Several things seem to be overlooked in trying to fix the current economic downturn at both the national and international levels. One is the impacts of globalization. Just a few years ago we all cheered about how connected the global economy has become. Hey, they make things and we buy things and we sell them the raw materials they need to make things so that we can buy even more things! Now we are not so sure. Little mutterings here and there, not very loud yet, suggest that maybe we should make things ourselves and erect barriers against the things they want to sell us. We'll see.
Another thing is complexity. Partly because of globalization, what governments, industries and institutions do affects much of the world, but how they do so is never quite obvious and creates growing waves of uncertainty. Intended outcomes often, perhaps always, have unintended consequences. No agency can be sure that the outcomes of its actions will be as planned. Or, as the situation of the North American auto industry demonstrates, even throwing vast amounts of money at a problem may yield negative rather than positive results. Yet another thing is morality. This may have something to do with the complexity of the system. It's become so complex that sharp operators think they can get away with just about anything, and in many cases they can. They can sell houses to people who can't afford them and flood the banks with securities based on worthless mortgages. They can operate ponzi schemes. And they can pay themselves huge bonuses simply by sitting in the right chairs in corporations which are not doing very well and which may be dependent on public funds. Institutionalized morality is, in my opinion, tied to a belief in God. I'm not saying that God does or does not exist, but only that he may be necessary as a source of ethics. Ethics are not rational, but they are essential to how people respect each other and behave one to another. They derive from a belief in higher purposes and powers. A few years ago, I spent a month working in the Los Santos area of Costa Rica. What amazed me when I first got there was the multiplicity of cooperatives in the area -- everybody helping everybody else with nobody left out. It didn't take me long to at least partly figure out why. In the middle of each of the main towns of the region stood an enormous church, a highly visible symbol of the ethics people were expected to follow. I'll stop here. I don't think we can de-globalize the world or make it much less complex, though these things may happen themselves if we keep using the world's finite resources at the rate we do. We can, however, strive to be more ethical and less self-serving. Whether we do so because the church has God tell us to, or because it is built into our common humanity, or because we are afraid of being hauled into the courts, doesn't matter. Judging by how much worse the situation we are in now could get, we simply have to do it. Ed ----- Original Message ----- From: "tim rourke" <[email protected]> To: "RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION" <[email protected]> Sent: Monday, March 30, 2009 8:41 PM Subject: Re: [Futurework] Sen on Keynes and Pigou Hm. Now do I reply cnfirming I only sent it once, and risk eight copies of it going out, or do I not reply at all and risk people thinking I sent out eight copies of it? tr On 30-Mar-09, at 6:23 PM, M.Blackmore wrote: > You may not post much to the list but I got 8 copies of it... did > anyone > else get multiple copies or is it my mail service playing silly b's? > > > On Sat, 2009-03-28 at 12:37 -0400, tim rourke wrote: >> Hello all; >> >> I do not post much to this list, but it is time to say some things. >> >> >> >> 1. There is no such thing as a free market. All markets are >> regulated, all economies must be administered. >> >> 2. Depressions happen when economies are so misadministered that >> people lose confidence in them. >> >> 3. The basic problem with any capitalist economy is that it requires >> constant growth or it collapses. Since the world is finite, >> inevitably the money system collapses. >> >> 4. There are people who might want to work 25 hours a day to satisfy >> some sort of drives, but there is nothing to be done to keep them >> busy 25 hours a day. >> >> 5. To repeat again, the world is finite. There is only so much of >> anything to go around. Any economic theorizing that does not start >> from there is bogus. >> >> 6. The deeper cause of the present economic malaise is that the >> economic systems of the world have overshot the carrying capacity >> of the world by a factor of about 1.4 or 1.5 . Total throughput >> must be