Re: social-democratic illusions/ was UK Decay
valis wrote: Is this comment (and I agree with the part about America) meant to support orthodox revolution as an option, or does it intend something else? I don't believe in the permanence of capitalism, if that's what you mean. But I do not know, and I don't think anyone does, how things will work out: I keep reading stuff on dematerialisation which sometimes looks optimistic, but at the same time I believe in Grow-or-Die and I just don't see how it can grow at 2% forever. Since reforms don't really bear on that, how can there not be revolution? But I dunno, truly.Mark
Re: social-democratic illusions/ was UK Decay
Quoth Mark Jones, in conclusion: The plain fact is that the German/Japanese mercantilist model has failed. These countries are going to approximate more to the Anglo-Saxon model. The idea that America can on the contrary be pushed in the direction of socially-inclusive 'welfareist' capitalism is a pathetic social democratic illusion. The trend is all in the other direction, as the massive impending shake-out in Europe will demonstrate. Social democratic models have had their day. They exhausted their potential two decades ago. Is this comment (and I agree with the part about America) meant to support orthodox revolution as an option, or does it intend something else? valis
Re: social-democratic illusions/ was UK Decay
At 07:44 PM 3/17/98 +, Mark Jones wrote: You need a long spoon to sup with the IBRD, it's true. However, propaganda which relies upon publicly abandoning the most significant indicator of market-driven progress is pretty double-edged. It's tacitly abandoning the capitalist dream altogether. Hmmm. I always thought that the 'capitalist dream' is monopoly capital, the concentration of wealth and power in fewer and fewer hands -- which is alive and well. Market-schmarket is just another form of newspeak invented by spin-doctors, a managerial ideology if you will that, like its predecessors form 'social Darwinism' to 'human relations' to Maslow's 'hierarchy of needs' and to Fukuyama's 'trust -- is nothing but a scam to legitimate the existing distribution of wealth and power. Since the market-schmarket schmooze provokes so much negative knee-jerk reactions, the spin doctors turned to the ngo-speak. What else is new? Wojtek Doug, do you know any insiders at Schroder's? I'd like to open an account there. A hero of one of my novels is a CIA agent, that should be good enough recommendation. Mark Doug Henwood wrote: You've got to be careful with this. Two people with good UN connections (who must remain anonymous) confirmed my suspicions that the sudden interest in PPP and social indicators demonstrated by the first UNDP Human Development Report was an attempt to divert attention from the hyperpolarized state of global income distribution, and to put the nail in the coffin of Third World calls for a global redistributionist strategy. I have similar suspicions about the World Bank's embrace of these things. Bank pres James Wolfensohn, a very clever fellow, actually said in his debut speech at the WB/IMF annual meetings some years ago that the true measure of development was not GDP, but "the smile on a child's face." This from a former investment banker and an alum of the Schroders Bank, long-time banker to the CIA. What happened was that Wolfensohn read all his green/NGO critics and appropriated their language - while not doing anything substantive to change the Bank's focus as a bank. Yes, GDP is a weak indicator of living standards, and yes social indicators tell a more accurate story, but they have propagandistic uses as well. Doug
Re: social-democratic illusions/ was UK Decay
Doug, Would you say the same critical things about the UN's Quality of Life Index (QLI)? BTW, those have generally shown pretty good conditions for officially socialist countries. Cuba does pretty well compared with other Latin American nations. They even had North Korea about even with South Korea a few years ago, although that would appear to have altered since the outbreak of famine in North Korea. Again, there is a serious foundation for looking at PPP rather than GDP. GDP in the US has gone up, but leisure time has gone down and more things are paid for in the market that used to be provided outside the market. Much more is provided for outside the market in LDCs. Maybe using PPPs makes the differences between the metropole and the periphery not look as great as GDP would make them look, but they are still very large. Barkley Rosser On Tue, 17 Mar 1998 12:22:54 -0500 Doug Henwood [EMAIL PROTECTED] wrote: Mark Jones wrote: The fact is that GDP does not correlate in any definite way to welfare. Even the World Bank recognises this, since it doesn't rely on GDP figures any more as an idnex of client welfare. The trend to replace GDP with GPI (Genuine Progress Indicator) ... You've got to be careful with this. Two people with good UN connections (who must remain anonymous) confirmed my suspicions that the sudden interest in PPP and social indicators demonstrated by the first UNDP Human Development Report was an attempt to divert attention from the hyperpolarized state of global income distribution, and to put the nail in the coffin of Third World calls for a global redistributionist strategy. I have similar suspicions about the World Bank's embrace of these things. Bank pres James Wolfensohn, a very clever fellow, actually said in his debut speech at the WB/IMF annual meetings some years ago that the true measure of development was not GDP, but "the smile on a child's face." This from a former investment banker and an alum of the Schroders Bank, long-time banker to the CIA. What happened was that Wolfensohn read all his green/NGO critics and appropriated their language - while not doing anything substantive to change the Bank's focus as a bank. Yes, GDP is a weak indicator of living standards, and yes social indicators tell a more accurate story, but they have propagandistic uses as well. Doug -- Rosser Jr, John Barkley [EMAIL PROTECTED]
