So what is it that keeps Europeans from cooperating together seriously in a Common Market such as the US has with interstate commerce? There are many states in the US that get subsidies far above the taxes they pay to the central government.
As the conservatives try to tear this down through "State Rights" and create private armies through the National Rifle Association the U.S. comes under more and more stress but what we do have is a common language and a general, albeit shallow, cultural structure. Is this the root of Europe's inability to share with one another and to combine their tremendous GDPs in ways that is good for all? Or do they do that and it just sounds like the don't? How does the language factor in Europe compare to say the issue of languages and groups in India? Any group of cultures can split as was shown by the Communist breakup and by the break-up in India over religion after the Empire dissolved. We are still paying for that in Pakistan, Iraq and Afghanistan. But what is it that holds groups together in an act of Reconciliation of differences and a crossing of the huge divides between them? Even on this list there are huge divides that seem irreconcilable but are they truly irreconcilable? Countries and united states are not the same as individuals and individual households. Mega reality is different and old provincialities often create disasters when applied to newer and larger entities. Perhaps it's amazing that there is as much cooperation as there is. There is a tremendous backlash in the U.S. at large against the relatively insipid government of the UN. Some people will simply never leave their killer assumptions at the door when they agree to talk. Often those assumptions are things that seem perfectly logical but when applied to larger realities actually creates chaos and failure in spite of their authority and so called "common sense." Is the worship of statistics and numbers one of those assumptions that don't work when a system as large as Europe or the US is being considered? Are these large political cultural systems more like the chaos systems of nature and require far more expertise than any one mere mind can contemplate given the limitation of any human on the planet to contemplate more than seven realities at once? It is no accident that music and art, which is concerned with the exploration of communication in all of the sensual mediums, runs up against human limitation in the contemplation of the expansion of the imaginative. Might I suggest that perhaps all of these 19th century economic stories are really hopelessly inadequate to deal with the complexity of the modern world and that we should admit that as a given before any conversation begins. What do you think? It seems to me that the assumptions here on this list are that if the world would follow the systems that are advocated, the world would be fixed. But which system and at what cost? Are we really diminishing complexity by demanding that the world walk the way we say or are we just creating tyranny? The reason I ask is that music went through this about twenty years ago in musicology when they had to admit the universality of music and musical elements but the relativity of all local musics and that creating a hierarchy of cultures just created a universal system that was neither universal nor worked AS a system at all. Might you not be knocking at that same door. Consider Beethoven's fifth symphony as a way out of your dilemma. "It's the overtones stupid."(musical joke) REH From: [email protected] [mailto:[email protected]] On Behalf Of Keith Hudson Sent: Monday, August 02, 2010 2:30 PM To: Ed Weick; RE-DESIGNING WORK, INCOME DISTRIBUTION, , EDUCATION Subject: Re: [Futurework] Usual Krugman rant Ed, At 11:45 02/08/2010 -0400, you wrote: Keith, it would be nice for the world to have a common currency whose value is invariable because it is based on a valued substance like gold, The main value of gold, quite besides its cosmetic attractiveness, is that it is largely not used for anything else and that its production is expensive, low and fairly constant. Almost all the gold that has ever been mined still exists as coin, ingot, or jewellery*. A currency that's exchangeable with gold is therefore under constant discipline not to be expandable at a government's pleasure. (*Most jewellery is in Asia where, mostly, it is also considered to be a currency as well as a status item.) just as it would be nice to have a world that is peaceful and nicely settled into economic patterns that vary little from year to year or even from decade to decade. However that is not the world we have. Countries vary greatly in terms of stability and the economic problems they face. A stable country one year may be less stable the next. Of course. And a weak government can make itself popular for a while by expanding its money supply and making its people think they're better off -- that is, until prices start catching up. Then, if a government is even more foolish, it prints more money, etc. Monetary policy during periods of stability may need to differ considerably from monetary policy during periods of instability and each country will have to make decisions on what kind of monetary policy it should pursue at a particular time. Having a common currency whose value is based on gold or another currency will inhibit the kind of action a country may need to take. It would only inhibits those governments that wish to escape their real problems by printing money. The Euro provides and example of the kinds of problems a common currency can raise. The Euro is even less of a full currency than the dollar or pound is. Its issuing bank, the ECB (European Central Bank), cannot create credit, nor can it disperse Euros around among its EMU (European Monetary Union) members to alleviate distress (as America can do among its States, or the UK among its regions). (The European Union -- not the same thing as the EMU -- can, and does, dispense some money, but this is only a very small amount in total. It's only part of the EU's running costs -- the 2% fee that the EU Commission charges member countries.) There is now considerable economic variation among the countries of the European Union. Some are doing quite well, others are facing large debts and unemployment. Yet the latter cannot take the kind of action that may be necessary because being tied to a "common good" can't permit it. No, it's the constitution of the ECB which prevents it. (And, while I'm mentioning this, the ECB was set up from the start with a considerable amount of gold in its reserves. If gold is no longer supposed to be a currency, what on earth is it doing there? It's there because all central banks know that national currencies, including now the Euro, might fail one day and gold is a reserve that can always be used in an emergency, whatever governments and the ECB may say about gold being some sort of medieval curiosity.) I wouldn't be surprised to see the EU begin to disintegrate before too long. I think the EMU will, but the EU will probably continue as some sort of political legacy in rather the same way as the British Commonweaith still (barely) continues even thought the Empire has long since gone. Control of national currencies is not only important for internal purposes, it can as I mentioned previously also be used strategically