Re: Back to slavery
RE Jim's: I'm going to have nightmares about a TV show John Pareto, Economist. I think the life (and economic theories) of Veblen would make a wonderful TV series. Perhaps David Duchovny could star in the series. Eric
Revised Version of Free Microeconomics Text
Pen-lers, At my website, http://economics.csusb.edu/faculty/nilsson/nilsson.htm You'll find a slightly improved version of my free on-line microeconomics textbook. Feel free to use as you see fit (as long as credit is given). I use the text in my intro micro texts. Eric Nilsson Economics CSUSB
RE: labor economics text
Title: labor economics text RE is there such a thing as a good labor economics textbook? Maybe: Unlevel Playing Fields: Understanding Wage Inequality and Discrimination by Randy Albelda, Robert Drago and Steve Shulman, Dollars and Sense, 2nd Edition 2001. Eric .
re: What is wrong with the mainstream economics?
Jks wrote, You need a common scale of some sort, some ranking mechanism. Otherwise you can't decide which of two outcomes is more efficient or if they're indifferent. This is of course right _if_ you explicitly model how someone decides whether to chose between the vector [embalmed Bentham, war in Iraq, and 2 poems] and the vector [no embalmed Bentham, no war in Iraq, and 3 games of pushpin]. But the beauty (sic) of high NC theory is that they do NOT model this explicitly. They only say, we dont know what is going on in peoples heads but they do make a choice of one of these two vectors and observations of this choice is what stands behind the preference orderings we use for individuals. As far as the implications of all of this for an internal ranking mechanism within people, the NCs just say, Thats not our issue and we dont care what goes on within people. The choice itself takes place within a black box we have no interest in investigating. As far as the claim of incommensurability of likes and dislikes, all we can say is that people _do_ make decisions between things that on the surface are incommensurable but this must imply that people can, and do, compare these things that others think are incommensurable. How else do people make the choices that they obviously make? They have a good point on this last claim: some meta-metric might exist that allows weighting of various apparently incommensurable likes and dislikes. But, hey, if Martha N says this aint possible Ill have to rethink all of this. Eric .
RE: Re: Re: re: What is wrong with the mainstreameconomics?
Ken writes, Surely when u come to practical applicatiions in social welfare theory such as cost-=benefit analysis not only are utilties measured they are measured in dollar terms. Even in applied micro you need not posit underlying utility functions: you can still use preference rankings. But this is not really a major issue. More to the point, within the logic of NC theory ONLY PO moves are valid. The claim that benefits costs (with no compensation occurring) indicates a good move is _invalid_ by the rules of the game of NC economics. But why then is such a move always _seen_ as valid by most economists? First, NC economists are generally unaware that this is invalid by their own rules of the game. Second, they want to provide policy guidance (so they seem to be doing important stuff) even at the cost of theoretical incoherence. Third, they have been taught that this is an okay move to make and, well, heck if others do it and if I need a job Im not about to sacrifice myself on an alter of theoretical purity. Eric embattled defender of the NC faith ;)
re: What is wrong with the mainstream economics?
Mat wrote, Is there a basic consensus in the philosophy of science about where empirical criticisms fit in? For awhile empirically inclined NC economists wondered if empirical evidence could be used to select between two different incomparable theories. They attempted to determine if empirical evidence could select between, say, a monetarist and a Keynesian theory of the interest rate. They came up with a not completely random method for doing this (how is that for high praise?): nonnested hypotheses testing. In the end, however, this approach failed to take the profession by storm except for a fringe of high tech econometricians because lots of these tests are really hard to implement. These nonnested hypotheses tests are based on the Lakatosian concept of excess empirical content: if theory A can explain observations the theory B explained and if theory A, further, can explain other observations then A had excess empirical content and, so, B should be rejected in favor of A. On my part, when I was young and still had brain cells, I wrote The Growth of Union Decertification: a Nonnested Test of Two Theories, _Industrial Relations_, July 1997 which convincingly showed that one NC theory should be rejected in favor of an institutionalist theory. NC economics has yet to recover from this article and later historians of economic thought will date the future decline of NC economics from the date of the publication of this article. :). Eric
RE: RE: Re: RE: Re: Re: re: What is wrong with themainstream economics?
Jim wrote, (this seems to involve interpersonal comparisons of utility.) I don't think this need be the case. Let's say I value the move from A to B by -$1. Let's say you give me a $1. This dollar might sadden you but it makes me as likely to chose B as A (if B comes along with $1). I am indifferent now between A and (B+$1). But we don't need to know anything about how you value $1. For instance with a $1 maybe I can buy coffee but with one less dollar you now can't cover that small hole in the wall of your office (which a dollar bill was really well suited for). A dollar might represent very different things to the two of us. Eric .
RE: nice to know
RE . . . are taking a detour through a computer licensed to: Government Systems Division, 13221 Woodland Park Road, Herndon, VA 22071, US. Well well! Virginia! Government! Interesting! Sounds scary. But a simple google search reveals the information that this might simply be a Sprint subsidiary. And, the computer itself need not be in VA, but is located elsewhere (or, actually, such Sprint computers are likely many places) but is simply licensed to Sprint with the above mailing address. Maybe these computers are part of some Sprint internet backbone. The feds might be grabbling all internet messages, but I'm not sure the previous message is quite the smoking gun the internet guru thinks it is. Eric .
Duct Tape Blues
(WASHINGTON (CNN) -- Americans have apparently heeded the U.S. government's advice to prepare for terror attacks, emptying hardware store shelves of duct tape. . .) Now that duct tape is key to our survival, you might want to listen to the classic, Duct Tape Blues. It is a free MP3 (unfortunately the second half is an ad for the artist). http://www.efolkmusic.com/ViewTracks.asp?Artist=Joel+Mabus You need to sign up to download the music for free. The lyrics include: You say your world has gone to pieces -- Things just fell apart You want to put things back together -- But you don't know where to start Well I got your solution -- The stuff you need to use It's a thing called Duct Tape -- There ain't nothing it can't do Now the Supreme Court got together and ate democracy for dinner They took the guy that came in second and made HIM the winner The system is broken - I can tell you how to fix it Send some duct tape down to Washington and show 'em where to stick it Eric Eric Nilsson Economics CSUSB attachment: winmail.dat
RE: RE: Western Rationality
Title: RE: "Western Rationality" Jim wrote, ...eight separate kinds of intelligence, Jim modestly fails to note his own contribution to this issue: there are also multiple kinds of stupidities. Eric /
RE: Re: Self-employed query
Seth wrote, Hello. When self-employed people go out of business in the U.S., how are they accounted for in the official job stats? Doug responded, It's based on self-reporting. If people describe themselves as self-employed and working, they're counted as such. If they describe themselves as not working, they're either unemployed (if they're actively looking for work) or not in the labor force (if they're not). During recessions, laid-off workers frequently become self-employed, which may mean they're drumming up business while pulling in little or no income. According to the BLS you are an employed person if either (1) you worked at least 1 hours for someone else (2) you worked in your own business, profession, It is possible that someone who has their own business, but has no work to do because they currently lack clients, might say that they _worked_ in their own businesses (trying to get clients, cleaning up the home office). They would be considered to be part of the labor force in this case as long as they continued to try to keep their business going. This would be true _even if_ such a person was looking for a job. If they give up their old business they might try to start a new businesses (rather than looking for a wage labor job) and, so, are then considered not in the labor force. It is not clear how the BLS deals with self-employed who do start looking for wage labor jobs--they might be classified as a job loser or they might be classified as a job leaver. The BLS definitions are not clear on how to deal with the self-employed who start looking for jobs elsewhere after a business fails. The situation Doug mentioned--laid off workers trying to start their own businesses and so no considered to be unemployed--certainly does happen. I don't have any idea, however, what percent of the unemployed do this. I'm not sure if the existing BLS data would permit--or wouldn't permit--this percentage to be discovered. Eric .
Future Criminals
Philip Dick's Minority Report (recently made into movie with many changes) was based on something similar to the following: Controversial Police Database Lists 'Future Criminals' Names, Addresses Of Potential Suspects Listed Posted: 12:02 p.m. EDT August 26, 2002 WILMINGTON, Del. -- Defense lawyers and the American Civil Liberties Union are up in arms over a police file of potential criminals in Delaware. The database contains a list of people who police believe are likely to break the law. It features names, addresses and photographs of potential suspects -- many of whom have clean slates. http://www.local6.com/sh/technology/stories/national-technology-163299720020 826-110826.html Eric
Foucault = ?
Finally in my dotage I'm reading Foucault. I know some on the list are knowledgeable of his work, so a couple of questions: (1) to what extent is Foucault = JS Mill's On Liberty - utilitarianism? (2) to what extent is Foucault = William Blake + Walt Whitman? (3) to what extent is Foucault = Gramsci - Marx? (4) to what extent is Foucault = Bourdieu / Giddens? (I have no idea what the latter might mean ;) ) Any thoughts? Thanks. Eric Eric Nilsson Economics CSUSB
RE: Re: ivy education
Doug H writes, . . . one's fellow students are an education in themselves. Classes were very lively - I wonder, however, whether this is _still_ true for the elite colleges. The increased competition now to get into such schools and increased attention to doing the right things during high school to get into an elite college might have changed the nature of the student body. Back in the good old days the less competitive nature of elite school admissions might lad led to a somewhat different student body. Eric (public school product)
George Orwell call home
Operation TIPS will be a national system for reporting suspicious, and potentially terrorist-related activity. The program will involve the millions of American workers who, in the daily course of their work, are in a unique position to see potentially unusual or suspicious activity in public places. http://www.citizencorps.gov/tips.html Eric
Short Book on Marx for Undergraduates
Title: Rogoff letter All, I'm looking for a short book about Marx's _social_ theory appropriate for undergraduates. In the past I've used Berlin's biography,parts of the Cambridge Companion to Marx, and Wood's KMin thepast but wantsomething different this time. I've also used KM's original writings but don't want to take this route this time and much of it is too hard for many undergraduates. Is anyone familiar with: (1) Marx: AVery Short Introduction by Peter Singer (of animal rights fame) (2) Marx: The Great Philos by Terry Eagleton I've not seen either but the price seems right on both of these ($10). Thanks for any thoughts. Eric .