Re: social-democratic illusions/ was UK Decay
You need a long spoon to sup with the IBRD, it's true. However, propaganda which relies upon publicly abandoning the most significant indicator of market-driven progress is pretty double-edged. It's tacitly abandoning the capitalist dream altogether. Doug, do you know any insiders at Schroder's? I'd like to open an account there. A hero of one of my novels is a CIA agent, that should be good enough recommendation. Mark Doug Henwood wrote: You've got to be careful with this. Two people with good UN connections (who must remain anonymous) confirmed my suspicions that the sudden interest in PPP and social indicators demonstrated by the first UNDP Human Development Report was an attempt to divert attention from the hyperpolarized state of global income distribution, and to put the nail in the coffin of Third World calls for a global redistributionist strategy. I have similar suspicions about the World Bank's embrace of these things. Bank pres James Wolfensohn, a very clever fellow, actually said in his debut speech at the WB/IMF annual meetings some years ago that the true measure of development was not GDP, but "the smile on a child's face." This from a former investment banker and an alum of the Schroders Bank, long-time banker to the CIA. What happened was that Wolfensohn read all his green/NGO critics and appropriated their language - while not doing anything substantive to change the Bank's focus as a bank. Yes, GDP is a weak indicator of living standards, and yes social indicators tell a more accurate story, but they have propagandistic uses as well. Doug
Re: UK Decay
In a message dated 98-03-17 05:07:29 EST, you write: definitely was going to sink? However, if you consult the archives of Marxism-International, you will see that the alternatives are what we talk about all the time. M Good, I am glad someone has it all worked out then.
Re: social-democratic illusions/ was UK Decay
Rosser Jr, John Barkley wrote: Would you say the same critical things about the UN's Quality of Life Index (QLI)? BTW, those have generally shown pretty good conditions for officially socialist countries. Cuba does pretty well compared with other Latin American nations. They even had North Korea about even with South Korea a few years ago, although that would appear to have altered since the outbreak of famine in North Korea. Again, there is a serious foundation for looking at PPP rather than GDP. GDP in the US has gone up, but leisure time has gone down and more things are paid for in the market that used to be provided outside the market. Much more is provided for outside the market in LDCs. Maybe using PPPs makes the differences between the metropole and the periphery not look as great as GDP would make them look, but they are still very large. Look, I think that using social indicators to measure the level of development is a good thing. But it's not a complete picture, nor is PPP, especially if you're talking about the global wealth/power hierarchy. The fact that U.S. money incomes are 40 or 50 times the level of African money incomes means something, even if it doesn't mean that Americans are 40 to 50 times "better off" than Africans. Did F. Scott Fitzgerald say something like "the ability to hold two thoughts in mind at once is a measure of intelligence"? Doug
Re: social-democratic illusions/ was UK Decay
Mark Jones wrote: The fact is that GDP does not correlate in any definite way to welfare. Even the World Bank recognises this, since it doesn't rely on GDP figures any more as an idnex of client welfare. The trend to replace GDP with GPI (Genuine Progress Indicator) ... You've got to be careful with this. Two people with good UN connections (who must remain anonymous) confirmed my suspicions that the sudden interest in PPP and social indicators demonstrated by the first UNDP Human Development Report was an attempt to divert attention from the hyperpolarized state of global income distribution, and to put the nail in the coffin of Third World calls for a global redistributionist strategy. I have similar suspicions about the World Bank's embrace of these things. Bank pres James Wolfensohn, a very clever fellow, actually said in his debut speech at the WB/IMF annual meetings some years ago that the true measure of development was not GDP, but "the smile on a child's face." This from a former investment banker and an alum of the Schroders Bank, long-time banker to the CIA. What happened was that Wolfensohn read all his green/NGO critics and appropriated their language - while not doing anything substantive to change the Bank's focus as a bank. Yes, GDP is a weak indicator of living standards, and yes social indicators tell a more accurate story, but they have propagandistic uses as well. Doug
