Starting from economic 'scratch' in Afghanistan
Characteristically weak article on the Afghan economy perpetuating the patronising myth of neo-liberal economics that it is starting from scratch. Compare the sneering about former socialist countries being basket cases throughout the 90's. http://www.iht.com/articles/43022.htm Dismissively it says the country is largely a land of farmers and herders instead of positively analysing the human and social capital that it already has in millions of people. But Marxists will probably be no better at offering a critique of the Imperial economic dispensation that will now be imposed after the peace making and the peace keeping, because they usually interpret Marx's analysis in a mechanical way, ignoring the amount of productive human activity that exists in any society alongside commodity exchange and with which it vitally equilibrates. The blindness behind this humane neo-liberal article also prevents them commenting more than ironically on the fact that 90% of the heroin consumed in Europe comes from Afghanistan, and that heroin is its export commodity most able quickly to recover an ability to draw in foreign exchange. In short, instead of referring to the intelligent and resourceful people of Afghanistan as mediaeval, they should be planning, and we should be criticising their plans, on the basis of a bottom up approach, not a top down approach of patronising saviours. That would be by far the quickest way to stabilise economic activity and to help it start growing again. But will serious marxists grasp the challenge of the necessary critique of what the IMF and the European Union is now going to do to Afghanistan? Of course those marxists who would be contaminated even by criticising international plans of reform will be unable to say anything apart from calling for a proletarian revolution in Afghanistan as soon as possible. Others I am more hopeful of. Chris Burford
Re: Jeff Madrick on the CPI
It is good to see Brookings noting the problems with the Boskin approach. But they are somewhat behind the curve on this topic. Most of the criticisms of Boskin noted by Brookings, and more, are discussed in my article, Trends in Compensation for Production Workers: 1948-1995, Review of Radical Political Economics 31(4), 133-163, December 1999 Dean Baker's Getting Prices Right also notes selected criticism of Boskin et al but my article covers more. Eric
Re: Re: Fw: After the Fall: Argentine Crisis and Possible Repercussions
Well, in the case of Argentina, I think it is quite clear when it stopped developing: March 24, 1976. That was the date of the military coup that introduced neoliberalism for good into the country (it is also not a coincidence that this was the bloodiest coup in the country's history, as people on this list are well aware). This isn't just rhetoric either. The absolute lack of government development policies, coupled with indiscriminate opening of goods and capital markets, has resulted in de-industrialization and job loss. Of course, the latest chapter of de-development (which hopefully ended last week) started in April 1991 with the implementation of the convertibility law. David Felix's article is very interesting and generally acurate, but I think he leaves out a key component: Cavallo and de la Rua were overthrown by a massive, spontaneous popular uprising. I am not sure at this point what the US and IMF response will be, but I am quite certain that more such protests are in store if neoliberalism comes back. People on the street have a pretty good understanding of what ajuste (adjustment) means, and there isn't much patience for those policies any more. IT is true that the uprising was not organized, and that most of those who participated do not belong to any political organization. This makes future uprisings hard to predict, since there is no convoking group or coalition. However, my sense from talking to people on the street is that we have had enough, we will not tolerate more. Another cacerolazo (protest where pots and pans are banged) is entirely possible if the preception becomes that changes aren't for real. Alan At 09:26 PM 12/26/2001 -0800, you wrote: - Original Message - From: michael pugliese [EMAIL PROTECTED] It would also increase opposition within the IMF directorate to U.S. dominance of IMF policy toward the developing countries, === Just when do countries stop developing? Didn't Arturo Escobar write something about the uselessness of development discourse? Ian _ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com
Re: Economics Insider Story
From: michael perelman [EMAIL PROTECTED] ... the NYT reports that ObL looks gaunt in the new tape. The NYT also says that the tape was apparently made in late November or early December -- in other words, at the end of Ramadan with all its fasting. Since ObL doesn't appear to do things by halves, perhaps his obvious weight loss owes something to religiosity and isn't due to stress alone. Carl _ Chat with friends online, try MSN Messenger: http://messenger.msn.com
RE: Farm subsidy data base
Gene writes: I put "subsidy" in quotation marks because I think of farm payments as covering the overhead costs, while proceeds from crop sales cover the out-of-pocket costs of getting a crop. I don't understand this. Whydo you see "subsidies" as covering overhead costs? it seems to me that they instead reflect the political clout of the Farm Bureau, farm-state senators, etc. "Welfare mothers," on the other hand, don't have that kind of clout... Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Enron
Enron Moves Money to Democrats By Larry Margasak Associated Press Writer Thursday, December 27, 2001; 8:02 AM A week before filing for bankruptcy protection, Enron Corp. contributed $100,000 to Democrats after giving nearly all its prior donations this year to Republicans. The money went to the organization that aids Senate Democratic candidates, but a recently hired attorney for Enron insisted the donations were unrelated to congressional investigations. Attorney Robert Bennett, who represented former President Clinton and other high-profile clients, said the money was pledged months before Enron's collapse prompted the congressional inquiries. Rather, he said, the shift reflected the Democrats taking control of the Senate this year. Donations of this type reflect certain political realities which are followed by all major corporations, Bennett said Wednesday about Enron's $50,000 checks on Nov. 25 and Nov. 26 to the Democratic Senatorial Campaign Committee. Enron filed for Chapter 11 bankruptcy protection on Dec. 2. Tovah Ravitz-Meehan, a spokeswoman for the Democratic Senate fund-raising committee, said the head of the organization, Sen. Patty Murray, D-Wash., has asked that Enron's money be given to a charitable organization. She said the committee is trying to find an organization that would help laid-off Enron workers. It wasn't right to keep it and it wasn't right to give it back to Enron so we're looking for charitable options, Ravitz-Meehan said. Congressional Republicans and Democrats alike have heaped criticism on Enron, accusing the company of burning stockholders who were unaware of the company's failing condition, throwing thousands of people out of work and decimating retirement accounts. This week, Democrats on the Senate Commerce Committee demanded that the Federal Trade Commission investigate why company executives were allowed to cash out their stock while other employees were prevented from selling the company's sinking shares in their retirement accounts. Bennett said it would be very unfair to draw any improper motive based on these contributions. While the money was given in November, a large portion of it had been committed as far back as September. Before the contributions to the Democrats, Enron this year had contributed $173,000 to candidates and parties, with almost 90 percent going to Republicans. Since the 1989-90 election cycle, Enron has made nearly $5.8 million in campaign contributions, 73 percent to Republicans. The contributions were compiled by the Center for Responsive Politics, an organization that tracks campaign finance issues. In addition to the corporate donations, federal reports show Enron chairman and chief executive Kenneth Lay donated $250,000 to the Republican Party during President Bush's campaign and raised at least $100,000 for Bush from other donors. The Justice Department is investigating Houston-based Enron for possible criminal conduct. The Labor Department and the Securities and Exchange Commission are conducting civil investigations. Bennett will represent Enron in dealings with Congress, the news media and investigators. He represented Clinton in the sexual harassment lawsuit filed by Paula Jones, and was the Senate ethics committee's counsel in the investigation of five senators with ties to a failed savings and loan operator.
