service Employees International Union, one of the groups leading the charge to pressure companies to perform racial audits, said on a June 10 Bloomberg Intelligence panel. “But I can certainly see this type of a kind of activist-investor approach over civil rights happening at some point in the future.’’

Nell Minow, who advises institutional investors on corporate governance issues at ValueEdge Advisors, said Engine No. 1 primed boards to be more alert and responsive out of fear of losing control.

“After we spent a lot of money on our first proxy contest, and took out a full-page ad in the Wall Street Journal for a quarter million dollars, we never had to do that again,” she said, referring to an aggressive campaign she waged against the Sears, Roebuck and Co. board in 1991. “Because people knew we would do that if we had to.”

Engine No. 1 succeeded under a set of unique conditions. First, the firm was started by a former hedge fund manager who used his personal wealth to finance a fight with around a US$13 million price tag, according to the fund. It also made a strong case for board change, arguing that the oil giant had lower shareholder yields than competitors and mounting debt and spending that jeopardized its dividend. Exxon was also losing money, and Engine No. 1 argued its resistance to transitioning to a low-carbon future would lead to more losses in the future.

“Exxon was unique in its own way,’’ said Eleazer “Ele’’ Klein, a lawyer who represented Engine No. 1 in its campaign. “It wasn't responsive to its shareholders’ frustrations.’’

Investors don’t often reject director candidates. So far this year, less than 0.5 per cent of the 15,000 board members in the Russell 3000 failed to get at least 50 per cent of the vote in an uncontested election, where seats are assigned based on vote totals. The three Exxon directors were the only ones ousted this year in a contested election, where board candidates have to receive a majority of votes, according to Bloomberg Intelligence data through June 29.

Pressuring companies to switch up their board, rather than a full-on takeover, may be a more realistic approach. Arjuna Capital, which has had success getting major technology and finance firms to release pay gap statistics, now has proposals at Facebook, Alphabet Inc.’s Google and Twitter to add civil rights experts as directors. “It’s a different existential crisis than Exxon is facing,” Natasha Lamb, a managing partner at Arjuna, said. “But it’s a business imperative.”

Alphabet said in its proxy statement that its current board is sufficiently qualified to provide civil rights oversight. Facebook declined to comment but pointed to a website outlining the company's efforts to address hate speech on its platforms. Twitter declined to comment.

Activists have made progress making alternative directors more palatable to big investors, said Rusty O’Kelley, an executive recruiter at Russell Reynolds. Five years ago, the typical slate would have included members of the fund or their close associates, he said. Now the groups work with executive recruiters to establish networks of board-ready candidates.

“They are much more likely to have a slate of people who have industry relevance, who represent gender and ethnic diversity and look and feel more credible,” O’Kelley said. “It’s designed to gain support from BlackRock, Vanguard and State Street.”

Activist investors have already this year submitted a record number of proposals aimed at improving diversity and equality in corporate America. Even though many of them failed, support averaged 32 per cent, well above the average 24.2 per cent over the previous five years, according to data from Bloomberg Intelligence. Companies often engage with activists if their proposals get at least 30 per cent of the vote, though they’re under no obligation to do so in most cases.


Some of their biggest targets, however, like Facebook and Alphabet are somewhat insulated from these kinds of campaigns because of their dual-class share structures. Facebook Chief Executive Officer Mark Zuckerberg, for example, has majority control of the social network even though he owns less than 15 per cent of outstanding shares.

Still, some boards are being proactive. A survey this spring by recruiter Spencer Stuart of 77 committee chairs on S&P 500 boards found that expanding or enhancing ESG initiatives is their number one priority over the next three years.

Traders Betting on Hawkish Shift by Colombia Face Reality Check

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Colombia’s central bank is stymieing derivative traders betting on faster-than-anticipated interest-rate hikes and creating obstacles for those bullish on the peso.

The unanimity of the central bank’s decision this week to keep rates unchanged spurred an unwinding of bets that Colombia would join Brazil, Mexico and other nations that are pulling back stimulus to curb inflation as their economies begin rebounding from the pandemic.

While the market was far from pricing in a rate increase at the Monday meeting, the peso rallied ahead of it on speculation Colombia could follow in the footsteps of Mexico’s surprise hike last week.

But the resounding decision to instead stand pat has given investors a strong incentive to shift cash elsewhere to seize on higher rates, adding another potential headwind to a currency that has been weighed down this year by political protests and economic uncertainty. Rate futures now show roughly even odds that the bank will hold steady again at the next meeting on July 30, and the peso has slid some 1.6% against the U.S. dollar since the decision.

“A more hawkish central bank of Colombia was an important driver for short-term tactical bullishness” for the peso, said Jens Nystedt, a fund manager in New York at Emso Asset Management, whose firm oversees $6.8 billion. But what this week’s meeting “signals quite clearly here is that they’re not going to be hiking anytime soon. That catalyst is not going to be there.”

Nystedt said the peso may strengthen on the back of oil prices in the medium term. But he said the bank’s stance means that any near-term advance in the currency will hinge on credit-rating moves and whether President Ivan Duque Marquez has success in reviving fiscal reforms to shore up the government’s finances.

Speculation that the bank would start lifting its key benchmark from a record low of 1.75% was spurred in part by figures showing that inflation accelerated, even though that was partly attributed to supply-chain issues caused by nationwide demonstrations and unrest set off by Duque’s ill-fated attempt to raise taxes. On June 25, the day after Mexico’s hike, part of the Colombian swap-rate curve saw its biggest daily swing in more than a year, only to reverse that after the bank held steady.

Futures markets are now pricing in an approximately 50% chance of a 25 basis-point-hike in July and that the bank’s key rate will be at 2.29% in three months, less than the 2.41% predicted ahead of Monday’s meeting.

As in other countries, Colombia policymakers see some of the uptick in inflation as the result of temporary factors caused by the emergence from the Covid-19 lockdowns. And while inflation went from 1.5% year-over-year in December to 3.3% in May, it’s still well within the bank’s target range.

Even if investors agree that the central bank has time to tighten monetary policy, the country’s currency could still underperform those from counties such as as Brazil, Mexico and South Africa where similar recoveries are underway and interest rates are higher. The annual yield an investor receives to carry a long Colombian peso position for one month adjusted by currency volatility is only 0.12%, half what traders get in the Brazilian real and less than a third of the cushion offered by the Mexican peso, which drastically impacts the attractiveness of the Andean currency.

There’s also the risk of more downgrades to Colombia’s foreign-currency bonds, which were cut to junk by S&P Global Ratings in May. Late Thursday, Fitch Ratings followed suit, dropping the debt to one step below investment grade.

“The central bank of Colombia is facing a less challenging inflation outlook in the near term so they have more room to wait than the other countries, like Brazil and Mexico,” said Mauro Roca, managing director of emerging markets at TCW Group Inc. in Los Angeles.

“Colombian rates don’t look the most attractive in a relative basis in the moment,” he said. “There’s still important political noise and that may affect the prospect of tax reform, which may also impact local assets.”

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