Central Bank of Nigeria (CBN) says it has successfully settled all outstanding foreign exchange (FX) obligations.

Hakama Sidi Ali, acting director of corporate communications at CBN, disclosed this in a statement on Wednesday.

Ali said the financial regulator recently concluded payment of $1.5 billion to settle obligations to bank customers, effectively settling the residual balance of the FX backlog.

On February 5, Olayemi Cardoso, CBN governor, said he inherited a $7 billion FX backlog when he became the head of the apex bank in September 2023.

Commenting further on the backlog settlement, Ali disclosed that “independent auditors from Deloitte Consulting meticulously assessed these transactions, ensuring that only legitimate claims were honoured”.

She said any invalid transactions were promptly referred to the relevant authorities for further scrutiny.

“Clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in last month’s Monetary Policy Committee meeting to stabilise the exchange rate and thereby curb imported inflation, spurring confidence in the banking system and the economy,” Ali said.

“Cardoso used the MPC meeting and a subsequent conference call with foreign portfolio investors to set expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.”

According to the spokesperson, at a recent meeting, Cardoso said CBN made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy.

“It was important that we go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions,” he said.

“This encumbrance to market confidence in the country’s ability to meet its obligations is now totally behind us.”

On January 29, CBN said $500 million had been released to various sectors to address the backlog of verified FX transactions.

Prior to this, the apex bank said $61.64 million was disbursed to foreign airlines through various banks.

EXTERNAL RESERVES UP BY $993 MILLION

Ali said CBN recorded a significant increase in external reserves.

“The CBN followed this month by reporting a significant increase in external reserves, rising by $993 million to $34.11 billion as of March 7, 2024, the highest level in eight months,” she said.

“The month-on-month increase was driven by a marked advance in remittance payments by Nigerians overseas, as well as higher purchases of local assets, including government debt securities, by foreign investors.”

The Cable

The supremacy fight between the Nigeria Labour Congress, NLC and Labour Party, LP, continued yesterday, with the union picketing the headquarters and secretariats of the party nationwide, insisting the national chairman, Julius Abure, quit office.

But the party in a swift reaction, described the forcible entry of NLC members into its headquarters and secretariat as illegal and criminal.

Speaking when workers occupied the Labour Party headquarters in Abuja, the Deputy President of NLC Political Commission, Theophilus Ndubuaku, said the picketing was to express workers’ grievances towards Abure’s administration of the party.

He said: “Nigeria is not the only country that has a Labour Party backed by Organised Labour. There are so many others.

“Why would our own be different, the essence of registering a Labour Party in this country is not only to become a president or hold an office but also to create a viable opposition and any country where there is no viable opposition, then there would be dictatorship. The reason we set up this party is to make us have good governance in this country.”

While faulting the alleged unilateral convocation of national convention without consulting the relevant stakeholders, the NLC stated further: “There has been court judgements declaring labour party as being owned by the NLC and there has been intervention by INEC telling Abure to appoint BOT members and organize all-inclusive convention.

“But what we now saw is a convention that we do not know who and who are going to be at that convention and the elected officers in the National Assembly thought he insulted them.

“You will not believe that a day before Abure issued the notice of the convention, he was with the NLC president and the political commission in the NLC office without telling them.

“All we are saying is that we do not want Abure, he should resign and go. He cannot be the sole administrator of Labour Party.”

Also speaking, the acting General Secretary of NLC, Bello Ismail, said the commission had been engaging Abure, thinking he was following due process,

“We were also thinking he was going to organise a convention, in line with the understanding with Labour to have an all-inclusive convention but Abure, knowing that he can never survive an all-inclusive convention wanted to do a convention in the night.

“Those in the NLC Political Commission have done a lot of efforts to reach this state of taking over our party by ourselves. We would insist that all democratic norms are fulfilled. We will insist that workers take back their party.

“We want a convention where we are all the stakeholders and we are very active and all will participate.
“We do not want a convention where one man will hand pick the officers of the party. We want a convention where in the 37 states of the federation, all stakeholders, including workers, youths, young people, informal workers can have a say in the party.

“We are not money people, but we have a voice and we want a party where, without money, we can participate, and that is what Labour Party offers.

”Now, it is in the hands of this usurper, he is looking for N30 million, N40 million, and so on to buy forms, excluding the people who founded the party. Enough is enough, Abure must go,” he said.

On his part, Chris Uyot, Secretary of the NLC Political Commission, said the national chairman of the party has decided to hold a convention without consulting, without discussion with the stakeholders in the party.

Comrade Uyot said: “He did not discuss with the NLC or with Labour or even with the House of Representatives who are stakeholders in the Labour Party, he did not discuss with anybody, he did not discuss with the Obidients, all the people that belong to this party or even have a stake in this party.

“So, he wants to have a convention where he will pick people as delegates, no it is not done. A convention starts from the local government areas, before it goes to states and then national.

“We are not going to have a dictator in our party, it is not going to be possible. Nigerian workers are democratic, and they support democracy.

“Nigerian workers own this party and would ensure they take hold of their party and chase out the looters.”
Responding, the Julius Abure-led National Working Committee, NWC, of the party decried what it described as unlawful break and entry into its national headquarters by “the militant arm of the Nigeria Labour Congress.”
The party, which noted that the NLC raid led to the collosal destruction of party property, described the act as a criminal misplacement of priority and an action done in bad faith.

National Publicity Secretary of Labour Party, Obiora Ifoh, said the party was appalled by the desperation exhibited by the NLC President, Joe Ajaero.

Ifoh said: “The party notes that the President of the NLC, Ajaero’s greed and inordinate ambition have pushed him into losing every sense of discretion and decency in his recent conducts, be it in his affairs with the workers or even the government.

“As a party, we wonder how Ajaero would lead a band of lawless persons who are known to have partisan interests in other major political parties such as the PDP and APC against a recognized independent political party.
“Ajaero’s continuous claim that NLC owns the Labour Party is not in any way supported by either the Electoral Act or the Constitution.