RE: Jeff Madrick on the CPI
Jeff Madrick writes: Certainly quality improvements have to be taken into account. But so must many other factors that affect the standard of living, including the quality of public goods, like transportation and the environment. The Schultze panel concludes that such an index is inherently too ambiguous to develop in an objective way. How does one account for traffic congestion, for example? A car is worth less if traffic deteriorates. If the crime rate rises, people may have to buy more security devices. Should that be translated into a fall in living standards? FWIW, I wrote an article that tries to bring in these kinds of effects into measuring the cost of living (COL) and its inflation rate, published in Madrick's magazine, CHALLENGE, March-April 2001. For the period 1951-98, the annual COL inflation rate was about 0.4 of a percentage point higher _per year_ than the inflation rate implied by the personal consumption expenditure deflator and about 0.1 of a percentage point high than that implied by the CPI. However, I agree with Madrick that in reality, the inflation rate can't be measured. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: Jeff Madrick on the CPI
- Original Message - From: michael perelman [EMAIL PROTECTED] The main contention of the Boskin report was that the Labor Department's statistical experts did not fully take into account the improved quality of many products. You may pay $1 for a razor, but if you get twice as many shaves as before, you are really getting more for your money. In effect, you are paying 50 cents for that razor. = What about tubes of toothpaste that go from 6.5 ounces to 6 ounces yet charge the same price? Has anyone watched the price of, say, pet supplies over the past 5-10 years? It would seem that the economy is loaded with as many, if not more, examples of less stuff for the same or slightly higher prices as there are stuff that gives consumers more 'bang for the buck.' Jim D's piece on hidden inflation PECC also explores lots of stuff that doesn't even appear on the mainstream's radar screen. Ian
Re: Argentine Crisis... Correction
I just re-read the David Felix Foreign Policy in Focus article and realized it was from September 2001, so of course he doesn't mention events in December!! My apologies, Alan At 10:57 AM 12/27/2001 -0400, you wrote: Well, in the case of Argentina, I think it is quite clear when it stopped developing: March 24, 1976. That was the date of the military coup that introduced neoliberalism for good into the country (it is also not a coincidence that this was the bloodiest coup in the country's history, as people on this list are well aware). This isn't just rhetoric either. The absolute lack of government development policies, coupled with indiscriminate opening of goods and capital markets, has resulted in de-industrialization and job loss. Of course, the latest chapter of de-development (which hopefully ended last week) started in April 1991 with the implementation of the convertibility law. David Felix's article is very interesting and generally acurate, but I think he leaves out a key component: Cavallo and de la Rua were overthrown by a massive, spontaneous popular uprising. I am not sure at this point what the US and IMF response will be, but I am quite certain that more such protests are in store if neoliberalism comes back. People on the street have a pretty good understanding of what ajuste (adjustment) means, and there isn't much patience for those policies any more. IT is true that the uprising was not organized, and that most of those who participated do not belong to any political organization. This makes future uprisings hard to predict, since there is no convoking group or coalition. However, my sense from talking to people on the street is that we have had enough, we will not tolerate more. Another cacerolazo (protest where pots and pans are banged) is entirely possible if the preception becomes that changes aren't for real. Alan At 09:26 PM 12/26/2001 -0800, you wrote: - Original Message - From: michael pugliese [EMAIL PROTECTED] It would also increase opposition within the IMF directorate to U.S. dominance of IMF policy toward the developing countries, === Just when do countries stop developing? Didn't Arturo Escobar write something about the uselessness of development discourse? Ian _ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com _ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com
More villages attacked
Still no news of the US investigation of the convoy bombing. How long will it take? Or will the issue just disappear--a more likely scenario. Already media almost entirely ignore the issue even though the basic US story seems quite unlikely to put it mildly. And it has not changed. I am sure that the villagers recently bombed both in the convoy incident and these new incidents are thankful that the US is not forcefully rooting out remaining Al Qaeda etc. because of fears of civilian deaths...If anyone sees any further reports on the convoy please let me know. I am collecting material for a potential article. Cheers, Ken Hanly VILLAGERS KILLED But the hunt hit more snags, included the reported bombing. ``The attack took place when the people were asleep,'' said one tribal source, quoting witnesses from Naka village. The source said 40 people were killed, up to 60 wounded and 25 houses destroyed, with villagers -- who said they were supporters of the new interim government -- left confounded. ``Neither Osama nor any other foreigner is in our village,'' one resident said. The private Pakistan-based Afghan Islamic Press (AIP) put the death toll at 25. A week ago U.S. planes hit a convoy on its way to Kabul for the swearing-in of prime minister Hamid Karzai's new government, killing up to 65 people in eastern Afghanistan. Karzai is to ask the United States to stop attacks in Paktia -- where some al Qaeda fighters may still be holding out -- after the apparent mistaken bombing, which is to be probed. Some Afghans claim their enemies deliberately misinformed the Americans to provoke the bombing. U.S. officials say the convoy opened fire first on U.S. aircraft. Afghan leaders, who swept to power after U.S. bombing weakened the Taliban, stressed they were still firmly behind the search for bin Laden and his fighters, but the defense ministry said they had all now fled over the border. Some 500 U.S. marines are on standby to go and search the eastern Tora Bora caves, where al Qaeda's last stand has petered out, but no order has yet been given. One U.S. official said pockets of al Qaeda resistance -- six at the most -- remained, but he said the U.S. ability to root them out was constrained by fears of hurting civilians
Re: Re: Re: Fw: After the Fall: Argentine CrisisandPossible Repercussions
For those of you who want to hear what Alan says about Argentina on Democracy Now, tune in to http://www.webactive.com/pacifica/exile/dn20011221.html Alan Cibils wrote: Well, in the case of Argentina, I think it is quite clear when it stopped developing: March 24, 1976. That was the date of the military coup that introduced neoliberalism for good into the country (it is also not a coincidence that this was the bloodiest coup in the country's history, as people on this list are well aware). This isn't just rhetoric either. The absolute lack of government development policies, coupled with indiscriminate opening of goods and capital markets, has resulted in de-industrialization and job loss. Of course, the latest chapter of de-development (which hopefully ended last week) started in April 1991 with the implementation of the convertibility law. David Felix's article is very interesting and generally acurate, but I think he leaves out a key component: Cavallo and de la Rua were overthrown by a massive, spontaneous popular uprising. I am not sure at this point what the US and IMF response will be, but I am quite certain that more such protests are in store if neoliberalism comes back. People on the street have a pretty good understanding of what ajuste (adjustment) means, and there isn't much patience for those policies any more. IT is true that the uprising was not organized, and that most of those who participated do not belong to any political organization. This makes future uprisings hard to predict, since there is no convoking group or coalition. However, my sense from talking to people on the street is that we have had enough, we will not tolerate more. Another cacerolazo (protest where pots and pans are banged) is entirely possible if the preception becomes that changes aren't for real. Alan At 09:26 PM 12/26/2001 -0800, you wrote: - Original Message - From: michael pugliese [EMAIL PROTECTED] It would also increase opposition within the IMF directorate to U.S. dominance of IMF policy toward the developing countries, === Just when do countries stop developing? Didn't Arturo Escobar write something about the uselessness of development discourse? Ian _ Do You Yahoo!? Get your free @yahoo.com address at http://mail.yahoo.com -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
RE: Re: Re: Re: Fiscal Crisis of the State
thanks. I don't expect to resolve any debates about Marx, or even to engage them. I don't know anything about that stuff. All I could hope to do is fairly evaluate JOC's theory in light of subsequent experience. I don't have a horse in the marx interpretation contest, so in that sense I may be a bit more objective than others.mbs Max, I think you might very helpful the discussion . . .