in international trade. China keeping the renminbi low for trade purposes is an example. It's quite entitled to fix its currency in any way it wants because that's what all governments did after the Bretton Woods Agreement in 1944 -- and then they remained fixed to the dollar. The only difference is that, from 1944 until 1971, America was able to force all other countries to pay any trade deficits they had (with America) as gold, America being the only country that was able to fix its own currency with gold. China, of course, didn't trade with America during that period and so it fixed its own currency by tying it to gold. After 1971 when President Nixon cut the link between the dollar and gold, America could have refused to have anything to do with the renminbi -- by not trading with China. But it chose to trade and on China's renminbi's terms. So, I agree that a stable common currency would be nice to have, but then so would a nice, quiet, stable and peaceful world. Because China (and Russia and India and the Middle East oil countries) don't like what the American government is doing to its own dollar (pauperizing it) they now think it's about time we had a proper world trading currency. Keith Ed ----- Original Message ----- From: Keith Hudson <mailto:[email protected]> To: Ed Weick <mailto:[email protected]> ; RE-DESIGNING WORK, INCOME <mailto:[email protected]> DISTRIBUTION, , EDUCATION Sent: Monday, August 02, 2010 10:18 AM Subject: Re: [Futurework] Usual Krugman rant Ed, At 09:17 02/08/2010 -0400, you wrote: Who's ranting? When it comes to employment, I don't see it as being primarily about mass producing consumer goods. There are many things that could be done to get people working and a Keynesian approach would probably be needed to get them to be done. American cities, roads, bridges and other vital pieces of infrastructure need to be rebuilt. Try it if you want. But Japan tried heavy Keynesian spending for a decade and somewhat less in the following -- but they were no better off after 20 years than at the beginning. Doing this might not employ all of the unemployed, but those who would have work would spend a lot more money on groceries, housing and other things they can't afford right now. Small businesses would benefit, multipliers would come into play and at least part of the currently depressed American world would reawaken. So, I tend to agree with Krugman -- bring Keynes back into the picture and let's see what happens. You'll get more of what we've had in the last 30 years -- declining real wages for average people (at least for those in work). Why, as Krugman argues, isn't government doing anything? It may be the nature of the Obama administration. Obama's opponents sit there staring at him and all he does is stare back at them. "Yes we can!!" is long gone. And so much now is about the forthcoming elections. Being perceived to be doing the right thing (really, doing nothing) will stand a better chance of getting votes than doing something would be. Raising tax revenues by getting people working could be important in terms of dealing with the deficit. Eliminating tax breaks for the rich could also be important. The European powers may be in a deflationary mode right now, but why should America be? And going back to some kind of gold standard arrangement is not the answer. It simply wouldn't work. It didn't work in the past, Can you tell me when and where it didn't work? so why should it work in today's far more complex world. The gold standard worked for England for 150 years and most of Europe for 80 on average and also for America for about 40 years -- all with no inflation whatsoever. All was cut short by the First World War when so much money was needed that it had to be printed. But then, later, when governments tried to go back onto a gold standard they did so without taking the subsequent inflation of the pound, dollar, mark, etc into account. Result? More inflation -- and even more so after Nixon cut off even international trade surrencies from gold in 1971. As more and more Chinese, Middle East oil exporters and big investors' money goes into gold and not dollars or government bonds, you can be certain that gold, as currency, is quietly re-asserting itself. All the Western banks are now grimly hanging onto what gold they still have because it's their only one sure asset they have these days. It can only mean one thing. We're going to revert to a gold standard -- or another reliable world currency -- sooner or later, whether after yet another chaotic episode like 2008/9 or by international agreement -- as China is calling for -- remains to be seen. Keith Ed ----- Original Message ----- From: Keith Hudson <mailto:[email protected]> To: RE-DESIGNING WORK, <mailto:[email protected]> INCOME DISTRIBUTION, ,EDUCATION Sent: Monday, August 02, 2010 2:13 AM Subject: [Futurework] Usual Krugman rant Paul Krugman is off on a typical rant this morning in the New York Times. He observes that unemployment will probably grow in the years ahead but says that there is "growing evidence that governing elite just doesn't care?" Of course they care! They care for their own skins in the coming years. Every conceivable type of government cares about unemployment, and has done so throughout history if it wants to maintain power and sleep easy. Paul Krugman refuses to entertain the idea that high and growing unemployment is structural. Why? Because, even after writing hundreds of op-eds over the years, he still thinks that Keynesianism can supply the solution. It might have done so in the 1930s when there was still a large tranche of still-expensive consumer goods awaiting mass production and purchase by a substantial proportion of the population. That's no longer the case. There's no long line of desirable consumer goods visible ahead of us. As regards existing goods, automation still proceeds. So "Congress is sitting on its hands" is it? And the Fed is not repeating inflation out of some sort of malignant obduracy, is it? (At least there are some officials who learn from their mistakes!) What's needed is not emotionalism on Krugman's part but some objective analysis in order to restore his status as a Nobel prize-winning economist and not a tub-thumper. Well, I'll give him some pointers. What we need -- and pretty soon, too -- is a total currency reform so that all advanced governments can write off their existing debts and not cripple our children and grandchildren with paying for their profligacy in the past few decades. And, from then onwards, a currency system that will make governments keep to sensible annual budgeting. We also need a substantial educational reform so that there'll be a demand pressure to expand or share the most interesting and highly-paid jobs. We also need substantial administrative/political reform so that we don't have a system whereby politicians have to selectively bribe this or that section of the electorate in order to remain in power. Keynes himself said something to the effect that governments always fall prey to outmoded ideas of a previous generation of economists. Well . . . that applies to economists, too. Keith Keith Hudson, Saltford, England _____ _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework Keith Hudson, Saltford, England Keith Hudson, Saltford, England
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