RE: Re: Short Book on Marx for Undergraduates
RE Terrell Carver has an old Oxford book on Marx's Social Theory that I thought was pretty good. Also out of print, but I've used his Cambridge Companion of KM, which he edited and has some good points. Eric .
RE: Re: RE: Short Book on Marx for Undergraduates
RE How about: Karl Marx by David McLellan, Viking Press, 1975. I like it but it is out of print! Eric
RE: Re: Short Book on Marx for Undergraduates
Joanna wrote, A - you're not going to let them see any original material For the economics of KM I've had students read v.1 of Capital in the distant past, but it understandably takes us a very long time to work through it. But, in any case, I do the KM economics that I'm interested in during lecture but want them to have more readings on historical materialism, alienation, theory of state, and all that good stuff. Eric .
RE: Re: Short Book on Marx for Undergraduates
Justin wrote, Best general intro to ME I know of id Richard Schmitt, Intro to Marx and Engels (Westview); I used to use that all the time. I just checked -- this is out of print too. Clearly a conspiracy is afoot! Eric .
RE: RE: Re: more more stock options
Title: RE: [PEN-L:27753] Re: more & more stock options REjoanna writes:Problem is, options don't work in a bear market. But when the stock market does start to go up--and a huge overhang of stock options are finally cashed in--what might happen to the stock market? Eric .
Costly privatizing of firefighting
Interesting article on Slate http://slate.msn.com/?id=2066948 Privatizing firefighting was supposed to cut costs. But it has done nothing of the sort. Last summer, which was an average fire season, was the most costly on record. Nearly $700 million was spent fighting fires$230 million more than budgeted. . . . During the 2001 fire season it cost an average of $1,340 per acre to fight fires on the national forests270 percent more than it did in 2000. Eric Nilsson Economics CSUSB
RE: Re: 1,000 firms run the economy
Doug Orr wrote, It is easy to get the number of firms by type. It is easy to get firms with assets in excess of $250M. What I have not been able to nail down is total business assets in the US. I have found total Corp. assets, but I have not found proprietor and partnership assets. Data from BEA asset and investment data: http://www.bea.gov/bea/dn/faweb/AllFATables.asp#S2 You might want to look at table 4.1 for, I think, total assets and breakdown of assets by type of ownership. This publication has lots of data on assets, breaking them down into many different categories. Be aware, however, of the different ways they use to total up assets (current replacement costs, historical costs, etc). I would be reluctant to combine asset information from different agencies as they all might have different ways to determine the value of assets. The Census of Manufacturers must also have assets data and might break it down by form of ownership. And, for more on type of ownership and assets you might look at IRS data IRS Data book _might_ have something http://www.irs.ustreas.gov/taxstats/display/0,,i1%3D40%26genericId%3D16907,0 0.html IRS studies of various types might also have something. http://www.irs.ustreas.gov/taxstats/display/0,,i1%3D40%26genericId%3D16810,0 0.html lists statistics by topics. Topic for partnerships and corps has spreadsheets with asset information for these two forms of ownership. Somewhere here I think proprietorships are also listed or information on them is given somewhere. Sometimes not logic exists as to what the IRS chooses to study. And there data is often many years out of date. Eric
RE: Re: Re: Re: RE: Re: RE: RE: Estimating Surplus
Doug wrote, I was just citing the convention of the NIPAs. Conceptually, the people who make up households have to be the producers and recipients of everything, since corps are just legal fictions, no? It is a fiction that corporations are quasi-persons. Regardless of that, corporations are the major sites of surplus generation and decision-making for what is to be done with the surplus in modern capitalist economies. I wonder the extent to which the assertion that households have to be producers/recipients is due to the requirements of methodological individualism. eric
RE: Estimating Surplus
Ian wrote, Households are suppliers/producers of labor power, no? Yes, but this does not mean that your economic theory must underline (or start with) the role of households. My starting point for understanding economic behavior in capitalism is the process of surplus generation within the firm, the use of this surplus, the economic/social/cultural/political consequences of the generation (and various uses) of the surplus, and the role of coercion and consent in the extraction of the surplus. One can certainly start with suppliers of various inputs (labor power and other stuff) to generate a theory of the economy--this is neoclassical economics--but the sorts of issues that you find natural to discuss within the resulting framework are not really that interesting to me. Eric
Odd message from Merrimack College?
Doug wrote, virus checkers telling me an email I never sent to someone I don't know was infected. The identity of the real source is usually in the X-Sender: field; the address in the From: field is forged. Checking all the internet headers of the message I got suggests that it originally might have come from merrimack.edu, that is, Merrimack College, instead of from the pen-l server. A quick check of Merrimack's economics department reveals that Jack Amariglio, who might be on pen-l, is there. Or maybe someone else on pen-l is there. It might be that when a pen-l message was delivered to Merrimack a virus/worm generated the message I got. Or maybe not. Eric
RE: Re: RE: Estimating Surplus
Doug wrote, Institutions and social structures like classes configure those people in arrangements that make possible surplus generation and distribution. But the start and end of any economic activity has to be human beings doing stuff together. True. But this do not imply you have to start with these folks in your economic theory or trace all economic flows to these folks. Capitalist firms drive the whole economy and, so, you should highlight surplus generation/use by these firm from beginning to end in your economic theory. You methodological individualist dog you. ;) Eric
1,000 firms run the economy
Well not quite... But data I just put in my spiffy text is: Number of firms with 1-99 employees in the US: 4,800,582 (or 98% of all firms with employees) Number of firms with 10,000 or more employees: 936 (or 0.002% of all firms with employees) Number of employees working in firms with 1-99 employees: 40,091,449 (or 36% of employees) Number of employees working in firms with 10,000 or more employees: 29,715,945 (or 27% of employees) That is, fewer than 1,000 firms control the labor of more than 25% of all employees in the US economy. These same firms, of course, control a large part of the surplus generated within the US economy also. A large proportion of workers, however, work for very small firms (less than 100 employees) but none of these firms is really very important (economically, politically, culturally, etc). I would never argue a political strategy of pitting small firms again the giant firms. Rather, I point out the role of these giant firms to underline that way that the decisions of a relatively small number of firms (over what to make, what sort of jobs to provide, what ad campaigns to run, etc) has a really big impact on the whole economy. Source http://www.census.gov/csd/susb/susb2.htm. US Census Bureau, Statistics of US Businesses, 1999 data Eric
Estimating Surplus
For the NIPA aware. If you want to come up with a crude estimate for the total surplus generated by capitalist firms within the US economy, is there anything particularly wrong with simply summing up various data taken from the National Income data in NIPA (table 1.14)? To wit: Proprietors income with inventory valuation and capital consumption adjustments (line 9) + Corporate profits income with inventory valuation and capital consumption adjustments (line 20) + Net interest (line 29) And then rounding down a bit (to the closest trillion) to remove profit (surplus) earned by non-capitalist firms (with no employees). I go back-and-forth on the interpretation of net interest and whether it should be included. (Yes I'm aware of Shaikh's work on national accounting but his main issues--e.g., on productive vs. unproductive labor, net versus gross output, etc--are not necessarily relevant to a simple calculation of the surplus). Eric
RE: Re: Estimating Surplus
Doug wrote, Conceptually and practically, it's difficult to separate the labor income from capital income components of proprietors' income. Following the recommendation of Mayo Toruno, I'm multiplying proprietors' income by the ratio of (corp profits / (corp profits + employee comp)). This ratio is about 11%. Although Doug is right that conceptual issues are many and complex, I bet that the correct answer would be close to that Mayo suggested. Eric .
RE: RE: Estimating Surplus
Max wrote, I would say net interest paid (not personal interest received) and rent belong too. I'm not sure about rent as my concern is with surplus generated within an economic relationship involving wage labor (i.e. capitalism). The rental income in NIPA is for PERSONS (except for those who are part of the real estate industry) and a large part of it is imputed rental income that homeowners (pay themselves?) for living in their own houses. Some of it is payments for copyrights, patents, etc, but not too much I think. If you rent out your house to someone else this is unlikely to involve capitalist wage labor. You might earn income from ownership of capital (a house) but this isn't capitalist profit. Of course, I'm not entirely sure whether net interest payments should be included as profit from lending something scarce (money) need not be profit from capitalist activities. But I haven't quite figured this out yet. Eric .
RE: RE: RE: RE: Estimating Surplus
Re Max's what about a corporation whose business is rental real estate that includes improvements to the land? Such an activity would affect general corporate income, I guess. Eric .