RE: Re: RE: Re: Re: RE: Enron's Success Story
I would say the relevant test in this context is whether the product kept flowing to customers at prices that covered production costs. The California crisis is clearly an example of consumptis interruptis, but no role of Enron's bankruptcy in that crisis has been raised, as far as I know. So I see no downside in the Enron affair as far as market failure is concerned. Whether it was overhyped by some conservative commentators is another matter. If I was looking around for market failure, my first impulse would be on concentration and the restricted output, high prices, and inequitable distribution of rents associated with them. Also up there would be the proliferation of external costs and failure of government to deal with them. mbs Max, nicely clear statement, isn't there another issue here? Enron supposedly proved that market forces were superior to government regulation. It could create low prices for consumers and lush profits for investors. Michael Perelman
Re: RE: Farm subsidy data base
My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. I agree with you that the clout of the Farm Bureau, et. al. shape both the size and destination of the money. The other aspect of this is the international -- keeping corn production high (through the farm subsidy) ruins farmers in other countries. Another aspect is the subsidy for turning corn into automobile fuel, a subsidy for ADM, our friendly supporter of NPR.. Why subsidize driving when people are hungry? Gene Coyle "Devine, James" wrote: Gene writes: >I put "subsidy" in quotation marks because I think of farm payments as covering the overhead costs, while proceeds from crop sales cover the out-of-pocket costs of getting a crop. I don't understand this. Why do you see "subsidies" as covering overhead costs? it seems to me that they instead reflect the political clout of the Farm Bureau, farm-state senators, etc. "Welfare mothers," on the other hand, don't have that kind of clout...Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: RE: Re: Re: RE: Enron's Success Story
Max, I read the big push to define the Enron affair as criminal as an effort to suggest that there is nothing wrong with the functioning of the market, just some bad apples who everybody thought were good apples. Which is not to say that pushing the criminal investigation high into the Bush administration is not a good idea. Gene Coyle Max Sawicky wrote: Two different issues seem to be mixed in here. One is market failure, the other is illegal acts by Enron execs possibly linked to illegal acts by the Bushies. The mere fact of a company failing, even a large one, is not a market failure. Market failures exist because markets keep functioning in some perverse, diseconomical way. Neither is the commission of illegal acts a market failure. In this case, such acts happen to be politically sensational. That's the importance, IMO. Not market failure. Capitalism is guilty of its successes, not its failures. mbs To answer Michael's question below: No. But the reason for the Wall ST Journal story was not to work through micro theory to get the right answer. The article appeared to head off any questioning of the market in Congress or State legislatures. People . . . Michael Perelman wrote: Is it ever possible to the disprove market efficiency to the satisfaction of a conservative economist?
Re: Re: RE: Farm subsidy data base
Gene, I have been pushing the idea that the economy breaks into two different sectors. 1 consists of the undifferentiated commodities, and the other, those sectors protected by intellectual property rights. The former will remain in trouble while the latter will prosper as long as it is backed by state power. But then, you will have to wait until my book comes out in a few months On Thu, Dec 27, 2001 at 09:47:31AM -0800, Eugene Coyle wrote: My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
RE: Re: RE: Re: Re: RE: Enron's Success Story
You could read it that way, but whether or not the affair does point to an inherent problem with markets is another matter. Choice and imperfect law creation/enforcement make illegal acts possible; that doesn't mean the underlying arrangement isn't the best available.mbs Max, I read the big push to define the Enron affair as criminal as an effort to suggest that there is nothing wrong with the functioning of the market, just some bad apples who everybody thought were good apples. Which is not to say that pushing the criminal investigation high into the Bush administration is not a good idea. Gne Coyle
RE: Re: Re: RE: Farm subsidy data base
That's a useful distinction, but I would say it is the commodity sector that 'works' as far as markets go, and the other one that doesn't. The stability of the intellectual-prop sector preserves its inefficiency and unfairness. Market functionality travels over the dead bodies of failed suppliers. -- mbs Gene, I have been pushing the idea that the economy breaks into two different sectors. 1 consists of the undifferentiated commodities, and the other, those sectors protected by intellectual property rights. The former will remain in trouble while the latter will prosper as long as it is backed by state power. But then, you will have to wait until my book comes out in a few months On Thu, Dec 27, 2001 at 09:47:31AM -0800, Eugene Coyle wrote: My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Marx Ricardo on fiscal impotence
[was: RE: [PEN-L:20847] Re: RE: jim d? doug?] Rakesh writes: as i am writing on the state, mixed economy, etc presently, i would appreciate it if you could point me to the quote in which Marx accepts Ricardo's view of fiscal policy. In the volume III, chapter 29, there's a reference to government debt as purely fictitious. (Intl. Publ. 1967 ed. p. 465.) To Marx, as I understand him, this means that government borrowing does not promote the production of surplus-value at all (so it's not non-fictitious capital, i.e., self-expanding value), with the interest payments simply coming from taxes. See also chapter 30 (pages 476-7). In a footnote in the latter, Marx quotes Sismondi, a deviant Ricardian. As I understand Ricardo (and I am far from being a true student of that economist), he believed that any government borrowing (i.e., Keynesian stimulus) corresponded to taxes to pay the interest on the government's increased debt. This lowers the present and future income of the population, reducing spending, counteracting the fiscal stimulus. The Chicago-style Harvard economist Robert Barro put this in terms of so-called rational expectations and pushed it further than Ricardo, who didn't seem to take it seriously in practice. CRITIQUE: The problem is that increased government borrowing might (1) increase the capacity of the economy to produce, e.g., by corresponding to investment in infrastructure, education, public health, etc., which allows a higher profit rate to be produced (cet. par.); and/or (2) increase the demand for the economy's production, allowing faster turn-over of commodities and capital (higher volume of sales and capacity utilization rates) and thus higher realized profit rates. A combination of these means that the tax base (i.e., aggregate income) rises, so that the interest on the government debt can be paid without there being a higher tax burden on any individual. That is, as Jim O'Connor might say, the government's efforts might be indirectly productive even if they aren't directly productive of surplus-value. Of course, the state might engage in state capitalism (as with places like Algeria or Mexico, until recently at least). In this case, the state debt would be a claim on the surplus produced directly by the state. The Ricardian view (or at least the Barro version) is based on the idea that the economy is always at full employment and that government investment in public goods never bounces back to help government revenues. I guess the latter is saying that the private sector can do a better job of providing public goods (which is quite silly). Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
farm subsidies