Re: social-democratic illusions/ was UK Decay
One of my reservations about the PPP technique is that I'm convinced that the IMF and such use it to make global comparisons less embarrassing. Zimbabwe's PPP at $2,030 sounds a lot better than its cash income at $540 (World Bank figures). Even so, Zim's PPP income was 8.6% of the US's in 1987, and 7.5% in 1995. Doug Yes, using PPP does hide the embarrassment. But simple dollar conversions is also misleading. My cook just told me to get some tomatoes and I got a kilo for Rs. 8 (roughly US 20 cents). I bought assorted vegetables five minutes ago for a total bill of Rs. 30, less than a dollar. There must be some utility of the PPP. Anthony D'Costa
Re: UK Decay
I know this is going to sound hackneyed, but isn't 'And your alternative?' more or less what Ismay asked the captain when told the Titanic definitely was going to sink? However, if you consult the archives of Marxism-International, you will see that the alternatives are what we talk about all the time. Mark PJM0930 wrote: In a message dated 98-03-16 15:05:29 EST, you write: Of course, the social market economy, like all the social-democratic fantasies which Dennis seems to share, are forms of accommodation by corrupted proletariats to big capital, and are therefore obstacles to achieving socialism and nto stepping-stones along the way. This is all elementary. It only seems sedcutive in the reformist world of illusions and daydreams which seems to inform Dennis' world view. And your alternative??? -Paul J. Meyer
Re: social-democratic illusions/ was UK Decay
Doug Henwood wrote: One of my reservations about the PPP technique is that I'm convinced that the IMF and such use it to make global comparisons less embarrassing. Zimbabwe's PPP at $2,030 sounds a lot better than its cash income at $540 (World Bank figures). Even so, Zim's PPP income was 8.6% of the US's in 1987, and 7.5% in 1995. Surely the correct way to understand per capita income figures is not as expressing something positive (the higher the figure, the higher the 'standard of life') but as an INDEX OF EXPLOITATION. This, if you will, is my real theoretical gripe with Dennis' constant crowing about the virtues of Germany etc. He is gloating over the fact that Axis capitalists exploit their workers more effectively. The fact is that GDP does not correlate in any definite way to welfare. Even the World Bank recognises this, since it doesn't rely on GDP figures any more as an idnex of client welfare. The trend to replace GDP with GPI (Genuine Progress Indicator) is another reflex recognition that if, for example, you sink an oil tanker and the costs of clean-up actually enhance GDP, then there is something wrong with the measure. The October 1995 Atlantic Monthly piece by Clifford Cobb, Ted Halstead, and Jonathan Rowe, If the GDP is Up, Why is America Down? sets all this out at length. For at least three decades, US GDP has mushroomed, but real living standards by many tests, even mortality and morbidity, have fared much less well. But this is the bourgeois gripe: as I say, the real issue is that GDP pc figures, allied to national income breakdowns, tell us mostly about the rate of exploitation of a national working class, and that is how they should be understood. For it is the case that metropolitan proletariats are EXPLOITED and do not live by unequal exchange with the South alone. The CIA discomfiture over East Germany was revealing: basically, Cold War statisticians had a hard time explaining why East Germans enjoyed such good health and longevity statistics. That's why they overestimated socialist GDP figures. Now capital is again retreating from the ex-GDR, disillusioned with the lazy, workshy Ossies, who just never learnt to work hard under socialism and still do not associate capitalist spectacle with the necessary sweat and self-exploitation. The lesson is that people who lived under socialism are somehow inoculated against speed-up. Of course, the working class in countries like the US and the UK which get away with running payments deficits for centuries at a time may also suffer from 'low productivity', 'low skill base' (ie, just don't give a fuck about the job) and other sins of imperial self-indulgence... Mark
Re: UK Decay
In a message dated 98-03-16 15:05:29 EST, you write: Of course, the social market economy, like all the social-democratic fantasies which Dennis seems to share, are forms of accommodation by corrupted proletariats to big capital, and are therefore obstacles to achieving socialism and nto stepping-stones along the way. This is all elementary. It only seems sedcutive in the reformist world of illusions and daydreams which seems to inform Dennis' world view. And your alternative??? -Paul J. Meyer
Re: UK Decay