RE: Re: RE: RE: Estimating Surplus
Doug wrote, Net interest is figured as what biz pays to households, right? It's an expense for business and an income for households. Yes indeed that is the case. I guess such a number doesn't add to capitalist surplus. For what it is worth: Corporate profits + Estimated profit part of proprietors' income = $767 billion + $84 billion = $851 billion. This is a crude estimate of the amount of capitalist surplus, but it is likely in the ballpark. Eric .
RE: RE: RE: Re: RE: RE: Estimating Surplus
Max wrote, Part of profits are paid to households too. I don't see how you can include profits but not net interest paid. I feel like Reagan, who allegedly was convinced by the last person he talked with ... I think I now would include net interest--these payments go to persons (as a payment for the use of their money capital) but the money to pay them came out of the surplus. And, so, net interest payments to persons should be added to corporate profits and proprietors' profits to get total surplus. (The same holds true for tax payments and distributed profits, both of which are already included in corp and proprietors' profits.) So now, until I received a message from someone else: surplus = corp profits + proprietors' profits + net interest = 767 + 84 + 554 = 1,400 billion dollars Eric
RE: Re: Re: : Markets and Diversity
Michael wrote, Thanks for all of your responses. My intuition is that goods with very small marginal production costs, such as books and television, tend to aim for mass markets, while other types of goods try to be able to capture expensive niches, often with the adjective designer attached to the product. Two points: (1)do you really think supply side/technical factors lay behind diversity/nondiversity? (2) is there a chicken/egg problem: the attempt to go mass production/(nondiversity) might lead to large scale production which might lead to low marginal costs (due to the large fixed costs). Eric .
RE: Re: Markets and Diversity
Michael wrote, . . .the honcho told him that the book would be unacceptable because the table of contents was not similar to that of McConnell's book. Which is why my intro micro text will be self-published (for free!) on the web. Eric .
RE: Lies, damned lies, and economics
RE or with Mayo Toruno's book. The second edition of Mayo's book, The Political Economics of Capitalism, will appear in the not-too-distant future. It will be published by Atomic Dog Press. http://www.atomicdogpublishing.com/home.asp Eric
Bartleby, the Scrivener: A Story of Wall-street
A movie version of H. Melville's short story, Bartleby the Scrivener, will appear this weekend. The story appears online at http://www.bartleby.com/129/ and other places. The story involves an employee who refuses to work and who refuses to be fired. His employer is not entirely sure what to do about this situation. Although the movie apparently plays up the comic aspects of this situation, the Melville short story, as is typical for things written by Melville, has many layers(as does Shrek--inside comment for those with children): tragic, comic, and absurd at many different levels. The amazing thing about this story is that it was written in the 1850s as capitalism was started to spread rapidly in the US. Most readers in the 1850s would have shared with Melville a concern with the spreading capital-labor relationship. Perhaps it's a good sign that now in 2002 movie-makers think that such a short-story would be of interest to the public today. For what it is worth, over the past few years my students have become increasingly discontent with the world of work they will face (if they are lucky!) after graduation. Melville is, of course, the greatest American writer. Eric Eric Nilsson Economics CSUSB
Price Discrimination on Internet (was Lies, damned lies, and economics)
Eugene C wrote, DeLong is doing a new wrinkle now (new to him, apparently) with the discovery that monopoly and discriminatory pricing is good for society. These people cannot be topped or stopped -- only ignored by us. The topic of price discrimination--in the context of the Internet--seems to be cutting edge stuff in the mainstream world. The debate is both over (1) is it good or bad? and (2) is it possible to implement? The reason it is cutting edge is the"consensus" in the business world is that price discrimination is profitable, possible, and inevitable on the internet. A recent article on the plans by IBM, Compaq, and HP to introduce a (weak) form of dynamic pricing appears at http://www.infoworld.com/articles/hn/xml/01/05/14/010514hndynamic.xml Although DeLong and others claim that price discrimination (that goes beyond what is possible outside the Internet) ispossible and isassociated with good things, this is the result of fuzzy (and wishful) thinking. In fact, the jury is out as to whether (first degree) price discrimination is really possible on the Internet.It would be easy for customers to foil attempts to target them for higher prices by eliminating information in cookies (or using cookies with false information within them) and/or by learning shopping behavior that a shopping site's algorithm believes indicates someone with a high elasticity of demand. And, of course, Amazon.com got slapped on its virtual hands when it started activities that would permit it (so it thought) to introduce price discrimination. Guess who's been reading up on price discrimination today? ;) Eric
Small and Imperfect Step to Alternative Text
RE the call for an alternative text... A crude draft of an alternative text can be found online at: http://economics.csusb.edu/faculty/nilsson/nilsson.htm Click on Course Webpages and then on Economics 200: Principles of Microeconomics. Warning: expect some incoherence in these chapters as much of the material is still in the first draft stage. Notable parts of this text are (1) the photograph of the corn economy on page 3 of chapter 1 and (2) chapter 13 which does stuff not done in standard texts relevant to why firms become large. Eric Nilsson Economics CSUSB
RE: Hetero Depts
Forget not humble California State University at San Bernardino (http://economics.csusb.edu/index.html)-- From a department of 8 economists: Nancy Rose (PhD UMass) radical feminist (current chair) Mayo Toruno (PhD UCR) radical institutionalist (past chair) Carrie Aldana (PhD UCR) radical institutionalist Kazim Konyar (PhD UCR) left wing environmentalist Eric Nilsson (PhD UMass) confused but well-meaning regular visiting instructor: Chris Niggle from Redlands (PhD UCR) radical institutionalist Bonus fact: we have a BA in Economics (Political Economy track) and a Political Economy Minor. From our web page (designed by yours truly): Among the theoretical approaches represented in the department are mainstream economics, institutionalism, feminism, and political economy. By taking courses from faculty who do research in these various approaches, students gain a more valuable intellectual experience than typically provided by an economics department. The department includes many outstanding teachers. Surveys of CSUSB graduates indicate that the Economics Department provides the best instruction of any major in the social sciences. Graduates have expressed their appreciation by contributing many thousands of dollars to special scholarships available only to current Economics students. Eric .
RE: Hetero Depts
RE Wow, Eric, thousands of dollars from alums to fund scholarships in econ--cool! Our current scholarship accounts hold about $50,000. We give out 4 small scholarships each year (about $700, or one quarter's worth of fees). Not too bad for a very small department in an unknown state school in one of the poorest urban areas of the state. The person most responsible for this is Tom Pierce, one of the two right wing members of the department (in our department, the right wing is liberal Keynesianism). Eric
RE: Profit Rates -- From Michael Yates
Max wrote, Without doubt, you can spot all sorts of problems in their work. But I would be willing to bet that you would not be able to arrive at a better way of doing it, given the same resources and data that are available to them. I generally agree with this claim. One of the main problems with government statistics is that the users of these statistics don't look at all the documentation generated by the government to explain/justify what they do. This documentation often reveals the great amount of thought that has gone into the most minor details of many government-produced sets of data. This documentation goes FAR beyond the quick-and-dirty justifications appearing in the official methodology publications they issue (or instance, the BLS's Handbook of Methods gives just a surface indication of the reason the BLS does what it does). This documentation is often filled with explicit or implicit statements of the weakness of the data. It is often not easy reading, but it is essential reading for those who want to avoid misusing/misinterpreting the data. Further, all data agencies continually reconsider how they do they generate data. A paper trail of this rethinking exists in a vast number of published and unpublished papers on the minute details of data creation. At the same time, most government data implicitly or explicitly accepts uncritically neoclassical economics. But having done this, the government data producers take everything amazingly seriously. As a result, much government data has some silly ideas embedded within it. Eric .
RE: Re: re: profit rates
Sabri wrote, And I worked at money management firms and other firms that provide analytics to them. ... But, there are those who are dishonest liars. I know it. I have worked with them. In my experience private sector data producers--particularly those in the financial sector--sometimes produce a product that is very bad. Not all do, but many do. They often want to sell their data--or use their data to sell something else (pieces of paper!)--and this effects how the data is produced and what it says. Most government data producers do not have to sell their data to survive and, so, the market factor that might corrupt their data generation process is missing. Of course there are honest and dishonest people in any data producing operation. But when data is produced as a commodity (or to help sell another commodity) this tends to increase the role of dishonesty. Eric.
RE: RE: RE: Re: re: profit rates
Jim wrote, Didn't Merrill-Lynch financial advisors recently get in trouble for selling info that was inaccurate -- but helped the investment-banking side of the business? I know the LA Times has covered this at least twice a week or so ago, but I haven't see much in the WSJ about it. Eric .
