Re: back to PPP comparisons
this helps. Paul
Re: JEP Schleiffer
1) I, for one, deeply regret the loss of JEP. I don't think anyone can really maintain that the new version is more socially useful, especially compared to the way JEP was before the 'great turnover', when the AEA itself was less monolithic. It seems that within the AEA, there is now a ruling dynamic that is far more concerned with promoting their ideology than with serving the public. 2) Latest AEA/AER publication (San Diego Proceedings) has a choice article: Does Competition Destroy Ethical Behavior? by Andrei Shleiffer. Opening sentence: This paper shows that conduct described as unethical and blamed on 'greed' is sometimes a consequence of market competition. This builds on the author's article entitled Corruption in last year's QJE. I am sorry to kick someone when they are down, and also to criticize someone not on the list but... 3) The two issues are part of a larger problem - AEA's role (or lack of role) in promoting ethics and a sense of public responsibility in the profession. I was struck by this at the San Diego ASSA and commented on it to the list at the time. AEA, and the economics profession in general, lags considerably behind other fields on this point. Paul At 08:55 AM 7/31/2004 -0700, you wrote: Shleifer is the editor; DeLong is gone. So the journal has become more technical, less topical. Its beauty, especially under Stiglitz, was that it could keep non-specialists informed about different fields and truly offer different, even dissident, perspectives. On Sat, Jul 31, 2004 at 08:47:51AM -0700, Devine, James wrote: [was RE: [PEN-L] Deeper Problems for Shleifer] Michael writes: Does anybody niotice the rapid decline in the Journal of Economic Perspectives? A right winger will take over the Journal of Economc Literature. I haven't been paying attention. Why do you think that the JEP is in decline? why do you think it went into that tailspin? who is the editor? is it still Brad deLong? who's taking over the JEL? replacing whom? jim d -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: PPP comparisons
On 8/5/2004 Sam Pawlett wrote: One thing I've never understood about PPP, is it an attempt to measure -what it is like living in a poor country- or is the idea more modest as the above paragraph suggests trying to demonstrate what the market equivalent amount of currency buys in a given country? For example the PPP GDP or GNP per capita of a country is $US 500. Does this mean that living in that country on that given amount of money is like living in the USA on the same amount of money? It is more muddled than that. PPP creates its own international currency: the international dollar which makes things not very comparable (but you only see that if you look hard for the footnotes and sometimes it is left out). PPP does use the US as the normalizer - i.e. the U.S. PPP basket = 100 so, if one believed in the U.S. basket as a true reflection of U.S. life (not an accurate assumption) then $500 in PPP would be like living on that in the U.S. Paul Paul
Re: re PPP comparisons
On 8/7/2004 Mike Lebowitz wrote: I don't know anything myself about the way the PPP is constructed or the neoclassical assumptions that Paul proposed were used. Intuitively, though, it makes real sense to select the PPP measure (ie., something that takes into account prices) over one using market exchange rates. Eg., according to the dollar/cuban peso market exchange rate, we might conclude that Cubans live on the equivalent of $20 USD per month. Anyone think that tells us very much about the Cuban standard of living? michael Yes this is where most people get drawn into the PPP : the per capita GNI (or GDP) numbers look so low. And they are low, if we think of measuring living standards which GNI or any of the national accounts do NOT, they only are a ticker to the market economy without double accounting. Comparing national accounts is only a 'market economy to market economy' basis. So the developing country's GNI per capita feels low for various reasons. For example conventional National Accounts would normally leave out all the non-market income of the traditional economy in a developing country. Likewise, the whole pattern of life changes to facilitate the lower standard of living. I recall when it was not rare in Europe not have a refrigerator (or only a small one). People ate perfectly well because things were organized around this: small portions at regular prices, distribution channels were structured so people could shop for food every day, etc. Today, if you can't afford a refrigerator it becomes hard to imagine how most West European families would cope. People think of the low per capita income in developing countries and say it makes no sense in terms of comparing lives. It doesn't, but that is because national accounts compare market economies not living standards. Along comes PPP which recalculates the numbers and since it moves developing countries closer to the developed countries, people think it makes more sense. But the more realistic numbers are entirely coincidental - they still are not measuring living standards because national accounts measure something else. But, on its own terms PPP probably overshoots the developed\developing country relationship for narrow statistical reasons (the PPP authors admit this) and distort rankings within developing countries (for example the PPP conversion factor for Venezuela is relatively small because it is already much integrated in the tradable economy). Above all the PPP becomes treacherous when one starts to then use them outside of per capita comparisons - e.g. growth rates over time, response to neoliberal measures, etc. [BTW: I don't know how Cuba's national accounts are calculated. The World Bank does not publish any figures at all. I imagine it is largely guesswork by whomever you are citing (UN?); as you know most planned economies used Net Material Product as their equivalent. There can't be a logical conversion factor for the same reasons PPP doesn't work (apples and oranges). In fact, that is how this international comparison business got started (for example Gerschenkron, Alexander A dollar index of Soviet machinery output, 1951). It was quickly grasped (a bit like PPP) as an ideological tool, ultimately with people like Wolfowitz and Pipes jumping in.] Paul
Re: back to PPP comparisons\Chris' question
Chris wrote As a general question, do these income comparisons somehow factor in nonmonetary income, state-supplied benefits or similar perks? E.g., in the country in which my butt is parked, monetary incomes are generally relatively low, but most families own their own apartments and grow their own food in part, plus electricity and utilities are dirt cheap, even giving the recent price increase. Thanks. I hope I am not presenting myself as expert on this (anyone out there who is?) but here is my understanding. State supplied utility benefits such as electricity are in Russia's national accounts in Ruble terms, so yes they are included in these comparisons. BUT there is no objective way to compare electricity in Russia vs. the U.S. (i.e. how do you convert the Rubles to dollars). Straight exchange rates are flawed (prices may be lower in Russia); so they have tried to create a different PPP conversion BUT, as I have tried to point out, inevitably this has new flaws and biases that are as serious. Self-grown food is normally not in *conventional* national accounts - one example of why people get perplexed when they see very low GNP p/c figures that don't match up to their intuitive feel for living standards. As the obsession with GNP has grown, analysts have tried to extend it to measure life as a whole by imputing their own estimates of all sorts of things, including such non-market production, along with household production (esp. women's work and child labour), depreciation of the environment, etc. Some of this may have bled into including a bit of self-grown food in some countries' national accounts. ((And of course in Russia all bets are off when it comes to the official accounts which periodically include estimates of unrecorded income in ways that are negotiated within the govt and with foreign authorities.)) Existing apartments are assets so they are not, per se, in Russia's Ruble national accounts. But the depreciation (or creation of new assets) would be - in theory - put in the Ruble national accounts (no doubt big errors and guesses here). But depreciation would appear only under the heading of a Net National Product not the Gross National Product (aka Gross National Income). I don't even want to think about how they would include depreciation of an asset in a PPP version of a Net National Account (I haven't checked but I bet they don't bother to try to produce this). Of course Russia is maintaining much of its living standard by living off its assets (and human skills) and this is another way that Gross National Accounts don't capture living standards. Paul
HDI\PPP Michael,Ulhas and Michael
[See what happens with some encouragement - soon I'll be overposting! I'll try to make this the last.] 1)Uhlas writes: Paul was trying to show how PPP numbers overstate the economic growth in the developing countries. I am not sure I understand how he has reached that conclusion. For India, from 1992 to 2001, the GNI increased by 64% when calculated by the World Bank Atlas method (non-PPP). But for the same period GNI increased by 91% using PPP! For all low and middle income countries taken together the difference is even more extreme (22% growth vs. 44%!). It is not just that India is made to look less poor via developed countries (which would be a one time distortion). It is also that India (and poor countries as a whole) are made to look like they are also closing the remaining gap (a statistical bias because High Income countries are not affected). [All stats from the WB's WDI.] Furthermore, the discrepancy between the two methods grows - by as much as 4 or 5 times - during the neo-liberal period (tell me off-line if you want the chart for India, the change is dramatic). So, there is a bias in the bias which shows neo-liberalism as a great success. As I explained previous posts, this is built-in since the PPP model recalculates the numbers drawing from a neo-classical General Equilibrium model where market prices are assumed powerful and beneficial. But in fact the GNI/PPP are just numbers from a model driven by assumptions...although they are presented as if they are statistics. Then the statistics are used to prove correct the assumptions from the free market model. [BTW there are various flavors of PPP-type models. The Bank has chosen the most extreme version that has the most free-market assumptions. The other versions of PPP, logically, produce lower numbers. See below for examples.] 2) Michael Perelman writes: If we were go[ing] to try to make some sort of quantitative measure of a human development index, I think I [would] try to get a handle on how people at the bottom fared rather than looking at averages. I couldn't agree more. One catch is that - in another little noticed development - the World Bank has withdrawn its support for calculating income distribution figures. A quick look at the World Development Indicators shows that in most cases the last calculation is a decade old (and not capturing the radical changes of our era). One imagines that they will soon not be published at all. Income distribution is being replaced with the Banks own poverty measure. Their poverty measure combines the (flawed) PPP with a (flawed) measure of poverty. The two flaws combine to show great reductions in the number of the poor - a great theme of the World Bank publications recently (see comments about the Wade article below). This is why I often suggest people use numbers like the infant mortality rate so that the plight of the poor isn't erased by progress at the top (also these numbers are more accurate than most and respond quickly to changes). 3) Michael Lebowitz writes: In relation to questions raised by Paul on HDI, etc, a friend has directed me to a recent piece by Robert Wade in New Political Economy. I assume it's in the following issue: Volume 9, Number 2, June 2004 Looks interesting. (It will take me a long while to read it, people interested in an electronic copy should contact me off-line). Robert Wade (now at LSE) is often an insightful open minded liberal who is well informed (including several years working for the World Bank). The article is mostly about the World Bank's claims that world inequality and world poverty are diminishing. Although Wade does not spend much time on the statistics question he does make the point that the conclusions depend almost entirely on the particular choice of measurement. I am not truly familiar with the literature on the statistical issue (anyone out there who is?). Among the beleaguered non-mainstream economists who do write on these issues in a technical manner, I don't know anyone who has translated these issues into an applied context. But here are some links: a)For a non-neoclassical critique: Columbia University economist and philosopher team How Not to Count the Poor: http://www.columbia.edu/~sr793/count.pdf b)Other authors agree with neo-classical models but point out that PPP version used by the Bank (and hence internationally) has extreme free market assumptions (e.g. assuming no substitution bias in General Equilibrium models). One such author is Steve Dowrick of Australia Nat. Univ. and has written on such issues with Brad deLong (familiar on the internet as no great critic of the World Bank). Dowrick shows that relaxing just one of the extreme neoclassical assumptions produces a different PPP index that reverses the Banks conclusions about poverty and distribution. See http://ecocomm.anu.edu.au/people/info/dowrick/world-inequ.pdf and http://acsr.anu.edu.au/staff/ackland/papers/global_poverty.pdf C)An atypical World Bank
OFFLIST re international income comparisons, etc
At 11:14 AM 7/27/2004 -0400, you wrote: In relation to questions raised by Paul on HDI, etc, a friend has directed me to a recent piece by Robert Wade in New Political Economy. I assume it's in the following issue: Thanks very much, I will look for it and will also try to comment a bit more in a couple of days. Did your friend have any other comments or views on the discussion - not many people follow this. Paul
Apologies for OFFLIST re international income comparisons, etc
Sorry, egg on my face. At 12:04 PM 7/27/2004 -0400, you wrote: At 11:14 AM 7/27/2004 -0400, you wrote: In relation to questions raised by Paul on HDI, etc, a friend has directed me to a recent piece by Robert Wade in New Political Economy. I assume it's in the following issue: Thanks very much, I will look for it and will also try to comment a bit more in a couple of days. Did your friend have any other comments or views on the discussion - not many people follow this. Paul
Re: HDI, GNP and the PPP factor
Michael and Yoshie write: Yoshie, you are not the only one that has been pestering Paul. Michael Perelman Paul, why don't you put together your notes on the PPP factor that you've posted here and publish it as an article for the general audience? -- Yoshie Many thanks, the encouragement is much much appreciated. Paul
Re: HDI, GNP and the PPP factor
the interests of the 'powers that be' - can you imagine how it would be howled out of use? Hope this gives some response. Paul
Re: HDI, GNP and the PPP factor
Ulhas writes: I don't know what you mean neo-liberal, but nobody is using _PPP numbers_ in India to support neo-liberal policies. It is buried in the statistics they (the neo-liberal proponents) use. For example, on Thursday you helpfully posted the Financial Express's article on the statement from the Government releasing the HDI statistics. The first line (quoted from your post) reads: India's human development index (HDI) has shown a steady improvement in the last couple of years. India's ranking, however, at 127 out of 177 countries remains the same as in the previous year... Well, this HDI, that has shown steady improvement in the last couple of years is partly based on the PPP version of India's GNI (and only that version is presented). What the Government should really have to answer for is why - after decades of significant improvement - the infant mortality rate and the under-five mortality rate have NOT improved in the last couple of years. For reasons I explained earlier, these are much more illustrative statistics when it comes to human development. In fact there were almost 2.5 million child deaths EACH year. According to UN and Government of India-agreed estimates the vast majority of these deaths could have been prevented and were unnecessary - if these poor children had been given a small fraction of the political commitment shown the business community. BTW, I would *guess* that for the pro-neo liberals virtually every GDP\GNI statistic in the India vs. China debate uses the PPP version. Btw, the Human Development Report for India is prepared by India's Planning Commission. What WB has to do with it? Ulhas Yes the last Report was 2001 (publ. 2002) and prepared by the IPC, funded by the UNDP. The various Indian state reports (worth looking at, see http://hdr.undp.org/reports/view_reports.cfm?country=INDcountryname=INDIA%20 ) were prepared by the state governments and funded by UNDP. These reports are different than the global Human Development Report which publishes the global HDI and is published exclusively by UNDP itself. The press report you posted referred to the global UNDP report. It prepares the HDI based on the data received from the World Bank (for national accounts). Paul
HDI, GNP and the PPP factor
Louis had expressed some belief that official statistics may have biases and there has been an ongoing discussion of the Human Development Index. So, I thought I should look up the numbers for the impact of the PPP effect alone. For the 130 or so countries listed as Low and Middle Income the World Bank calculates a Gross National Income (GNI, formerly called Gross National Product, GNP) of $6.1 trillion in 2002. This is using the Bank's own version of the standard National Accounts technique, similar to the U.S. government, and uses a 3 year average of exchange rates adjusted for inflation using the country's GDP deflator to convert to the US Dollar. BUT, using the PPP technique I described in earlier posts, the World Bank also calculates an imputed (imaginary) GNI. For the same group of countries this calculation boosts their Gross National Income from $6.1 to $20.5 trillion! This is a 320% increase - but just on paper and of course to buy imports, pay debts, etc nothing has improved, although the World Bank calls its international PPP conversion factor the International Dollar. [see http://www.worldbank.org/data/wdi2004/tables/table1-1.pdf for the data]. This PPP version doesn't just inflate National Income it also has statistical biases that show economic progress over time (even if there had been none) and show neo-liberal policies as successful (even they have produced no improvement). Only 6 years earlier the standard version of GNI showed the Low and Middle Income as having almost the same GNI - $5.7 trillion. The PPP version for that year showed a GNI of $15.1 So, in just 6 years the PPP conversion has gone from increasing stated output by 260% to increasing stated output by 320%. [See the World Bank World Development Indicators 1998 for the comparison] The PPP conversion factor does not seriously inflate the GNI within the High Income group (in fact many years it shrinks the GNI of Europeans and Japanese vis-a-vis the US) so, using the PPP version of National Income purports to show great progress in 'closing the gap' between rich and poor countries. Combined with the PPP-linked World Bank poverty measurement, great progress is shown to have been made in reducing the absolute numbers of the poor [http://www.worldbank.org/data/wdi2004/Section1-intro.pdf]. Indeed, it has been a little noticed trend that today most of the World Bank's 'public relations' type documents, most human development related documents, and most documents arguing for the success of the neo-liberal project use PPP *and only* PPP. Even where there findings would be utterly reversed by the once standard method. Even the introductory chapter to the World Bank's flagship statistical publication (cited above) uses ONLY the more favorable (and yet artificially constructed) version. Even the Human Development Index we have been discussing presents ONLY one version - and this radically changes many stated conclusions. It is not, as if the actual National Income Accounts are not used in other environments where that method would be more favorable to the Bank or the IMF's policy objectives. Indeed in some cases - such as those involving debt negotiations, foreign investment, or sectoral policies promoting the private sector, it appears (by purely casual observation) that *only* the non-PPP version appears. Paul
HDI: Cuba vs. Mexico