“ For his information, a political party is owned by those who are card-carrying or financial members of the party.

“We are aware that more than 90 percent of the members of the NLC have not met this condition and therefore cannot claim to be the owners of the party.

“The constitution also provides that no organisation can own any other organisation. The NLC as an organisation can therefore not claim the ownership of the Labour Party.”

Vanguard

Why Israel is so determined to launch an offensive in Rafah

Israel is determined to launch a ground offensive against Hamas in Rafah, Gaza’s southernmost town, a plan that has raised global alarm because of the potential for harm to the hundreds of thousands of civilians sheltering there.

Prime Minister Benjamin Netanyahu says Israel can’t achieve its goal of “total victory” against Hamas without tackling Rafah.

Israel has approved military plans for its offensive. But with 1.4 million Palestinians jammed into the town, Israel’s allies, including the U.S., have demanded greater care for civilians in its anticipated incursion.

Most of those Palestinians have been displaced by fighting in other parts of Gaza and are living in densely packed tent camps or crammed into apartments.

Netanyahu is sending a delegation to Washington to present the administration with its plans.

WHY RAFAH IS SO CRITICAL

Since Israel declared war in response to Hamas’deadly cross-border attack on Oct. 7, Netanyahu has said a central goal is to destroy the Islamic group’s military capabilities.

Israel says Rafah is Hamas’ last major stronghold in the Gaza Strip, after operations elsewhere dismantled 18 out of the militant group’s 24 battalions, according to the military.

Israel says Hamas has four battalions in Rafah and that it must send ground forces to topple them. Some senior militants could also be hiding in the town.

WHY THERE IS SO MUCH OPPOSITION TO ISRAEL’S PLAN

The U.S. has urged Israel not to carry out the operation without a “credible” plan to evacuate civilians. Egypt, a strategic partner of Israel’s, has said that any move to push Palestinians into Egypt would threaten its four-decade-old peace agreement with Israel.

In a phone call with Netanyahu this week, President Joe Biden told the Israeli leader not to carry out a Rafah operation, said the White House’s national security adviser, Jake Sullivan. He said the U.S. was seeking “an alternative approach” that did not involve a ground invasion.

ISRAEL DOESN’T APPEAR CLOSE TO SENDING IN TROOPS

Netanyahu said he was sending a delegation to Washington “out of respect” for Biden. But in a statement Wednesday, he said he had told Biden that Israel “cannot complete the victory” without entering Rafah.

Despite the tough talk, Israel doesn’t appear close to sending troops into Rafah. This may be connected to ongoing attempts to broker a temporary cease-fire. Qatari mediators say those talks would be set back by a Rafah invasion.

There are also logistical concerns.

Israel’s military says it plans to direct the civilians to “humanitarian islands” in central Gaza ahead of the planned offensive. Netanyahu said Wednesday evacuation plans had not yet been approved.

AP

WESTERN PERSPECTIVE

Ukraine's capital Kyiv is under Russian missile attack, mayor says

Russia launched a missile attack on Ukraine's capital, Kyiv, early Thursday, injuring eight people and damaging residential buildings and industrial facilities, mayor Vitali Klitschko said.

It was the first large missile attack on Kyiv in recent weeks.

Klitschko said on the Telegram messaging app that air defence units were repelling the attack. He said missile debris fell in different parts of the city.

"There are already eight injured as the result of the enemy's attack," Klitschko said.

He said that debris from a downed Russian missile hit several residential buildings, industrial sites, and a kindergarten.

Emergency workers rushed to sites in different parts of the capital and were extinguishing several fires, he said.

** Russian missile attack on Ukraine's Kharkiv kills five, causes fire

A Russian missile hit an industrial area in Ukraine's northern city of Kharkiv on Wednesday, killing at least five people and injuring eight while causing a major fire in a printing house, local authorities said.

The mayor of Kharkiv, Ihor Terekhov, said five others were missing after the strike. In a later posting on Telegram at about 11 p.m. local time, he said Kharkiv had come under fresh shelling, with explosions in the city.

President Volodymyr Zelenskiy said the strike underscored the lack of proper air defences in Kharkiv, Ukraine's second largest city, and elsewhere, particularly in northern regions near the Russian border.

"Kharkiv needs an adequate number of air defence systems, Sumy region needs it, Chernihiv region and all our regions suffering from Russian terror need it," Zelenskiy said in his nightly video address.

"Our partners have these defence systems. And our partners need to understand that air defences must protect lives."

The Kharkiv region, which borders Russia to the north and lies close to the frontline, has suffered regular drone and missile attacks during Russia's two-year-old invasion.

The X-59 missile struck the multistorey industrial building in the afternoon.

"The building houses production facilities and offices. This is an act of terrorism because it was conducted at a time when the vast majority of the people are at work," Volodymyr Tymoshko, head of the regional police, was quoted as saying on a police account on Telegram.

"In addition to the five dead, there are another five who are missing," Terekhov, the mayor, said on Telegram.

"We have identified them, but they are not among either the injured or the dead."

Terekhov said the fire, which had spread quickly, had been almost brought under control at the site.

One of the reasons for the severe fire was that a printing house was located in the building, Kharkiv regional governor Oleh Synehubov said.

A furniture and paint products factory also came under attack, Serhiy Bolvinov, the head of the investigative department of the regional police, said.

Moscow denies deliberately attacking civilians in the full-scale invasion of Ukraine which it launched in February 2022, although many have been killed in frequent Russian air strikes across the country.

RUSSIAN PERSPECTIVE

Western troops in Ukraine ‘an open secret’ – Poland

The fact that Western forces are present in Ukraine is now an ‘open secret’, Polish Foreign Minister Radoslaw Sikorski has told German press agency dpa.

The statement comes less than two weeks after the minister said the deployment of NATO troops to the country was “not unthinkable,”and that he appreciates French President Emmanuel Macron for not ruling out the idea.

In an interview with dpa on Wednesday, Sikorski stated, “As your chancellor [Olaf Scholz] said, there are already some troops from big countries in Ukraine.” 