RE: net products, profit, surplus-labor
The following are neutral questions as I have nothing vested at all in any previous models of Marx's value theory. I do have problems with models of the sort that Andrew K thinks are invalid. In response to Daniel D's: Why would anyone carry out production of a good worth half as much as its inputs? Andrew K responded: They wouldn't, not knowingly. That's not what's at issue here. I've not followed the debate much at all. But the above leads me to ask Andrew K about the information assumptions he makes in his model and the associated assumption of the behavior of capitalists. In short, what do capitalists know and when do they know it? If capitalists don't know that they are unknowingly producing a good worth half as much as its inputs, how can it be assumed that they can maximize profits or, at the very least, how can they produce to make a profit? Can capitalism survive in such a setting? If a model dispenses with the assumption that capitalists know enough to make a profit, can this model be of capitalism? The information structure of the model, which might be spelled out in detail in some written work, seems to be critical to the validity of the model if the model is to be anything other than a technical model of production unrelated to capitalism (which presumes capitalists have enough information to make profits). If the latter is the case, that's okay but such an aspect of model might be underlined a bit more. Whatever the weaknesses of models of value they do claim to be models of capitalism, not pure technical models. Maybe this claim is wrong, but it has been a long time since I've read the relevant material. Do capitalists only discover what has happened in production with a lag (that is sometime after production takes place). This is entirely possible, of course, and likely realistic. Are information lags consistent with a simultaneous determination of everything (as I think is the intent of the model)? If there are information lags, how are decisions made by capitalists in real time? -- How is decision-making under incomplete information dealt with in the model? After all, prices seem to be set somewhere (the market?). What information set exists for market actors and how does it differ from that capitalists have about production? Does an inconsistency exist in the information assumptions made for actors in different sites of the economy (market and production)? Are prices set in spot markets in the model? It seems they might be, but maybe the market pricing process is not modeled at all. If it is not modeled is there a possibility that the price outcomes are inconsistent with profit-seeking behavior by capitalists? Can incomplete information exist in production but complete information exist in market contexts? Related ramble: is the market period (during which prices are set) different from production periods (during which capitalists have, finally, full information about the outcomes of production)? Re an earlier statement by Andrew K: I actually do deny the existence of a physical surplus, in the real world. What implication does this have for Marx's theory of history? Does it undercut key elements of Marx's theory of history or is the claim that a surplus exists (whatever index is use to aggregate individual items in society) not necessary to this theory of history? I recognize the index number issue, but I wonder if a serious consideration of the arbitrariness of index numbers calls into question one aspect of the Marxian view of pre-communist societies? I've always liked the claim that the dominant class gets control of the surplus, but if the concept of the surplus is logically incoherent what can be saved of such a claim? Eric Nilsson
RE: Re: Protection, Contagion, Reflation
JD wrote at the same time that the IMF pushes them to deflate? And at the same time the switch to a single currency and a single central bank was accomplished to reduce the effectivess of (domestic) political pressure to lead to (potentially) pro-growth, inflationary policies? Eric
Re: FW: It's good nukes week!
Carrol wrote, There has been considerable discussion of this already on LBO -- where the near consensus was that the _leaking_ (presumed deliberate) of this story might be significant and/or scary, the substance of it was commonplace. I wonder if the Bush administration will find itself painted into a corner if, say, one of the events in which they threatened to use of nukes does actually happen? Will they believe they must now use the nukes in order to maintain their credibility even though the actual event really does need nukes? Imagine what bad things might happen if, say, Cheney got to make the call about using nukes? The US has raised the stakes (by indicating they are more likely to use nukes) but what happens if others around the globe are not concerned with the higher stakes (or believe it is a bluff)? In this sense, the new (intentionally) leaked policy represents a very bad development. Evidence that the leak was intentional is that the US is not demanding that the LA Times tell the US who leaked the documents. Eric
RE: Re: RE: BLS Daily Report
RE It's not easy to read the tenure numbers - tenure could rise in a weak job market, as people hold on to what they have, and fall in a strong one, as they feel confident about changing jobs The national numbers don't show that much of a change between 1983 and 2000 And I believe I read recently that whereas firms for many years tried to layoff older and higher paid workers (who tended to have long tenure) they often now target younger/less skilled (who tend to have lower tenure) Eric
Re: Rigor mortis?
Jim wrote, More generally, math by its very nature describes an idealized world. That doesn't mean that it shouldn't be used as much as that it has to be used _very carefully_ if one's goal is to understand the world. I, who has used math in a previous life and am now learning game theory, see math as discovering the implications of various logical assumptions. The relation of these assumptions (and their implications) with the real world is somewhat in doubt. This does not mean that math models are not helpful when we consider the real world. They can point out possible mechanisms and connections that are unlikely to be discovered in other forms of discourse. Eric
RE: Re: Rigor mortis?
Jim D wrote, I think it's important to remember that the phrase the real world is redundant. I guess this depends on one's epistemology, but I don't want to start any discussion about epistemology. Pen-l seems to have a lot on its plate now. ;) Also, isn't it more accurate to say tht math models can clarify one's thinking about possible mechanisms and connections instead of allowing them to be discovered? The discovery seems to be a pre-mathematical stage of the analysis. I think that both things can happen but I that sometimes that discovering stuff with a math model can be more interesting than clarifying one's thinking. Having said that, the math work I'm doing now fits into the latter approach (clarifying).. Eric .
RE: Productive Forces
Jim wrote, How do we measure the "productive forces," anyway? It seems that capitalismwould measure their development differently from other modes of production.(Capitalism might measure them in terms of labor productivity, which ismarketable output per worker, corrected for inflation. There are all sortsof index-number problems with that measure, BTW.) I would go further. It could be argued that no "objective" measure of the level of productive forces can exist. Presumably a productive force is considered productive because it leads to some good or service that people want and/or need. But, asSmith and Marx recognized, wants and needs are (partly) socially/historically determined. The ability to produce cell phones at lower cost (and the same quality) would be considered an advance in the productive forces if people wanted cheaper cell phones. But if people, for some reason, decided they no longer wanted cell phones the ability to produce cheaper cell phones would not be considered an advance in productive forces. The level, and rate of growth, of the productive forces is subjectively determined.Further, if people can be convinced that they no longer want what the machines and tools and technology of their society produces they might come to see the productive forces within their society as regressing. The implication of the above for a theory that sees the development of the productive forces as the motor of historical development is not good. Eric
RE: Productive Forces
dd writes I think it would be possible in principle to come up with a mathematically rigorous definition of the productive forces in terms of the ability to produce arbitrary physical objects of a given information-theoretic complexity of structure, and then carry the analysis on from there. I would be possible to generate such an index if you had adequate data. However, the resulting measure would _not_ be a meaningful measure of the productive forces. Productive forces must produce what people want. And what people want changes over time and cannot be tracked by arbitrary physical objects. But recognizing this might, actually, be very interesting even from within an (otherwise) narrow Marxian perspective. If one class becomes convinced that the existing tools, machines, and equipment fail to produce what they want, then they might come to see that the existing forces of production are insufficient for their needs. And, perhaps, they might act to alter both the forces of production and the social relations of production (recogizing that FoP and SRP codetermine each other). I'm sure there are logical connections missing in the previous paragraph but the basic idea is okay, I think. It underlines the importance that ideology--or at least ideas--have in determing so-called material reality/facts. Eric .
RE: Productive Forces
Melvin P wrote, Is not human beings the decisive element in the production forces? Certainly an argument can be made that, broadly understood, human beings are part of the productive forces. Whether it is the "decisive element," I don't know. I don't think Marx--not that his opinion is decisive here (I duck)--saw the development of the people component of the productive forces as being key for determining historical evolution. He tended to focus onwindmills, steam mills,and other such non-human productive forces. Neoclassical economics, however,oftenclaims that people (or, more precisely, the human capital embodied in them) are key to economic growth. Of course, that neoclassical economists claim this does not mean it is wrong. They made a good point. I wonder if someone would claim thatthe skills and abilities people have (apossiblecomponent ofthe productive forces)might come into conflict with the social relations of production. More generally, many economists (both neoclassical and non-neoclassical) see disembodied technological advance as being key--that is, the ideas people have in their heads and/or on paper or other writing service (perhaps on CDs now) are seen as key for economic growth. Or, perhaps the institutionalist wouldclaim thatinstitutions--in the sense of the way people interact in production--are key to productivity advance. If people are included as productive forces then the issue of the advance of the productive forces duringa Schumpeterian creative destruction process--which devalues many people's skills--indicates further the complexities ofidentifying "objectively" theproductive forces in an economy. Eric .
RE: Productive Forces
Charles wrote: actually the productive _forces_ can be measured to a certain extent using the physics concept of force, in that there is at least in the period from European feudalism to capitalism a leap in the amount of energy capture and ability to do work ( in the physics sense of work = force x distance) with technology I think I disagree about being able to use force--as defined by physics--to quantify the amount of the productive forces But Charles' point raises an idea I've not thought of before--which likely has been well-discussed by those more knowledgeable than me: to what extent did Karl M get his ideas about productive forces from the ideas of physics then current in Europe? The notion of force (as used in physics) certainly existed in Europe by the early 1700s I guess the equations of mv or mv^2 also existed Was Karl M aware of such things and, if so, did it play a part in the development of his theory of history? Eric
RE: Productive Forces
Carrol wrote: Are you assuming that Marx _did_ have a theory of (universal) history based on the development of the productive forces? I am assuming that at one point Marx did have a theory of history in which the productive forces played an essential role Whether concepts from the physics of his time contributed to this development (or formulation) was pure speculation on my part, but I wonder if others (a Phil Mirowski critic of Marxian economics ;) ) have wondered the same thing RE The idea of a universal history undercuts the fundamental marxists recognition of the _historical_ contingency of capitalism It is a denial of history rather than a theory of history But didn't the old man believe that for forces of production and the social relations of production drove broad historical development up until the revolution? Afterwards humans could, he believed, drive historical development; before this baser (so to speak) forces drove history A Marxian theory of historical development based on FoP and SRP does not assume eternal capitalism but, instead, denies that capitalism is more than a way-station to a better place Eric
PLEASE USE PLAIN TEXT, WAS Productive Forces
Carrol wrote I don't know who started using html formatting on this thread but it is obnoxious. Was blue text what you are referring to? If so, it was me: I mistakenly sent out such a message. But, for what it is worth, colored text is not always the same as HTML. My blue text was courtesy of the MIME e-mail format--which I use. MIME is capable of colored text (and other things too)! But I bet you don't want to see these things Eric
RE: Productive Forces
Charles wrote, CB: He was certainly aware of these physics basics, but I am sure he did not reduce his productive forces to physical forces I didn't hope to imply that I merely wondered if Marx's way of thinking about historical developments was influenced by ideas developed first in theoretical physics (in addition to ideas from G Hegel and other assorted more philosophical thinkers) Writing in my typically sloppy fashion I might have suggested that Marx literally borrowed from physics, which I didn't mean to imply Hey, come on, this is a dissertation topic for someone out there ;) Eric
RE: Productive Forces
Sabri Oncu wrote, . . .The main reason of why I am writing this is to let you know about a book I found a while ago in a used book store. It is this: The Mathematical Manuscripts of Karl Marx, New Park Publications Ltd, 1983. The book was edited by S.A. Yanovskaya in Moscow in 1968. The translation is by C. Aronson and M. Meo. Thanks for the reminder about this book. I remember it was very interesting. Among other things it showed how much mathematics Marx had taught himself in prepartion for his work on Capital. Eric .