Ulhas writes: Hi Diane ! Mexico is not far behind Cuba in HDI, AFAIK. Quite true: they are right next to each other this year (Cuba #52 with and index of 0.809; Mexico #51 with 0.802). And I think the comparison illustrates the point about indexes (and maybe about reconstituted statistics such as PPP). Also my point about using numbers that measure actual lives. A Mexican will look at her/his country's health statistics and see that *average* life expectancy at birth is 73.4 years which is not bad, but still 3.4 years behind Cuba (a poorer county). But when she looks at infant mortality rates (the largest single factor in life expectancy BUT less subject to the 'fallacy of the average' since poor infants' deaths are not 'offset' in the average) she will see that in Mexico 29 infants die per 1,000 while in Cuba only 9 children die. The issue then is clearer: in Mexico it is inequality that is producing a grave social injustice. Many innocent infants die and it is not necessary. You see what you have to change - and who has to be reached. My point about GDP (or GNI) per capita vs. the reconstituted PPP version of GDP is going to be harder to illustrate with this example. First of all, the Bank doesn't seem to list Cuba's GDP in either version. More importantly GDP would be a muddled indicator in any version: it is not really a human indicator, it is subject to the fallacy of the average, it doesn't include non-cash income and it misleads since international comparisons are inherently 'apples and oranges' (this goes back to, sigh, value theory). BUT, Mexico's GNI per capita is $5,920 (this standard version uses the actual exchange rates). The reconstituted (and imaginary) PPP version boosts the figure to $8,880. It does this (I am simplifying, but fairly) by taking a North American basket of traded goods and figuring out an exchange rate by comparing it to those items in Mexico (this has big problems but lets skip it). They then apply this imaginary exchange rate to things that can not be traded (e.g. the income a barber gets from giving an open air haircut in Mexico City) AS IF that item could be traded. So it is AS IF that Mexican barber could sell his service in the Los Angeles market. Of course the problem is that if that barber wants to buy more of the corn they now import for tortillas he has to do it with at the actual exchange rate with the actual pesos he earned - not the imaginary pesos that the PPP recalculation gave him AS IF he could sell it in Los Angeles. Which is why he has go to Los Angeles and work there. It short, in this way (and several other ways) the PPP version of GDP is an imaginary calculation drawing on lots of neo-classical trade theory about the law of one price and free markets. But this ideological reconstitution is now presented instead of the actual statistic (itself often misused) AS IF it is the real number. Hope I am not dragging this out. Paul
Re: HDI 2004\3rd World
Chris Doss writes (with related points from Daniel Davies and Ulhas Joglekar) : --- Paul wrote: Is there any common cause with any of today's 3rd world economic\political elite (Malaysians? Brazilians? Koreans? Russians? Vietnamese?)? --- Russia is not a 3rd world country. Point taken. And of course neither are any now 3rd world countries since the 2nd has disappeared. That may be part of the point. Doug's post illustrated some dilemmas that were faced: there were elites in the periphery that shared *some* of our goals vis-a-vis the center but did not share our goals vis-a-vis their own population. Likewise, there were 1st world liberals (actually includes lots of others) who shared *some* of our goals vis-a-vis oppressed poor, women, environment etc. in the 3rd world but only so long as these efforts did not threaten (and maybe strengthened) their privileged position internationally. I am concerned over how to handle these cross currents today (aside from saying 'death to all') and wonder how much can I apply my previous experience now that the 2nd and 3rd world categories are gone. I imagine Chris Doss finds that his difficulties explaining Putin to others on this list relates to this point - no? And, of course, all of us are caught in terrible conflicting priorities when it comes to events in the Middle East. Paul
Human Development Index 2004
Thanks to Louis and to Ulhas for pointing out the recently released Human Development Index 2004 and Doug for his comments. I want to make a somewhat different point about indexes themselves - caution about their use. Social, economic and political indexes have become a popular tool among think tanks, NGOs and in official governmental organizations - for some of the most important uses (such as allocating aid funds or assessing policies) they now often replace the use of the underlying data itself. Constructing mathematical indexes to present disparate data in a consolidated manner parallels the long-standing trend in Economics of presenting extensive mathematical or econometric models - and it falls into several similar traps. These newly emerging socio-economic indexes often use extraordinary arithmetical measures whose methods are not available to 99% percent of those who read the reports. I find three problems often appear: 1) Indexes (which inherently combine 'apples and oranges') often do so in arbitrary and misleading ways that are not accessible to 99% of the users. While at first glance there are enough similarities to the original data to make the index seem plausible, the flaws show up as the data gets put to use in important judgements (such as whether there is relative progress over time, or the value of particular controversial policies). Frequently these flaws show up with a bias. For example at http://hdr.undp.org/reports/global/2004/pdf/hdr04_backmatter_2.pdf you will see how the Human Development Index (HDI) is constructed. It merges data from 3 fields (health, education and GDP), so first it creates an index (normalizing) of each one. The health proxy is the least problematic: life expectancy of 85 years is = 100; 25 years = 0. But now we are not measuring years of life but numbers on the index and this can (and does) affect the final conclusions in unforeseeable ways. I will come back to the indexes on Education and GDP. The three indexes numbers are then merged into one index number: decided as 1/3 for each factor. (I am not making this up!) So one assumes that an index number of say 10 points in education equals an index number of 10 points in health or GDP and that they can be merged even though these index numbers themselves are arbitrarily chosen, correspond to nothing in the real world and can not be logically added together. 2) Some index numbers have other indexes or artificial constructs nested inside them, making them an arbitrary index of arbitrary indexes. For example in the HDI (per the website above), the education index contains an (arbitrary) literacy index and an (arbitrary) enrollment index mixed in (arbitrary) 2/3rds to 1/3 proportion. The most problematic is the GDP per capita element which is not, in itself, a human development indicator at all. In fact this index uses the PPP version of GDP - a vast recalculation of the GDP that has an enormous amount of arbitrary (and biased!) assumptions that create an as if world rooted in neo-classical trade theory [too much to elaborate in this post]. The PPP numbers produce numbers that narrow the gap between most developing and developed countries AND continue to show that gap narrowing over time (mostly because PPP assumes a world AS IF 3rd world labor could freely trade in the developed world market). PPP also shows the US significantly richer than Europe (mostly because it assumes a US based market basket AS IF Europeans strived to live an American style life). For no intrinsic reason (these are apples and oranges) the disparities in income numbers are larger than the numbers produced for health and education, so it is the natural logarithm of the PPP version of GDP/p.c. that is used (?!). 3) All of these index calculations create proxies of proxies. However inaccurate or biased they are (or are not), one is no longer debating the real problems of real people. Rather, one debates the meaning or the construction of indexes. The focus shifts from mass movements to policy analysts and negotiators. There are clear allies (and de facto opponents) of an effort to end unnecessary child deaths in the 3rd world or to provide functional literacy for every adult. But debates among NGOs, academics, and development officials about raising the human development index is not process that necessarily leads to mobilization of those allies in a common movement. In short, the indexes can sometimes take one away from a focus on the practical reality or actual people and lead away from the social processes that produce change. It is not that I am against all indexes for all uses (and the HDI is among the most benign). But as analytical and as mobilizing tools they have to be treated at arms length - above all one has to look 'under the hood'. Paul
Re: Human Development Index 2004
Doug writes: I should have added that part of the impulse behind the development of the HDI was to reduce pressure for redistribution - to shift the focus from economic to social indicators. Of course, there are virtues to foregrounding social over economic indicators, and lots of people use the HDI complex for those purposes, but at the higher levels, the more sinister spin applied. My source on this is a former long-time UN press officer, and it was subsequently confirmed by someone very close to Mahbub ul-Haq, the Pakistani economist who guided the development of the index. Doug Very relevatory (pays to have good sources?). In this specific case the sources (and the individual they cite) may not accurately reflect what drove events (the HDI and the HD Reports began in 1990 when the pressure for global redistribution from the North to the South was long gone) but no doubt this accurately reflects what your sources felt and/or Mahbub said to them. Above all, the comments DO highlight an important aspect of global economic politics for decades before 1990 and that history is relevant today. In the '60s and '70s, the third world elite was pressing for the New International Economic Order (North/South redistribution) and SOME people in this camp (maybe including your sources?) saw the movement for the poor/basic needs (and the later human rights, gender and environmental movements) as attempts by Northern 'liberals to avoid allowing the third world governments to construct autonomous states with their own elites. Hence the suspicions and possible confirmations. Conversely, SOME involved in the human needs movements viewed the 3rd world elite and their economic crowd as unlikely to be willing to redistribute the wealth (and the rest) within their country, and likely to 'take the money and run' if given the chance. These splits were very real and central at the time. In retrospect, I think it is fair to say that there WAS some of the worst in each group and that once the neo-liberal era began this group quickly left their old ideals and objectives behind. And this is not news to readers of this list - ironically, today the worst are mostly close allies. But new opportunities for 3rd world/progressive 1st world links will emerge (as they are already). What lessons should be learned? But what happened to the best in each group? What prevented the best from forging stronger links as neo-liberalism emerged as a threat? How does one learn to better distinguish the worst from the best? Is there any common cause with any of today's 3rd world economic\political elite (Malaysians? Brazilians? Koreans? Russians? Vietnamese?)? I wonder...where is Doug's source today? Paul
Productivity: Economics Blogs
Dmytri Kleiner wrote: As I'm sure most of you have noticed US labour productivity has been the talk of the economics blog world of late. .. I can't resist asking which ones you read or would reccomend. I am aware of DeLong and Sawicky - any others that focus seriously on economics or eco policy?
Re: Coziness with the Saudis is a bipartisan phenomenon
A delightfully gruesome and subtle joke... --pb speaking of the Saudis, they regularly behead murderers, etc. So the beheading of captives by Iraqi insurgents isn't as shocking to people in the Middle East as it might be to us Amurricans. If Halliburton collects enough of the nubs, should it be taxed for additional capital gains?
Africa should not pay its debts - Jeffrey Sachs
I have not followed Sachs closely in most recent times but I think he would strongly object to being called a 'man of the left'. I have heard him point out that his macroeconomic views are thoroughly mainstream (akin to his Harvard ex-colleagues) and that indeed starting in Bolivia and Poland he argues that liberalization and market reforms had to proceed *faster* and more comprehensively than the IMF or the WB had thought possible (hence the appellation 'shock therapy'). One place Sachs has differed from his ex-colleagues is his willingness to also criticize the donor countries/IFI's strongly and publicly for not providing the financing and market access that would fund these free market reforms. Also, unlike many of his colleagues, he has not held a post in these governments or institutions nor received a large part or his financing from them (he has only a recent part-time advisor/commentator role at the U.N.). Most of the time he has been brought in as a consultant to a government that supports greater free market policies (the Haiti case is more complicated) but seeks to have an advocate in negotiating a better financed deal, with more debt relief. So the Africa statement is not a departure from his past record. Sachs also differs in his preparedness to delve into U.S. congressional insider politics (his late father, a prominent lawyer, was a significant figure in Chicago democratic politics, including I believe a role in support of the Civil Rights movement in the '50s which Jeffrey cites as an influence in his support for social services in the 3rd world). Paul Sachs has always been basically a man of the left, and has been saying sensible things about sovereign default fo longer than anyone else I can remember (including me and Richard Portes). Perhaps the whole Harvard Institute thing should be viewed by revisionist historians as a brief aberration in the career of a basically good bloke. dd
Re: Deflation?
Jim Devine writes: the problem is that it's possible for what superficially looks like vigorous growth to hide deep instability. I interpret the US boom of the late 1920s in these terms, just like Bob Pollin's interpretation of the Clinton boom in his recent book... Agreed but...isn't the transformation from a post-war type society (and class structure) back to sort of a 1920s type a lengthy process that still may have a ways to go? Even more so when one takes the international dimension into account. The world has never really seen this particular sort of transformation backwards. That transformation process gives a lengthy one shot to profit rates and keep the boom running for a while (of course with LOTS of short term fluctuations and fragilities that cause short term crises that could be mismanaged and become big). Plus couldn't there be some technological reasons giving profit rates a long wave type upward buoyancy? Couldn't a boom last long enough to make it seem like we are being Cassandras? If predictions don't become true within a reasonable time frame they can be politically discrediting - unless one is very clear. BTW, I put boom in quotation marks because I think it is really more of a transformation: a large part of the population (not the part that the media reflects) will see little or no benefit and, above all, will see themselves structurally excluded from wealth and power in large and new ways. BTW, Jim surely knows this, but Dumenil Levy's new book (which I haven't yet digested) seems to make a good starting point on some of this (a bit more along Jim's lines than mine). Paul
Re: Further confirmation of Mark Jones
On Sat, 12 Jun 2004, Carrol Cox wrote: The material facts regarding oil depletion, global warming, mercury poisoning of the seas, have _never_ been a central issue except in the thought of those who cannot or who refuse to think politically. And thinking politically involves NOT What should the government(s) do? But How can those who recognize the 'facts' achieve political power to do something about it? How can 'we' achieve political power? Then the question becomes: In what way does knowledge of the future of oil contribute to achieving political power? And my answer to that question is, it does _not_. I suppose knowing about storm clouds for wars doesn't matter either, although I don't recall any Marxist who didn't care about that issue. Paul * Vol.21-Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's Legacy RESEARCH IN POLITICAL ECONOMY, Zarembka/Soederberg, eds, Elsevier Science ** http://ourworld.compuserve.com/homepages/PZarembka
Chronicle of Higher Ed. article: SUNY Art Professor's Use of Bacteria Prompts a Federal Investigation and an Academic Chill
PATRIOT ACT on the move: You can now sign a letter of support at the Critical Art Ensemble Defense Fund page. http://www.caedefensefund.org/. Poster for the demonstration are also available. http://www.caedefensefund.org/demonstration.html An article in the Christian Science Monitor on this situation http://search.csmonitor.com/search_content/0607/dailyUpdate.html and Chronicle of Higher Ed at http://chronicle.com/temp/email.php?id=91navlpqxhto7sw2b0afvm7hoxqnnei1 -Original Message- From: Paul Zarembka [mailto:[EMAIL PROTECTED] Sent: Tuesday, June 08, 2004 12:03 PM Subject: Chronicle of Higher Ed. article: SUNY Art Professor's Use of Bacteria Prompts a Federal Investigation and an Academic Chill This is about Steven J. Kurtz, UB! Remember: protest is being planned at 9 a.m. on Tuesday, June 15 outside the courthouse at 138 Delaware Ave. in Buffalo. This article, SUNY Art Professor's Use of Bacteria Prompts a Federal Investigation and an Academic Chill, is available online at this address: http://chronicle.com/temp/email.php?id=91navlpqxhto7sw2b0afvm7hoxqnnei1 This article will be available to non-subscribers of The Chronicle for up to five days after it is e-mailed. The article is always available to Chronicle subscribers at this address: http://chronicle.com/daily/2004/06/2004060803n.htm
Re: Mike Davis on Hubbert's Peak
On Tue, 1 Jun 2004, sartesian wrote: Anybody interested in knowing just how flexible and elastic the speculations about peaks really are would do well to read the original peakist himself, the petroleum Malthus, M. King Hubbert. Take a look at http://www.hubbertpeak.com/hubbert/nehring.pdf and you will read the King predicting a peak in the non-communist world's oil production in the early to mid 1980s, etc. etc. etc. Didn't exactly happen that way, now did it? Checking out the 1980 report you posted says: Enough is known about world oil supplies to make a few specific observations: (1) Assuming political stability in the major exporters, non-Communist world oil supply is likely to range between 45-60 MBD* in 1985 and 40-60 MBD in 2000 (compared to 52 MBD in 1979). The sizes of potential increases in Saudi Arabia, Mexico, and Iraq and of the decrease in the United States account for a major portion of the variation in production possibilities (10 MBD or approximately 50% of the variation in the year 2000). --In fact, 2002 was about 63 MBD, after subtracting out USSR and China from: http://www.worldoil.com/INFOCENTER/STATISTICS_DETAIL.asp?Statfile=_worldoilproduction (2) As a group, the non-Communist industrialized countries will experience no significant increase in production. In fact, production in these countries may decrease by as much as 50% by the year 2000. 2002 OECD was 21.88 (ibid), but I can't immediately find 1980 (except U.S. at 10+). (3) In the short term, U.S. production may decline from its current level of 10.2 MBD to a level of 7.2-8.5 MBD in 1985. Production in the year 2000 may range between 4-7 MBD. The high estimate for the year 2000 (7 MBD) depends on both the annual addition of 1 billion barrels to proven reserves and the extensive use of enhanced recovery techniques. 8.06 MBD in 2002 for the U.S. (4) OPEC production during the next 20 years will not differ significantly from its current level of 31 MBD. Any increases in the production rate will be strongly dependent upon Arab OPEC producers. Except for Iran, only Saudi Arabia, Kuwait, and United Arab Emirates have the reserves and Iraq the estimated potential to increase production rates. Substantial dependence on Arab OPEC (the Persian Gulf region) is likely to continue with its obvious implications for foreign policy. 28.57 in 2002 (ibid., while your report p. 45, predicted 27-37 for 2000) In sum, I don't understand the objection to this report of 1980. A new book is Dale Allen Pfeiffer's book The End of the Age of Oil and a major proponent of peak oil is http://www.fromthewilderness.com/ . Paul
Textbook recommendation for Environmental Economics?