Last month during a press meeting, Scholz justified his rejection of the delivery of Taurus cruise missiles to Ukraine by saying that Berlin would not participate using soldiers in targeting control, either from Germany or on the ground.

“What the British and the French are doing in terms of target control and accompanying target control cannot be done in Germany,” the chancellor told journalists at the time. His words have been widely interpreted as confirming the presence of Western soldiers in Ukraine.

Asked by dpa whether Scholz’ revelation was a problem, Sikorski responded, “In Polish, we have the expression ‘tajemnica poliszynela,’ which describes a secret that everyone knows.” 

Sikorski reiterated that Warsaw would not send ground troops to Ukraine, citing historical reasons. “Ukraine and Poland have been one country for 400 years. This would provide fodder for Russian propaganda. Therefore, we should be the last ones to do so,” he concluded.

The Polish diplomat, however, welcomed the French president not taking the option of sending ground troops off the table.

Macron said in late February that he “cannot exclude” the possibility of soldiers from the US-led military bloc being sent to aid Kiev. The statement sparked a wave of denials from the leaders of NATO member states, who insisted they harbor no plans to deploy combat troops to Ukraine. He doubled down this month, saying that Paris recognizes no limits or Russian “red lines” when it comes to backing Kiev. Europeans “will have to live up to history and the courage that it requires,” the French leader insisted.

In his recent address to Russia’s Federal Assembly, Russian President Vladimir Putin commented on the talk of “deploying NATO military contingents to Ukraine,” by saying that all previous attempts to conquer Russia have ended in failure, and that “now the consequences for potential invaders would be far more tragic.”

** Potential deployment of French troops to Ukraine may be of benefit to Russia — Medvedev

Eliminating French military personnel that may appear in Ukraine would be a critical but not particularly difficult mission for the Russian Armed Forces, but for Paris such a humiliating defeat of its legions would be tantamount to being guillotined, Russian Security Council Deputy Chairman Dmitry Medvedev said.

"Actually, for the success of our cause, it would be nice if the restless French dispatched a couple of regiments to ‘Banderaland.’ It would be very problematic to hide such a number of servicemen, so systematically eliminating them would not be the most difficult task, but surely the most important one. But, just think of the beneficial knock-on effect!" he wrote on his Telegram channel.

As Medvedev noted, with so many coffins to be delivered to France from a foreign country it would be impossible to hide the mass deaths of professional soldiers.

"There will be no chance of getting away with various lame excuses and speculations that mercenaries choose their own fate and that they are risking their lives at their own discretion," he warned.

The deputy head of the Russian Security Council pointed out that such military personnel would become full-fledged combatants as part of an interventionist contingent, and so their destruction would be "a priority and a matter of honor" for the Russian Armed Forces.

"As for the Gallic roosters in the French leadership, it would be tantamount to being guillotined. They would be torn to pieces both by the enraged relatives and angry members of the opposition, who have been assured all along that France is not at war with Russia. Also, it would be a good lesson for other rambunctious fools in Europe," Medvedev predicted.

He suggested that the immortal lines of 19th century classic Russian writer Alexander Pushkin will prove their timeless relevance once again:

"Then send your numbers without number,

Your maddened sons, your goaded slaves,

In Russia's plains there's room to slumber,

And well they'll know their brethren's graves!"

On French military in Ukraine

On March 19, Russian Foreign Intelligence Service (SVR) Director Sergey Naryshkin said that France was already preparing a military contingent to be sent to Ukraine, which would initially amount to about 2,000 soldiers. At the same time, he remarked that French military personnel have been unofficially present in Ukraine for quite a while already. Some have already been killed or wounded.

Naryshkin pointed out that France unofficially recognized the deaths of its own servicemen. The French army has not experienced such a level of losses since the Algerian War of 1954-1962. The Elysee Palace, as Naryshkin noted, also believes that the number of dead Frenchmen has exceeded a psychologically significant threshold, and now there is a question of how to bury the dead and treat the wounded in stealth so as not to spark popular protests.

Reuters/RT/Tass

Does free-market capitalism buttress democracy, or does it unleash anti-democratic forces? This question first emerged in the Age of Enlightenment, when capitalism was viewed optimistically and welcomed as a vehicle of liberation from the rigid feudal order. Many envisioned an equal-opportunity society of small producers and consumers, where no one would have undue market power, and where prices would be determined by the “invisible hand.” Under such conditions, democracy and capitalism are two sides of the same coin.

Domestic propaganda in the United States has pushed the same optimistic vision over the past century, aiming to convince voters that free-market capitalism is essential to the “American Way,” and that their liberty depends on supporting unfettered free enterprise and distrusting government. But economic developments in recent decades suggest that we should re-examine such beliefs.

To see why, allow me first to clarify some background ideas about what I call technological competition among innovating companies seeking to amass market power. Such competition differs from conventional price competition by producing only one or a few winners, rather than permitting all firms to survive with lower profits.

The winners of technology races are uniquely positioned to consolidate their market power through diverse strategies – including issuing periodic technology updates, acquiring competitors, or erecting barriers to entry with patents (often attaining far greater market power than intended by patent legislation). Technological domination thus is the basis for achieving market power over products sold to consumers, which in turn allows a company to extract monopoly profits.

In such situations market power becomes so entrenched that potential rivals prefer to cooperate with the top firm rather than compete with it. Laissez-faire policies that permit the growth of monopolies only enhance such power. As a result, market power becomes a permanent feature of a capitalist economy. Technological competition is ineffective, and creative destruction does not restore economic efficiency.

Permanent market power alters capitalism by ushering in a winner-takes-all economy in which one or a few technologically dominant firms monopolize each sector. Such an economy not only deploys resources inefficiently; it also produces a concentration of economic and political power that threatens democracy, whose survival then becomes dependent on the creation of new policy tools to protect it.