Some posts of mine are slow getting thru, but I've already now commented at length on the PPP question. However: Dennis R Redmond wrote: As Doug's post pointed out, the market GDP of Germany is, in per capita terms, indeed much higher than that of the UK. Less than $3k pa is so marginal as to not be worth questioning -- and if the CIA updated the Factbook they might reasonably continue to suggest that UK pc income exceeds German. The purchasing power parity index measures consumption only, not things like production or distribution; basically, it makes rich countries look poorer relative to the US, PPP parities form a trend line around which real exchange rates move and towards which they converge. The PPP certainly does tell us somethign about the real world -- it is GDP per capita (but Dennis and I have a problem about reality: he is a physiocrat, and I am a marxist). These cross-country comparisons are important, because they show that people can indeed intervene in an economy and change things; Germany was half as rich as the UK in 1960, but caught up by the late Seventies; Italy was probably a quarter as rich as the UK in 1960, and caught up in the early Nineties. Japan was a tenth as rich as America and caught up in 1993 or so. Things just are not like this. Japan for example has PPP pc incomes at least 20% lower than US; Europe and Japan as a whole are at least 20 years behind the US in productivity terms, according to some very interesting data reported in the Sunday Times yesterday; as for 'catching up with the UK' etc, the history of postwar Germany is one of a country whose industry was left essentialy undamaged by the best efforts of the RAF and USAAF and in the gioven Bretton Woods conditions, and given a cowed but incentivised workforce, who had no reason toe xpect such god luck as Marshall Aid, it's not a great surprise that the pre-existing fundamentals would soon assert themselves. In fact Germany had overtaken the UK on the fundamentals by about 1890. The economy is not destiny; the UK decline relative to other countries didn't have to happen that way. But it did. And pretending this never happened makes about as much sense as expecting a revolution from the dank and dismal hybrid of Clintonite rhetoric and Majorite austerity otherwise known as Blatcherism. Lurid rhetoric aside, we have to return insistently to the nature of the world-system and the relationship between finance capital and industrial capital, which has to do with both the circuits of capital and with the nature of imeprial hegemony. From 1870, the UK exhibited signs of becoming a coupon-clipping rentier capitalism. In the following century it did not however lose its general pre-eminence, as the principal ally of US imperialism. The situation today is that the ONLY measure of value in the world is money, and the UK pound is today worth DM3.03, something which there seems to be agreement will continue for several years at least. Why? Because British capitalism has done enough things right in the past 25 years not to suffer the fate of Castilian Spain, and Germany has done enough things wrong historically to still be lumbered with some of the consequences. Despite deindustrialisation, the UK economy is per capita and in value terms, similar to the German. The UK economy is also perhaps the most open and deregulated in the world. Europe still has to endure the consequences of opening-up, and so does protectionist Japan. On present performance they have nothing to hope for except slipping further behind the US, which the UK will continue to slipstream. As far as this weird charge Mark keeps making, that I'm a secret agent of the Teutonic/Nipponic Fourth Reich, I suppose I ought to be flattered. I haven't said any such foolish thing. What I do say is that the idea that Germany and Japan can displace Anglo-Saxon world hegemony has already been tested to destruction. This whole discussion is mispremised, in fact. Of course, England is a decrepit and parasitic rentier imperialism. Of course German economic 'success' depended historically on being sheltered by US imperialism, on the exploitation of millions of gastarbeiter and the Third World generally. Of course, the social market economy, like all the social-democratic fantasies which Dennis seems to share, are forms of accommodation by corrupted proletariats to big capital, and are therefore obstacles to achieving socialism and nto stepping-stones along the way. This is all elementary. It only seems sedcutive in the reformist world of illusions and daydreams which seems to inform Dennis' world view. Obviously Austria, Denmark, the Netherlands, Luxembourg, eastern France, northern Italy, Scandinavia, Singapore, Hong Kong, South Korea and Taiwan simply don't exist. Nor do Sony, Mitsubishi, Acer, Siemens, Nokia, Alcatel, Hyundai, Fiat, Nestle, Deutsche Bank, etc. All a product of my fevered American imagination! Actually
Re: social-democratic illusions/ was UK Decay
Rakesh Bhandari wrote: In terms of those figures does the Japanese GDP per capita income on the basis of PPP remain almost 20% lower than the US? Yes. US at $26,438, Japan at $21,795. At any rate, it is a bit obscene that the focus remains almost solely on such comparisons within the imperial fraternity One of my reservations about the PPP technique is that I'm convinced that the IMF and such use it to make global comparisons less embarrassing. Zimbabwe's PPP at $2,030 sounds a lot better than its cash income at $540 (World Bank figures). Even so, Zim's PPP income was 8.6% of the US's in 1987, and 7.5% in 1995. Doug
Re: UK Decay