Anyone have a recommendation? I'm teaching it first time this fall and prefer not having 'the market' and its wonders the reference point. Thanks, Paul * Vol.21-Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's Legacy RESEARCH IN POLITICAL ECONOMY, Zarembka/Soederberg, eds, Elsevier Science ** http://ourworld.compuserve.com/homepages/PZarembka
EARLY WARNING: Venezuela's radical opposition will ignore CNE decisions on recall referendum
See what may be the outlines of the U.S.-led coup in preparation: http://www.vheadline.com/readnews.asp?id=21394 Attention in the article is upon the radical-right opposition, rather than upon the government's preparations, and gives a feel for what the government and the Venezuelan masses have to prepare for. I have no idea whether the recall petition will be ruled sufficient or insufficient, but I have read that Chavez himself welcomes a recall vote as he believes he would easily win such a vote. I also don't know anything about protections for the integrity of any such recall vote, but I'm quite sure the opposition will claim fraud if they lose the recall, just as they will claim fraud if the repair process does not lead to a recall vote. So, the described preparations are as relevant for now or as for mid-August. Paul Z. * Vol.21-Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's Legacy RESEARCH IN POLITICAL ECONOMY, Zarembka/Soederberg, eds, Elsevier Science ** http://ourworld.compuserve.com/homepages/PZarembka
Re: Nick Berg and Ben Linder
I find the question of whether Berg was actually killed by beheading and by whom far more interesting than the NYT article about Berg's personality. See, for example, The Nicholas Berg execution: A working hypothesis and a resolution for the orange jumpsuit mystery http://www.brushtail.com.au/nick_berg_hypothesis.html Paul Z. * Vol.21-Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's Legacy RESEARCH IN POLITICAL ECONOMY, Zarembka/Soederberg, eds, Elsevier Science ** http://ourworld.compuserve.com/homepages/PZarembka
(just published) NEOLIBERALISM IN CRISIS, ACCUMULATION, AND ROSA LUXEMBURG'S LEGACY
NEOLIBERALISM IN CRISIS, ACCUMULATION, AND ROSA LUXEMBURG'S LEGACY Research in Political Economy, Volume 21, 2004, 298 pages Editors: Paul Zarembka, State University of New York at Buffalo, and Susanne Soederberg, University of Alberta This volume explores overlapping themes in radical political economy. The first section looks at the disciplinary role of capital under neoliberalism through an examination of official development policies of the US government and the World Bank, labour restructuring in Argentina, the tenuous nature of global finance, and cultural dimensions of bourgeois ideology. The second section examines, theoretically, accumulation of capital and finance and, empirically, the relation of values to prices. The third section focuses, both theoretically and biographically, on the legacy of one of the most important Marxists of all time: Rosa Luxemburg. Photos PART I. THE DISCIPLINARY ROLE OF CAPITAL UNDER NEOLIBERALISM Responding to Neoliberalism in Crisis: Discipline and Empowerment in the World Bank's New Development Agenda Marcus Taylor, University of Warwick American Imperialism and New Forms of Disciplining the 'Non-Integrating Gap' Susanne Soederberg, University of Alberta The Logic of Neoliberal Finance and Global Financial Fragility: Towards Another Great Depression? Anastasia Nesvetailova, University of Liverpool Disciplining Labor, Creating Poverty: Neoliberal Structural Reform and the Political Conflict in Argentina Viviana Patroni, York University Global High Culture in the Era of Neo-Liberalism: The Case of Documenta11 Karyn Ball, University of Alberta PART II. ACCUMULATION AND FINANCE Marx and the Theory of the Monetary Circuit Andrew B. Trigg, The Open University Hilferding's Banking Theory in the Light of Steuart and Smith Costas Lapavitsas, University of London Economic Crisis and Socialist Revolution: Henryk Grossman's Law of Accumulation, Its First Critics and His Responses Rick Kuhn, Australia National University Spurious Value-Price Correlations: Some Additional Evidence and Arguments Andrew Kliman, Pace University PART III. ROSA LUXEMBURG The Coherence of Luxemburg's Theories and Life Estrella Trincado Aznar, Complutense University of Madrid 'Like a Candle Burning at Both Ends': Rosa Luxemburg and the Critique of Political Economy Riccardo Bellofiore, University of Bergamo Publisher: Elsevier Science/JAI 655 6th Avenue New York, NY 10010-5107 Fax: (212)-633-3680 . . . Tel: (888)-437-4636 Or email: [EMAIL PROTECTED] Or, click www.elsevier.com/wps/find/bookdescription.cws_home/BS_RPE/description#description * Vol.21-Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's Legacy RESEARCH IN POLITICAL ECONOMY, Zarembka/Soederberg, eds, Elsevier Science ** http://ourworld.compuserve.com/homepages/PZarembka
Re: The New UN resolution on sovereignty
The Reuters article is not so clear. The NY Times (below) has it closer: The text itself is not publicly available because it was presented for consultation and not tabled. Apparently no one is as outraged as they were last year, when the US draft was leaked for publication. As widely reported some governments on the Security Council find it difficult to establish the precedent that the UN will find a country fully sovereign but *legally* precluded from ordering foreign troops out its country - and indefinitely. [For these countries' much of the UN Iraq debate has become a matter of avoiding establishing future legal precedents.] Also, for those with an eye to regional stability, they want to avoid having the U.S. order Iraqi troops into a Faluja or a Karbala. The point about lawsuits is twofold: first, there are frustrated creditors who may try to seize Iraqi oil, since debt relief (including the '91 War reparations) and some form of 'bankruptcy' shield have STILL not been fully worked out. Second, despite the talk, many courts might well find that this resolution does not fulfill minimum requirements for national sovereignty and that the Geneva Conventions and UN Conventions are still in force on the US as an occupying power. These Conventions limit the ways an occupied country can have its natural resources exploited and limit the degree you can privatize national assets. These courts might order the oil (or the proceeds) seized out of respect for international law. Worth remembering: attempts to get the UN to sanction bypassing the Geneva Conventions in Iraq has been a reoccurring major theme for the Bush Administration. At the end the war, the U.S. draft resolution of May *2003* fought strenuously to do the same for all areas - at that time it was for release of responsibilities in the military as well as the political and economic spheres. (See the then proposed U.S. text of Resolution http://www.nytimes.com/2003/05/08/international/worldspecial/09UNTEXT.html?pagewanted=1 and Pen-l's discussion of it). http://www.nytimes.com/2004/05/25/international/middleeast/25NATI.html UNITED NATIONS, May 24 The United States and Britain introduced a draft Security Council resolution on Monday that pledged a transfer of power to an interim government in Iraq on June 30 but left open to further negotiation the authority and duration of the American-led multinational force remaining in the country. The draft resolution would give that force broad authority to take all necessary measures to contribute to the maintenance of security and stability in Iraq, including by preventing and deterring terrorism. But, while it calls for close coordination between Iraq's new government and the foreign troops, it does not set a date for their withdrawal or explicitly empower Iraqis to order their departure. The resolution, aimed at gaining international support for the political transition in Iraq, backed the current effort of the United Nations envoy, Lakhdar Brahimi, to appoint the caretaker government and endorsed a timetable of United Nations-planned direct elections for a national assembly by the end of January. Ambassadors from the 15-nation Security Council, which split bitterly last year over the American and British decision to go to war, greeted the proposal on Monday with general approval, despite misgivings over the security arrangements. Gunter Pleuger, the ambassador from Germany, whose country opposed the war in tense and fractious deliberations last year, called the draft text a good basis for discussions. He said the final resolution would make clear that we have a new start in Iraq. I don't see major disagreements, although there are points to be refined, said Ambassador Heraldo Muñoz of Chile. There are differences, but at the same time I have seen progress and growing agreement. Diplomats said they hoped for a vote on the final resolution early in June, but that timing seemed overly optimistic with the many imponderables on the central security issue in the draft circulated on Monday. Much of the timing depends on when Mr. Brahimi makes his choices and returns to New York to present them to the Council. He has been directed to pick a president, two vice presidents, a prime minister and 26 members of a cabinet by the end of this month but may not make that deadline. A number of Security Council diplomats said they were disappointed by the draft resolution's determination that the contentious issues of how detainees will be handled and what will be the relationship between the new Iraqi government and the multinational force will be detailed only in an exchange of letters next month between the force, the United Nations and the members of the new government. That step cannot be taken until those members are chosen by Mr. Brahimi. A senior United States diplomat said the majority of questions at the closed session had focused on
Re: Mark Jones Was Right
. The problem of global warming and climate change has been brought dramatically to us here due to the wild-fires last summer that cost hundreds of homes. This summer is forcast to be similarly hot and dry. We are on water rationing year round in an area of irrigation-dependent agriculture. We can water lawns once a week which means that they dry up and turn brown. We have decided to replace all of our lawn with a Japanese type garden with all plants that do not need watering. I.e. drought resistant xeroscaping. But in the midst of this, our development-based city council is approving a new golf course and 1,200 houses in an area that already can't supply itself with adequate water. Why, because we want to have development to support population growth to reduce taxes and So what I am saying is that in order to improve the lives of most of the people on this planet, we have to reverse the population trend. This can not be done obviously by killing off two-thirds of the population as some on this list suggest, but rather by doing the things that promote smaller families -- educating women in developing countries and supplying birth control information (something the Bush administration has cut UN and international funding for), providing pension schemes so that people aren't required to have large families to support them in the old age, providing paying jobs so that child labour is not required to maintain family income, etc. (These are all things that the IMF and the American Treasury have opposed.) We know what causes birthrates to fall. We just have to do those things and overcome the fundamentalist ideologies that pervade the US administration, and the patriarchal regimes in some of the developing world. This does not mean, however, that we can ignore policies to reduce profligate resource use and, in particular, reduce oil consumption. The most obvious first necessary step is some form of carbon tax to raise North American prices, at least to European levels. Somehow, we must get the US to tie into Kyoto. We must look both to conservation and alternative, renewable, energy sources. We must look at regulations that reduce factory farming in favour of more organic and natural agricultural (with BSE, Avian Flu-Virus, pig and cattle induced water poisoning , that ain't rocket science either). Such policies may give us enough time to bring down the population to sustainable levels without the 4 horsemen of the apocalypse. But be assured, if we don't, drought, plague, starvation and war will do it for us. Paul Phillips, Economics, University of Manitoba
Re: Mark Jones Was Right
Yes, Jim, although if as some are suggesting we shift from oil to coal, the problem will get worse, not better. Furthermore, it does nothing to solve the population pressure on other resources, in particular water. Paul Devine, James wrote: it may be good luck if the scare-mongers are correct that we're going to run out of oil soon, since that would limit the burning of hydrocarbons and moderate the tendency toward global warmng. -- Jim D.
Re: Mark Jones Was Right
[EMAIL PROTECTED] wrote: Comment There are not too many people on earth and one has to examine the source of their thinking. When challenged to define the carrying capacity of the earth, what we end up talking about is economics and not the physical mass of the earth and its metabolic processes. How many people can the earth carry - what ever that means? Since I disagree totally with this, there is not much point in carrying on the debate. But as Max has said, it is ideas like this that explains why the left has never made much headway in North America. Paul Phillips
Re: Mark Jones Was Right
Doug Henwood wrote: I'm confused. Are you saying that the left would be more popular if we said there are too many people, and the too many of us consume too much? Doug No, what I said , or at least what I meant to say, was that this belief that all the problems are caused by property relations and that there are not real (ecological) constraints on population growth and resource utilization has become a barrier to communicating with workers and the general population. I have done a lot of worker education with unions and with labour studies programs most of my working life (which I began as research director of a major labour federation in Canada) and the quickest way I found to alienate the workers you were working with was to tell them that they are the problem with their overconsumption and demands for a higher standard of living. What was effective was to start with the problems, pollution, unemployment, debt, poverty, global warming and show that these were problems and that they originated in the working of the system. But if I told them that the only solution was revolution or even radical change in the system, they would laugh me out of the room and not invite me back. However, if I could show that more modest and incremental changes were not only possible but would begin to control the power of capital, they were interested. And then we could discuss what they could do. I was always carefull as possible to back up my critique with the best science (and not 'bourgeois' science) that I could find, mainly from 'radical' scientists. This turned the workers and my labour studies students on. And a few became strong activists. A century ago in British Columbia the left/labour/socialist camp was rent asunder by the insistance by the Socialist Party on the 'impossibilist' doctrine. Nothing could be improved without the overthrow of the system and they actively fought participation in the parliamentary electoral system. The reform labour people took a different view and fought for reforms through the legislative process and were surprisingly successful in achieving such things as the 8 hour day and safety regulations in the mines. These were the founding members of the social democratic parties in BC and Canada which, despite their weaknesses and failures, have definitely improved the welfare of Canadian workers and Canadians generally -- medicare, old age pensions, unemployment insurance, labour law, etc all originated with a social democratic labour party. None of this is revolutionary, but it is IMHO, it is progress. What I was objecting to is the modern day 'impossibilists' and their denial of ecological constraints on population and resource utilization and their 'blame the victim' of modern day workers for overconsumption. In any case, I don't think there is enough common ground for a constructive debate on this issue and since I am heading to Slovenia for a month tomorrow (I will be leaving the list until mid-May) so this is my last post on this 'dead-end' thread. Paul
[Fwd: New Economics Student Journal At the New SchooL]
I am forwarding a couple of messages Fred Lee circulated on his post keynesian list that I thought would be equally of interest to those on pen-l. Paul Phillips --- Forwarded message follows --- Subject:New Economics Student Journal At the New SchooL Date sent: Fri, 9 Apr 2004 14:36:08 -0500 From: "Lee, Frederic" To: Dear Colleagues, A New heterodox journal from the graduate students at the New School. Fred Lee *** NEW SCHOOL ECONOMIC REVIEW The graduate students of the Economics department at the New School have launched a brand new online journal titled the New School Economic Review. The NSER will be open to scholars, practitioners, and students primarily to publish opinion-based political economy. Our objective is to provide a forum for critical voices from all perspectives in economics. Possible topics for submissions include reflections on the state of economics as a discipline, comments on current world political and social affairs, or good old fashioned economic analysis. The first issue has no single theme so that we can accept a diverse set of submissions. Here are the details: The submission deadline is April 30th. Papers should be 3 to 10 pages long. We will publish by Mid-May. The website is now live at the following address: www.newschool.edu/gf/nser. Submission guidelines are posted on the site. Please also take a look and make any comments, inquiries, ideas for essays to submit, questions, accusations, tirades, or aspersions to the editorial board. For now, think about what you'd like to write... because you all have to write! We look forward to hearing from each of you. The Editors, NSER --- End of forwarded message ---
[Fwd: corporate felons]
I am forwarding a couple of messages Fred Lee circulated on his post keynesian list that I thought would be equally of interest to those on pen-l. Paul Phillips Original Message --- Forwarded message follows --- Subject:corporate felons Date sent: Fri, 9 Apr 2004 12:52:48 -0500 From: "Lee, Frederic" To: Dear Colleagues, Fred Schiff would like info on corporate felons--see his request below. If you have any info for him, please e-mail it to him. His e-mail address is [EMAIL PROTECTED]. Fred Lee I'm [Fred Schiff] doing a series of half-hour news and public affairs shows. My journalism students are producing radio, television and online stories. My part is to do an interview segment where I try to add the depth and context that is usually missing in the commercial news media. Is there anyone on the heterodox listserv who can help us with a story we are trying to concerning the pattern or extent of indictments of upper management of American corporations? Any who may have collected an inventory or chronological timeline listing of these indictments from the past four years. We're especially interested in opinions and interpretation of the class-wide nature of corporate felons, particularly within the so-called "inner circle" of leading banks and the Business Roundtable. Thanks, Fred --- End of forwarded message ---
Re: Will more violence provoke an extension of the US occupation?