The Second Gilded Age

The First Gilded Age (1870-1914) is an essential reference point for comprehending the current moment, because its anti-democratic worship of business power undermined the optimistic Enlightenment view of markets. True, it was a period of extraordinary technological and economic progress, delivering most of the major twentieth-century innovations. Between 1895 and 1904, however, more than 2,000 firms were merged into 157 large conglomerates, leaving virtually every sector of the US economy dominated by a powerful monopolist.

Those who created these trusts believed they were doing God’s work of strengthening the economy by saving it from “ruinous” competition. Supported by the ideas of the eugenicist Francis Galton and Herbert Spencer’s theory of social Darwinism, business leaders saw themselves as the superior, intelligent men who had prevailed in the process of natural selection.

This selection process also applied to their firms, through which they were building a new society in which a few strong men would lead. It followed that small and weak firms must be eliminated or swallowed up within strong monopolies. The latter were seen as superior to all the unfit firms that were going bankrupt in frequent depressions. The big monopolies were also considered progressive organizations. As John D. Rockefeller put it, monopolization was unstoppable because it was “the law of God.”

These ideas were rejected by Progressive reformers and those pursuing antitrust enforcement under President Theodore Roosevelt after 1901, and under President Franklin Roosevelt in the New Deal era. Americans in these periods chose democracy and rejected the power-worshiping oligarchy, resulting in a long era of economic growth with shared prosperity.

But that story ended in 1981, when renewed laissez-faire economic policy led to the contemporary techno-winner-takes-all economy. In this Second Gilded Age, the worship of power and wealth has returned with a vengeance. Capitalism’s strong incentives for innovation and growth remain, but the survival of democracy hinges on whether the system’s most destructive effects can be contained.

In a techno-winner-takes-all economy, the market power conferred by innovation leads to one or a few firms monopolizing each industry. One firm might offer costly products of high quality, while a second may offer low-cost products of adequate quality. All these products are trademarked, and all monopoly profits are considered “innocent” by law, because they result from “spontaneous” innovations and are not subject to antitrust enforcement.

In this environment, small firms on the margin are vulnerable to either hostile acts or acquisition by larger firms. Dominant firms find it easy to snatch up competing innovative technologies, because small firms are reluctant to risk losing an economic war against powerful incumbents.

When a firm increases its price and earns monopoly profits, that leads to inefficient use of its economic resources, ultimately resulting in significantly lower output and lower demand for labor and capital inputs. As an approximation, a monopoly firm’s output and inputs might be reduced by as much as half. When market power is widespread, this results in lower investment, lower wages, and a lower rate of wage growth. The aggregate outcome is lower levels of income, consumption, and capital stock.

Moreover, when prices are too high, too few consumers will benefit from new innovations – as one often sees with costly drugs. There is substantial evidence that market power leads to extensive abuses of power more broadly. These might include the erection of high entry barriers to would-be competitors, suppression of competing innovations, efforts to compel acquisition of competitors, and so forth. The result is a gross national product that grows more slowly than is technologically feasible.

Capital Income and Monopoly Profits

The existence of monopoly profits changes business accounting. Under competitive conditions, the income created by a firm is divided into a labor share and a capital share. But with permanent market power, a firm’s income is divided into three shares: labor, capital, and monopoly profits.

This distinction between capital income and monopoly profits is central to techno-winner-takes-all capitalism. Net income paid to capital consists of interest payments at the prevailing market rates, whereas monopoly profits extracted by pricing higher than incremental costs are paid to the source of market power: mostly privately owned technology and other intellectual-property rights.

The fact that firms led by technologists “exploit” both labor and capital is the heart of the story, setting techno-winner-takes-all capitalism apart from the socialist view, in which capital always exploits labor.

Rising market power has caused most Americans to experience declining or, at best, slowly rising real (inflation-adjusted) incomes. Most monopoly profits originate in innovations, but the proportion of people who invest in risky startups or in companies engaged in risky innovations is small. Those profiting most from an innovation are the innovator and a small circle of financial advisers and early investors who buy the firm’s initial shares at low prices.

When an innovation succeeds, the firm’s stock becomes publicly traded, and its value rises sharply, making the owners wealthy within a short time. This explains why most monopoly profits and executive incomes earned today – and the wealth created by those profits since the 1980s – have benefited only a small minority of Americans. Income and wealth inequality have duly risen ever since.

The rapid rate of wealth accumulation caused by innovations contrasts sharply with the slow pace of growth attained by the accumulation of capital through savings. An extremely high rate of monopoly profits is the only way one can accumulate unimaginable wealth within one’s lifetime, and it explains why the US has 756 billionaires.

In a techno-winner-takes-all economy, conventionally measured profits are divided between capital and market power. Economic theory explains that interest payments compensate owners of capital for their past savings, whereas a patent pays royalties for a monopoly over a technology. These are two different economic functions. Equally, capital income and monopoly profits are different: a retiree with saved wealth is a capitalist who earns capital income, whereas an entrepreneur-inventor who owns a successful Silicon Valley startup makes mostly monopoly profits.

The same distinction between capital income and monopoly profits requires markets to differentiate between a firm’s associated assets, capital, and monopoly wealth. While a firm’s capital is the value of the tangible assets it owns (such as equipment, structures, and inventories), monopoly wealth is the current market valuation of future monopoly profits it is expected to earn.

In 2019, most capital owned by US corporations was financed by bonds, implying that the value of companies’ capital was expressed mainly in the bond market, leaving the stock market to reflect mostly monopoly wealth. In the same year, monopoly wealth accounted for 75% of the total value of stocks on US exchanges. The stock market has become primarily an arena for trading monopoly wealth, and the main risk of owning a firm’s common stock is the risk to its future earnings of monopoly profits.

Political Fallout

These economic and market dynamics have far-reaching political implications. One is high inequality, which is a direct result of a high degree of market power. It is well known that economic inequality creates political inequality, by giving the wealthy a stronger voice.