On Sun, 15 Mar 1998, Mark Jones wrote: The CIA world factbook (1995 figs which do not reflect recent devaluation of the DM, appreciation of sterling) tells the following story: GDP: Germany: purchasing power parity - $1.4522 trillion (1995 est.) western: purchasing power parity - $1.3318 trillion (1995 est.) eastern: purchasing power parity - $120.4 billion (1995 est.) As Doug's post pointed out, the market GDP of Germany is, in per capita terms, indeed much higher than that of the UK. The purchasing power parity index measures consumption only, not things like production or distribution; basically, it makes rich countries look poorer relative to the US, whose consumption standards are deemed to be the model for the rest of the world (never mind the dark side of the US model, things like ecological havoc, programmed obsolescence, and a submoronic, stupidity-inducing mass culture), and makes poor countries look richer on paper than hegemonic foreign exchange markets dictate they are. These cross-country comparisons are important, because they show that people can indeed intervene in an economy and change things; Germany was half as rich as the UK in 1960, but caught up by the late Seventies; Italy was probably a quarter as rich as the UK in 1960, and caught up in the early Nineties. Japan was a tenth as rich as America and caught up in 1993 or so. The economy is not destiny; the UK decline relative to other countries didn't have to happen that way. But it did. And pretending this never happened makes about as much sense as expecting a revolution from the dank and dismal hybrid of Clintonite rhetoric and Majorite austerity otherwise known as Blatcherism. As far as this weird charge Mark keeps making, that I'm a secret agent of the Teutonic/Nipponic Fourth Reich, I suppose I ought to be flattered. Obviously Austria, Denmark, the Netherlands, Luxembourg, eastern France, northern Italy, Scandinavia, Singapore, Hong Kong, South Korea and Taiwan simply don't exist. Nor do Sony, Mitsubishi, Acer, Siemens, Nokia, Alcatel, Hyundai, Fiat, Nestle, Deutsche Bank, etc. All a product of my fevered American imagination! Fortunately, any day now the EU will come to its senses and adopt the sterling as its new currency of choice. The sun never sets on dear Albion! -- Dennis
Re: social-democratic illusions/ was UK Decay
Western German unemployment would be roughly 7%, if not for the annexation of the former GDR. Oh, one would have thought that as a result of the annexation growing numbers of people, engaged in a more intensive division of labor, would have have faciliated a growth in productivity which would have in turn induced a growth in population. But there are no such Smithean virtuous circles even for mighty German capital; it simply squanders human labour on a collosal scale. Moreover, I frankly can't understand what Dennis is saying about the Japanese "boom"--I have assumed he has been pulling toes for months. As Grossmann noted in his polemic against Luxemburg, a real upswing in production goes together with rising imports of raw materials, semi finished goods and so on. In periods of boom net exports of raw materials and semi-finished goods should exceed net exports of finished commodities; the ratio should be reversed in depression. What can one say about a Japanese "boom" which can't communicate itself through the medium of commodity imports to any of its major trading partners? As the Asian crisis underlines, imports have declined as a result of Japanese stagnation and a chain repercussion has started as orders and foreign investments are cancelled. This is of course not to say that heavy US imports are evidence of a real boom for American capital. But then we get back to Mark's arguments about the priviliges from the dollar as the reserve currency. I thought it was obvious that we are simply suffering through global stagnation. Best, Rakesh
Re: social-democratic illusions/ was UK Decay
take on the ex-Axis powers is way too optimistic, but we have the OECD's latest estimates of market and PPP figures, as well as the IMF's latest, contradicting you. Has something happened in the last 6 months to turn this all upside down? In terms of those figures does the Japanese GDP per capita income on the basis of PPP remain almost 20% lower than the US? At any rate, it is a bit obscene that the focus remains almost solely on such comparisons within the imperial fraternity; after all what leads to relative stagnation in the imperialist world (falling rate of profit) induces run away absolute pauperization in the rest of the world. And that is what we now confront, experienced in imperialist countries in the rather muted form of an immigration crisis. From the World Development Report of 1995, we find that of the 2.5 billion men women and children who constitute the world's labor force at the present time, 1.4 billion live in poor countries, defined as having an average income per capita of less than US $695 (in 1993). More than a billion individuals have to make do with one dollar or less a day. The global army in search of work is going to grow in the next three decades by another 1.2 billion, a massive increase that will be concentrated almost exclusively outside the already developed world. It is well known that while in 1870 the average income per capital of the richest countries was 11 times that of the poorest; that ratio rose to 38 in 1960 and to 52 in 1985. This report also celebrated (rightly) the tripling of GDP per worker between 1965 and 1993 in East Asia and its doubling in South Asia. Of course there is good reason to believe that however much growth is restored in Asia, incomes will even lag further behind productivity than before. Rakesh