[was: RE: [PEN-L:20964] Re: RE: Farm "subsidy" data base] Gene writes:My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. in theory,in acompetitive market without "subsidies," the exit of farmers from the market would mean that prices gravitate towardthe minimum average cost. I agree with you that the clout of the Farm Bureau, et. al. shape both the size and destination of the money. The other aspect of this is the international -- keeping corn production high (through the farm subsidy) ruins farmers in other countries. the latter is because ofdumping, no? But even without dumping, if the US farmers sold at minimum average cost, wouldn't that drive most non-US farmers out of business, since US farming is so productive by capitalist standards? Another aspect is the subsidy for turning corn into automobile fuel, a subsidy for ADM, our friendly supporter of NPR.. Why subsidize driving when people are hungry? supposedly, the investment in methanol is supposed to pay off in terms of cleaner air. Does it, or is the subsidy just a boondoggle -- or does it just encourage more driving (and thus more pollution)?Jim Devine
RE: RE: Re: RE: Re: Re: RE: Enron's Success Story
Gene writes: Max, I read the big push to define the Enron affair as criminal as an effort to suggest that there is nothing wrong with the functioning of the market, just some bad apples who everybody thought were good apples... Max writes: You could read it that way, but whether or not the affair does point to an inherent problem with markets is another matter. Choice and imperfect law creation/enforcement make illegal acts possible; that doesn't mean the underlying arrangement isn't the best available. Perhaps it's impossible to write a perfect law (or to enforce it) when dealing with imperfect/asymmetric information (etc.) combined with rapacious profit-seeking? Jim Devine
Re: Marx Ricardo on fiscal impotence
Jim writes: In a footnote in the latter, Marx quotes Sismondi, a deviant Ricardian. jim, you're joking right? sismondi a deviant ricardian? sismondi criticized ricardo root and branch for failure to theorize possibility of a general glut which failure he traced back to the faulty abstractions on which classical economics was based, no? As I understand Ricardo (and I am far from being a true student of that economist), he believed that any government borrowing (i.e., Keynesian stimulus) corresponded to taxes to pay the interest on the government's increased debt. This lowers the present and future income of the population, reducing spending, counteracting the fiscal stimulus. well it would be silly to deny that future after tax income would be greater if the govt did not have to deduct taxes in order to honor past debt obligations, but I don't read Marx denying that future pre tax income may turn out to be greater than it would otherwise have been if the state at times runs deficits and prevents a hemmoraging in the current monetary flow. The Chicago-style Harvard economist Robert Barro put this in terms of so-called rational expectations and pushed it further than Ricardo, who didn't seem to take it seriously in practice. my understanding too. CRITIQUE: The problem is that increased government borrowing might (1) increase the capacity of the economy to produce, e.g., by corresponding to investment in infrastructure, education, public health, etc., which allows a higher profit rate to be produced (cet. par.); and/or (2) increase the demand for the economy's production, allowing faster turn-over of commodities and capital (higher volume of sales and capacity utilization rates) and thus higher realized profit rates. but where does Marx say otherwise? Jim, you implicitly seem to agree with what I wrote on fictitious capital in pen-l 20805: while the value borrowed through the issue of govt paper is destroyed in its function as capital (unless of course the state is itself undertaking commodity production) that paper still yields a return. The value extinguished, only the state's taxing power and credit standing can thus stand behind the paper which it issues. That's the ABC's of what Marx is saying in Capital, vol 3. Which is not to say that he's right. But even though state spending pulverizes value, it is indeed possible--and MARX NEVER DENIED THIS--that state's latent fiscal power will be stronger in the long term if it borrows and spends in a downturn than if it adopts the Treasury view. I think this is what you are missing in your suggestion that Marx had a so called nihilistic Ricardian view of fiscal policy : that govt paper represents (as Marx underlines) *purely* fictitious capital does not mean that the effects of govt debt are necessarily fictitious or illusory. It may indeed turn out that in practice Keynesian policies have only illusory or fictitious consequences, and it may even be that Keynesian policies are in fact counterproductive. As Bill Gerrard has suggested, Keynesians having commited themselves to a hydraulic or mechanical view of their system have failed to recognize openly that their policies may prove impotent or even counterproductive. Failure may not only be the result of insufficient govt intervention or the the wrong policy mix. Of course if one argues the view that govt deficit financing attempts must always fail or worse, then one has made a strawman of himself. Mattick certainly did not make this point, and in fact underlined that govt stabilization programs had been successfully tried and theoretically defended in germany before Keynes (I think Juergen Backhaus has written on this). Mattick was more subtle than usually recognized...including by his followers, myself included! In the early 60s Mattick thought that govt production would expand in response to the weakness of private capital formation and while the mixed economy could remain stable it would eventually itself become a further impediment to private capital accumulation. A combination of these means that the tax base (i.e., aggregate income) rises, so that the interest on the government debt can be paid without there being a higher tax burden on any individual. but Mattick's Marxian or value theoretic analysis never denied this. See the chapter on the mixed economy in Marx and Keynes. That is, as Jim O'Connor might say, the government's efforts might be indirectly productive even if they aren't directly productive of surplus-value. A potential problem with O'Connor's analysis is that he refers to deficit financed infrastructure as itself capital the value of which is thereby presumably (and directly) transferred to the marketable output. That is, O'Connor does not develop Marx's idea that govt paper is purely fictitious capital in the sense that only the state's taxing power and credit standing can stand behind it while
textiles
An old nemesis who runs marxmail.org was kind enough to send this to me this morning: http://www.nytimes.com/2001/12/27/opinion/27BRAI.html Doug and Liza, have USAS said anything about all this yet? It's not a cynical question. Rakesh
Re: textiles
Wasn't the textile industry cave in the key to getting fast track passed in the house? On Thu, Dec 27, 2001 at 10:48:05AM -0800, Rakesh Bhandari wrote: An old nemesis who runs marxmail.org was kind enough to send this to me this morning: http://www.nytimes.com/2001/12/27/opinion/27BRAI.html Doug and Liza, have USAS said anything about all this yet? It's not a cynical question. Rakesh -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: textiles
Wasn't the textile industry cave in the key to getting fast track passed in the house? the nyt reporter at the time suggested that it was indeed quite important. rb
RE: Re: textiles
Yesterday on NPR it was said that 75,000 textile jobs have been lost in the last yr. in the U.S. Compared to 15,000 in steel. Michael Pugliese P.S. If Roger Milliken, a major bankroller of the Birch Society and a textile tycoon is in that textile industry association, how much noise did he make? From: Michael Perelman [EMAIL PROTECTED] To: [EMAIL PROTECTED] Date: 12/27/01 10:57:06 AM Wasn't the textile industry cave in the key to getting fast track passed in the house? On Thu, Dec 27, 2001 at 10:48:05AM -0800, Rakesh Bhandari wrote: An old nemesis who runs marxmail.org was kind enough to send this to me this morning: http://www.nytimes.com/2001/12/27/opinion/27BRAI.html Doug and Liza, have USAS said anything about all this yet? It's not a cynical question. Rakesh -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Jeff Madrick on the CPI