Was this written by the Kerry election campaign team? :-P Paul Phillips Joel Wendland wrote: Statement of the Political Bureau: About Recent Events snip It is quite clear that these developments do not serve, in any way, the country s stability, and will not help to resolve any of its numerous problems, but rather will lead to further deterioration of conditions on all levels: political, security and social. If this course of events is persistently maintained, the people will then find themselves in a vortex of violence and violations of the law with unpredictable consequences and an extremely negative impact on the current main objective of Iraqi people: to take control of power from the occupation forces on 30 June. We condemn violence and terror in all forms and shades leading to bloodshed of innocent people as well as destruction of national assets. At the same time we call upon everybody to maintain peace, exercise self-restraint and handle issues wisely and prudently. Law must be respected as the arbiter in all spheres of life. Furthermore, the discourse of democratic dialogue must be adopted as civilised effective means for resolving existing problems and settling differences and conflicting opinions, rather than extremism, bigotry and pressures to impose unjust diktat. snip Political Bureau of the Central Committee Iraqi Communist Party Baghdad 7-4-2004 http://www.iraqcp.org _ FREE pop-up blocking with the new MSN Toolbar get it now! http://toolbar.msn.com/go/onm00200415ave/direct/01/
Re: unsubscribing...
Michael, Perhaps you could post all the standard commands for unsubbing, or postponing mail, and for resubbing etc. since many of us will be wanting to postpone or unsub due to summer and conference travel, etc. and given our state of academic dementia, our memories of how to do that are somewhat diminished :-[ Paul Paul Phillips, Economics, University of Manitoba joanna bujes wrote: Unsubcribing for a week while in NYC. Michael? Can you please do that? I don't know how. Thanks, Joanna
Commendante Fidel
Just finished watching the two hour documentary on CBC Newsworld by Oliver Stone on El Commendante, Fidel Castro, which I understand was commissioned by HBO but censored in the United States because it was not critical of Castro. (It has been subtitled, Lunch with Fidel). Actually, it was very interesting and brought out a lot of the humour in Castro, as well as his criticism of the Soviet Union. But what was perhaps the most offensive to the US censors was his obvious veneration by the majority of the people of Cuba. Bush could only wish that he could walk about the streets among the common people like Castro without fear of assassination. Plus, I expect Bush can only wish he would be elected with the support of the majority of the population as Castro obviously has (I have been several times to Cuba and talked with a number of people including a group of cultural people that we brought to Canada. Interestingly, the young people in the groups told jokes about Castro while the older ones complained that they were too young to know what a hell it was like before Castro. But that is another question. In general, almost all the people I have talked to revere and admire Fidel even as they criticize him.) This raises another interesting contradiction. Colin Powell criticized Russia because Putin did not debate with his opponents before the recent presidential election. According to Powell, it was not a democratic election even if Putin got 70 percent of the vote. Now this comes from the administration of Bush who not only lost the election (until awarded it on a technicality by his friends on the Supreme Court) but, in the process, refused to debate with his only true opposition in the election campaign, Ralph Nader. I think it is at least arguable, that the US is the least democratic of all the so called western democracies. I think Canada will be adopting proportional representation or some variant of it in the next 5 or 10 years leaving only the US and to a lesser extent Britain with the undemocratic 'first past the post system'. (At least the Bristish system allows for 3rd party representation.) Ah well, Wave the flag and shout democracy. Just leave the rest of the world alone. Paul Phillips
Re: Another classroom exercise
While Michael is undoubtedly right, university administrations reward those who do research and slight teaching. But that is no excuse for teachers to neglect their moral responsibility to teach properly and to serve their students. I think Jim was once a student of mine and I hope he never felt that I neglected the students for easier paths to money and promotion. And, if he wants to help his students, he can refer them to my text "Inside Capitalism" where I have almost all of his key words in the index, or at least discussed.;-) Paul Phillips MICHAEL YATES wrote: While Zizek's behavior is reprehensible, especially given that his teaching duties are almost certainly minimal, it is not uncommon that when teachers get burned out, they start to take short cuts. These are often indirectly encouraged by the administration which cuts funding for teaching, takes on too many students for the faculty, rewards easy teachers who give high grades, etc. Teachers start to give micky mouse tests, reduce readings, cut short their classes, take days off, etc.Avoiding students is a common enough short cut. Of course, a basic problem is that tenure often enough has little to do with teaching well. Disdain for the undergraduates is an occupational disease. Michael Yates - Original Message - From: Louis Proyect To: [EMAIL PROTECTED] Sent: Sunday, March 28, 2004 3:48 PM Subject: Re: [PEN-L] Another classroomexercise I visited Jim Craven's classes (huge classes, and he has toteach a lot of them to make ends meet) last December. Thestudents were curious and asked me goodquestions. Michael Yates A couple of years ago when Iwas on the phone with Jim a lot discussing Blackfoot and related issues, Ioften caught him in the tail-end of a conversation with a student in hisoffice. Although I never mentioned it to him, I was always impressed withthe obvious rapport he had with the student and the individual attention heseemed to be giving. Compare that with Zizek who confided to Lingua Francaabout putting up a schedule of meetings with non-existent students on hisoffice door. Since he didn't want to waste his time engaging with ordinarystudents, he faked being all booked up. Honestly I can't understand whyanybody who has invested in the time and energy to get tenure would behavein this fashion. For me the high point of the week is meeting some youngperson from Marxmail in person who wants to discuss politics. Or evenexchanging email. Louis Proyect Marxism list: www.marxmail.org
Re: human capital again
I think some of the confusion in this thread relates to the fact that 'capital' has two meanings in the economics context. One meaning of capital is 'stored up dead labour utilized to enhance the productivity of living labour'; the second, 'a social relation'. Human capital in the form of education conforms to the first meaning but, obviously, has a very different social relation than physical capital owned by the capitalist. As a university professor, I am still 'wage labour' and still a member of the working class (and there is no sense in making the destinction between blue and white collar here), but I receive at least part of my increased productivity from my 'investment' in education in the form of higher wages. If the employer can appropriate or expropriate that investment (by taping my lectures, printing my textbooks and teaching materials without paying a royalty, forcing me to put my course on the internet or on disc, etc.) then I may not receive any return to my investment and my wages will tend to fall to those of basic labour. Normally, the capital investment can't be expropriated from the worker and thus the social relationship between capital (investment in education/training) and labour is markedly different than it is between physical capital and labour. Likewise for the distribution of the increased productivity of labour. Paul P Devine, James wrote: recently, the NY TIMES had an article about how much organizational capital (the social capital inside the organization a.k.a. corporate culture) could be recorded in PCs and thus used and remembered more easily. This, they said, was how the PC helped productivity. Jim D.
Re: human capital again
michael perelman wrote Paul, you are certainly familiar with the sheepskin effect -- that what people earn with their human capital reflects much more their credentials than their actual knowledge. A substantial literature within conventional economics confirms this commonsense idea. I have never said that human capital explains or accounts for much, never mind all, of income differentials. Even the major champions of human capital theory don't make that kind of claim. Mincer's well known study, for instance, finds that education explains only 7 % of income differentials (30% if you include years of work experience as human capital, which I don't). Nonetheless, the concept of human capital is very useful in explaining how labour markets work and are structured. Richard Freeman's work on college graduates labour markets stands out as does Piore's, Gordon, Edwards and Reich's, et al. work on segmented labour markets. What Freeman's work points out is also the importance of the sheepskin in granting monopoly power to the graduate -- that is, there is an interaction between human capital acquisition and power in the labour market I do not deny that education is important, but human capital theory seems to reinforce the notion that market forces work without power relations. A back hoe owned by Halliburton you surely more valuable in terms of the market than one I would own. As I said above, you can not necessarily separate human capital theory from power. Nor, as E. O. Wright has shown, can you separate the effects of human capital from class. i.e. the higher the class, the greater the returns to education. As I indicated in my previous post, it is important to separate out the productivity increasing effect of investment in human capital from the social relation of capital as a way of expropriating surplus value. Paul P
Re: San Fran. demo--NYC Demo
My reaction to the NYC demo was different. Of course there was a smaller turnout than a year ago, but not 'disproportionately' so (say half). Most importantly the composition was similar to last time (I watched the entire length of both marches closely). It was not just the Vietnam-era middle aged, middle class white people. There were healthy numbers of young people, and more diverse than I saw in the anti-globalization demos. There were lots of new immigrants, middle easterners but also latino and hatians. Overall, the march was more mainstream than I might have expected - illustrating an untapped vein of anger? On the negative side were the lower proportions of African-Americans. Last year's march was only a bit better but there was a very respectably sized march in Harlem; it seemed that an opportunity is being missed. Likewise, last year there were an amazing number of small organized groups from individual workplaces, neighborhoods, schools, individual churches, clubs, etc. This year the vast, vast majority marched individually. And of course the large lack of white working class people that has been the unique hallmark of American politics since WWII. One note. Many organized groups of students from NYC's own public colleges (CUNY) which is predominantly 'minority' - energetic and focused (practically no such organized groups from the private or even the State Universities). They seemed educated, clearly not co-opted and personally engaged - perhaps sensing that they are far less likely to make into the increasingly wider divide to the upper-middle class than would have been possible 15 years ago. In political style (and sociological background) they seemed a bit reminiscent of the cadre that form a core of Latin American left wing popularist groups. Paul Gene Coyle writes At the San Francisco march last Saturday there were the now-familiar signs. Noticable were the many Kucinich signs, plus big banners carried by Kucinich supporters. The signs mentioning Kerry seemed to all carry an admonition for him to behave lest support not be forthcoming. A nice sunny day, a mellow march. The turnout was noticably smaller than the crowds of a year ago. Gene Coyle
Re: human capital again
Michael, I have read of 'cultural capital' and 'political captital' which seems to be equivalent of that obscene capitalist construction called, I think, 'good will' which corporations can claim as wealth when they sell out. But that is not investment in any sense in that it does not involve investment of (labour) resources in creating something of productive ( and productive is the operative word) value. Human capital is something quite different. Humans invest in buying knowledge, produced by labour, which increases their productivity at a later date. In that sense, human capital is a form of 'dead labour' equivalent to physical capital. None of these others are 'real' investment in 'dead labour' and hence, are not capital in the sense we use the term. Paul Phillips Michael Perelman wrote: 112-3: They refer to a plethora of capitals -- human capital, cultural capital, and even self-command capital.. Baron, James N. and Michael T. Hannan. 1994. The Impact of Economics on Contemporary Sociology. Journal of Economic Literature, 32: 3 (September): pp. 111-46. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: human capital again
Michael, The fact that human capital is tracked by class is not really rellevant. Does one tract physical capital by class? Does a backhoe owned by a working class person have less value than the backhoe owned by GW Bush? Only because of the social status heaped upon BW Bush by his birth/pedigree/wealth. But that is a false valuation. The backhoe in the hands of a qualified worker is worth much more than a backhoe in the hands of an incompetent GWB. So much the same with human capital. I came from a working-class family who had the goals of educating all their children to escape from being working class, not because they were anti-working class (they were all radical socialists, union activists, political activists) but because they saw that the only way we were to escape being wage-slaves was to become educated (i.e. accumulate human capital) that would not only alow us an element of independence, but also to get "a return to our investment" in education. George Bush did not get a return to education (human capital) but to the power of priviledge -- i.e. to a monopoly of power. What you are in effect saying is that GWB got where he did because he worked harder (i.e. his return was greater than those who had equal human capital.) This, I would suggest is crap. Paul Michael Perelman wrote: Paul, I don't think that "human capital" is a particularly useful concept. In the US, student are tracked according to class -- although it is not official. Even in the absence of tracking, poor students go to poor schools. So a GW Bush can go and get a Harvard MBA as evidence of human capital. Are humans capital or does the concept make capital human? I understand how I can accept a reduced income to go to med. school get a higher income, much as a capitalist invests in capital, but there are so many factors involved. Also, much learning does not come from labor. Students usually learn more from their fellow students than from professors. Rant finished. On Mon, Mar 22, 2004 at 09:37:50PM -0800, paul phillips wrote: Michael, I have read of 'cultural capital' and 'political captital' which seems to be equivalent of that obscene capitalist construction called, I think, 'good will' which corporations can claim as wealth when they sell out. But that is not investment in any sense in that it does not involve investment of (labour) resources in creating something of productive ( and productive is the operative word) value. Human capital is something quite different. Humans invest in buying knowledge, produced by labour, which increases their productivity at a later date. In that sense, human capital is a form of 'dead labour' equivalent to physical capital. None of these others are 'real' investment in 'dead labour' and hence, are not capital in the sense we use the term. Paul Phillips -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: 'human capital
I, too, am no great fan of Becker (indeed the concept of human capital did not originate with Becker but with Theodore Schultz) but the concept of 'human capital' is indeed very useful even within a Marxian theoretical framework, as the quote by Tom indicates. Indeed, although he doesn't use the term, human capital is referred to by Smith as one of the 5 (and the only one that has empirical justification) causes of compensating differentials within the classical framework. Moreover, it is very useful in conceptionalizing intermediate class formations on the basis of 'ownership' of (human) capital combined with the attempts by professions to monopolize (and act as a monopoly) to restrict supply of human capital and hence extract monopoly profits from 'restricted ownership.' To my mind, there is no contradiction with the LTV . Indeed, it gives it more explanatory power. Paul Phillips, Economics, University of Manitoba [EMAIL PROTECTED] Tom Walker wrote: I would like to draw your attention to the discussion on pages 32 to 35 of the 1821 pamphlet, "The Source and Remedy of the National Difficulties" (described by Engels as "the most advanced outpost of a whole group of writings of the 1820s..."). The author constructs a "rude guess" as to how far the "exactions of capital" extend. He does so by subtracting, from the incomes of several classes of people, the average annual wages of a common labourer. Income above that standard he reckons as being interest on capital, "for even the high wages of mechanics and other artizans, inasmuch as it exceeds this, is interest of capital; capital expended in their apprenticeship, in indentures, premium, food, or clothing, or loss of time." If you follow the entire analysis, it should be clear that not all of this 'human capital' would be 'productive'. In fact, without singling out Bishops, Barristers or Persons educating youths in Universities and Chief Schools, a large quantity of it may be presumed to be fictitious capital, corresponding to the relatively large proportions of fictitious capital in general that is analyzed previously in the pamphlet.