Re: social-democratic illusions/ was UK Decay
Mark Jones wrote: And the IMF has yet another set of data (more favourable to the UK, too). Not sure what the point of this is except to show that figures can vary. Yes, obviously, UK pc GDP is now higher than FRG, by ANY test, and 10 yrs after absorbing GDR, maybe it's not just tongue in cheek of me to say so w/o qualification. [...] Doug Henwood wrote: Mark Jones's assertion that UK per capita incomes are now higher than German ones is something I hadn't heard before. The first two columns show the OECD's estimates for 1995 reported in their handy little booklet, the OECD In Figures, 1997 Edition; the third column shows the latest figures available from International Financial Statistics, converted at market exchange rates: marketPPP 97Q3 Germany $29,542 20,497 24,597 UK 18,777 17,756 22,113 Mark, 24,597 22,113, no? How, then, can you say "UK pc GDP is now higher than FRG, by ANY test"? These are the latest stats the IMF has published, for the third quarter of 1997, converted at 97Q3 exchange rates. I'm all for staring reality straight in the face, and I entirely agree that Dennis' take on the ex-Axis powers is way too optimistic, but we have the OECD's latest estimates of market and PPP figures, as well as the IMF's latest, contradicting you. Has something happened in the last 6 months to turn this all upside down? Doug
Re: social-democratic illusions/ was UK Decay
.And the IMF has yet another set of data (more favourable to the UK, too). Not sure what the point of this is except to show that figures can vary. Yes, obviously, UK pc GDP is now higher than FRG, by ANY test, and 10 yrs after absorbing GDR, maybe it's not just tongue in cheek of me to say so w/o qualification. Especially since the 30% DM depreciation makes the case totally clear-cut. The real point is that either Dennis is right, and the past is the future, or else Germany is about 8 years behind the UK/US in the restructuring process, which I'd say largely succeeded in the UK/US. Where will France/Germany be 2-3 years down the line? That's the REAL qn. Altho UK mortality/morbidity stats have shown a slight but statistically-significant downturn during the past 2 decades, in general social cohesion is holding, and people are by some tests 'better off (altho GPI is a FAR better test than GDP, and shows that living standards have DETERIORATED in ALL cap countries since the 1960s). But one of my real gripes with Dennis is that you can't look at the modern world-system in purely country-terms; that social-democratic bird's-eye view doesn't hold up any more. There are no national-state definitions of the crisis, or possible solutions either. To that extent, globalisation HAS happened - and individual country stats have to viewed accordingly. Nevertheless, Dennis' insistence that the UK/US are on some kind of Anglo-Saxon rubbish heap, while Germany/Japan are pwoering into the future, is obvious nonsense. Mark Doug Henwood wrote: Dennis R Redmond wrote: Western German unemployment would be roughly 7%, if not for the annexation of the former GDR. Britain's low unemployment is due to sleazy Tory redefinitions of the unemployed and a vicious war on the poor, which have driven people off the welfare rolls and into the nether gulfs of ragpicking capitalism. According to the OECD, UK unemployment in 1996 (the most recent year available) was 8.0%, and in Germany, 10.3%, using "commonly accepted definitions," which I assume means what national statistical offices report. But using harmonized definitions, that gap narrowed substantially, with the UK at 8.2% and Germany at 8.9%. The U.S. Bureau of Labor Statistics, which also tries to harmonize definitions, reports that UK unemployment in 97Q3 was 6.9%, and Germany, 7.8%. Mark Jones's assertion that UK per capita incomes are now higher than German ones is something I hadn't heard before. The first two columns show the OECD's estimates for 1995 reported in their handy little booklet, the OECD In Figures, 1997 Edition; the third column shows the latest figures available from International Financial Statistics, converted at market exchange rates: marketPPP 97Q3 Germany $29,542 20,497 24,597 UK 18,777 17,756 22,113 Doug
Re: social-democratic illusions/ was UK Decay
Dennis R Redmond wrote: Western German unemployment would be roughly 7%, if not for the annexation of the former GDR. Britain's low unemployment is due to sleazy Tory redefinitions of the unemployed and a vicious war on the poor, which have driven people off the welfare rolls and into the nether gulfs of ragpicking capitalism. According to the OECD, UK unemployment in 1996 (the most recent year available) was 8.0%, and in Germany, 10.3%, using "commonly accepted definitions," which I assume means what national statistical offices report. But using harmonized definitions, that gap narrowed substantially, with the UK at 8.2% and Germany at 8.9%. The U.S. Bureau of Labor Statistics, which also tries to harmonize definitions, reports that UK unemployment in 97Q3 was 6.9%, and Germany, 7.8%. Mark Jones's assertion that UK per capita incomes are now higher than German ones is something I hadn't heard before. The first two columns show the OECD's estimates for 1995 reported in their handy little booklet, the OECD In Figures, 1997 Edition; the third column shows the latest figures available from International Financial Statistics, converted at market exchange rates: marketPPP 97Q3 Germany $29,542 20,497 24,597 UK 18,777 17,756 22,113 Doug