RE What about tubes of toothpaste that go from 6.5 ounces to 6 ounces yet charge the same price? Has anyone watched the price of, say, pet supplies over the past 5-10 years? The BLS does attempt to take these sort of things into account. It is a near impossible task to come up with a cost-of-living index, but the BLS does as good a job as anyone can. When Katherine Abraham was the head of the BLS (during the Clinton years) it was a first-class outfit. The BLS produced its own critiques of the Boskin report that were generally very good, noting for instance the likely overstatement of quality improvements. Things might change somewhat with changes at the top of the BLS made (to me made) by the Bush leaguers. The main problem is that few (even economists) really understand what the published inflation rates take (and to not take) into account. For instance, deflating nominal wages by the CPI does NOT lead to a measure of the standard of living of workers. Eric
Re: Re: Re: RE: Farm subsidy data base
I'm looking forward to your book. Gene Michael Perelman wrote: Gene, I have been pushing the idea that the economy breaks into two different sectors. 1 consists of the undifferentiated commodities, and the other, those sectors protected by intellectual property rights. The former will remain in trouble while the latter will prosper as long as it is backed by state power. But then, you will have to wait until my book comes out in a few months On Thu, Dec 27, 2001 at 09:47:31AM -0800, Eugene Coyle wrote: My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: RE: Re: textiles
michael pugliese wrote: Yesterday on NPR it was said that 75,000 textile jobs have been lost in the last yr. lost due to national and global recession? loss of jobs that would have been added if not for recession? lost due to automation? lost to specifically defensive automation in the face of imports? lost due to surge of imports? how was this number arrived at? what is it an estimate of? is it reliable? why we should we be concerned only with job loss in one sector, not net job gain or loss due to globalization or regional markets (i.e., why not include jobs gained directly and indirectly from capital inflow, including foreign direct investment; jobs gained from exports)? why not estimate how successful the 'North' has been in slowing down the loss of industries in which they have no comparative advantage as well as the human consequences that this had on poor countries? Michael, I remember when you were sending around *very* low estimates of the human destruction wrought by the us sanctions on iraq, while suggesting that they were authoritative because some person with impeccable leftist credentials had made them. It did not seem to me to be a very credible way of proceeding. Rakesh
the profit rate recession
For those interested, I recently gave a talk at the Marxist School in Sacramento, California, suggesting that the recent recession is connected with the trend rise of the rate of profit. My notes are available at: http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
RE: Re: RE: Re: textiles
Rakesh, the speaker was not identified but he did not sound like someone with academic credentials, probably got the stat from his shop steward in UNITE! On the Iraq #ers, that was from The Nation and the background stuff I added about David Cortright was a fyi in the interests of just saying in effect this not some guy like Anthony Cordesman from the Georgetown CSIS or some such. Plus those numbers came from Lancet, the UK medical journal. I get so tired of (others, not you!) exaggerated figures on the deaths due to sanctions. When the truth is horrible why inflate? Anyway, good questions below, maybe I'll track down the NPR reporter that did the story and send her a e-mail. Michael Pugliese --- Original Message --- From: Rakesh Bhandari [EMAIL PROTECTED] To: [EMAIL PROTECTED] Date: 12/27/01 11:22:48 AM michael pugliese wrote: Yesterday on NPR it was said that 75,000 textile jobs have been lost in the last yr. lost due to national and global recession? loss of jobs that would have been added if not for recession? lost due to automation? lost to specifically defensive automation in the face of imports? lost due to surge of imports? how was this number arrived at? what is it an estimate of? is it reliable? why we should we be concerned only with job loss in one sector, not net job gain or loss due to globalization or regional markets (i.e., why not include jobs gained directly and indirectly from capital inflow, including foreign direct investment; jobs gained from exports)? why not estimate how successful the 'North' has been in slowing down the loss of industries in which they have no comparative advantage as well as the human consequences that this had on poor countries? Michael, I remember when you were sending around *very* low estimates of the human destruction wrought by the us sanctions on iraq, while suggesting that they were authoritative because some person with impeccable leftist credentials had made them. It did not seem to me to be a very credible way of proceeding. Rakesh
iraq
michael pugliese wrote: On the Iraq #ers, that was from The Nation and the background stuff I added about David Cortright was a fyi in the interests of just saying in effect this not some guy like Anthony Cordesman from the Georgetown CSIS or some such. well i found this article pretty unhelpful. were given no reasons why the estimates were at odds. we were not told why cortright had limited himself to child mortality in estimating impact of sanctions. we were not told what kinds of indirect deaths were excluded from the estimates that he found reliable. his analysis of the oil for food program and the life indicator disparaties in the North and South is at odds with the cambridge group's. He does not try to resolve the arguments in a systematic way. i really couldn't believe that the nation would run something so shoddy analytically on such an important topic. I get so tired of (others, not you!) exaggerated figures on the deaths due to sanctions. When the truth is horrible why inflate? or deflate. Rakesh
RE: Re: Marx Ricardo on fiscal impotence
Jim doesn't want our very civil offlist exchange on the list so i'm just sending my reply especially because i want to share the quote with which i end: Constatin Pecquer, 1839: One fact is certain, general...it is the silent but very decisive struggle of the workers against their masters with a view to forcing the captains of industry to raise their wages... How can one not see that to leave [the wage earners] dependent on the insufficiency of a fluctuating wage is to wish to find oneself surrounded in times of crisis and general unemployment by a famished multitude, to create riot and civil war, and perhaps to arm new Spartans... __ Marx didn't write the book on the state, so it's up to us to figure out what a value theoretic based view of the state would be and then to determine whether such a theory is illuminating, right? I refer to Mattick because he saw himself working out exactly this--a strictly value theoretic analysis of state deficit spending. yes but that implies that govt bonds are directly fictitious. That is, the state borrows sum of money and then buys arms or hires people to buy roads. That value which the state has borrowed has now been pulverized in the sense that it will not itself expand. The road may however encouage more investments in car and truck making. NO MARX does not refer to an immediate crowd out effect. HE DOES NOT SAY THAT MONEY BORROWED BY THE STATE WOULD HAVE OTHERWISE BEEN INVESTED BY THE PRIVATE SECTOR. But my point is that deficits do not necessarily increase the size of the surplus value or necessarily encourage entrepreneurs to make investments that they wouldn't have otherwise. I think Marx does have multiplier and accelerator effects in vol 2 from private investments, but this is a good question, and i am excited to stick my head back into vol 2. the problem is that radical keynesians do not entertain the possibility of fiscal policy inadequacy. it's always a matter of pushing for more intervention or a different kind of policy mix. even the radical keynesians are bourgeois: they believe that the state can set things right even if idle money and productive capital are left in private hands. if you want to read a real inflationist deficit spending fanatic, check out george gilder who wants interest rates to go ever lower, no matter the effect on the retired, and defense to be ever stregthened, no matter the effect on world peace. While taxes on capital are ever reduced even if that is irrational from an efficient stimulus point of view as the Kaleckian John Foster has very interestingly argued. People like Sweezy and Foster accept the technical validity of Keynesian economics but do not think the state can be used *given the political balance of class forces in a monopolized capitalism* to mediate the conflict between property owners and the property less. Constatin Pecquer, 1839: One fact is certain, general...it is the silent but very decisive struggle of the workers against their masters with a view to forcing the captains of industry to raise their wages... How can one not see that to leave [the wage earners] dependent onthe insufficiency of a fluctuating wage is to wish to find oneself surrounded in times of crisis and general unemployment by a famished multitude, to create riot and civil war, and perhaps to arm new Spartans... Rakesh