RE: Commodity fetish
Doug Henwood wrote: I'll bet a lot of PEN-Lers don't approve of makeup or stylish clothes either. Hold on. Readers of the WSJ (a few days ago) know that the _newest_ fashions have rips, tears, and wrinkles and look, in general, very beat up and old. Because of this fashion development, I am now--and have for years--exceedingly and proudly stylish. Eric
RE: Re: new cpi
RE It's been clear for a long time that the BLS has largely gone along with the Boskin stuff . . . I imagine that the behavior of the BLS towards revising (sic) the CPI changed once Katherine Abraham left as head of the BLS. Her term expired in about September 2001. I bet no one in the administration wanted to offer her a new term. She was a strong advocate against mindlessly changing the CPI methdology. Eric .
RE: RE: Double tax on savings
Ellen writes, Isn't this ceding too much to the double-taxation position. I mean yes it' true that the thrifty brother will pay more income tax than his twin, but he will also earn more income (the interest on saving in addition to the original income) than his twin. I agree with you Ellen. But the double-tax perspective--which I'm trying to understand--seems to rely on the claim that the interest income is NOT truly income. They seem to claim that the interest earnings merely reflect the fact that a dollar next year is worth less than a dollar today. They use the interest rate to discount future income. This cancels out any interest payment as income. That is, I think that's the argument. Eric
Double tax on savings
Does anyone know the origin of the phrase double tax on savings. I'm teaching public finance and must address the issue of double taxation on savings as the textbook makes a big deal out of it. For the life of me I don't see how taxing income and then taxing capital gains/interest constitutes double taxation. Was the phrase double taxation on savings invented to justify tax cuts for investors? If so, does anyone know when this idea first appeared? Thanks for any leads on this. Eric Nilsson Economics CSUSB
RE: RE: Double tax on savings
Thanks Max for the information and for sharing part of your underground classic. Max wrote, A more neutral way of describing this is to note that if you earn a dollar and save it, as opoosed to spending it immediately, you pay more tax in the first case then in the second. To help me understanding the issue: Assume a 10% tax rate: Case 1 Income = 1,000 savings = 0 taxable income = 1,000 tax = 10% x 1000 = $100 summary income = 1,000 tax = 100 tax rate = 10% Case 2 Income = 1,000 savings = 500 INTEREST INCOME = 100 taxable income = 1000 + 100 = 1,100 tax = 10% x 1,100 = $110 summary income = 1,100 tax = 110 tax rate = 10% The second person pays more tax (but same tax rate) because they have more income. However, . They are instead the time-translation of some primordial stock. So the argument is that interest earnings is NOT really income. Rather, it is merely something that accounts for the different value of money at different times and, so, should not be taxed: it is merely the same money, but at different times? In this view, case 2 income is really 1,000 and the tax rate is 11%? If this logic is accepted, this implies that interest income is not income at all in any case. No? Really strange. Eric
Re: A project for Pen-l -- Krugman point
Max wrote Somebody should do a number on how Krugman's academic work deflates free trade theory/ideology. It does and it doesn't. Krugman is a free trader because, and not despite, of his academic work. Krugman's work is similar to that for an optimal tariff in that it is possible to, theoretically, identify a government intervention into trade that makes the nation (doing the intervention) better off. But the response of Krugman to his own work has been to point out: 1) information failures made it difficult if not impossible to determine a particular government intervention that will lead to good results (because of this a bad intervention is likely to occur that makes the nation worse off) 2) in any case interest group politics will mean that the actual government interventions into trade will not be those that help the nation but will be those that help powerful interest groups, and 3) if the foreign nation retaliates to the government intervention everyone might be worse off. These are the reasons that Krugman tends to be a free trader as have those who have analyzed optimal tariffs. Eric Nilsson Economics CSUSB
Mainstream trade theory in general
Re the discussion of mainstream trade theory. The ideological function of undergraduate trade textbooks is to argue for free trade. But mainstream theory doesn't necessarily support this perspective. All changes in trade leads to winners and losers. Neoclassical welfare theory has long recognized the problem in determining the net effect on welfare of adding these gains and loses. The only satisfactory resolution is to say that IF winners compensate the losers (and still have something left over) then trade will benefit the nation. If the winners do not compensate the losers than absolutely NOTHING can be said about the actual effect of trade on the welfare of a nation. This ain't my opinion; this is mainstream welfare economics. Undergraduate mainstream trade textbooks get very interesting when they try to justify adding together gains and loses (without compensation taking place). At best they say you can't really add this stuff together but, you know, we will anyway so that we gain insight (sic) into the effect of trade. This is really strange logic. Another random statement: I never really saw the point of the critique of Ricardo and of efforts to beat up on notions of comparative advantage. That mainstream trade theory books start with Ricardo (and Smith) is really strange. I don't know of any other mainstream field that starts off with the oldest theories and then ignores how by the 1920s mainstream trade theory more-or-less dumped any link to Ricardo's theory once subjective utility and opportunity costs entered the discourse. I feel comfortable saying that if two regions have different currencies and different domestic price ratios, then the exchange rate might settle so that trade occurs between the two nations. Of course trade need not be balanced. Such an argument need not be based on relative productivity differences. It is simple mathematics. Of course, the explanation of why relative prices different in different countries must go beyond simplistic Ricardian and Heckscher-Ohlin stories. Further, it is obvious that sometimes trade is based on political power--e.g., colonies--and not on markets. And, of course, lots of trade is really intra-firm transfers across borders by MNCs and, so, need not follow the dictates of relative price differences. Eric Eric Nilsson Economics CSUSB
Question about Isbister's Capitalism and Justice
Has anyone read the book in the subject line? It was published in Jan 2001. I'm thinking of using for a public finance course but only know the name of the book and that he is a progressive. Thanks. Eric Nilsson Economics CSUSB
RE: Re: Re: query
Perhaps of relevance are IRS reports: Page of reports relevant to tax returns of individuals: http://www.irs.ustreas.gov/prod/tax_stats/ind.html Page of reports on tax data by size of income: http://www.irs.ustreas.gov/prod/tax_stats/soi/ind_ agi.html Most recent IRS report on tax returns for high income earners. The most recent report, however, is for 1998: http://ftp.fedworld.gov/pub/irs-soi/98hiinco.pdf I've not looked at this particular report but most IRS reports of this type have lots of nifty information. Eric .
Your slice of Tax cut
For those wanting to know how much Bill Gates will save with the new tax cut over the next 10 years --- The tax experts at Quicken TurboTax have developed an easy to use calculator to help you estimate how your taxes might be affected. Simply enter the information requested below and we'll do the rest. See http://www.quicken.com/taxes/taxrelief/estimator/ Eric
RE: Re: RE: Re: Re: brad de long textbook
RE Brad's It is a perfect illustration of how monopolistically competitive markets with entry do not produce anything like the social optimum... It is also a clear example of how firms, seeking to make profits, shape market structure: market structure is often endogenously determined by profit-seeking firms. I recollect this sort of thing being discussed in the NC literature in the mid-to late-1980s but I don't think this point of view has done much to change how micro is taught at the undergraduate level. Competition in NC textbooks is still of the static sort rather than the dynamic type of competition discussed in the classical literature. (Debating note: when in doubt label what you don't like as static and label what you do like as dynamic.) Eric .