In thinking about this issue, I measure market power by the share of monopoly profits in income, and consider data about the domestic corporate sector where market power can be exercised. As the chart below shows, the degree of market power fluctuates with high long-run persistence. In the First Gilded Age, monopoly profits reached 31% of corporate income; in the Second Gilded Age, which began in 1981, their share has reached about 25%. These figures are compatible with other researchresults, showing a sharp corresponding rise in personal inequality.

Rising market power will always cause rising inequality, benefiting some and harming others. But a passive free-market policy aggravates such outcomes, because individuals are left to fend for themselves, and public policy neither compensates those harmed nor mitigates what causes it. Innocent citizens’ livelihoods then become society’s price for the collective gains from economic growth – an injustice that has severe political consequences.

The main winners from free-market policy and rising market power since the 1980s have been the few in the top income stratum and the technically skilled with a college education, while unskilled workers without a college education have been the most harmed. The result is social polarization, with the poor pitted against the rich, and the less educated against the college educated.

The critical point to remember is that this deeply divisive inequality results from technology and a specific free-market public policy. Those who lost their livelihoods recognize that they are the victims of a policy choice. They paid the price for others to benefit, and for some to grow immensely wealthy, and American democracy has been weakened as a result. The evidence shows that most of the participants in the January 6, 2021, attack on the Capitol were former thriving workers who had been left behind.

A Dangerous Trifecta

These outcomes reflect the impact of three factors: rising market power, automation, and globalization. Rising market power, as we have seen, has caused the decline or slow growth of all labor compensation. Meanwhile, automation has contributed to rising inequality among labor skills, by replacing some workers while benefiting others (an effect known as “skill-biased technological change”).

Consider the assembly line, which was introduced in 1913 to lower the cost of labor. Production was reduced to simple steps that made most of the skilled workers who produced automobiles at that time redundant. To work on the assembly line, one needed only the discipline and mental ability to perform a repetitive task, meaning no long apprenticeship, much less a college degree, was required.

The assembly line thus increased the productivity of unskilled workers and raised their wages. It created a class of highly productive, low-educated blue-collar workers whose work experience was their most valuable asset, one that allowed them to enjoy middle-class living standards.

Automation and robotics have had the opposite effect, replacing the unskilled workers who perform repetitive tasks, and causing them to lose their valuable work experience. Some found alternate well-paying jobs, but most workers without a college degree were forced to take dead-end, low-paying service jobs. This eviscerated the US middle class, previously populated by well-paid blue-collar workers.

Equally important, computers have complemented the work of college-educated skilled workers performing complex tasks that can now be executed more efficiently, increasing these workers’ own productivity and wages. Artificial intelligence, however, is likely to cause another upheaval in the skill composition of the US labor force.

The third factor is the wave of globalization that originated with the post-World War II US policy to help Japanese and German manufacturing recover. The same process then enabled China’s growth, much to the detriment of US manufacturing jobs. After the 1980s, information technology permitted more-educated workers to find satisfactory alternative employment, but this was not so for less-educated former blue-collar workers.

These three forces created large classes of winners and losers. Although those directly harmed were mainly low-skilled and less-educated workers in manufacturing and mining, the degradation of their lives also eroded the incomes of their immediate and extended families. Because most lived in specific geographic areas, such as the Midwest and Southeast, these regional economies experienced a slow economic death. Depression drove many to alcohol, substance abuse, and suicide, causing life expectancy to decline, while policymakers mostly ignored the problem.

Though we lack precise statistics, it is safe to say that these developments degraded the lives of tens of millions of Americans. Those harmed viewed their plight as profoundly unjust. They are angry and have lost faith in the system that betrayed them.

This is not surprising. It is essential for the viability of democracy that the public considers the distributive effects of public policy to be just. Without a just policy to tax the winners and help the losers recover their income and dignity, democracy will be weakened. Those harmed have turned against the educated elites who designed the policy, and against immigrants they perceive as taking their jobs and competing for scarce public goods and services. They have found a home in new anti-democratic movements such as Donald Trump’s MAGA, which has now taken control of the Republican Party.

Elephants in the Room

Over time, the techno-winner-takes-all economy has enabled the rise of a collection of interdependent economic and political power centers identified by the large firms, their top managers, and leading shareholders. Large firms – and a few ultra-wealthy individuals – exercise vast power through lobbying and campaign donations, but their power does not stop there. They also acquire vast amounts of information with which to manipulate our purchases and dominate our channels of communication. Armed with AI, their control over much of the information we receive will probably increase further.

All the ill effects noted up to now are exacerbated by social media. Firms like X (formerly Twitter) and Meta – each wholly controlled by a single billionaire – can have decisive effects on any election, which is hardly compatible with a healthy democracy. Much has been written about the destructive impact of social media on the functioning of democracy and civic engagement, so the point I would stress concerns their legal status.

Experience has shown that social-media platforms are conducive to mob behavior and the spread of fake news, conspiracy theories, hate speech, and much else. This content proliferates because the platforms are protected by Section 230 of the Communications Decency Act of 1996 (which was enacted not to improve public welfare but to aid President Bill Clinton’s re-election).

Making matters worse, the US Supreme Court has contributed to the formation of monopoly power and become a major obstacle to reform. In its 2010 Citizens United decision, it removed all restraints on using corporate wealth to influence elections, ignoring extensive literature showing that wealth substantially affects policy and carries extra weight in the political process.

Extreme wealth inequality also has significant anti-democratic culturaleffects that stem from wealthy individuals’ belief that they deserve to be rich by dint of their superiority. While the lifestyles and attitudes of the rich and famous are not central to my own work, I do think they can tell us something about the impact of wealth inequality on the vitality of democracy.

Consider two examples. The first is Andrew Carnegie, who came from humble beginnings but became one of the world’s wealthiest men by building a vast, vertically integrated American steel empire. Intending to promote the idea that rich people should devote their wealth to helping others, he wrote an article in 1889 that was turned into a book entitled The Gospel of Wealth.

In reflecting on what had made him wealthy, Carnegie seized on the prevailing ideas of his era. He saw himself as among the strong, superior human specimens naturally selected to be rich. Though he set out to encourage the wealthy to contribute to worthy causes, his conclusions were deduced from an obviously anti-democratic worldview.