Re: the profit rate recession
Title: Re: [PEN-L:20980] the profit rate recession For those interested, I recently gave a talk at the Marxist School in Sacramento, California, suggesting that the recent recession is connected with the trend rise of the rate of profit. My notes are available at: http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine jim, i think this is a very valuable piece. it seems to me 1. you have confused changes in vcc with changes in occ. This decrease in K/Y seems linked to the 1980s and 1990s shake-out of U.S. manufacturing (dis-investment from old equipment and plant), investment in more modern fixed capital in new sectors or even modified versions of old sectors (as with the rise of steel mini-mills), and the falling prices of some capital goods (e.g., computers) and important raw materials such as oil. For example, your first reason for decrease in K/Y is crisis induced devaluation. So this is a change in the VCC, not the OCC. K/Y is a proxy for the former, not the latter. 2. You don't say anything about the effect of interest rates. Doug H and Fred M have both argued that spike of profit rate (as conventionally measured) especially in the 90s was a result influx of foreign capital, which reduced borrowing costs. But in the last few years borrowing costs have risen considerably for weaker and highly leveraged firms. Does this increased interest burden play any role in your explanation of crisis? 3. Aren't you arguing that there is a tendency for ex ante saving to exceed ex ante investment? But why in the face of underconsumption isn't there just more building of mills for the sake of building mills? Rakesh
Re: RE: Re: Re: RE: Farm subsidy data base
Some queries and remarks: 1) What does 'works' mean. Farm commodities are not sold as free market commodities since they are subsidized. THe only sense I can see to works here is that consumers pay low prices. But in market theological terms arent they artificiallly low? 2) Why is the sector involving intellectually protected sector differentiated? When the protection runs out are the commodities undifferentiated as the now competing types of glysophate? They are differentiated only because they are protected not qua product. Related to this matter 3) Many commodities not protected by intellectual property rights seem differentiated. For example there is feed and malting barley and different varieties of each not counting hybrids. In the case of grains there is always price differentiation in terms of grade. In crops such as apples they are surely not sold just as apples but as this or that type and quality. But perhaps you are using undifferentiated in a technical way I do not understand. 4) But political reality makes it impossible to achieve market functionality over the dead bodies of producers. There is a tradeoff. The system works only because market functionality is sacrificed to saving some who would die if the market were truly functional. Isnt this so? 5) Intellectual property rights backed by state power does not necessarily bring success. A good example is GM flax. A patent was issued to a U of Sask prof. who gained nothing except notoriety and a lot of publicity. GM wheat is more ambiguous but it seems that the wheat will not come on the market for some time because of consumer concerns. Even the Canadian WHeat BOard has opposed its release on the market right now. GM potatoes have been a disaster so far for developers as large purchasers and processing plants will not touch them, at least in Canada. 6) Aren't organic commodities differentiated from non-organic even though there are no intellectual property protections? Or are state sanctioned requirements to be organic such? Cheers, Ken Hanly - Original Message - From: Max Sawicky [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Thursday, December 27, 2001 12:15 PM Subject: [PEN-L:20968] RE: Re: Re: RE: Farm subsidy data base That's a useful distinction, but I would say it is the commodity sector that 'works' as far as markets go, and the other one that doesn't. The stability of the intellectual-prop sector preserves its inefficiency and unfairness. Market functionality travels over the dead bodies of failed suppliers. -- mbs Gene, I have been pushing the idea that the economy breaks into two different sectors. 1 consists of the undifferentiated commodities, and the other, those sectors protected by intellectual property rights. The former will remain in trouble while the latter will prosper as long as it is backed by state power. But then, you will have to wait until my book comes out in a few months On Thu, Dec 27, 2001 at 09:47:31AM -0800, Eugene Coyle wrote: My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
RE: Re: the profit rate recession
Title: Re: [PEN-L:20980] the profit rate & recession concerning mynotes that I posted on-line (at http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm),Rakesh writes:1. you have confused changes in vcc with changes in occ. I don't care, since what's important is the change in K/Y (the fixed capital-output ratio). It's via this ratio that changes in the vcc and/or the occ play a role in determining the rate of profit. If the vcc and/or occ rise and don't raise K/Y, they're irrelevant. 2. You don't say anything about the effect of interest rates. Doug H and Fred M have both argued that spike of profit rate (as conventionally measured) especially in the 90s was a result influx of foreign capital, which reduced borrowing costs. But in the last few years borrowing costs have risen considerably for weaker and highly leveraged firms. Does this increased interest burden play any role in your explanation of crisis? Yeah, I also didn't discuss Mattick or the price of tea in China. I agree that interest rates play a role, especially in the short run (though I don't have much faith in the power of Alan G. the Fed). Look at the other papers I put on my web-site (http://bellarmine.lmu.edu/faculty/jdevine/papers.htm#research). But in the paper at hand, I had to limit myself. So Iput my emphasison the longer term. I focus on the rate of profit -- what Keynes might have called the "average efficiency of capital" -- as the main determinant of private domestic fixed investment (outside of housing). In econ-lingo, my emphasis in this paper was on _shifts_ in the IS curve rather than on _movements along_ it. The increasedinterest burden does play a role, though I didn't emphasize that as much as the burden of debt relative to income. The two explanations go together; they're complementary. 3. Aren't you arguing that there is a tendency for ex ante saving to exceed ex ante investment? But why in the face of underconsumption isn't there just more building of mills for the sake of building mills? I didn't deal with the saving/investment nexus _at all_.However, since I reject Say's Law, the fact that ex ante investment sometimes falls below ex ante saving should go without saying. Inmy papers that I cite in the bibliography, I talk about the "more building of mills for the sake of building mills," which I call either the "Tugan-Baranowsky Path" or "bootstrap growth" or "profit-led growth." Indeed, as suggested by the last name listed, I argue that rising profit rates and shares _encourage_ such craziness. The problem, as I argue, is that as this kind of boom persists, the economy becomes increasingly unstable (prone to collapse). I won't bother you with the details of the arguments. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~JDevine"From the east side of Chicago/ to the down side of L.A.There's no place that he goes/ We don't bow down to him and pray.Yeah we follow him to the slaughter / We go through the fire and ash.Cause he's the doll inside our dollars / Our Lord and Savior Jesus Cash(chorus): Ah we blow him up -- inflated / and we let him down -- depressedWe play with him forever -- he's our doll / and we love him best."-- Terry Allen.