Re: book question Dumenil/Levy
Dumenil showed me his galley proofs last week; he said its coming out from MIT press shortly. My sense was that it builds on the foundation laid by their article on post-war profit rates in the Fall 2002 RRPE (I posted on this on pen-l in Jan 2003) BUT now sees a major change caused by the role of finance. Curiously an otherwise fine presentation he gave last December, had some of: 'excess savings driving investment' that was criticized (but I did not get a chance to check whether this made it to the book). I join Tonak in encouraging a discussion of their work if there is interest - although I also couldn't participate for another 2 weeks. Paul P.S. There is also an article by them in the latest RRPE: Real vs Financial profit rates. I haven't had a chance to read it but it looks good. At 10:05 AM 3/21/2004 -0800, you wrote: Has anyone looked at Capital Resurgent: Roots of the Neoliberal Revolution by Girard Duminil and Dominique Levy -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: Corporations/Side Issue
Just to supplement Jim's comments, in Mondragon wages were set at comparable outside market wages and then profits at the end of the year were allocated to individual members savings funds which would be paid out on retirement. The purpose was to build up funds for investment in expanding the coops without having to rely on the commercial money market or banking system. All employees were required to become members except for specialists brought in for short term projects (e.g. an engineer hired to design a new product or process.) Wage differentials were regulated with a maximum differential of 3 to 1 although last I heard, they were considering raising this to 6 to 1 because of the difficulty they were having in attracting professionals as members as the co-ops moved more and more into high tech areas and into research and development. In the case of Yugoslavia, wages were set by the workers councils, usually at levels suggested by the managers. With the 1974 constitutional changes that introduced contractual self-management and the 1976 Law on Associated Labour, the financing of investment was abandoned by the state and the independent banks and was transfered to the enterprises from retained earnings and borrowings from their captive banks. This led to what became known as the 'Yugoslav disease' because the workers would distribute all the earnings in the form of wages leaving nothing for reinvestment. The enterprises would then borrow from their captive banks which basically printed the money with the resulting inflation that really was a major factor in the collapse of the system. This was, of course, illegal under Yugoslav law but by then the state authority was so dispersed and self-management so intrenched that little was done to curb it. Horvat claims, and I think he is right, that the real mistake was to abolish the state investment funds. It was during the time of the state investment funds (the period of market socialism) that the rate of economic growth and wage growth was at its highest. Nevertheless, the self-management system of setting wages did result in the most egalitarian distribution of wages in Europe, both in the capitalist and communist worlds. Paul P Devine, James wrote: Mike B. writes: I'm wondering about these pressures to cut costs which Chomsky refers to. Don't they lead to the big, nice co:operative having to try to find cheaper sources of material via low wage, usually dictatorial political states? FWIW, David Schweikert's "market socialist" utopia of worker-managed co-operatives has two major institutions that are aimed at preventing the co-ops' profit-maximization from turning into this kind of thing: 1) a minimum wage, so that profit-max doesn't involve co-ops competing via a race to the bottom among themselves. [I think there must also be some rule about not hiring non-co-op members to do work. But I don't remember it.} 2) a special tariff on imports from countries that don't live up to labor standards. In this case, the revenues collected by making these imports more expensive to domestic consumers are supposed to be returned to the country whose imports are taxed as a lump sum (development aid). Jim Devine Paul Phillips, Senior Scholar, Department of Economics, University of Manitoba
Re: Government aid for US mortgages
Robert Manning wrote: snip The investment risk of peaking US housing market prices (buttressed by historically low debt service levels) is globalized through the sale of these mortgage-backed securities in international markets such as London and Japan. Hence, low interest rates fuel higher home values which contribute to the consumer borrowing cycle via higher home equity loans which are deductible from Federal income taxes. Doesn't this kind of sound like a Ponzi scheme? Paul P
Corporations/Side Issue
Mike B wrote I agree, it would be much better, if workers ran and managed the the firms in which they exploited themselves for surplus value. Honestly though, hasn't the history of creating such entities, like say Mondragon or the Amana Colony or the kibbutz movement and all the utopian socialist movements of the past-- co:operatives included--proven that they always morph into the undemocratic, totalitarian corporate structures which we see ruling us today? In other words, hasn't wage-labour always resulted in the developement of capitalist social relations? Sincerely, Mike B) What evidence is there that Mondragon has morphed into an undemocratic, totalitarian corporate structure? Last I heard it was still going strong and expanding without any change in its co-operative structure. Check out the Mondragon website. On the theory of 'market socialism' more up to date than Vanek and the others mentioned is Bruno Jossa and Gaetano Cuomo, The Economic Theory of Socialism and the Labour-Managed Firm. (EdwardElgar, 1997). I also like Branko Horvat's The Political Economy of Socialism (Sharpe, 1982). On Mondragon, a recent book by Greg MacLeod, From Mondragon to America: Experiments in Community Economic Development (University College of Cape Breton Press, 1997) is an interesting interpretation written by an activist in co-operative community economic development in the Maritimes. (I met Greg in Mondragon where I was doing some research on worker co-ops and he was leading a group of Canadian students studying the Mondragon and its derivative, the Valencia, model.) For a depressing and entertaining history, origins and abuse of corporations which addresses most of the issues in the main thread see the new 3 hour documentary The Corporation that has won a number of awards at film festivals (including Sundance I believe). Mike Moore, Naomi Klein, Noam Chomsky and Elaine Barnard are featured in the film as well as Milton Friedman and Michael Walker of Canada's ultra-rightwing Fraser Institute. The film was made by a Canadian and has been in general release as a feature film for the past few months. It is particularly interesting in view of the discussion on this thread because it analyzes the corporation as an individual suffering from all the medical symptons of a psychotic personality. By the way, corporations are legally individuals in Canada and thereby their right to free speech is protected by the Charter of Rights in Canada's Constitution. This status was used by the big tobacco companies when they appealed against a law restricting what they could put on their tobacco packaging. If I remember correctly, the tobacco corporations won. So David Shemano is definitely wrong when he says that a corporation does not speak as an individual. Paul Phillips Senior Scholar, Economics, University of Manitoba
Re: Question on public choice theory
Michael asks: Public choice theory suggests that people vote with their pocketbooks. How would they explain that more educated people have more liberal voting preferences? I hate to rise to the defense of public choice theory. However don't you find that in Europe (and to some degree Japan) there is (was?) a wider range of choice and that the pattern is a bit clearer? As a mass phenomena, urban educated middle class people have tended to range as far left as the Socialist Party (or in Britain the Liberals and New Labour) - but no further. In short the center-left. Slightly less educated middle class people, often more provincial, voted center-right. The center-left middle class group has often been employed in fields like education and health that relied heavily on public sector support or lived in urban areas that required heavy public investment and guidance. The center-right middle class group worked in fields like supervisors or middle managers in the private sector, often living in less urban areas. Then of course there was that small phenomena (so loved by penl-ers): the alienated intellectual, often propelled by social exclusion or a radicalizing experience in their youth. I suppose in the US the patterns become harder to sort out in a linear manner. Is this in part the 2 party system which leaves people with only a binary and not a continuum of choices? Isn't one also struck by the historical role that plantation slavery/racism continues to play in in distorting the income/politics correlation? I am always amazed when I think about what American history would be like (going back to the Mexican-American War!) if poor Southern whites had sided with their economic interests. Of course in Europe the race phenomena now starts to resemble the US and there are great efforts to impose a binary system centered using the votes of the middle class as the fulcrum. Japan has resisted the neo-liberal solution for an extraordinary decade and a half of stagnation, maybe in part because of the social solidarity in a society lacking that wedge issue. Paul --
Re: Conference on the Special Relationship (UK)
If this were true Blair would have torpedoed Kyoto. --pb I don't see why this conference is needed. The US tells the UK what to do. They do it. Period. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine -Original Message- From: k hanly [mailto:[EMAIL PROTECTED] Sent: Monday, March 08, 2004 7:20 AM To: [EMAIL PROTECTED] Subject: [PEN-L] Conference on the Special Relationship (UK) [ Presenting plain-text part of multi-format email ] Call for a Conference on the Special Relationship Website: www.specialrelationship.net Subscribe to the discussion list by sending a blank message to [EMAIL PROTECTED] You are invited to participate in a project to organise a two-day Conference on the Special Relationship. It will be a national conference with international dimension, with speakers from the US, the Middle East and elsewhere. It will take place in Sheffield in early 2005, and maybe also in Manchester and London. A book will be produced of the Conference papers. The main themes of the Conference will include: -the origins of the special relationship in post-WW2 Middle East, in particular the 1953 military coup in Iran and the 1956 Suez Crisis; -the economic relations between the US and the UK; -the $ vs.?, US vs. Europe -the special relationship goes to war - the invasion and military occupation of Iraq; -the Israel-US-UK triangle -what is imperialism? (This has been included as a theme since examination of the specific alliance between imperialist USA and UK needs to be informed by a working concept of imperialism in general) Please contact us via our website or discussion list for a full Conference Prospectus, in which these themes are broken down into individual elements. All who read this are invited to consider submitting a paper on any of these topics - and we welcome suggestions for new topics. The Conference Working Group invites and urges you to offer some of your time over the next twelve months to realising this project. We need YOUR help with many and varied tasks - from selecting articles for the website and considering proposed papers, to designing publicity, raising funds, translating important articles into English, organising the Conference itself. Please volunteer to help share these tasks, and you will also share in the overall design and direction of the event. *** What is the special relationship? The 1956 Suez crisis ended Britain's pretensions of being a stand-alone imperial power. Ever since, Britain has protected its vast interests in the Middle East and elsewhere by maintaining the closest of alliances with the USA. This special relationship is responsible for doz-ens of military coups and invasions, the deaths of millions of people, and the theft of trillions of dollars. Few phenomena are as important, yet suffer such incomprehension, as the special relation-ship. At the Labour Party Conference, Jeremy Corbyn asked with amazement why are we, a British Labour Government with a very large Parliamentary majority, so signed up to the ul-tra-right wing George Bush? A review of the 50-yearspecial relationship and of the Labour Party's rôle within it would show that nothing could be more natural. Did you know. Question: what is the name of biggest oil com-pany within the US? Answer: BP (British Petroleum), which has 40% of its employees in the USA. Question: the ruling families of which country own two of the three biggest oil companies in the world? Answer: Britain (BP and Shell; Exxon is the big-gest). BP has major interests from Colombia to Africa to central Asia. Along with other British banks and multinationals, it relies on US mili-tary power to protect its property and super-profits. Question: which country is 2nd only to the USA in the size of its empire of overseas wealth? Answer: .you've guessed it; Britain. In 2001, Britain's overseas direct investments totalled $902bn, 14.4% of the world total (compared to 21.1% owned by US imperialists, 7.9% owned by the French, 7.8% owned by Germans, and 4.6% owned by Japanese). * The motive for the Conference is to respond to the almost universal failure of the anti-war movement to comprehend why Britain has joined in the US-led war and occupation of Iraq. Blair is Bush's poodle sums up a widespread view, propounded by Steve Bell cartoons, Tony Benn, the SWP and many other influential voices critical of the Blair government's actions. It is a notion which only makes sense if we ignore the fact that Britain is itself an imperialist power, the home for two of the three largest oil companies in the world, and the owner of the second-largest stock of FDI after the USA (second to none in relation to its size). The Conference organisers (at the moment,
Re: sorry about that...
Hey, some of us would like the recipe for Chai too! Paul joanna bujes wrote: Chai message was obviously meant to go to ravi. J.
[Fwd: [Fwd: Dr Seuss]]
Enjoy For the 100th anniversity of Dr. Seuss The Whos down in Whoville liked people a lot, But the Grinch in the White House most certainly did not. He didn't arrive there by the will of the Whos, But stole the election that he really did lose. Vowed to "rule from the middle," then installed his regime. (Did this really happen, or is it just a bad dream?) He didn't listen to voters, just his friends he was pleasin' Now, please don't ask why, who knows what's the reason. It could be his heart wasn't working just right. It could be, perhaps, that he wasn't too bright. But I think that the most likely reason of all, Is that both brain and heart were two sizes too small. In times of great turmoil, this was bad news, To have a government that ignores its Whos. But the Whos shrugged their shoulders, went on with their work, Their duties as citizens so casually did shirk. They shopped at the mall and watched their T.V. They drove a gas guzzling big S.U.V., Oblivious to what was going on in D.C., Ignoring the threats to democracy. They read the same papers that ran the same leads, Reporting what only served corporate needs. (For the policies affecting the lives of all nations Were made by the giant U.S. Corporations.) Big business grew fatter, fed by its own greed, And by people who shopped for the things they didn't need. But amidst all the apathy came signs of unrest, The Whos came to see we were fouling our nest. And the people who cared for the ideals of this nation Began to discuss and exchange information: The things they couldn't read, in the corporate-owned news, Of FTAA meetings and CIA coups, Of drilling for oil and restricting rights. They published some books, created Websites, Began to write letters, and use their e-mail (Though Homeland Security might send them to jail!) What began as a whisper soon grew to a roar, These things going on they could no longer ignore. They started to rise up and reach out to all Let their voices be heard, they rose to the call, To vote, to petition, to gather, dissent, To question the policies of the "President." As greed gained in power and power knew no shame The Whos came together, sang "Not in our name!" One by one from their sleep and their slumber they woke The old and the young, all kinds of folk, The black, brown and white, the gay, bi- and straight, All united to sing, "Feed our hope, not our hate! Stop stockpiling weapons and aiming for war! Stop feeding the rich, start feeding the poor! Stop storming the deserts to fuel SUV's! Stop telling us lies on the mainstream T.V.'s! Stop treating our children as a market to sack! Stop feeding them Barney, Barbie and Big Mac! Stop trying to addict them to lifelong consuming, In a time when severe global warming is looming! Stop sanctions that are killing the kids in Iraq! Start dealing with ours that are strung out on crack!" A mighty sound started to rise and to grow, "The old way of thinking simply must go! Enough of God versus Allah, Muslim vs. Jew With what lies ahead, it simply won't do. No American dream that cares only for wealth Ignoring the need for community health. The rivers and forests are demanding their pay, If we're to survive, we must walk a new way. No more excessive and mindless consumption Let's sharpen our minds and garner our gumption. For the ideas are simple, but the practice is hard, And not to be won by a poem on a card. It needs the ideas and the acts of each Who, So let's get together and plan what to do!" And so they all gathered from all 'round the Earth And from it all came a miraculous birth. The hearts and the minds of the Whos they did grow, Three sizes to fit what they felt and they know. While the Grinches they shrank from their hate and their greed, Bearing the weight of their every foul deed. From that day onward the standard of wealth, Was whatever fed the Whos spiritual health. They gathered together to revel and feast, And thanked all who worked to conquer their beast. For although our story pits Grinches 'gainst Whos, The true battle lies in what we daily choose. For inside each Grinch is a tiny small Who, And inside each Who is a tiny Grinch too. One thrives on love and one thrives on greed. Who will win out? It depends who you feed! Author: Unknown Paul Phillips
Re: the poverty of pundits
Jim, any idea who this Brooks is? Paul Devine, James wrote: I wonder if Paul Krugman is embarrassed to appear on the same op-ed page as this fellow: March 2, 2004/New York TIMES More Than Money By DAVID BROOKS
Re: Estanblished Trade Unions Left Politics, was Re: He does have a point
I think it is perhaps a little dangerous to generalize from US experience as it it were the standard of what goes on elsewhere. Though many Canadian unions have become established defenders of the status quo (mostly Canadian branches of so-called 'international' -- i.e. US dominated and controlled unions) many Canadian unions have been bulwarks of the left. In the past we can look to such unions as the west coast fishermen, woodworkers and longshoremen, at the EU, the MMSWU and, more recently at the CAW which has supported the new socialist initiative. Also, historically, the public sector unions in Canada have strongly supported progressive causes -- for instance the postal workers who pioneered maternity leave, etc. etc. What I find on this list is that we have a membership that is obsessively concerned with 'naval gazing', looking only at what goes on on the US without much concern either with historical analysis or with comparative analysis. I would suggest many would be well rewarded by reading, and digesting, Geoff Hodgson's engaging book How Economics Forgot History -- or how I might phrase it, how Economics forgot institutions. Paul Phillips, Senior Scholar, Department of Economics, University of Manitoba. Hypothesis: Trade Unions are actively left in their politics ONLY during their early stages, when the chief issue is establishing the right to exist. Once that right is established, they rapidly cease to be an element in left politics. At the present time, with only scattered exceptions, one will not, in the u.s., find social activists _and_ trade union leadership in the same social/political locations. In most instances of radical activists inside the trade-union movement you are more apt to meet those activists in organizations separate from the trade union itself.
Re: He does have a point
Frankly, I don't think this is the case. I have quit the NDP on several occasions and stopped supporting them materially when they voted for world crimes against Yugoslavia. I just could not be associated with a party that supported killing and bombing my friends that I had worked with for years. That they were misinformed and mislead by the media and the government of the day is no excuse. The NDP fell victim to the same misinformation as the Democrats in the US fell to Bush's lies about WMD and the New Labour Party did to Blair's lies (may the decent labour party veterens rest in peace). They were stupid, but not duplicit. The NDP at the provincial level, however, despite their hesitation and capitulation to 'neo-liberal' doctrines, have been enormously progressive relative to so called liberal and conservative (democratic and republican) regimes. I lived in Manitoba for 34 some odd years, the majority of which (thank goodness) were under NDP governments. I have since moved to B.C. which has a liberal/conservative government. The quality of life is definitely inferior. Hell, the quality of life for us relatively well-off retirees, is also declining as the government makes cutbacks to medicare in favour of the 'for profit' medicare providers. The most interesting (?) example is the Premier of Alberta who has declared that medicare is unestainable at the same time as he declared a 3 billion surplus from oil revenues. The Manitoba NDP government, despite all the criticistm, mine included, was clearly superior to its predecessor The question I have for pen-l-ers is, when and if, public revulsion for capitalist exess will result in any political resonse? I would recommend that anyone interested in such things take in the movie The Corporation Marvin Gandall wrote: Notwithstanding the above, I wouldn't describe myself as a political cynic counselling others not to vote. I regularly vote for the social-democratic NDP in Canada. But I think it's worth pointing out, for the purposes of your debate, that I don't do so because I think the party, in the unlikely event it should take power at the national level, will govern much differently than the Liberals or Conservatives. The NDP 's history of governing at the provincial level in the West and in Ontario shows this to not be the case.