RE: Re: RE: Re: brad de long textbook
Brad wrote: If you wished (although God knows why you would) to portray your actions as a gamble by a flinty-eyed amoral profit-maximizing academic careerist, you could say that: Okay, Okay -- you saw right through me. But you missed one key aspect of my free (sic) text: while I will not make any money off the text itself, I do hope to market a line of action figures that come out of my book: Supply-Demand Man and Working-Class Heroes vs. Exploiting Surplus Extractors WWF-style action figures. And, again to be honest, I hope to make money off of product placement. For instance (from my text): Suppose you have a very strong preference for Martha Stewart's pine-scented aromatherapy candles which sell at K-Mart for $9.99. In this case, you might buy lots of them at this price. And your utility will be very high if you do this. Still, I must protest the flinty-eyed insult: my eyes are kinda droopy and not flinty at all. Eric;)
RE: Re: brad de long textbook
Plug I too have a textbook coming out in September or October. (Or maybe later depending on what I do this summer: so may obligations; so little time). I had previously thought I'd have it done by now but Oh, and I did not get $1 million advance ... Title: Microeconomics: The Quest for Profits, the Use of Power, and the Social Good Level: Principles of Microeconomics Cost: ZERO -- downloadable free from the Internet as Adobe Acrobat files (professionally formatted to look pretty). Or, for the cost of shipping ($3?), available on a CD. Publisher: Me Chapter Titles: The Surplus, Different Economic Systems, Development of Capitalism, Profits and the Markup, Competition, Barriers to Entry, Strategies to Boost Firm Profits, Social Limits to the Actions of Firms, The Drive for Large Size, Industrial Landscape of US Economy, Demand, Social Creation of Demand, Monopoly, Oligopoly, Highly Competitive Industries, Supply and Demand, The Employment Relationship, Wages and Work Effort, Technological Change, and Capitalism and the Social Good. It should be 200-250 pages when completed Plus, I think this will be the first open source textbook: you will be able to download Word files that contain all the text, tables, and figures. You will be able to do what you want with this material for your students: only use certain chapters, rewrite it, add to it, etc (as long as you don't do it to make money! You must provide this material to students at the cost of reproducing it). The text is best described as a mix of Bowles/Edwards and a standard micro text that doesn't fetishize mathematics and diagrams. Why am I doing all this work and, then, giving it away free? Answer: Damaged DNA. Eric Nilsson Department of Economics California State University San Bernardino, CA 92407 [EMAIL PROTECTED]
RE: Re: Re: brad de long textbook
Jim wrote, After all, it's the sovereign consumers who decide what sucks and what doesn't suck. But remember one of the key characteristics of the textbook market--the ultimate user (the student) does not pick the book. The professor does (and most often the professor does not have information about the price). Indeed, the vast majority of publishers fail to provide any price information for the professor. Instead, they stress the number of colors, the spiffy graphs, the boxed examples, the pre-written exams, etc. And as price competition doesn't exist (and the price is not known), nonprice competition tends to lead to higher and higher priced books as professors are unable to see how more colors leads to a higher price. Further, some professors might select a book not because it is the best for the final user (student) but as a status good: hey, I'm using X's book--ain't I cool. Or, other professors see I'm using X's book, which is new and cutting edge, and so maybe they'll think I'm also cutting edge--and worthy of getting tenure. Eric .
RE: Re: Re: Re: Re: Re: important news for parents of young kids
Jim D wrote, including (yuk!) Pokemon You got to get into Rugrats. We don't have cable so we only see it via rented videos every few weeks (you also avoid the commercials that way!). One could argue that Rugrats is a bit subversive--as much or more so than the Simpsons. It certainly is very creative. For what it is worth the person who writes the music for the series once headed up the music group Devo. That alone scores points with me. From the very beginning, we clearly labeled (for our kids) commercial TV and commercials in particular as junk and told our kids that the goal of these things is to sell you stuff. This has worked out pretty well. Although my kids (Peter is 7 and Emily is 3) only rarely see commercials, as we only watch PBS which has become increasingly commercial, whenever possible I decode them as we watch them (they are claiming here that this toy is necessary if you want to be a popular boy. That doesn't made any sense to me. What do you think Peter?) At the same time, unfortunately, Peter can read a Lego catalog for up to an hour at a time, seemingly memorizing each detail of each Lego kit being sold. How we let this happen is not clear to us. In any case, this is not helpful when we go to a store that sells Legos. We tell ourselves, however, that Legos are better than Pokemon. (But who knows.) And then there are the annual passes to Legoland, which is somewhat over an hour away from here. These are not cheap. But Hollywood produces dreck (1) because people want it, In other contexts I'm sure Jim could be more careful not to make such an extreme claim. How kids, and parents, come to want low culture is a complex process mostly involved, I think, with the nature of capitalism which creates these wants. I don't think there is a dreck DNA strand within us. My 2 cents. Eric .
RE: Re: RE: Re: Re: Re: Re: Re: important news for parents of young kids
Jim wrote, yeah, tastes are a dependent variable, but that doesn't say that people don't have bad taste a lot of the time (and I don't exclude myself from this). The key is not whether you have bad tastes, but whether you feel _guilty_ for having bad taste: that is, whether you have metapreferences that made you wish you didn't like such things. And, of course, we all know how culturally determined is the specification of what bad taste includes is. ;) Speaking of bad taste, I'm now listening to one of my favorite musical groups of all time: the Dead Kennedys. I could listen to Kill the Poor and California Uber Alles all day long. Talk about bad taste! Ah, the good old days. Jim, were you at Berkeley when the DKs were starting out (circa 1977, I think)? Eric .
RE: Re: (Fwd) Complaint about violation of academic freedom in hiring
Brad wrote: ... David Noble's fear of "Digital Diploma Mills" . . .shows gaping holes in his ability to construct a logical argument... but then we read Brad's 'logical argument' undercutting the flaws of Noble's writing: It wasn't pleasant. It wasn't persuasive. And it seemed to indicate a very different attitude--an immoral attitude... But the above is not an argument--it is assertion followed up with a loaded term. I disagree with many details of Noble's argument and I do think he is being merely speculative in what he writes. But as I work within the California State University system--which is attempting to be in the cutting edge of the sort of thing Noble is concerned with--much of what Noble writes seems reasonable and possible. While the CSU will be unlikely to achieve what it wants, it is certainly trying its best to reduce the skill input (and cost) in the production of college degrees. Things are undoubtedly different in the University of California system. Eric .
RE: Re: RE: RE: Re: humor
At 02:27 PM 3/29/01 -0500, you wrote: Q: How many neoclassical economists does it take to screw in a light bulb? A: The bulb would not have burned out in the first place if not for government regulation. Eric .
RE: SC- Death of Employee Rights - Employers Can Force Arbitration on Employees
RE the AP report: The arbitration law does not apply to employment contracts for seamen, railroad employees or any other class of workers engaged in foreign or interstate commerce. Circuit City contended that the exception from the arbitration-enforcement law was limited to workers actually involved in moving goods from one state to another. The Supremes seemingly agreed with this claim. I know almost nothing about law, but it seems the decision to read "engaged in commerce" narrowly undercuts the logic of all federal laws as applied to business. If Circuit City sells in many states but pays someone else to actually transport goods across state borders, it would seemingly be NOT engaged in interstate commerce (in the new interpretation) and, so, is exempt from most federal laws. Is this were the Supremes are headed--a radical reduction in the proportion of firms covered by federal law by this new reading of the meaning of the term "interstate commerce."? Eric .
RE: Re: Re: Re: Re: hires
RE Jagdish Bhagwati - who, despite his free-trade zealotry is a quirky and open-minded guy - he lamented the mediocrity of the left candidates. .. I recollect reading sometime within the past year from an economist denied tenure are Columbia complaining about the unusual amount of unfair and cruel behavior he experienced within the economics department there. For instance, he was told he was a star but was eventually rejected for tenure for not very compelling reasons (so he thought). Eric
Query on collusion-fostering government programs
Pen-l folks: Some have argued that certain great depression and WWII programs that brought US firms together to help plan industry output contributed to these firms being able to achieve collusion after the end of these programs. Not only did firms in these government organized industry groups learn more about the cost and pricing structures of their rivals, but industry leaders developed social relationships that contributed to later implicit and explicit collusion. I can't remember, however, who argued this. Does anyone remember? Thanks. Eric .
What next for the Greens?
We could go round and round about mistakes/miscalculations/betrayal but not much is served by that. More important is, what is next for the Greens? If the election goes to Bush, as seems most likely, then what will the attitudes be of those who were on the fence between Gore and Nader? Will they be upset with Nader and, so, be very unlikely to back the Greens in the future? Or, will they say, what the heck I might as well shift to the best alternative, the Greens, although they are (some might believe) responsible for a minimum 4 years of Repub horrors? Will the Demos, if Bush is elected, shift slightly to the left to get the Greenish vote or will they shift slightly to the right hoping to win by becoming (more so) the left wing of the Repubs? It seems to me that a rightward shift is more likely for the Demos--if they move left, they will lose votes to Repubs as they gain votes from Greens. The next result might be zero gain in votes for them and a net gain for Repubs. If Demos move right, they gain votes at the expense of Repubs: they might lose their left wing to the Greens--a net gain of zero for Demos-- but they will take away votes from the Repubs which, on the whole, might lead to greater Demo success. Eric . Eric Nilsson Department of Economics California State University San Bernardino, CA 92407 [EMAIL PROTECTED]
RE: Re: Re: Re: Re: voting for Nader
I initially wrote, But the bottom line is who do you want--Bush or Gore--appointing people to, say, the National Labor Relations Board? Some responses have ranged from 1. my question leads directly to fascism (Carrol, Gar), 2. progressive politics might have been better off if Dole had become president (Carrol), 3. my messages imply we should become good little Democrats (jks). My response: I utter some hyperbole _ (fill in the blanks) in response to the above hyperbole. Mbs asked about "how" it makes a difference who is president while Jim D asks about whether it matters who is appointed with moble capital and declining budgets. Response: vetos, who is appointed to various positions within the federal government (including NLRB and Supreme Court), and general ideological discourse uttered by the president. And, yes, even in an era of open economies and declining enforcement budgets, I think it matters who is making the decisions. Eric .