RE: RE: Re: the profit rate recession
Title: Re: [PEN-L:20980] the profit rate & recession Rakesh writes: Doug H and Fred M have both argued that spike of profit rate (as conventionally measured) especially in the 90s was a result influx of foreign capital, which reduced borrowing costs. I missed this. I don't know what Doug and Fred argue here, but I think Marx's theory that the profit rate is determined independently of -- and largely constrains -- the interest rate is a good one. Since I see the profit rate as determined by accumulation, technological change, class struggles, etc., I don't see how a temporary spike in interest rates could determine the profit rate. BTW, the profit rate I use has both interest and non-interest profits in the numerator. JD
RE: iraq
The following is an archived copy of a message sent to a Discussion List run by the Campaign Against Sanctions on Iraq. [Re: can we trust Iraqi sources? From: farbuthnot [EMAIL PROTECTED] Subject: Re: can we trust Iraqi sources? Date: Mon, 17 Dec 2001 22:34:31 + -- From: andrew mandell [EMAIL PROTECTED] To: Voices uk [EMAIL PROTECTED], [EMAIL PROTECTED] Subject: Re: can we trust Iraqi sources? Date: Mon, Dec 17, 2001, 7:53 pm Hi. i had a question regarding the figures that may have been already answered but if so i missed it. How accurate would the pre 1991 mortality rates be that I suppose are the basis for sanction related death estimates. It seems coming out of the Iran Iraq war it would have been in the governments interest to see those figures deflated to add to the sense of the victory that wasn't if those rates were deflated obviously that would make things even more messy. Andrew At 07:38 PM 12/17/01 -, Voices uk wrote: I've not much to add to Per's e-mail, except perhaps to stress that these remarks extend beyond the child mortality figures (which seem to be the focus of Per's e-mail). It's a matter of historical record that the Iraqi Government has often put out figures - and made statements - that are either misleading, false or inconsistent with earlier figures / statements of their own (and, as Per says, they are also clearly *not* a disinterested party). Dirk actually sent me a classic example last week - an AFP report (December 5th) in which the Iraqi Trade Minister Mohammad Mehdi Saleh 'accused the UN sanctions committee ... of blocking six billion worth of contracts concluded within the framework of the oil-for-food program.' According to this report Saleh claimed that 'six billion dollars worth of contracts were *still* blocked by the UN sanctions committee' (emphasis added, unlike the report Glenn mentions there doesn't seem to be any ambiguity here). Of course, the reporter had no problem finding out - and reporting - that there were actually $4.37 billion worth of goods on hold. Finally, Dirk wrote that 'There have been so many independent reports, with independent figures.' However if we're talking about child mortality figures this isn't actually true. Indeed, in his March '99 'Morbidity and Mortality' paper Richard Garfield noted that, whilst there was good data available on child nutrition, water quality and a number of other social and health indicators which influence child mortality, data was 'not available from any reliable studies on mortality since 1991' (the oft-cited 1995 FAO mission study 'suffered from serious flaws in methods and interpretation' and its results were subsequently withdrawn by its authors). This remained the case until the August '99 UNICEFsurvey. If it weren't for the UNICEF report the pro-sanctions lobby would find it much easier to claim that the humanitarian crisis was a propaganda fabrication, or deny its scale (for a good - if extreme - example of this see eg. Anthony Cordemann's book 'Iraq and the War of Sanctions'). I think it's also fair to say that the UNICEF report played an important role in shifting public opinion over here in the UK. Best wishes, Gabriel -Original Message- From: Dirk Adriaensens [EMAIL PROTECTED] To: [EMAIL PROTECTED] [EMAIL PROTECTED]; Per Klevnäs [EMAIL PROTECTED] Date: 16 December 2001 18:02 Subject: Re: can we trust Iraqi sources? Dear Per and others, Prof.Waterlow, the pope of the nutritionists, wrote a letter in november 1991 to the Lancet, appealing at the UN to monitor child mortality and the food situation on a monthly basis (J.C. Waterlow, Malnutrition in Iraq in The Lancet, 338,ii,23/11/1991). The answer in the Lancet of 21-28/12/1991: there is compelling evidence that economic sanctions against Iraq have led to dangerous shortage of essential commodities, including food and medicine. Immediate action, rather than statistical analyses, is what's needed to avert a public health disaster in that country. A report of the WHO (The effect of Embargo on Iraqi Children health status) in 1993 says: it is not necessary to do another study to demonstrate that the embargo has a negative impact on the health status of the Iraqi children. What will the political decision be if there is an increase of mortality with 200 or 400%. Does it really depend on the amount of the increase? Is there a figure past which the embargo is no longer tolerated on humanitarian grounds? There have been so many independent reports, with independent figures. The Harvard Study Team, The effect of the Gulf Crisis on the Children of Iraq, published in the New England Journal Of Medicine, 1991. There was the International Study Team, Infant and Child Mortality and Nutritional Status of Iraqi children after the Gulf Conflict, Cambridge, april 1992. There was the FAO report in 1993 Nutritional Status Assessment
Re: RE: iraq
The following is an archived copy of a message sent to a Discussion List run by the Campaign Against Sanctions on Iraq. [Re: can we trust Iraqi sources? are you implying that I said that we could? Wow! I speak to the lack of reasoned analysis in the Nation coverage (double meaning of coverage probably deserved) and now you are suggesting that I may pimping for Saddam? It may be that Cortright's estimates are correct; my point is that there is no reason to believe him given how underdeveloped and unsystematic his analysis was. It's a travesty to me that the Nation could have run the piece. Well maybe not; my opinions regarding the American left have been expressed before. Rakesh
Re: RE: Re: the profit rate recession
Title: Re: [PEN-L:20986] RE: Re: the profit rate recession concerning mynotes that I posted on-line (at http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm),Rakesh writes: 1. you have confused changes in vcc with changes in occ. I don't care, since what's important is the change in K/Y (the fixed capital-output ratio). It's via this ratio that changes in the vcc and/or the occ play a role in determining the rate of profit. If the vcc and/or occ rise and don't raise K/Y, they're irrelevant. don't agree. it's good to distinguish analytically between crisis induced effects on vcc and effects of technical change (labor or capital saving) on occ. Due to the latter alone the VCC may have risen. Inmy papers that I cite in the bibliography, I talk about the more building of mills for the sake of building mills, which I call either the Tugan-Baranowsky Path or bootstrap growth or profit-led growth. Indeed, as suggested by the last name listed, I argue that rising profit rates and shares _encourage_ such craziness. The problem, as I argue, is that as this kind of boom persists, the economy becomes increasingly unstable (prone to collapse). I won't bother you with the details of the arguments. please excerpt your analysis of why this kind of boom becomes unstable. i ask this sincerely because as duncan foley notes in understanding capital one cannot but agree with luxemburg's sarcastic dismissal of the tugan vision, yet her dismissal seems predicated on the equally untenable assumption that the purpose of capitalist production is consumption. Yeah, I also didn't discuss Mattick or the price of tea in China. oh so the funny stuff is on list. let me think more about how interest costs play into all this. Rakesh
Re: the profit rate recession