Re: More on Beware Generals Bearing a Grudge
Hey Jim, I played polo for twenty years and I am not now, nor was I ever, an aristocrat nor were any of those that I played with. On the other hand, my string of ponies never exceeded three, the minimum needed to play a full game. Paul Devine, James wrote: Patton MacArthur were both from the most aristocratic families. I understand that they both had their own strings of polo ponies and both played polo, a very aristocratic sport. Jim Devine
Re: Stephen Roach on worship
Roach falls prey to the fallacies that hobble almost all neoclassical economists -- he ignores (a) the static nature of trade/welfare/growth theory, (b) externalities (e.g., the pollution costs of long-distance transport, the lack of environmental protection, worker health and working conditions regulation) (c) the inequalities of economic/political power both between countries and, within countries, between workers and the state/capital (e.g. the suppression of Chinese and Mexican unions, etc.) and (d) the total disregard for the failure of traditional trade theory to include reasonable assumptions rather than utopian ones (such as pure competition, no economies of scale, symetrical and perfect knowledge, yada, yada, yada.) Besides, as a Canadian resident in B.C. where the forest industry is the most important export industry, protectionism by the US has been a dominant force for years now with the soft-wood lumber duties and, more recently, the ban on beef and other meat shipments to the US. As a former Prairie-ite, I am equally enraged by the duties put on our grain exports because of the alleged subsidy involved in the handling of grain by the Canadian Wheat Board -- an allegation that has been made and dismissed by international investigatory bodies 19 or 20 times over the past ten or so years -- but still implemented by the Bush regime. In short, protectionism has always been there to rescue the profits of capital or agribusiness -- Roach is merely concerned because now it might, because of the political pressures of an election year, actually be used to rescue the wages and employment of the working class. Nothing could be more anathama to a neoclassical economist. Paul Phillips Eubulides wrote: [at least he's confessed] http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0 Global: Offshoring Backlash Stephen Roach (New York) It's economics versus politics. The free-trade theory of globalization embraces the cross-border transfer of jobs. Political systems do not - especially as election cycles heat up. That heat is now being turned up in Washington, as incumbent politicians in both parties come face to face with the angst of America's jobless recovery. Jobs could well be the hot button in Campaign 2004. And offshoring - the transfer of high-wage US jobs to the low-wage developing world - could quite conceivably be the most contentious aspect of this debate and one of greatest risk factors for ever-complacent financial markets. Like most economists, I worship at the high altar of free-market competition and the trade liberalization that drives it. But that doesn't mean putting a positive spin on the painful dislocations that trade competition can spawn. Unfortunately, that was the mistake made recently by the Bush administration's chief economist, Gregory Mankiw, in his dismissive assessment of white-collar job losses due to offshoring. Like most economic theories, the optimal outcomes cited by Mankiw pertain to that ever-elusive long run. Over that timeframe, the basic conclusion of the theory of free trade is inarguable: International competition lowers costs and prices, thereby boosting the purchasing power and standard of living of consumers around the world. The practical problem in this case - as it is with most theories - is the concept of the long run. Sure, over a long enough timeframe, things will eventually work out according to this theoretical script. But the key word here is eventually - the stumbling block in presuming that academic theories map neatly into the shorter time horizons of financial markets and politics. Lord Keynes put it best in his 1923 Tract on Monetary Reform, cautioning, In the long run, we're all dead. History, of course, tells us that a lot can happen between now and that ever-elusive long run. That's precisely the risk in the great offshoring debate, in my view. As always, context defines the issues of contention. And in this case, the context is America's jobless recovery - an unprecedented hiring shortfall in the first 26 months of this recovery that has left private nonfarm payrolls fully 8 million workers below the path of the typical hiring upturn. This is where the offshoring debate enters the equation. One of the pillars of trade theory is that wealthy industrial economies like America' s can be broken down into two basic segments of activity - tradables and nontradables. International competition has long been confined to the tradable goods, or manufacturing sector. By contrast, the nontradables sector was largely shielded from tough competitive pressures, thereby providing shelter to the 80% of America's private sector workforce that toil in services. Consequently, as competitive pressures drove down prices in tradable goods, the bulk of the economy and its workforce benefited from the resulting expansion of purchasing power. Advanced, knowledge-based economies thrive on this distinction between
Re: The economy - a new era?
Jim Stanford in his book Paper Boom discusses this issue at great length including a lot of empirical data demonstrating the superior economic and 'political' position of large firms vs small business. Small business tends to gravitate to a demagogic, right-wing populist position, often tinged with racisim because of competition from immigrants who 'self-exploit' in easy to enter sectors such as ethnic restaurants, mom-and-pop stores, truck farming and personal services. Paul Phillips Doug Henwood wrote: Julio Huato wrote: Why would concentration be more propitious for progressive politics? I can think of several reasons. Less competition means less pressure on wages (though this would be partly offset by higher prices in noncompetitive markets). Large firms are easier to organize, regulate, and supervise. The big bourgeoisie is often more socially tolerant than their smaller comrades. Small business in general is often a font of reactionary social attitudes - in the U.S., they're much more anti-regulation, anti-union, anti-green, and are more likely to support the right wing of the Rep party. snip Doug
US blocks UN proposal to combat obesity]]
This seems to have been censored out by the major media. Paul Phillips Just another bit of evidence that what's good for big business is good for the rest of us, eh? WSWS : News Analysis : Medicine Health US blocks UN proposal to combat obesity By Barry Mason 9 February 2004 Back to screen version | Send this link by email | Email the author Obesity is one of the major causes of non-communicable disease. Worldwide there are around 300 million obese people with another 750 million considered overweightapproximately one sixth of the worlds population. In May 2002 the World Health Organisation was mandated to prepare a report on the virtual epidemic of obesity that is concerning health workers around the world. The report is to be presented to the Word Health Assembly meeting in May 2004, and a draft version, WHO Global Strategy on Diet, Physical Activity and Health, was published last November. Independent international experts on diet and physical activity contributed to the report, which concluded that a profound shift in the balance of the major causes of death and disease is underway in most countries. Globally, the burden of non-communicable diseases has rapidly increased. It points out that for the year 2001 non-communicable disease accounted for 60 percent of the 56 million deaths worldwide and 47 percent of the global burden of disease. It insisted that, apart from tobacco consumption, high levels of cholesterol in the blood, low intake of fruit and vegetables, being overweight (and) physical inactivity are among the leading factors in the increase in non-communicable diseases. For all countries, current evidence suggests that the underlying determinants of non-communicable diseases are largely the same. These include increased consumption of energy-dense, nutrient-poor foods that are high in fat, sugar and salt; reduced levels of physical activity ... Of particular concern are the increasingly unhealthy diets and reduced physical activity of children and adolescents. The report advocates a global strategy to improve diet, calling for initiatives to be undertaken by the food industry to modify the fat, sugar and salt content of processed foods and to review many current marketing practices ... [so as to] accelerate health gains worldwide. It calls for a cut in the intake of fats in general and to shift towards unsaturated fat, a cut in the consumption of salt and of refined sugars as additives and the encouragement of consumption of healthy alternatives such as fruit, vegetables, legumes, whole grains and nuts. It calls on food manufacturers to limit the levels of saturated fats and trans-fatty acids, sugar and salt in existing products and to follow responsible marketing practices that support the strategy, particularly with regard to the promotion and marketing of foods high in saturated fats, sugar or salt, especially to young children. The report, when finally agreed will be advisory only, making recommendations to the giant food manufacturers and calling for them to carry out initiatives. It will have no power to impose any of its conclusions on these mighty corporations. But the food industry is not prepared to allow even a whiff of criticism to be aired against its activities. As soon as the draft report was published, the Grocery Manufacturers of America (GMA), which represents corporations such as Birds Eye, Coca-Cola, Del Monte and Heinz, lobbied the Bush administration to act on their behalf and attack its findings. A letter was dispatched to the United Nations from William Steiger, a special assistant in the US Department of Health and Human Services, raising the US governments objections. The letter called into question the whole scientific basis of the WHO report. It denied the role of manufacturers in creating the demand for unhealthy foods, especially by targeting food advertising at children, and took exception to the singling out of particular foods such as those containing high levels of fat, salt and sugar. Steiger wrote that the US government, promotes the view that all foods can be part of a healthy and balanced diet, and supports personal responsibility to choose a diet conducive to individual energy balance, weight control and health. He criticised the WHO report for not stressing the responsibility of the every individual to balance his or her diet for themselves. A GMA spokesman commented, One of the things we didnt see in the document was a recognition that it ultimately comes down to what individuals choose to do. You cant solve the problem by government fiat. Consumer groups all over the world have denounced the efforts of the US government to undermine the WHO document. The cynical attempt of the food manufacturers to mislead consumers had already been highlighted in a report submitted last year to the WHO consultation on diet and health. A report from the International
The Euro's woes -- think of poor Canada
Ideology has taken us from champ to chump ByJIM STANFORD Monday, February 2, 2004 - Page A13 E-mail this Article Print this Article Advertisement The evidence is mounting that Canada's economy has quickly faded from being champ of the industrialized world, to become one of its chumps. For six years straight, beginning in 1997, we matched or exceeded growth rates in the U.S., and we led the G8 over that period. Today, in contrast, we're growing at a fraction of the pace of the U.S., Britain, and even Japan. Last year's bizarre string of economic accidents gets some of the blame: SARS, blackouts, forest fires. But the latest GDP numbers prove we were still stuck in the mud long after these temporary troubles had passed. Remember, the U.S. economy had its own troubles last year, yet bounced back impressively. What explains our fall from economic grace, despite our much-vaunted "fundamentals" (like balanced budgets and low inflation)? Sadly, our problem is rooted more deeply than the fleeting misfortunes of 2003. We're suffering once again from a demonstrated tendency by Canadian policy-makers to show more commitment to their own doctrinaire rules than to the concrete well-being of Canadians. Far from protecting us from downturn, our strong "fundamentals" -- and more precisely, the rigid policy rules which protect them -- are actually making things worse. Let's start with the Bank of Canada, which enforces our most famous economic rule: keeping core inflation between 1 and 3 per cent, come hell or high water. Following this rule, the bank concluded two years ago that Canada's economy risked severe overheating (despite 7.5-per-cent unemployment), and boosted interest rates five times in 12 months. This opened a huge gap between Canadian and U.S. interest rates, and sent the loonie soaring. Strangely, Alan Greenspan kept cutting U.S. rates; he wanted to ensure growth got back on the fast track, and he doesn't worry about any one-dimensional policy rules. The Bank of Canada stuck to its guns for a few fateful months, ensuring our stagnation persisted long after the last SARS patient was sent home. By the time it started wiping egg from its face last fall, the damage was done. Today our interest rates are still two-and-a-half times U.S. levels. But financiers know U.S. rates will rise, where ours (courtesy of a self-inflicted slowdown) can only fall. I and a few hundred other economists have warned for months that, one way or another, the loonie will come down: either the easy way (through pro-active rate cuts), or the hard way (through economic slowdown and reactive rate cuts). The Bank could have prevented the whole senseless episode by cutting rates sooner and deeper. But this would have required it to look beyond its myopic policy rule. An even more perverse rule is guiding fiscal policy. The new conventional wisdom in Canadian
Re: Perelman on Brenner
Sabri, Of course, no individual is indispensable and employers can downsize and increase the intensity of work for support staff or can, in many cases replace white collar workers with capital (e.g. replacing telephone receptionists with voice mail or touchtone routing) but the point that I was making is that labour cost is not a function of output. In the case of say a retail clothing store you need at least one clerk whether that clerk sells 50 shirts in a day or 10. The store will also require a bookkeeper and stock reorder clerk, again whether it sells 50 shirts or 10. Thus, if sales are down and profits fall, the easiest possible way to restore profits is to cut the wages of the clerical staff (or perhaps cut hours which reduces wages though not necessarily wage rates.) One way to reduce labour wages for this kind of labour is to outsource offshore -- e.g. software writing to India, telemarketing to Jamaica, etc. Paul Sabri Oncu wrote: Paul: However, white collar (non-productive) workers are a fixed cost. Squeezing their wages reduces fixed cost and hence can improve profits. Being an ex-whitecollar worker, I am not so sure about this Paul. As a saying goes in the business world, "no body is indispensable". At least, this is what I experienced when I was there. Why was I a "fixed cost" to the establishment I worked at? As the COO of a company who wanted to keep me, when I resigned and conditioned my stay for a substantial raise, once said: "You will do what you gotta do!" I don't think there are many in India or in Turkey or in the US, for that matter, who know certain things as well as I do, but I left and they lived happily ever after! Best, Sabri
Re: sending large articles to pen-l
Michael, But on the other hand, if you or others just send a url, many of us just delete the message and never follow it up. I for one never follow up a url -- it is too time consuming and sometimes proves fruitless. If this list were to become just a list of urls, I would probably log off. It is much easier to just delete any article that I am not interested in. Paul Phillips Michael Perelman wrote: Please try not to send large articles to the list -- like I did yesterday. It is better just to send the url. Large articles cause several problems. They fill up mailboxes for people with limited space. They take up a lot of space on Hans' server. People outside of the US with expensive dial up connections may have to pay a lot to download -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
Re: important article
According to today's Globe and Mail, Kerry is not only leading the Democratic pack, but also has surged ahead of Dubya in the opinion polls. While the latter gives us non-Americans some glimmer of hope or ridding the international political scene of that hideous creature, I don't know enough about Kerry to make any judgement about whether he would be a good choice relative to others in the field. I know he voted against the first gulf war and for the Iraq invasion. Was that because he was taken in by the Administration's lies about WMD or is he also an imperialist? What of his domestic policies stance? Can any of you down there give us furriners an objective evaluation of him? Northern minds want to know. Paul Phillips
Re: Perelman on Brenner
Sabri, The problem is that it is somewhat more complicated than that. For one thing, in goods production almost all labour intensive production has gone offshore so that in what is left of manufacturing is capital intensive and production wages are a small part of cost. In that case, squeezing wages won't help restore profits significantly. However, white collar (non-productive) workers are a fixed cost. Squeezing their wages reduces fixed cost and hence can improve profits. However, that is not the real story. That is the shift in labour from high wage to low wage (largely service) work where wages are a large part of 'variable' cost. I suggest you go to the EPI website and look at their snapshot on the destruction of high paying jobs and the growth of low-wage jobs. In all but two states in the US the average wage of expanding industries was hugely lower than the average wage of declining employment industries -- by 20 to 40 per cent lower. In the 'growth' industries, lowering wages is a major source of improved profits. Paul Phillips, Economics, University of Manitoba Sabri Oncu wrote: Jim: This means that profit booms are most likely to be based on increased indebtedness. This is how I see it, too. The profit rate increases are not so much as a result of wage squeezes anymore. That is a thing of the past. As Michael keeps saying, and I agree, we are now in the age of high fixed costs and low marginal costs. As someone I knew many years ago, whose name I don't recall now, once said, this "reserve army" is not "the reserve army of labor" anymore. It is the reserve army of permanently unemployables. Best, Sabri
Re: A. Sen on Sraffa, Wittgenstein, and Gramsci
Thanks for the interesting review (and tip). People may wish to know that the article is in the latest edition of the Journal of Economic Literature which also has a fine review of Brenner's book 'Boom and Bubble' by our own Michael Perelman (thanks Michael). I have not yet been able to read them, but I have noticed two more recent Sraffa articles (in the current Contributions to Pol. Eco, the annual published by the Cambridge J. of Eco people). One article, based on the recent opening of Sraffa's papers in Cambridge, seems to offer a novel interpretation of the origin (and hence context) of Sraffa's system. It seems to me (under informed) that the majority of commentators have situated Sraffa as a descendent of Ricardo's theory of value vs. a minority that emphasize Sraffa as a descendent (for better or worse) of Marx's transformation of values into prices of production as an intellectual starting point. Now, based on his unpublished writings and letters, it appears that Sraffa drew his intellectual starting point from Marx's reproduction schemes. The article is written by Giancarlo de Vivo, of Naples. Incidentally, the CPE issue also has an extended and very honorable book review of two of Geoffrey Harcourt's books done by Gary Mongiovi (still on Pen-l?). Paul Tonak writes: I just finished reading the following fascinating article by Sen. .