rationalized globally according to the sustainable capacity >> of the land base, and realistic human needs. >> >> 7. Some way must be found of running an economy on a steady state >> basis, without interest charges. >> >> tr >> >> >> >> >> >> >> >> >> On 27-Mar-09, at 3:28 PM, Harry Pollard wrote: >> >>> Ed, >>> >>> Well put together article, but it suffers from the usual >>> problems. It >>> is written as if land does not exist. Yet, there can be no >>> production >>> without access to land. And if land prices become too high, >>> production >>> stops. >>> >>> Sen wrote: >>> >>> “Certainly, the cumulative downturn we are observing right now, >>> which is edging us closer to a depression, has clear Keynesian >>> features; the reduced incomes of one group of persons has led to >>> reduced purchases by them, in turn causing a further reduction in >>> the >>> income of others.” >>> >>> Georgists would immediately ask "Why are there 'reduced incomes >>> of one >>> group'?" >>> >>> George argued that depressions are not caused by overproduction, nor >>> are they caused by under consumption (everyone's favorite). Rather, >>> said George, they are caused by under production. People cannot find >>> jobs, which means they can't buy -- underconsumption. This means the >>> shelves aren't cleared -- obvious evidence of overproduction >>> >>> So, why can't they find jobs? >>> >>> You may recall the first assumption of Classical Political Economy >>> period. It is: "Man's desires are unlimited." >>> >>> If we worked 25 hours a day, we could never satisfy unlimited >>> desires. >>> >>> So, why it's so hard to find a job? >>> >>> In a free market economy, businesses succeed and fail all the time. >>> People fall out of work and get new jobs continually. But what >>> happens >>> if new jobs dry up because increasing land costs dampen the >>> supply of >>> new businesses? "Underproduction" is with us -- a condition, which >>> leads to apparent underconsumption and overproduction. >>> >>> The free market requires fresh supplies to come to market in >>> response >>> to price increases. These return prices to equilibrium. New land >>> cannot come to market in response to increasing price. Under >>> pressure >>> of increasing demand, prices keep rising, as they try to draw more >>> land to market. >>> >>> As Will Rogers said: "They ain't making no more dirt." Further, you >>> can't move land to market to bring prices. So, in a normal economy, >>> land prices are always pushing the envelope. As I've said, at that >>> point, any "trigger" can set off a depression. >>> >>> This should be separated from the land bubble (for heaven's sake, >>> not >>> a housing bubble). It is probable that 'bubbles' don't do much >>> economic harm. When the 'exuberance' has abated, some will have won, >>> others will have lost. >>> >>> While the producer of a Beanie Babies walks away with $1 billion, >>> others may have garages packed tight with unsellable Babies. >>> >>> Of course, in the present case it didn't help much that the Bush >>> administration was deliberately forcing lower interest rates, >>> even as >>> the Democratic Congress was encouraging Fanny and Freddie to lend >>> billions to people who were poor risks. Nor did it help that Wall >>> Street was effectively hiding this suspect paper in packages that >>> they >>> sold around the world. >>> >>> Needless to say, all this nonsense is supposed to be evidence >>> that the >>> free market has failed. >>> >>> Bah! >>> >>> Harry >>> >>> ****************************** >>> Henry George School of Los Angeles >>> Box 655 Tujunga CA 91043 >>> Tel: 818 352-4141 >>> ****************************** >>> >>> From: [email protected] >>> [mailto:[email protected]] On Behalf Of one >>> Weick >>> Sent: Sunday, March 08, 2009 6:00 AM >>> To: [email protected]; futurework >>> Subject: [Futurework] Sen on Keynes and Pigou >>> >>> Good discussion of the current implications of Keynesian and >>> Pigovian >>> economics by Amartya Sen in the current New York Review of Books. >>> Took me way back to when the world was green (or purple or >>> whatever). >>> >>> It's at http://www.nybooks.com/articles/22490 . >>> >>> Ed >>> >>> >>> >>> >>> _______________________________________________ >>> Futurework mailing list >>> [email protected] >>> https://lists.uwaterloo.ca/mailman/listinfo/futurework >> >> >> _______________________________________________ >> Futurework mailing list >> [email protected] >> https://lists.uwaterloo.ca/mailman/listinfo/futurework >> > > > _______________________________________________ > Futurework mailing list > [email protected] > https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