The false theory of eugenics was popular during the First Gilded Age because it offered the rich an explanation of why they felt superior to those less well-off, thus providing a justification for their opulent lifestyles. Nowadays, with our modern knowledge of genetics, the wealthy cannot openly claim to be more intelligent than others. Nevertheless, many still feel superior, and they have found other ways to express it.

In “The Techno-Optimist Manifesto,” published last fall, Netscape co-founder and venture capitalist Marc Andreessen envisages a future in which the march of technology will be led by technologists innovating at an ever-increasing rate, culminating in the creation of a “techno-capital machine” that produces all necessities at vanishing marginal costs. In this telling, technologists are not just wealthy businessmen but messiahs who will guide humanity with their innovations and maintain social order by fighting their “enemies.” The obstacles to be knocked away include social responsibility, risk management, trust and safety, and regulations.

Andreessen’s vision combines technologists’ role as civilizational leaders with that of free markets in allocating all resources. The implication is that government should serve no function in the future.

This is a decidedly anti-democratic vision – a Silicon Valley oligarchy superimposed on a libertarian society. According to Andreessen, everyone else’s roles and rewards will be determined by how unfettered markets value their skills and economic contributions. Never mind that, in his scheme, the world appears to be converging to an economic system where most people will have virtually no market value.

Although Carnegie and Andreessen offer different views, they espouse the same gospel of wealth and power, and thus represent the same kind of threat to democracy. Moreover, their attitude is shared by many in the business community and academia. PayPal co-founder Peter Thiel’s contention that “Competition Is for Losers,” and that monopoly drives progress, amounts to the same old worship of power. So, too, did Joseph Schumpeter’s argument that a strong monopoly firm is superior to a competitive firm.

Similar ideas have been invoked since the 1930s to support lower taxes for wealthy Americans, who are said to deserve their hard-earned income and wealth. This sense of entitlement enabled the rich to justify their tax noncompliance and use of foreign tax sheltersto hide their wealth, in turn fueling the growth of a sprawling tax-avoidance industry.

The Chicago Fallacy

But it is the Chicago School’s ideas about monopoly that have had the most impact in recent decades. In the late 1970s, the economist Aaron Director and the legal scholar Robert Bork argued successfully that the Sherman Antitrust Act was designed to protect consumers only by ensuring they pay the best current price, an interpretation that ignores the strategies noted earlier, used to build up monopolies over time, and the other adverse effects of market power.

An entire generation of jurists and lawyers then bought in to the fallacy that technological competition can create progressive monopolies that benefit consumers. This idea was laid bare in Supreme Court Justice Antonin Scalia’s statement in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP (2004):

“The mere possession of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful; it is an important element of the free-market system. … the possession of monopoly power will not be found unlawful unless it is accompanied by an element of anticompetitive conduct.”

How could a distinguished jurist accept such flawed, simplistic reasoning? The theories of eugenics and social Darwinism had been discredited, but they were replaced by market efficiency as the new anti-democratic “law of God.” The market is held up as a natural-selection mechanism that enables the strong and efficient to survive. If a monopolist triumphs in the market, that means it is the best organization to offer consumers low current prices. With this flawed reasoning, we have come full circle: Thanks to their superior power, monopolists are the best promoters of consumer welfare!

Back to Democracy

The ill effects of techno-winner-takes-all capitalism call for numerous policy changes. I outline many in my book, The Market Power of Technology, but I can mention only a few here. They fall into three categories, starting with data: We need accurate national and sectoral data on monopoly profits and wealth in order to develop robust public policies.

The second category concerns restraints on the market power of technology. Among other things, we should place strict limits on firms’ ability to acquire technologies to expand their technological reach; require higher standards for patent issues; reduce interrelated patent pyramids (which are used as entry barriers) by shortening the duration of secondary patents (those whose description depends on another patent); revise labor laws to improve the balance of power in the marketplace by making it easier for workers to organize and bargain collectively; and impose corporate income tax on monopoly profits. 

Finally, we need economic policies that will strengthen democracy. These include reforms that make restraining technological market power an explicit goal of antitrust law; increase marginal income tax rates (closer to 50%) on higher earners; repeal Section 230 and consider proposals to turn social media into regulated utilities; and invest extensively in low-income families’ children’s early education and health (which research indicates is the most promising path to stabilizing the American middle class and democracy over the long run).

Last but not least, we should establish “recovery rights” for those harmed by policy-supported adverse events. Workers displaced by forces such as the market power of technology, automation, globalization, or even the Federal Reserve’s monetary policy would have legal rights to assistance for rehabilitation, the acquisition of new skills, or direct compensation. This would eliminate the neglect that pervades existing policy. A similar approach is already used in Scandinavia with positive effects on democratic stability. Such policies can be designed to be universal and with minimal bureaucratic discretion.

Some on the radical left believe that capitalism, as Marxists describe it, is dead and has been replaced by surveillance capitalism, technofeudalism, digitally controlled systems, or something else. And yet, the profound impact of technology and the existence of a third claimant on national income both show that capitalism is as creative and strong as ever.

What has happened is that capitalism has been changed drastically by technology. Milton Friedman’s vision of Capitalism and Freedomnow seems out of touch with economic reality. Yet because many still cling to it, the policy reforms we need are being blocked. Without greater public mobilization to support them, the threat to democracy will continue to grow, in America and around the globe.

Project Syndicate

You can't win as a new venture founder working alone. You need to have business relationships with team members, investors, customers and myriad other support people. That doesn't mean you have to be a social butterfly to succeed or introverts need not apply.

It does mean that you need to look, listen and participate in the business world around you and network through all available channels, like business-oriented social networks online (LinkedIn), local business organizations (Chamber of Commerce) and events or conferences in your school or industry.

I hope all this seems obvious to you, but I still get a good number of notes from "technologists" who have been busy inventing things all their life but can't find a partner to start their first business and others trying to find an executive, an investor or a lawyer.