Re: social-democratic illusions/ was UK Decay
Dennis R Redmond wrote: according to the official OECD statistics -- about as mainstream as you'll ever find -- the index of UK growth from 1989-96 was around 106 (meaning, the economy was 6% larger in 1996 than in 1989) while the index of German growth was around 112. Per capita GDP figures were $28,000 in 1996 for Germany, and around $19,000 for the UK. With an income gap this large, even 2% growth in Germany is mathematically about the same as 3% growth in the UK; Britain would have to grow 4-5% a year to actually gain ground on Germany. The CIA world factbook (1995 figs which do not reflect recent devaluation of the DM, appreciation of sterling) tells the following story: GDP: Germany: purchasing power parity - $1.4522 trillion (1995 est.) western: purchasing power parity - $1.3318 trillion (1995 est.) eastern: purchasing power parity - $120.4 billion (1995 est.) GDP real growth rate: Germany: 1.8% (1995 est.) western: 1.5% (1995 est.) eastern: 6.3% (1995 est.) GDP per capita: Germany: $17,900 (1995 est.) western: $21,100 (1995 est.) eastern: $6,600 (1995 est.) UK: GDP: purchasing power parity - $1.1384 trillion (1995 est.) GDP real growth rate: 2.7% (1995 est.) GDP per capita: $19,500 (1995 est.) "The UK economy registered 3.9% GDP growth in 1994, the best rate for six years, but slipped back to 2.7% in 1995." Dennis: UK austerity has meant vicious budget-cutting in Britain's schools, universities and health care system. UK: Life expectancy at birth: total population: 76.41 years male: 73.78 years female: 79.17 years (1996 est.) FRG: Life expectancy at birth: total population: 75.95 years male: 72.8 years female: 79.27 years (1996 est.) [note: mortality and morbidity rates were LOWER in the old GDR, as one might expect from a socialist country with a proper health service; overall West German health and longevity levels are worse than UK] I cannot be bothered to do the digging on higher education participation rates, but I have no doubt that they give the lie to Dennis's version. Dennis: Britain's low unemployment is due to sleazy Tory redefinitions of the unemployed and a vicious war on the poor, which have driven people off the welfare rolls and into the nether gulfs of ragpicking capitalism. I'm tempted to ask if Dennis has ever been here. We should really examine workfoce participation rates, I agere, to get a true measure of unemployment. But the UK is not quite as Dickensian as Dennis dreams. Mark
UK Decay
On Sat, 14 Mar 1998, Mark Jones wrote: Between 1995 2nd qtr and 1997 2nd qtr (IMF figs) UK interest rates remained at 108-110 basis points above German long-term rates. In the same period the pound rose from an average 2.20 DM to peak at 3.04 DM. The Italian lira in the same period appreciated by 20% against the D-mark, while Italian long term rates CONVERGED from a 450-basis pt. difference to 110 basis points. So whatever made the difference, it self-evidently wasn't interest rates. Short-term bobs in interest rates aren't the same thing as long-term trends. The interest rate policy of central banks is one of, but not the only factor in determining currency rates; also important are capital flows, degree of cross-border transactions, the overall level of economic activity and inflation. A good example is the appreciation of the US dollar from 1980-85; after the end of the Volcker recession, the dollar kept rising, even though interest rates were actually lower in real terms in 1985 than in 1981, say. Markets can be pretty irrational, not just for months but for years. In Italy's case, the lira was way, way undervalued in the post-1993 period, and stayed undervalued despite punishingly high interest rates. The recovery happened because low Central Europe rates lubricated the business cycle and allowed the Italian economy to recover; i.e. real rates have been falling, while the lira has been rising. This has in turn fed back into the expectations of the investing classes, such that the Italian bourgeoisie is now set to join the euro, while the UK continues to pretend that it's still the center of the world economy (Blair's freeing of the Bank of England from Gov't control reads like the dismal parody of the creation of an autonomous European Central Bank). -- Dennis
Re: social-democratic illusions/ was UK Decay