RE: RE: RE: Re: Re: Re: Re: voting for Nader
My Dear Max, RE Now now, Eric. My question was much more focused than that. You said Gore would provide more space for progressive movements. I asked *how* 8 yrs of Clinton has done so. Gore would provide a better atmosphere than Bush. Nader would provide a better atmosphere than Gore. I would provide a better atmosphere than Nader :) I will overreact--sensitive sort that I am--to your chiding me for using cliches, by citing the following recent decision by the NLRB: --- Bridgestone/Firestone, Inc. (21-CA-31471, 31592; 332 NLRB No. 56) San Diego, CA Sept. 29, 2000. Chairman Truesdale and Member Fox agreed with the administrative law judge that the decertification petitions relied on by the Respondent in withdrawing recognition from Teamsters Local 481 in two separate bargaining units were tainted by the Respondent's unfair labor practices, rejecting the position of the Respondent and their dissenting colleague that certain of the alleged unfair labor practices found by the judge are time-barred by Section 10(b). Citing Ross Stores, 329 NLRB No. 59, slip op. at 1-3 (1999), they explained: "[A]s all of the conduct alleged in the amended complaint occurred within a period of several months and was essentially alleged to be part of an overall plan for the Respondent to rid itself of the Union, the conduct satisfies the tests of relatedness with respect to legal theory, factual circumstances, and the Respondent's defenses." [HTML] [PDF] The majority, citing Caterair International, 322 NLRB 64 (1996), agreed with the judge that an affirmative bargaining order with its temporary decertification bar is appropriate. It found that a bargaining order vindicates the Section 7 rights of employees who were denied the benefits of collective bargaining by the Employer's withdrawal of recognition without unduly prejudicing the rights of employees who oppose continued representation because the duration of the order is no longer than is reasonably necessary to remedy the ill effects of the election. The majority noted that in addition to withdrawing recognition, the Respondent also failed to furnish information requested by the Union; promised better benefits to employees if they rejected the Union; dealt directly with employees by requiring them to sign forms to release their home addresses to the Union; and solicited employees to initiate and sign decertification petitions. The affirmative bargaining order serves the policies of the Act, the majority said. It noted that a cease-and-desist order, without a temporary decertification bar, would be inadequate. This is the sort of thing that the Reagan NLRB (and an elder Bush and Dole administration NLRB) might not have decided although the activities cited above are clear violations of the NLRA. Eric .
RE: Query on slavery
RE non-Marxists like Fogel, Engerman, and Oakes . . . . tries to show that the plantation system was both profitable and efficient on capitalist terms. I believe that current mainstream thought on slavery is that: 1) slave holders wanted to make money but they did not seek the highest profit possible. In this sense they might have differed from capitalists. In particular, slave holders could have made more money from investing in manufacturing, but they did not. The culture of the slaveholders looked down on manufacturing and, so, they were generally unwilling to invest in manufacturing. Empirical work my mainstream economists indicate this. 2) slavery was not "efficient" in any meaningful way. It was profitable because slaveholders forced slaves to work hard and long. That is, more human input (work effort) was produced within slavery. More input got more output. This is not efficient this is making people work hard. Further, slavery production itself was "inefficient" because slaves intentionally worked poorly when they could get away with it. And, because slaves often broke any expansive tools, slaveholders were not able to use the "best" techology available. Fogel and Engerman themselves eventually came around to this point of view after attacks they experience after Time on the Cross. The above ideas I think are generally well accepted within the mainstream of economic historians. Eric
RE: Requiem for a Dream
Louis, RE ... CP'er Nathaniel West. West was in the CP? It makes sense to me, but who has said this? Eric
RE: Re: Re: Those questionable productivity numbers
RE: Has Dean Baker or anyone else done a detailed analysis of the impact of "quality" adjustments to the last few years' productivity and output data? It would be nice to have some sensitivity analysis... Is the idea that price indexes understate the growth of quality (as claimed by Boskin et al)? And, if so, that productivity measures are understated when using these (too rapidly growing) price indexes. But little compelling evidence exists that quality improvements are understated when price indexes are generated. Eric Eric Nilsson Economics California State University, San Bernardino San Bernardino, CA 91711 [EMAIL PROTECTED]
RE: Re: Re: Re: Re: Economics and Literature
RE They are difficult, although there is some nice stuff in them. Hard as it is, there is some pretty language in the cahpter on commodity fetishism. -- and -- The first few chapters of _Capital_. They *are* turgid and nearly unreadable, in the standard English translations at least... I hope "literary" is not being reduced to "pretty language." In fact, I would go so far as to say that great literature (fiction and nonfiction) could have lots of turgid writing in it. For instance, the literariness of Paradise Lost, Moby Dick, and Four Quartets does not come from reader-friendly pretty language. Eric
RE: Re: RE: Re: Re: Those questionable productivity numbers
Doug wrote: The price indexes for computers are truly stunning, turning nominal increases of 5-10% into real increases of 50%. U.S. GDP growth without computers over the last year is 5.2%; with, 5.7%. In the GDP accounts, final sales of computers grew $24 billion in nominal terms (99Q2-00Q2), which was inflated into $131 billion in real terms. ^^ I understand the first sentence - it claims that computer related stuff is more-or-less 50% better now than in the recent past. (I question this, though, for most of my uses 1989 WordPerfect worked better than 2000 Word and I _regularly_ have to reinstall Windows 98 on my home computer because the operating system starts doing strange stuff after just a few months - my God my lost productivity during that period of time! I could have, say, mowed the lawn. I never had to reinstall DOS. Are not most productivity measures for computer are based on raw computing power? Actual improvements in what the product does for the consumer are much less than this. But I don't understand how nominal $24 b becomes real $131 b. Eric
Re: Those questionable productivity numbers
Doug wrote No, it implicitly claims that stuff gets 5 to 10 times better over the course of a year. 5-10% nominal inflates into 50% real. / / / / / / / / This is crazy. This is what price/productivity data published by the government (implicitly) says? Eric .
RE: Re: Re: Those questionable productivity numbers
Doug wrote, first, In the GDP accounts, final sales of computers grew $24 billion in nominal terms (99Q2-00Q2), which was inflated into $131 billion in real terms. Then, See the spreadsheet at http://www.bea.doc.gov/bea/dn/comp-gdp.exe. I looked at this spreadsheet. It is very hard to follow as BEA did not clearly explain what the numbers were but I have some vague ideas having done something generally similar for different types of data in the past. Be that as it may, I see where you got your $24 nominal number and your $131 billion real number. I think, however, that the author of the spreadsheet does _not_ intend for you to compare the 24 with the 131. Unlike some NIPA tables, the real numbers for a given year in this spreadsheet are _not_ intended to be generated from the nominal data in any straightforward fashion. More concretely, note the nominal values over 1999II to 2000II grew from 91 to 115. The real values over the same period grew from 232 to 363. Since the starting values (91 and 232) are not the same, you can't simply compare the absolute growth over the two periods in any reasonable way (24 versis 131). But if you 'deflate' the 232 to equal 91 for the real series (and do the same deflation for the 363), then you find the new 'real absolute' growth in the real numbers is now about 50. This 50 might now be compared to the 24. (That is, you multiply both 232 and 363 by the ratio 91/232 to get about 91 and 141 and the difference between these is 50). The upshot of this is that implicit in the BEA data is not . . .it implicitly claims that stuff gets 5 to 10 times better over the course of a year. but given the 50 real growth versus 24 real growth results above this is more like 2 (given your approach). But this is, I think, not a right conclusion (that is, the number 2). If nominal grows 24 -- from 91 to 115 (as in the spreadsheet) -- while real grows 50 -- from 91 to 141 (data in the spreadsheet translated to the same base as with the nominal data) -- then this does not imply a halfing of prices. Rather an approximately 20 percent fall in prices will do the job. Such a decline leads real grow to go from 91 to 141. That is, 115 times 0.8 equals about 141. This implies that -- according to the BEA data -- prices fell by 20 percent in the computer sector between 99II and 20II. Alternatively, things are better but maybe only about 20 percent better. Computer stuff got better about 20 percent over the past year according to the BEA. Using this assumption, they conclude that _without_ the computer sector growth between 99II and 00II was 5.6 percent while growth _including_ computers was 6.0 percent. This is certainly a big difference, particularly over the long run. If anything, some might argue the improvement should be higher than 20 percent. If this is indeed true, then the US economy might have grown even faster than the 6 percent noted above. All the above is tentative. Eric .
RE: RE: Re: Re: Those questionable productivity numbers
Oops. RE That is, 115 times 0.8 equals about 141. Obviously "115 divided by 0.8" makes a bit more sense. Eric
RE: Re: RE: Re: Re: Those questionable productivity numbers
Doug wrote But why can't I compare the 24 with the 131? They're both aggregates, and the comparison shows that some massive inflation of nominal values is going on to produce the real values. These things get truly preposterous over the long term - nominal spending on computers grew 143% from 1987 to 2000, which translates into 3457% in real terms. This strikes me as meaninglessly silly. I'm not sure exactly what the number in the spreadsheet mean. Consider the data on nominal spending on computers in 1987 versus 1999: In the first year nominal spending is indicated as $48.5b while in the latter year it is $92.5b. These numbers seem so off that nominal spending in this spreadsheet must mean something strange. Nominal computer spending only doubled in last 10 years while CPI was up 30% over the same period of time? I'll try to explain more clearly the 24/131 issue in a day or so -- I'm off to be daddy at home for a few days now. Eric .