What these people need is more relationships, not more experts, more blogs or more books. So I thought I would drop back to some essentials in building and nurturing business relationships (most of these apply to personal relationships as well):

1. Build your network

These are people of all levels who have been there and done that, meaning people who know something that you need to know.

See this article from a while back, "Why Professional Networking Is the Missing Piece to Your Success," on how and where to get started. You don't need a thousand friends, but a few real ones can make all the difference.

2. Give and you will receive

Relationships need to be two-way, and can't be just all about you. If you are active in helping others with what you know, they will be much more open to helping you when you need it. The more you give, the more you get in return, both literally and figuratively.

3. Work on your elevator pitch

This is a concise, well-practiced description of your idea or your business, delivered with conviction to start a relationship in the time it takes to ride up an elevator. It should end by asking for something, to start the relationship.

4. Don't skip all business social settings

Face time is critical, even with the current rage on social networks, phone texting, and email. Studies show that as much as 50 to 90% of communication is body language. That's usually the important relationship part.

5. Nominate someone as your mentor

Build a two-way relationship with several people who can help you, and then kick it up a notch with one or more, by asking them to be your mentor. Most entrepreneurs love to help others and will be honoured to help you.

6. Cultivate existing allies

These are people who already know and believe in you, but may not be able to help you directly in your new endeavours. But don't forget that each of these allies also has their own network, which can be an extension of yours, if you treat them well.

7. Nurture existing relationships

We all know someone who claims to be a "close friend," but never initiates anything. They never call, they never write and wait for you to make the first move. If you don't follow up on a regular basis with someone, there is no relationship, only a former acquaintance.

On the positive side, many attributes of an introvert lead to better business decisions, such as thinking before speaking, building deep relationships and researching problems more thoroughly.

Mark Zuckerberg, Facebook founder, is currently the most famous introvert entrepreneur, so don't let anyone tell you it can't be done.

One of Mark's secrets seems to have been to surround himself with extroverts like COO Sheryl Sandberg and people who have a complementary energy.

But working alone doesn't get you very far. It takes a team to win in the game of business, so take a look around you to see how you are doing so far.

Inc

Nnamdi Kanu, leader of the proscribed Indigenous People Of Biafra (IPOB), says he would restore peace in the south-east in two minutes if released from detention.

The IPOB leader said nobody in the south-east can counter his orders concerning the security situation in the region.

Kanu spoke on Tuesday after he was denied bail by Binta Nyako, presiding judge of the federal high court, Abuja.

He said violence has persisted in the region because he is being held in the custody of the Department of State Services (DSS).

“Anybody committing crime cannot go free. I swear, anybody committing crime in the east cannot go free,” he said.

“They are doing it because I am in the DSS (custody). If I were to be outside, nobody could try this. I suspect that some people in government are complicit. They are making money with insecurity.

“They know if Nnamdi Kanu is outside, in two minutes this nonsense will stop. Who is the bagger or idiot that will speak when I am talking?

“That I would give an order in the east… who is the idiot that I would give an order that would counter it? Nobody can. I am Nnamdi Kanu. Rubbish!

“Anybody involved in any form of violence in the east in the name of IPOB is a goner and they know it. Let me come out of this mess, only two minutes… there will be peace in the east.”

The court ordered an accelerated hearing of the seven-count terrorism charge preferred against Kanu on Tuesday.

The Cable

Residents of Okuama community in the Ughelli South Local Government Area of Delta State where 16 military personnel were killed have opened up on the alleged reprisal.

It would be recalled that troops attached to 181 Amphibious Batallion, Bomadi Local Government Area of Delta were killed while on peace mission.

Trouble started when the troops responded to a distress call after the communal crisis between the Okuoma and Okoloba communities both in the South South State.

There were reports that the military went on a reprisal attack after the incident.

But reacting, Director, Defence Media Operations, Edward Buba, said the armed forces being a disciplined force complies with its rules of engagement, laws of armed conflict and respect for human rights.

Buba, a Major-General, said the military would not be led by emotions, but by the rule of law even in the face of provocation, adding that the incident would not demoralise or deter gallant troops from carrying out their constitutional duties as expected.

However, speaking with DRTV in Warri, two Okuama residents accused the military of carrying out mass killing.

The residents, who pleaded anonymity, said the soldiers had visited their community for a peacekeeping mission and were received in the town hall.

According to the residents, it was all fine until they asked to take the community chiefs away.

They said the soldiers reacted violently when the community insisted they leave without their chiefs.

On of the residents said: “On the 14th of March, we were at home when some military officials came to our community. We welcomed them and they said that they wanted to walk around the community. They walked around the community and said that they wanted to have a peace talk at the town hall.

“They went to the town hall. The military men were entertained and welcomed. They (the soldiers) asked for the community chairman and community leaders. They sat with them and had a talk. After that, they asked the chairman and some community leaders to follow them.

“We said that they had had the peace talk with the leaders already so they should leave, but the soldiers insisted they had to take them away. The people said no. From there, the army turned the whole story into violence. Right there, in the community town hall, the soldiers started shooting our people, killed many of the young people. People started running; some were killed instantly. Nobody expected any shooting.

“The army went and came back with more reinforcement. About twenty more people were killed immediately.”

Another source said: “The army – they just changed all of a sudden and opened fire on us. Women and children died. We cannot find some of our children and our parents.

“They (the soldiers) killed over 20 of our fellow residents. Some of our buildings were razed. Many residents have fled and there are even dead bodies in the bush where we have been hiding. We want the government to come to our rescue.”

Daily Trust

Central Bank of Nigeria (CBN) has lifted its restrictions on the importation of milk and dairy products.

On February 11, 2020, the CBN added milk and dairy products to the list of items not eligible for forex.

However, in a notice to customers, Zenith Bank said the regulator had provided an update on eligible items for foreign exchange in a notice to commercial banks on March 12.

“Please be informed that the Central Bank of Nigeria (CBN), through its circular Ref No. TED/FEM/PUB/FPC/001/010, dated March 12, 2024, has provided an update on eligible items for foreign exchange (Non-Valid for FX),” the statement reads.