Dennis wrote: Markets can be pretty irrational, not just for months but for years. This is a cop-out. Markets are neither rational nor irrational. They exist and what occurs is susceptible of explanation. Short-term bobs in interest rates aren't the same thing as long-term trends. The data I cited was for long-term rates. The interest rate policy of central banks is one of, but not the only factor in determining currency rates; Indeed, you are right. Which is why it oversimplifies to say as you did yesterday, that the pound appreciated: Because British interest rates are higher than Continental European rates. British rates are currently higher primarily because the British economy is growing faster than European economies. A good example is the appreciation of the US dollar from 1980-85; after the end of the Volcker recession, the dollar kept rising, even though interest rates were actually lower in real terms in 1985 than in 1981, say. Markets can be pretty irrational, not just for months but for years. Far from being evidence of irrationality, this was a classic instance of US seignorage at work, a fundamental mechanism of imperial tutelage. In Italy's case, the lira was way, way undervalued in the post-1993 period, and stayed undervalued despite punishingly high interest rates. The recovery happened because low Central Europe rates lubricated the business cycle and allowed the Italian economy to recover; i.e. real rates have been falling, while the lira has been rising. The lira was undervalued enough, other things being equal, to stimulate the Italian economy. But that did not happen because interest rates were high. The combination of high rates and depreciated curency ought to tell us something about the parlous condition of European economies on the threshold of monteray union. In fact ALL major European currencies have appreciated against the DM. I.e., the DM has undergone an unprecedented devaluation. This is evidence of competitive failure and poor German economic performance - Germany is now a balance of payments deficit country with high unemployment and low growth. The UK by contrast recorded growth above trendline and a $6bn balance of payments SURPLUS in 1997. The UK has the lowest unemployment rate in Europe and the budget is in balance. UK per capita incomes now exceed German by most tests. This has in turn fed back into the expectations of the investing classes, such that the Italian bourgeoisie is now set to join the euro, while the UK continues to pretend that it's still the center of the world economy (Blair's freeing of the Bank of England from Gov't control reads like the dismal parody of the creation of an autonomous European Central Bank). The reason why Britain is not joining the Euro has nothing to do with pretensions of imperial grandeur and everything to do with the long-range thrust of Anglo-Saxon world politics. With respect to Japan, as deregulation and open-markets take hold there is going to be a massive shake-out which will reveal the true extent of concealed unemployment, as well as the profits-crisis of Japanese monopolies, which wil continue to retrench and 'hollow-out' in this decade and next. The plain fact is that the German/Japanese mercantilist model has failed. These countries are going to approximate more to the Anglo-Saxon model. The idea that America can on the contrary be pushed in the direction of socially-inclusive 'welfareist' capitalism is a pathetic social democratic illusion. The trend is all in the other direction, as the massive impending shake-out in Europe will demonstrate. Social democratic models have had their day. They exhausted their potential two decades ago.
Re: social-democratic illusions/ was UK Decay
On Sat, 14 Mar 1998, Mark Jones wrote: Germany is now a balance of payments deficit country with high unemployment and low growth. The UK by contrast recorded growth above trendline and a $6bn balance of payments SURPLUS in 1997. The UK has the lowest unemployment rate in Europe and the budget is in balance. UK per capita incomes now exceed German by most tests. Western German unemployment would be roughly 7%, if not for the annexation of the former GDR. Britain's low unemployment is due to sleazy Tory redefinitions of the unemployed and a vicious war on the poor, which have driven people off the welfare rolls and into the nether gulfs of ragpicking capitalism. German balance-of-payment deficits are small and have to do with the fact that guestworkers export lots of D-marks to places like Turkey and Eastern Europe; the trade balance, however, is solidly positive, in contrast to the UK's deeply negative trade balance. Budget balances prove nothing. German deficits are financing the reconstruction of the GDR, and are instrumental in powering the Visegrad mini-boom; meanwhile, UK austerity has meant vicious budget-cutting in Britain's schools, universities and health care system. Finally, according to the official OECD statistics -- about as mainstream as you'll ever find -- the index of UK growth from 1989-96 was around 106 (meaning, the economy was 6% larger in 1996 than in 1989) while the index of German growth was around 112. Per capita GDP figures were $28,000 in 1996 for Germany, and around $19,000 for the UK. With an income gap this large, even 2% growth in Germany is mathematically about the same as 3% growth in the UK; Britain would have to grow 4-5% a year to actually gain ground on Germany. It doesn't have to be this way. If Britain taxed its rich, put the brakes on London speculators, dumped its military programs and reinvested in the welfare state and in the public sector, it could heal many of the terrible wounds Thatcherism inflicted on British society, and even catch up with countries like France and Belgium. Ironically, that archetypical ex-colony, Ireland, helped along by big EU subsidies and a booming software market, may achieve this before the UK does. Anyone have further details on the Irish 1992-98 boom, and how Gov't did (or didn't) play a role in this? -- Dennis