RE: Re: Re: pomotismo
Jim wrote In the context of Amherst, a pomotista is a Wolf/Resnick postmodernist-Marxist (or Marxist-postmodernist). As I understand their view, it is that (1) there's no way to decide between neoclassical and Marxist theory except via moral commitment (leaning toward epistemological nihilism) and that (2) the Marxian view of the world involves seeing every situation as overdetermined by economics, politics, class, race, gender, etc., with none of the determinations or structures being more important than any of the others. The problem with number 2 above is that if - at the level of theory -- capitalist economic relations are no more important for causing bad stuff than, say, shoe styles than there is no reason to desire to transform economic relations more than there is to alter shoe styles. They do have a non-explanation for why they end up focusing on class relations but it is silly and, possibly, intellectually dishonest. And, by the way, Wolf/Resnick have merely taken the point-of-view of neoclassical general equilibrium theory (everything affects everything else) as their theoretical blueprint for their Marxist theory. Eric
RE: Econ texts - possible to teach Marx seriously?
Jim wrote Though this is true, it is very abstract. The phenomenon of the post-1973 stagnation of wages ...can be explained only at a lower level of abstraction. ...I would explain it in terms of the end of the nation-state-based "model" of capitalist accumulation which involved truces between the major classes and sometimes explicit social-democratic "accords." Jim, your 1973 dating might be off. It is possible that wage decline has its roots BEFORE the 1973 oil shock. And I'm starting to think that the federal government had more to do with real wage decline than I once thought. Federal government inaction/action led to the erosion of the real wage floor and to a lowering of the ceiling already by early 1973 before OPEC entered the scene. Low wage industries (e.g., retail industries) were hurt by the failure of the minimum wage to keep up with inflation from 1969 and later. Between 1968 and early 1973 the real minimum wage fell by 20% in real terms and this was all caused by domestic inflation rather than by OPEC/food inflation of 1973. Federal government minimum wage increases kept the real value of the minimum wage through the rest of the 1970s at about its early 1973 levels. (The 1980s were a different matter of course). It was over 1968-1973, then, that low wage workers found that the floor under them sunk sharply. And, then, the government more-or-less went after the construction industry in the early 1970s. The 1971 wage/price controls were designed to reverse the real wage gains of construction workers and where successful in achieving this goal. Construction workers were, importantly, the highest paid-and possibly strongest-group of workers by the late 1960s. So, even before the 1973 oil/grain shock real wages at the top and at the bottom of the scale were falling. (Finance, insurance, and real estate workers-who typically earned in the middle range of real wages--also started to experience stagnant wages by 1971 but I don't know yet why this was the case). I'm not saying that the 1973 prices increases didn't play a role - they obviously did - but the ground for real wage decline was being set before OPEC (as alleged productivity problems) entered the scene. Even without the post 1973 inflations we might have seen real wages falling or, at the very least, stagnating for some time due to forces already acting before 1973. Eric
1970s business philosophy and books
Does anyone know what management theories/philosophies and, in particular, business books were popular during the 1970s? I imagine that the pre-1973 oil shock theories/books would differ from the post-1973 theories/books. Eric Eric Nilsson Economics California State University, San Bernardino San Bernardino, CA 91711 [EMAIL PROTECTED]
RE: increasing profit rates
Behind high profits are low real wages for most categories of production workers (during a period of good economic growth). These low real wages are the product of in part a changed cultural landscape. This, in turn, was consciously created by firms and their friends in the 1970s and 1980s. Firms cant just treat their workers badly. They must have reasons that are seen as justified by society as a whole. A whole set of reasons for treating workers badly are now accepted by society (or at least by the mass media). The 1970s inflation gave us: We must fight inflation (by keeping wages from growing too fast). OPEC actions in the 1970s and imports into key industries in the 1980s (due largely to the strong dollar) gave us We must win against those foreigners (by keeping wages from growing too fast). The latter also taught firms that if they could CLAIM financial trouble, they could often successfully push for lower real wages (even if the firm really wasnt in financial troubles). This gave us, We must keep wages low because of our financial troubles, but it really isnt our (i.e., the firms) fault but is external circumstances (globalization, recession, etc) force us to act this way. Globalization is often used today in this way Dont blame us as we are forced to act this way by the even increasing globalized economy, bla, bla). Sometimes I think globalization is less a description of the facts than an ideological tool used by firms against workers. Also important is the rise in the 1990s of the CULT OF THE STOCK MARKET. The stock market demands that we . You see it really isnt our fault it is the stock markets fault and we are all, after all, now stock market investors as the mass media tells us so . Eric Eric Nilsson Economics California State University, San Bernardino San Bernardino, CA 91711 [EMAIL PROTECTED] winmail.dat
RE: welcome back Peter Dorman
Michael wrote, According to the latest available figures from the National Census of Fatal Occupational injuries, 6,218 workers were killed in 1997, up from 6,112 the year before. More recent data (for 1999) now at http://stats.bls.gov/news.release/cfoi.toc.htm LA Times recently (within last 2 weeks) had an article on California occupational injuries, likely based on state data found at site above. LA Times reported that injuries in construction industry have grown in recent years whereas most other industries have experienced declines. The reason for the construction increase was, in part, the lack of enforcement of existing rules/laws. Eric
Wage setting (was 'Nader Demands Banning, Pulping of Harry Potter')
Max, what theory/empirical evidence lays behind your statement: the wage of the 'guy in the auto plant' is crucial in putting upward pressure on labor standards in general. I've just started to do research on the spillover (or lack of spillover) of wage increases (decreases) from one 'key' industry to other 'nonkey' industries and on the existence (or not) of an economy-wide "standard" for wage increases. I've yet to reach any conclusions. So, any thoughts on this (mechanism of spillover, how 'standard' set, etc) would be appreciated. Eric Eric Nilsson Economics California State University, San Bernardino San Bernardino, CA 91711 [EMAIL PROTECTED] winmail.dat
RE: Nader Demands ...
Re exchange between Doug and Max: Doug: ". . . Service sector workers, who are by far a majority of the U.S. working class, may well gain from trade." Max: "What gain would that be?" The single most important determinant of real wages of service workers is likely the minimum wage. If international trade contributes to lower US prices (but don't reduce minimum wage or service wages), then service workers might benefit from trade as far as consumption goes. But, IF the minimum wage is effected by international trade in some way then maybe service workers are not necessarily better off when trade increases. Whether by coincidence or not, the correlation over 1960 to 1999 between the real value of the minimum wage and the ratio of trade deficit divided by GDP is 0.6. (Of course, the real value of min wage generally fell after 1970 and the trade deficit started to get worse a bit later so the correlation is not a surprise). Why might worsening trade deficit lead to lower real minimum wage? Possibly, trade problems pushes min wage increases off the political agenda. (Assuming Congress/Press/President can focus on only one economic issue at the same time). Possibly, trade deficit contributes to nationalist/pro-capitalist ideology and this tends to lead public to look more at wages as a cost to business and to possibly think that increased min wages might reduce competitive positions of US firms. These things might make an increase in the minimum wage less politically practical. Further, as management in certain 'trade-impacted' industries becomes more aggressive in keeping wages down for trade reasons, this aggression might spillover to affect aggressiveness in other (service) industries. Eric Eric Nilsson Economics California State University, San Bernardino San Bernardino, CA 91711 [EMAIL PROTECTED] winmail.dat
Wage Setting
RE My own guess would be that *if* there is a key wage it is the wage for non-labor (public aid, disability, unemployment, etc.). The "efficiency-wage" and cost-of-job loss literature implies/says this: increase in the social (or citizen) wage promotes increases in wages paid to employees. This mechanism, I think, does play a part for, at the least, low paid workers. RE I take the point that an increase anywhere ought to help the entire wage distribution, if we are talking about money, so in this sense the auto worker is no more key than the sandwichman. Insofar as this is a different labor market, there is less impact on other markets. It is less easy to substitute across groups. The above is, dare I say it, the neoclassical theory of wage spillover. This doesn't mean that is it wrong but the focus on a symmetrical relationship between wage spillover in different industries and of substitution between workers in different markets tends to be too narrow. Others, more mainstream labor economists, have focused on "pattern bargaining" within the union sector (that that this is very large now) as being the cause of wage spillovers within the union sector. Some 1940s-1960s institutionalists believed that the spillover wage across the whole economy and that it was asymmetrical - the wages within auto, steel, etc industries were determined by conditions within these industries (and macro factors) and other industries generally followed this wage increase by ignoring their own industry conditions. I think there might be some truth to this institutionalist perspective up until the mid-1970s. By the mid-1970s it is likely that this pattern of wage setting broke down. Importantly, real wages in the construction industry were the first to fall starting in the early 1970s. Soon afterwards real wages in many retail industries started to fall also along with textile/clothing wages. Auto and steel wages generally kept rising to late 1970s or early 1980s but then fell after that.(That is, the traditional key sector didn't lead the way down). Be that as it may, my own tentative hypothesis is that after the 1970s wage spillover mechanisms weakened as individual industry forces, more aggressive capitalists in general, and a change in ideology (anti-worker) tended to play a larger part in determining industry wages. And, of course, a decline in the real minimum wage. But, I've just started thinking about all of this. Eric Eric Nilsson Economics California State University, San Bernardino San Bernardino, CA 91711 [EMAIL PROTECTED] winmail.dat