Yes, I did find your talk interesting. Do you have any similar numbers for other countries, or when you compare your trends for the US with profit trends in other countries, what are the differences? I generally agree with your focus on fixed capital and using 'conventional' profits rates, but I also wonder if something important is not being missed when circulating constant capital (raw materials and other non-fixed-capital inputs) is left out of the analysis of the reasons for the trends, especially about the role of the organic composition of capital. If I remember correctly, Fred Mosely also leaves out circulating constant capital from his profit rate. Several questions come to mind. My impression from the business press is that faster throughput and reducing waste in transforming materials have been a key element of productivity changes in recent years. This element of change in the organic composition of capital is ignored when the profit trends are expressed as yearly profits over the stock of fixed capital alone. A useful series by the US Federal Reserve (see www.federalreserve.gov/releases/G17/ip_notes.htm) shows that more than half of industry (roughly manufacturing and mining) value-added is accounted for by materials and intermediate goods, as opposed to final goods. The materials share of total industry value-added has been rising. This breakdown of industry by the stage of production underlines the *quantitative* significance of circulating constant capital. Or, am I misunderstanding something? Subcontracted inputs have become more important. While I suppose that in principle the accounting in separate business units should not affect the aggregate shares of fixed capital, profits, etc., I wonder if this is really is true. For example, is subcontracting an important vehicle for transfering profit from subcontracters to their oligopolistic customers. Even if the overal capital-output ratio does not change, who gets the profits does change, through unequal exchange. Also, is it prossible that more subconstractors means that more profit is taken in the form of profits rather than big salaries for managers? As we all know, measures of fixed capital are always a problem. In a comparison of productivity trends in US and Canadian manufacturing, Andrew Sharpe of the Centre for the Study of Living Standards (http://www.csls.ca/pdf/lanc.pdf) notes that all of the 1990-1997 increase in US manufacturing productivity (and almost all of the difference between Canada and the US) is concentrated in industrial machinery and electronic equipment sectors alone. He seems to question how accurate the US data is, but more to the point here, the boom in this sector suggests that a lot of machinery and computers has been scrapped and replaced with the latests and greatest, but probably before passing on its value. You note the decline in K/Y is related to the shake-out in manufacturing but, for example, while computer prices have declined massively, the fixed capital numbers may not reflect their service life. Another question - how much of computer-type purchases are counted as fixed capital? Bill Burgess At 11:34 AM 27/12/01 -0800, you wrote: For those interested, I recently gave a talk at the Marxist School in Sacramento, California, suggesting that the recent recession is connected with the trend rise of the rate of profit. My notes are available at: http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
RE: Re: RE: iraq
oY VeY! No, Rakesh, I know you aren't pimping for the Ba'athist regime! (And, neither, am i neo-conservative!! [Heh, some may say different!] That fwd. went to the Numbers debate, from folks that know the issues quite well. Follow the URL's. I know we lefties can really get defensive...I'm not immune myself having been called more wretched things on the net in the last two yrs. than any other period in my life...incuding the elementary school playground... Back to Iraq, that post goes right to the credibility of the various numbers bruited about and cites and bunch of the most cited studies. Michael Pugliese P.S. Dilip Hiro has a new book on Iran and Iraq in pb. from Routledge. --- Original Message --- From: Rakesh Bhandari [EMAIL PROTECTED] To: [EMAIL PROTECTED] Date: 12/27/01 2:48:10 PM The following is an archived copy of a message sent to a Discussion List run by the Campaign Against Sanctions on Iraq. [Re: can we trust Iraqi sources? are you implying that I said that we could? Wow! I speak to the lack of reasoned analysis in the Nation coverage (double meaning of coverage probably deserved) and now you are suggesting that I may pimping for Saddam? It may be that Cortright's estimates are correct; my point is that there is no reason to believe him given how underdeveloped and unsystematic his analysis was. It's a travesty to me that the Nation could have run the piece. Well maybe not; my opinions regarding the American left have been expressed before. Rakesh
Re: RE: Re: RE: iraq
Michael, you know better than to get into this sort of thing. Rakesh should not have made it personal either. On Thu, Dec 27, 2001 at 03:14:36PM -0800, michael pugliese wrote: oY VeY! No, Rakesh, I know you aren't pimping for the Ba'athist regime! (And, neither, am i neo-conservative!! [Heh, some may say different!] -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: RE: Re: Re: RE: Farm subsidy data base
Excellent questions, Ken. Ken Hanly wrote: 2) Why is the sector involving intellectually protected sector differentiated? When the protection runs out are the commodities undifferentiated as the now competing types of glysophate? They are differentiated only because they are protected not qua product. Related to this matter In addition, many types of intellectual property are differentiated because competition is prohibited. 3) Many commodities not protected by intellectual property rights seem differentiated. For example there is feed and malting barley and different varieties of each not counting hybrids. In the case of grains there is always price differentiation in terms of grade. In crops such as apples they are surely not sold just as apples but as this or that type and quality. But perhaps you are using undifferentiated in a technical way I do not understand. Undifferentiated may have been an unfortunate word choice. The feed barley is undifferentiated insofar as the purchasers do not differentiate among the various growers. 5) Intellectual property rights backed by state power does not necessarily bring success. A good example is GM flax. A patent was issued to a U of Sask prof. who gained nothing except notoriety and a lot of publicity. GM wheat is more ambiguous but it seems that the wheat will not come on the market for some time because of consumer concerns. Even the Canadian WHeat BOard has opposed its release on the market right now. GM potatoes have been a disaster so far for developers as large purchasers and processing plants will not touch them, at least in Canada. Of course, merely offering intellectual property without any use value will not be profitable. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: RE: Re: RE: iraq
from a friend: WHY DO DEATHS FIGURES IN THE THIRD WORLD MATTER TO THE FIRST. they never did before, and even if it did to the peace movement that was small and ineffective. take Algerias death toll in the war of independence: was it one million take or add one half! or any other war in the periphery, Rwanda, Columbia; in France military generals feeling the guilt of mass slaughter in Algeria were literally suppressed from speaking their minds. racism is a practice or effective hate, not a feeling of hate by the slave against the master. colonialism past and present is the practice of racism. should a political case or plight be made on the basis of the number of skulls a people accumulate? war kills and sanctions kill. the killing should stop. but so long as one working class lives off the toil of another, that will never happen and it will be a number discussion. number discussions degenerate into number theory. --- Michael Perelman [EMAIL PROTECTED] wrote: Michael, you know better than to get into this sort of thing. Rakesh should not have made it personal either. On Thu, Dec 27, 2001 at 03:14:36PM -0800, michael pugliese wrote: oY VeY! No, Rakesh, I know you aren't pimping for the Ba'athist regime! (And, neither, am i neo-conservative!! [Heh, some may say different!] -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED] __ Do You Yahoo!? Send your FREE holiday greetings online! http://greetings.yahoo.com