Re: immigration
of Columbia University, these workers are often agents of change when they return, even if they are unskilled, because they bring back new attitudes, financial resources and knowledge. But simply requiring workers to return home is not enough. Attractive incentives must be provided as well, and those in the Bush plan are inadequate. Devesh Kapur, a professor of government at Harvard, who with his colleagues has done comprehensive research in the field, suggests that one possibility is to have the United States retain part of the wages paid to new legal migrant workers in an investment account that is given back to the workers only when they return to their home countries. Forced returning home is problematic. What of the children? Do they come for a couple of years and then go back. What happens to their education. Are they forced to stay at home so that the income taxed by the migrant workers is used to subsidize American workers and education system while the Mexican kids and dependents get only a fraction of what the exploited workers can save. As for the power of businesses over their recruits in the Bush plan, Mr. Kapur says that employees should be required to work for their sponsoring company for only a limited time, and then be allowed to look for other jobs. For all its benefits, however, greater labor mobility is no panacea in itself. In the United States, for example, a Bush-style immigration program would work best, in my view, in tandem with a reasonable increase in the minimum wage. As for sending nations, Mr. Rosenzweig points out that returning money in the form of remittances is most productive when the economy can adequately channel them to useful investment and social programs. Without a strong increase in the minimum wage, such a program would be devastating for the low income earner in America. Moreover, some older policies work at cross purposes. Mr. Kapur notes that one reason so many Mexicans flee to the United States is that the North American Free Trade Agreement subjected them to low-price American agricultural competition that is subsidized by the government. More labor mobility, then, is an exciting potential source of growth for all, but it will work only in conjunction with proper safeguards and fair and productive social policies. No, it is an exciting source of profits for corporations and for low cost services for the middle income. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine Paul Phillips, Economics, University of Manitoba
Whither the AEA
An entirely subjective report from the AEA sessions of some trends (compared to say five years ago). I am not writing about the sessions organized by heterodox groups as there were too few of them for generalizations. 1) Overall: The AEA continues to be ever more monolithic (as hard as that is to belive). Grad students and younger professors especially show signs of the near-capture of graduate programs by neo-classics and, as one professor put it, an almost boot-camp like training regime. The presenters (and even the presentations themselves) also seem to have ever tighter funding ties to the Federal Govt\Bretton Woods\consulting firm complex - without much effort at outside balance. In some cases, and in an earlier time of academia, I believe questions of academic ethics and intellectual objectivity would have been raised by such ties. This said, having the program away from the East Coast did allow for what seemed like a little bit of space for topics like economic history and the history of ideas. 2) Topical themes coming to the fore included health policy, public pension (esp privatization), corporate governance, deflation, terrorism. 3) U.S. govt. policy. I was eager to find signs of re-thinking, second thoughts, or misgivings. I found few, if any. The Republicans were adamant: full speed ahead - and at a faster pace (Hubbard, Forbes, Barro). There were practically no 'Republicans' who spoke in moderate tones (e.g. 'this far is good, but not much further') or even reflective tones, except ironically Greenspan. I looked hard to see whether the 'Democrats' present had found a newer voice - but I did not find it. There was the much reported deficit hawk presentation by Peter Orszag\Rubin (cited Krugman in NYT of 1\6), lavish praise for Greenspan by Yellin, 'more of the same' by Rivlin, others talked of the need to fix Social Security, etc. There was no effort to even appear to have learned some 'lessons', in fact some younger 'Democrats' showed a full display of their renowned smug arrogance - from the podium. [Also, anyone know anything about the Peter Orszag and his brother Jonathan? I see that they were Clinton advisors and that now they, Laura Tyson, and Stiglitz have a private 'consulting firm' in the Bay Area offering advice and lobbying to their former institutions. I suspect we will hear more of them.] One bright spot was Robert Pollin who although given only 5 minutes as practically the only non-mainstream participant in all the AEA, very effectively covered a large amount of territory. [The sessions I attended often had a broad review of economic performance over the last 15 years and a forward perspective. Yet there was NOT ONE mention of the massive and unprecedented shift in income distribution, with the prospect of an historical shift in the American economy and society back to a 1920's type dual economy.] 4) Globalization : There were far more international sessions (and participants) than there were say 10 years ago. Yet they were almost exclusively organized by and with either academics who are currently paid as consultants with the Bretton Woods institutions or the BW staff themselves. Unlike east coast conferences, no current senior BW staff actually came to California - all this was handled either by former staff/now consultants (Rogoff, Edwards), senior consultants (Kaminsky), soon-to-be staff (Aizenman), or Bush admin officials (Kristen Forbes). In one session, even a majority of the participants appeared to be either BW staff or mid-level officials from newly independent countries brought to the conference on a training program. Some of these same senior consultants\employees were on the Program Committee that framed these sessions. Only one mild dissenter was included (Rodrik; I don't think Bhagwati really qualifies). There was no effort to represent the now very large dissenting movements from the Washington Consensus, and even Stiglitz and Sachs were referred to (by name, behind their backs) only in sneering terms. One panel on Capital Liberalization seemed designed only to refute Stiglitz and promote a new effort by the IMF to further liberalize banking in Latin America [there are, apparently, some specific not-yet-public proposals]. In some cases the panels, of IMF employees and consultants, were designed not just to present IMF ideas and policies but to actually assess the performance of their employer. In many cases, throughout the conference, there was no public disclosure of a financial relationship that one knows of only through separate sources. One exception was Dani Rodrik (on global issues), although he was critical only on the narrowest grounds, his comments were clear and decisive. Paul
Re: Concept of efficiency
Ken, The neoclassical concept of efficiency is defined as the relationship between scarce Factor inputs and outputs of goods and services Economic efficiency is defined in cost terms. i.e. the lowest cost for producing the level of output that is demanded at that cost.. (See for instance the Harper Collins Dictionary of Economics). However, even this concept is narrower since it is restricted to single markets and excludes externalities. Prolonging the life of poor people, in this concept, is not 'efficient' if the poor are unable to pay for medicine, etc. However, if pay-per-use deters poor people from seeking health treatment such that they become more sick and either infect other people or become unable to work to support their families or eventually fall upon the charity of ngos or the state, the cost to society will be much greater than if the service had been provided in the first place free of charge. (By the way, a study in Saskatchewan when the Conservatives introduced user fees found that the cost went up and the 'technical efficiency' of health insurance went down even though the economic efficiency, in the eyes of neoclassical economists, went up.) Nevertheless, such subsequent social costs do not normally enter into the calculus of economic efficiency by most economists -- although the really good neoclassical type economists do consider such. See for instance, Mishan's Costs of Economic Growth. The other contradiction to this narrow neoclassical approach is that prescriptions are not at the discretion of the sick but rather at the discretion of their doctors -- or what some refer to as 'supply determined demand'. In such cases, the concept of efficiency always breaks down, as Stiglitz and others have demonstrated. Paul Paul Phillips, Economics, University of Manitoba k hanly wrote: Below is a paragraph from an economists post to another list concerning the introduction of various user charges in Iraq including for presecriptions as well as use of emergency services. From an efficiency point of view, pay per service is felt to be superior to payment through, say, income taxes, and then free at point of use: the resources cost something to provide, but if users can draw on them 'for free', then they will not face the same incentives to ration the use of expensive resources. From an equity point of view, this can be very regressive: the poor and otherwise socially disadvantaged may be more likely to fall ill or suffer from chronic illness. The author notes that the charges may increase the degree of inequity. But what exactly is meant by efficiency here. If efficient means optimum allocation of scarce resources to satisfy medical needs on the basis of need alone it doesnt seem efficient at all. User charges will only deter those who have scarce dollars others will continue to use the resources when they dont need them and that doesnt seem efficient. For the poorest they may not seek needed medical help at all and that is surely not efficient in using scarce resources to meed medical needs on the basis of need. So what sense of efficiency is meant in thuis context. Of course the author puts for free at point of use in scare quotes. Of course it is not free but is paid for from taxes or the like. Even from some nebulous economic view of efficiency it doesnt seem clear to me why this would be less efficient. In terms of results medical systems primarily funded through tax dollars rather than user pay cost less and produce at least as good results as systems such as the US where user pay is used more. Cheers, Ken Hanly
Re: Concept of efficiency
Ken, That is correct for Pareto efficiency but it must be pointed out that there is a different (infinite set) of Pareto efficient points corresponding to each and every (infinite set) of income/wealth distributions. That is, income/wealth distribution is a given and is 'outside the realm of economics' as it pertains to economic efficiency. Paul k hanly wrote: How does this concept of efficiency relate to pareto efficiency that is the view that a situation is efficient when no one can be made better off without someone else being made worse off, at least something like that! In terms of Pareto efficiency certainly if the poor could not pay for medicine or no one was willing to pay for it then it would not be Pareto efficient to purchase medicine for them. THe definition is hardly value neutral, efficiency would favor the rich's realization of their utility whereas in most cases realisation of the utiliity of the poor would be inefficient and the term is always used as if inefficiency is a prima facie bad.. In particular it would be inefficient should the rich not wish to provide them with money. I guess the moral though would be that generous charity would increase efficiency whereas taxation that took from some against their will to pay for the needs of the poor would be inefficient! Cheers, Ken Hanly - Original Message - From: "paul phillips" [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Tuesday, January 06, 2004 1:48 PM Subject: Re: Concept of efficiency Ken, The neoclassical concept of efficiency is defined as "the relationship between scarce Factor inputs and outputs of goods and services" Economic efficiency is defined in cost terms. i.e. the lowest cost for producing the level of output that is demanded at that cost.. (See for instance the Harper Collins Dictionary of Economics). However, even this concept is narrower since it is restricted to single markets and excludes externalities. Prolonging the life of poor people, in this concept, is not 'efficient' if the poor are unable to pay for medicine, etc.
Re: A shameless plug
Since several other members of Pen-l have recently plugged their books -- and quite rightfully so, I have just today begun to read Doug's newest which I got (after explicit hints) for Christmas -- I thought I might mention my recent book which came out this fall though it is directed primarily at a Canadian audience. It is: Paul Phillips, _Inside Capitalism: An Introduction to Political Economy_ (Halifax: Fernwood, 2003) 215 pp. It is primarily directed at the introductory textbook market for labour or union studies programs thought it is also used at intro and intermediate political economy theory courses. Chapter headints are: Introduction: Political Economy and Contemporary Canadian Capitalism Ch 1: Political Economy and Economics: The Issues Ch 2: Institutions of Production and Exchange Ch 3: Production Theory Ch 4: The Labour Process Ch 5: The Labour Market: Part One Ch 6: The Labour Market: Part Two Ch 7: Investment: Closing the Circle Ch 8: Growth and Crisis Ch 9: Aggregate Economics: Smoothing the Flow Ch 10: The International Sector and Globalism Ch 11: There is An Alternative -- Democracy If I were to describe my approach it would be Marxian informed, radical institutionalism/post Keynesianism/Kalecki-ism but, perhaps, with some neoclassical/classical leavening (for what that is worth). In any case, it is available in Canada through Amazon.ca. I don't know if it is available through Amazon.com in the US. The price is, if I remember correctly, something like $28 Cdn or around 22 USD. For what it is worth, That's all Folks! Paul Phillips, Economics, University of Manitoba
Re: something new/Waldheim
True, although it was probably only a secret from the public. As I recall, after war the Yugoslavs filed a formal complaint against him as a war criminal with the Allied war crimes tribunal (U.S., Soviet, UK, French). Since was he then was a career diplomat being posted to the key capitals rising to Foreign Minister of Austria and since neutral Vienna was the center of Cold War clandestine contact and monitoring for both sides, it is hard to believe that the key players had not worked up many a profile on him long before he was ran for UN Sec Gen. To put things in context, I believe the charges never went beyond being in the chain of command for atrocities (I think against partisans and British commandos). Although it was never charged that he actually initiated an atrocity or personally supervised one, it is still a war crime to be participate in the chain of command of one - let us remind people often. At 03:23 PM 12/21/2003 -0800, you wrote: Waldheim was a secret demon. That does not count. On Sun, Dec 21, 2003 at 05:57:45PM -0500, dmschanoes wrote: Kurt Waldeheim? - Original Message - From: Michael Perelman [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Sunday, December 21, 2003 5:26 PM Subject: [PEN-L] something new??? Is Qadhafi the first person in US history to make the transition from demon to statesman? Usually, it goes the other way. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED] -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Fidel Castro on unequal exchange
joanna bujes wrote: Mike Ballard quoted What we found in examining diaries, letters, autobiographies, pediatric and pedagogical literature back to antiquity was that good parenting appears to be something only historically achieved, and that the further one goes back into the past the more likely one would be to find children killed, abandoned, beaten, terrorized and sexually abused by adults. Indeed, it soon appeared likely that a good mother, one who was reasonably devoted to her child and more or less able to empathize with and fulfill its needs, was nowhere to be found prior to modern times. It seemed to me that childhood was one long nightmare from which we have only gradually and only recently begun to awaken. LLOYD deMAUSE Psychohistory and Psychotherapy, Foundations of Psychohistory 1992 I don't believe this, Joanna Neither do I. My research into aboriginal society prior to the European invasion reveals a society which was very caring of their children and one very intolerant of sexual abuse of children. Paul Phillips, Economics, University of Manitoba
Re: Query
Also, didn't someone in Freeman and Card, "Small Differences that Matter" make the point that the higher tuition in the US relative to in Canada was one of the factors explaining the greater increase in income differentials in the US and also a reason for the lower percentage of the young getting post-secondary education in the US? The other large body of evidence comes from the growth literature of the 1960s and 1970s and the social rate of return to education in some cases as high as 15% (in addition to a private rate of return of around 10% if my memory serves me correctly) thus making it a very good investment for government If the private rate of return is 10%, with a marginal rate of income tax of 35%, the rate of return to the government on private expenditure is already 3.5% independent of sales and indirect taxes or of social return. Also, Denison's (or was it Fabricant's) studies showed that productivity growth largely due to increases in 'human capital' was the major source of economic growth in the US. Dorethy Walters studies for the Economic Council of Canada reported similar results. Paul Phillips, Economics, University of Manitoba Michael Perelman wrote: I have made the point. I think lots of people have. Now you have students working 20+ hours and trying to get an education. I see high numbers dropping out due to stress -- They try to rush through to get it over with and cannot maintain the pace. The quality of education suffers as our neoclassical friends would say, human capital deteriorates. On Thu, Dec 18, 2003 at 01:36:07PM -0800, Eugene Coyle wrote: A friend passed along this query from a European correspondent: Do you know anybody critical of the US system of tuition fees who argues from an economic point of view: i.e. who refers to higher education as public good? We need to be backed up by critics from abroad. Otherwise benchmark with the US will lead to adopting your system. Any thoughts? Gene Coyle -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Estimating the surplus\Doug's question\Fred's comments
Fred B. Moseley wrote: Hi Doug, you are right that the appropriate unit of analysis is the world economy, and that surplus-value produced by e.g. Chinese workers is appropriated by US capitalists. But since this surplus-value is appropriated by US capitalists, it is mostly included in the estimates of profits in the US NIPAs. But this international aspect does mean that the estimates of the ratio of unproductive labor to productive labor in the US are overestimated. Comradely, Fred I think there has also been a tendency to forget and neglect the expropriation of surplus from independent commodity production that has occured in the past that has been a major factor in profits, including in the 'golden age of capitalism'. Perhaps the most important sector was agriculture where surplus in production was expropriated through monopoly power (agribusiness the railways, banks) and shows up as profits of agribusiness, railways, banks, food processors, etc. The depressed state of primary agricutlture (fisheries, independent forestry operators) has meant that there has been precious little surplus to expropriate through the monopolized price mechanism. I would suggest that this may also be a factor in the failure of the profit rate to recover to the levels of the golden age. Paul Phillips, Economics, University of Manitoba
Re: Amy Chua: World on Fire
Yoshie Furuhashi wrote: * World On Fire by Amy Chua snip She's overreaching somewhat when she says, early on, markets and democracy were among the causes of both the Rwandan and Yugoslavian genocides. And while Serbian hatred of the Croats was fanned by Croatian economic dominance, the Bosnians they butchered were as poor as they were. Chua makes these caveats herself in the relevant chapters, but they dilute some of the grand claims she lays out in her introduction. If this is the level of analysis and knowledge displayed in the rest of the book, then I wouldn't waste my time reading the book. It suggests a profound ignorance of Balkan history and the politico-economic basis of the ethnic divisions that resulted and which were fanned, not by democracy and markets, but by outside intervention from Germany, the US and the Catholic Church. Paul Phillips, Economics, University of Manitoba
Re: Estimating the surplus\Doug's question\Fred's comments
Fred,
Very glad you could make it - you were missed! I want to think more about
your post but have one small and one larger reflection.
1. I think we can all agree on the big focus of profit rates, as Paul
put it - that the rate of profit is the most important variable in
analyzing capitalism. And I agree with Paul that this emphasis on profit
and the rate of profit is what distinguishes classical-Marxian theories
from neo-classical theories.
In addition to Doug's main point ('show me the benefit of all this'), Doug
does make me wonder whether my description of the Classical/Marxian
approach should have been more specific (although the change might prove
more narrow-minded). As you know well, historically, the Classical
tradition focused on profits/profit rate but broke this down into the
changes that emerge from the labor\capital shares AND the changes that
emerge from what I was calling the 'capital side' (with lots of differences
and inconsistencies among Classical authors). Of course, since Sraffa
there has been an intelligent and articulate revival of interest in
Classical presentations of the first issue (wage/profit frontiers, etc)
WITHOUT the capital side. The discussion with Doug illustrates a point:
without the 'capital side' just how useful is such a presentation? Doug
gave good examples of how similar arguments could be made sticking to a
Keyensian\Kaleckian tradition that is more accessible to most. (Of course
Doug is also skeptical of the value of this approach even with the capital
side, but that is a different discussion.)
...
6. I have suggested another explanation of these important trends, one
based on Marx's distinction between productive labor and unproductive
labor - that an important cause of the declines in the share and the rate
of profit was a very significant increase in the ratio of unproductive
labor to productive labor. I am not sure that this is the correct
explanation of these trends, but I think it may be, and I think that it
worthwhile to at least consider what Marx's theory implies about the
causes of these trends and the likely prospects for the future.
And one important advantage that this theory has over the profit squeeze
explanation is that it provides a consistent explanation of why the share
and rate of profit have only partially recovered in recent decades, in
spite of the loss of workers' power and stagnant real wages - because the
ratio of unproductive to productive labor has continued to increase.