“In light of the foregoing, please note that the restriction on foreign exchange for the importation of dairy products and its derivatives to all entities except selected companies has been lifted.”

Zenith Bank said any entity that meets the “necessary extant regulation requirements is allowed to source for FX at the Nigeria Foreign Exchange Market (NAFEM) for the transactions”.

On October 12, 2023, the apex bank announced the lifting of the ban on 43 items previously restricted from accessing forex.

“Importers of all the 43 items previously restricted by the 2015 Circular referenced TED/FEM/FPC/GEN/01/010 and its addendums are now allowed to purchase foreign exchange in the Nigerian Foreign Exchange Market,” the apex bank had said.

“The CBN is committed to accelerating efforts to clear the FX backlog with existing participants and will continue dialogue with stakeholders to address the issue.”

Some of the affected items include rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, vegetables and processed vegetable products, poultry, tomatoes/tomato paste, soap, cosmetics, and head pans.

The Cable

Netanyahu spurns Biden plea to call off Rafah assault in Gaza

Israeli Prime Minister Benjamin Netanyahu spurned a plea from Joe Biden to call off a planned ground assault of Rafah, the last refuge in Gaza for more than a million displaced people, where Israel believes Hamas militants are holed up.

Netanyahu told lawmakers on Tuesday he had made it "supremely clear" to the U.S. president "that we are determined to complete the elimination of these battalions in Rafah, and there's no way to do that except by going in on the ground".

The two leaders spoke by phone on Monday. White House National Security Adviser Jake Sullivan said Washington believed that storming Rafah would be a "mistake" and that Israel could achieve its military aims by other means.

U.S. and Israeli officials will likely meet early next week in Washington to discuss Israel's military operation in Rafah, White House spokesperson Karine Jean-Pierre said on Tuesday, citing deep concern about reports of imminent famine in Gaza.

Jean-Pierre said Biden had asked Netanyahu to send a senior team of military, intelligence and humanitarian officials to Washington for comprehensive discussions in the coming days.

Washington has launched a new diplomatic push for a ceasefire in the nearly six-month-old war to free hostages and bring in food aid to ward off famine in the Palestinian enclave.

Secretary of State Antony Blinken announced a trip to the Middle East in which he would meet senior leaders of Egypt and Saudi Arabia to "discuss the right architecture for a lasting peace". Unusually, Blinken made no mention of a stop in Israel itself, and the Israeli foreign ministry said it had received no notification to prepare for one.

Late on Tuesday, an Israeli airstrike on a major roundabout killed 30 people from groups that local clans had formed to secure the entry of aid trucks into Gaza City, Hamas media said. Hamas denounced the strike on groups protecting aid trucks as an effort to "spread chaos and security anarchy."

At the Nuseirat refugee camp in central Gaza, an Israeli airstrike targeting a residential building with three floors killed at least 15 people, with some believed to be trapped under its rubble, Palestinian health officials said.

The Israel Defence Forces did not immediately respond to a request for comment on the airstrikes.

In Rafah, dazed survivors walked through the ruins of a home on Tuesday morning, one of several buildings hit in overnight Israeli airstrikes that killed 14 people in the city, where more than half of Gaza's 2.3 million people have been pushed up against the southern border fence with Egypt.

At a nearby hospital morgue, relatives wailed beside corpses laid out on the cobbles. A woman peeled back a tiny bloodstained shroud to reveal the face of a small boy, rocking him back and forth in her arms.

"There’s U.S. support, European support and support of the whole world for Israel, they support them with weapons and planes," said one mourner, Ibrahim Hasouna. "They mock us and send four or five airdrops (of aid) just to save their faces."

The war was triggered when Hamas fighters crossed into Israel on a rampage on Oct. 7, killing 1,200 people and capturing 253 hostages, according to Israeli tallies.

Nearly 32,000 people have been confirmed killed in Israel's retaliatory onslaught, according to Palestinian health officials, with thousands more feared lost under the rubble.

The international hunger monitor IPC, relied on by the United Nations, said on Monday Gaza's food shortages had already far surpassed famine levels, and Gazans would soon be dying of hunger at famine-scale rates without a ceasefire.

Israel, which initially let in aid only via two checkpoints on Gaza's southern edge, denies blame for hunger in the enclave and says it is already opening new routes by land, sea and air.

It says the U.N. and other aid agencies should do more to bring in food and distribute it. The U.N. says that is impossible without better access and security, both of which it says are Israel's responsibility.

"The extent of Israel's continued restrictions on entry of aid into Gaza, together with the manner in which it continues to conduct hostilities, may amount to the use of starvation as a method of war, which is a war crime," said U.N. Human Rights Office spokesperson Jeremy Laurence.

PEACE TALKS RESUME IN QATAR

Ceasefire talks are resuming this week in Qatar after Israel rejected a Hamas counter-proposal last week. An Israeli delegation headed by the country's spy chief travelled to Qatar on Monday, although an Israeli official said Israel believed any agreement would take at least two weeks to nail down.

Both sides have been discussing a six-week truce during which about 40 Israeli hostages would be freed in return for hundreds of Palestinian detainees and aid would be rushed into the Gaza Strip.

But they have yet to narrow differences over what would follow the truce, with Israel saying it will negotiate only for a temporary pause in fighting, and Hamas saying it will not release hostages without a wider plan to end the war.

A Palestinian official close to the mediation talks told Reuters that the new round in Qatar was expected to be "very tough", accusing Israel of deliberate stalling.

Hamas said a senior police commander was killed in the Jabalia district of northern Gaza, along with his wife and children, in overnight airstrikes, the second senior police official killed in two days after another was killed in an Israeli raid on Gaza City's Al Shifa hospital.

A third police chief was killed in an Israeli airstrike on a car in central Gaza's Al-Nuseirat later on Tuesday, Hamas media reported. Five people in all were killed in the attack, including children, Palestinian health officials said.

Reuters