This theory also provides an important prediction about the future - that
if the ratio of unproductive to productive labor continues to increase (as
I expect), then the recovery of the share and rate of profit will continue
to be slow and partial, thus leading to more wage cuts, speed-up,
etc. According to this theory, the US economy is definitely NOT at the
beginning of another long-wave period of growth and prosperity, similar
to the early postwar period (with steady real wage increases). The only
partial recovery of the share and rate of profit makes such a return to
more prosperous conditions very unlikely.
You have made me think about what is the nature of a long wave
upturn. Here are some quick thoughts and concerns.
1. a. Of course these are waves, not cycles (as in Kondratieff,
investment-accelerator, etc). It is not even as if a simple mechanism such
as the falling of the price of capital in a downturn will, in
itself, produce an upturn.
b. The up and the down of these waves are not symmetrical. While
there are forces common and inherent in the accumulation process to
downturns (tendencies to a rising OCC, etc), the upturns require
exceptional events that are not inherently produced by the downturn
process. Mostly these require some combination of major technological
change AND socio-political conditions that allow capital to overcome
resistance to the labor processes and social organization needed to
introduce the technological change. Each upturn is sui generus in its
causes (although some may want to argue for inherent links to the
innovation and political change process, these are links with more lengthy
chains).
c. There are no inherent 'rules' about the strength or duration of
a wave. Definitions are hard to make; mostly we have relied on historical
observations to generalize about size and length.
d. History gives little guidance as to the possible economic
processes in today's world that would produce an upturn and how would one
look. The last upturn involved WWII. The one before (1890's?) had our
great-great-grandfathers at work.
2. It is fairly obvious that a large part of the upswing in profit
rates has been from a shift in shares from labor to capital. Not (by
itself) the stuff to inspire thoughts of a long upswing. But my eye was
caught by this smaller (but steady) increase in capital productivity in
Dumenil's RRPE paper. We would need to know more of the source of this
uptick
Re: Estimating the surplus\Doug's question
Devine, James wrote: Hi, Fred. you write: spite of the loss of workers' power and stagnant real wages - because the ratio of unproductive to productive labor has continued to increase. A big question: _why_ does the ratio of unproductive to productive labor increase over time? if this ratio is squeezing profits, it seems that profit-seeking capitalists would make an effort to lower it. or is there some sort of technological or social imperative that pushes capitalists to increase the ratio anyway? or is it a matter of it being good for capitalists as individuals to raise the ratio even though it's bad for capital as a whole? why the ratio rises is important. For example, if we posit that demand-side stagnation has been the rule of late, that would push up the ratio (for a few years, at least) in that unproductive labor is typically overhead labor, while productive labor is laid off. However, this explanation doesn't fit the waves of "downsizing" (thinning out of management, etc.) that hit US business during the 1990s. (see below) Jim, I tried to offer one suggestion in my post a few days ago. In the 1970s, corporations attempted to restore the profit level through price increases (leading to a price-wage spiral) which was cut off by the recession of the 1980s. Since that time, we have been in a period of demand constraint. As a result, increasing productivity has been met by downsizing and wage restraint resulting in stagnant wages which leads, as you point out, to an underconsumption undertow. Major corporations respond to this demand constraint by increasing promotion, marketing and advertising thereby increasing the ratio of unproductive to productive labour. But given globalisation and Asian competition, firms can't raise prices to match the increased cost of unproductive labour. They respond by trying to cut managers, etc. In the 1990s, they were aided by technological change in white collar work (i.e. computerization) which reduced the relative demand for/employment of unproductive labour. (My figures for Canada indicate a significant decline in the employment of certain types of secretarial and clerical labour in the early 1990s.) But given the deflationary effect of global competition using low-wage 3rd world labour, 1st world corporations are unable to raise prices to restore (realized) profitability. Thus, the profit recovery in the 1990s was only partial in the light of continuing need to increase unproductive selling/marketing expenditures despite the rise in productive worker productivity. To the extent that the growth in non-productive worker productivity is on a declining projectory, there is little to give hope for a new long-term, profit-based expansion based on technological change, at least in North America and Europe where the ratio of productive to unproductive labour is already so low. I think my read on this is similar to Fred's. If not, I would be glad to hear, and if so, why? Paul Paul Phillips, Economics, University of Manitoba
Re: Estimating the surplus\Doug's question\Fred's comments
Jim Devine writes: the productivity of capital is sloppy writing. It refers to the ratio of output to fixed capital equipment (the inverse of some measures of the organic composition of capital). But, at least in Marxian lingo, fixed capital isn't productive. However, it can be indirectly productive, i.e., raising the productivity of productive labor. Thanks a lot :-) Actually since I was citing the data from Dumenil Levy in their RRPE article, I stuck to THEIR term. It raised my eyebrows as well, but they are not sloppy people (being French?) and I suspect they are going somewhere with this so I will let it stand - for now. But it is good you clarified it. More seriously, thanks for taking on Mike's question. Paul
Comprehensive Revision of NIPA
The BEA just released the first comprehensive revision of the NIPA in 4 years. In addition to updating the reference year from 1996 to 2000 there were some important methodological changes (along with the usual statistical updating). http://www.bea.gov/bea/newsrel/2003cr_newsrelease.htm 1) Such an update might have been expected to produce a major downward revision in the GDP growth rate of the last year or so. The news is that it did not (perhaps because of the introduction of chain-weighted indexes in 1996). The methodological changes led to a modest downward revision but the new statistical data led to an upward revision. So Bush can breath a bit easier: The pace of the current expansion has been revised down slightly; from the third quarter of 2001 to the second quarter of 2003, the average growth rate of real GDP is revised from 2.7 percent to 2.6 percent. But note: Corporate profits is revised up substantially for 2002; profits of domestic industries as a percentage of gross domestic income is revised up from 6.3 percent to 7.1 percent. 2) For those who love data, there are also many methodological changes (some have said that they lean towards more neo-classical interpretations), revised formats of tables and other novelties. Paul
Re: Estimating the surplus\Doug's question
Doug writes: I'd make the same argument using the real wage and the wage and profit shares of national income plus an analysis of the balance of class power. I saw that the profit rate, by my vulgar measure, fell during the 1970s and rose during the 1980s and 1990s. What happened? Unions were broken, the welfare state pared back, and a deep recession from 1980-82 scared the hell out of the working class. The profit rate fell sharply from 1997-2001 because labor markets were tight; Alan Greenspan was channelling Kalecki, saying that the pool of available workers was running dry, invoking the threat of wage inflation. As you say, tranlating the bourgeois stats into Marxian categories takes lots of work; why spend all that time crunching numbers when you could better spend it by thinking politically? Doug Yes. And this is a fine argument - on the labor/capital shares side of the profit rate issue (for political impact you might include the labor productivity increase being lower that the real wage increase). BUT I have been trying to point out that it does leaves out the capital side of the issue (were there any increases in capital productivity, capital price effects, etc?) - and this costs you politically (and at key moments can get things wrong). What do you lose, politically, by using ONLY the kind of argument you have laid out - which is more conventional, and hence, for now, more accessible and acceptable? Let me try it again, starting with Wolff's presentation (which might be a bit closer to you). You do lose LOTS politically in the terms of the contrast Wolff gives between the current era and the post-WWII era. The two eras differ not just just the contrast in fairness (a big enough issue) but the contrast in terms of actual increases in the productivity of capital. Wolff shows the Reagan-Clinton era as not just treating the average person badly, but for no real *sustainable* gain in the underlying engine of growth. When the IMF types call for temporary austerity in the name of future growth (as they will), with the Classical/Marxist numbers on the capital side one readily has the answer: this sacrifice is being frittered away in the current economic regime. In contrast, using just the conventional type numbers the Clinton people can claim that the process you describe was worth it because it led to sustainable growth (or at least was separate from that growth), and was just an income distribution problem that is now correctable. What do you lose intellectually that could lead to a wrong analysis that would have strategic political implications? Let's start with Dumenil Levy's numbers which mitigate *a little* the picture painted by Wolff. In their RRPE article they show *a bit* of an increase in capital productivity (don't get too excited, Clinton-istas). In a presentation last week at the New School [I'll try to post on this separately] Dumenil was overall pessimistic in his prognosis (for other reasons not relevant here) but emphasized in his conclusions that this mini-trend might be a loophole for the U.S. economy. Other people in the Classical/Marxist tradition (I believe Shaikh, but we will see when his book comes out) have felt yet more strongly about the possibilities of a coming upturn and feel this helps explain some of the current buoyancy. The point is one can't say that there will NEVER be a case of labor restraint contributing to accumulation (e.g. post war Japan) although the cases may be rare. It is very difficult to catch turning points and one has to avoid cry wolf - but this requires having the numbers calculated in a way that exposes these trends and counter-trends. The short-run Keynesian\Kaleckian issues are important. The long-run Classical\Marxist ones are too, especially at moments of changes in 'regime' - when long standing constants change. The point is not that one side is deeper. Life is both short and long run. They interact in some ways that contradict each other (a wage increase raises aggregate demand and so could raise profits, but the wage increase also raises costs and could lower profits) and some ways that reinforce each other. While the conventional categories sort of give you the Keynesian picture (Jim rightly corrected me when I slurred them as neo-classical), for now you have to go digging to get the Classical picture. But I think you will find it worth doing. Paul
Productive/Unproductive Labour
For what it is worth, I think there is some useful information gained by making the distinction between productive and unproductive labour (as defined by Jim) even though it is impossible to measure the distinction with any degree of accuracy. I did some calculations for the postwar period up to the 1980s looking at the rate of profit (conventionally defined a la Doug) and the ratio of production workers to white collar workers in Canada. My hypothesis was that the rising productivity and capital accumulation in production initially produced high levels of profits but as capacity rose (with demand constraints) and pressures on raw material and energy prices rose, there was a tendency of firms to increase their 'unproductive staffs and expenditures' (e.g. advertising) in order to increase (or at worst maintain) market shares in order, in turn, to attempt to maintain profits. At the same time, wages of productive workers were rising such that the increased productivity of productive workers was unable to offset the rising cost of unproductive workers such that realized profits fell. In the subsequent period, the rise of productivity of unproductive workers due to computer technology and the subsequent stabilization/fall in some forms of unproductive labour (and wage stagnation?) while productivity of productive workers has risen faster than (stagnant) wages has allowed profits to rise, at least until the more recent recession. The conventional data, using white collar employees as a proxy for unproductive labour, is consistent with the hypothesis through the time period I looked at. Paul Phillips, Economics, University of Manitoba
Re: Productive/Unproductive Labour
Carrol Cox wrote: The distinction between productive/unproductive (and perhaps reproductive) labor then can't either be accepted or rejected on the basis of economic statistics. ? This was not the point I was trying to make -- indeed the opposite. What I was saying is that the theoretical/philosophical distinction between productive and unproductive labour is a useful tool in understanding recent economic trends. The fact that the empirical data seems to support Marx's distinction is, however, welcome. Paul Phillips
Re: Estimating the surplus\Doug's question
Doug writes: ...I'm talking about things like NIPA profit measures. Why is it so important to translate those into allegedly Marxian categories. Every quarter when the flow of funds numbers come out, I divide NIPA profits by the FoF measure of the capital stock and get a profit rate for nonfinancial corps. Well, you just DID translate these into Classical and Marxian categories. Are you speaking prose and don't even know it ? (naw, we know you know this stuff). Of course if you are writing for an academic audience things tend to get to more refined. For example (and as I know you know very well) the profit numbers can include/exclude things that do genuinely need adjustment (the amount a self-employed person makes that is really in lieu of their own salary; a non-corporate landlord's rental income on residential housing, but not the NIPA's imputed rental income on owner-occupied housing). Similar adjustments are needed on the definition of capital (lots). Is it so important to make these adjustments - and how far should we go? Maybe it depends on the audience and purpose. In some contexts, such as trying to convince people steeped in other traditions to at least look at these other categories in more detail, I would be perfectly happy with the way you do it. But sometimes, particularly for research, the more extended recalculation is worth it - if only to rule out the adjustments as affecting the conclusions. I also think sometimes it is worth the level of detail as a reference and so we keep a clear idea of the definitions for when they are used in other contexts not involving the macroeconomy (and someday we will be in a position to change the way these categories are calculated!). To me the problem is not so much that there is too much effort at the obscure academic end (and it seems that for the last 6 years there are only 2 small papers existent that update the Marxist/Classical data ! so how much are we talking about?). Rather, there is practically nothing written that translates this work into applied political material for a more mass audience or to policy analysis (there is the fine chapter on finance in After the New Economy but that's a different context). Without this applied work relating to creating a mass movement and social change, the authors and readers have to use their imagination and vision to evaluate the usefulness of particular research points as IF they were to be then picked up in a mass or applied context. It tells me that profitability peaked in 1966, fell into 1982, rose into 1997, fell into 2001, and has since recovered. What does all the translation mumbo jumbo add to this analysis? If it's that too much K is tied up in unproductive pursuits, why the recovery from 1982-97? Ahhh. So what you really object to is not translating NIPA to Marxian, but the productive\unproductive work. Why didn't you say so? ;- ) Well, you heard Jim's pov on this. It is a very particular subset of Marxian work and does require an awful lot of work. 2) BUT to be a mechanic you need to know what's under the hood. e.g. is the profit rate rising because labor has been squeezed or because of something going on in the physical capital (see #3)? A marxist will measure the labor squeeze in terms of 'surplus value' but any other measure would do (up to this point only!) And, say, unit labor costs and other conventional measures can't tell you this? What is the productivity revolution but a rise in the rate of exploitation? A fall in the unit labor costs doesn't tell whether it was due to a merely lowering the wage or something that happened on the capital productivity side. Two very different social phenomena, no? . One CAN string along a series of short period analysis and for a while it is a practical solution for short term policy proposals (some Keynsians, like Paul Davidson, would say forever). But when deep fundamentals change ... aren't YOU going to want these recalculations? Gimme an example of what's changed - one that I couldn't come up with using conventional economic stats. Doug OK, I'll try, but please excuse the simplicity given the need for brevity. 1) Howard Dean announces that if elected he will exactly reproduce the Clinton era policies [never mind that he can't] but will re-distribute the growth back to working people WHILE achieving the same level of accumulation. 2) There is nothing in the numbers as categorized conventionally that immediately says this can't be done. Indeed, many post-Keynesians, using the conventional numbers, will say it can be done. 3) But Ed Wolff, using the numbers as compiled in his article about which I posted, says: [of course he actually doesn't, but I think this is faithful to the spirit of his article] No way. My numbers show that ALL of the profit rise, and hence the vast part of the capital accumulation (a little fudge on my part), was due precisely in the shift in shares from labor to capital
Estimating the surplus\Doug's question\Jurriaan's response
Thanks for the feedback most of which I agree with. I hope I did not imply that the rate of profit is the sole thing going on that matters. As you point out other factors such as turnover rate and monetary factors are very important. At 02:11 PM 12/5/2003 +0100, you wrote: Its not just Marxist but a Marxist Classical concept: investment drives the economy; expectation of future profit drives investment; curren profit rates *help* drive those expectations (all this in the 'long run'). Hence the big focus on profit rates. You are partly correct I think, but partly not. (1) For Karl Marx, the rate of profit (RP) is not just a jerk-off; and it is meaningless to talk about it without the mass/volume of profit (MP) (2) the economic significance of RP MP cannot be seen separately from the rate of reinvestment of realised surplus-value (the rate of accumulation) by type of activity, the turnover-time of capital, and the behaviour of a monetary currency (3) for Marx. private profit income is an appropriation which represents a fraction of the social surplus product - it is a yield on capital ownership, and the ownership of money capital, beyond social reserves, constitutes a claim on the social surplus product. (4) Consequently, in Marxian theory, profit constitutes the income of the bourgeoisie as a social class, apart from interest rent, and not just an accumulation/investment fund. (5) How exactly you measure the yield on capital invested may have an apologetic or justificatory function which prevents the real economic relationship from being understood.
Re: Estimating the surplus - Turkey (Cem Somel)
Doug writes: Trying to quantify it [surplus value] reminds me of Hayek's Prices Production. Doug Could you elaborate on the analogy? Are you saying that quantifying surplus value (or rather a workable proxy, in the same way the NIPA accounts are workable proxies) is too difficult empirically or is it theoretically illogical ? Thanks Paul
Re: Estimating the surplus\Doug's question
Sorry, Doug, but too many conversations are going on at the same time on this. I think Tonak was making a different point. But, here's my foolish quick late night try (foolish since this is stuff you know well and I am just I taking the bait to find out to which element of these breakdowns you SPECIFICALLY object). No doubt to the amusement of the list at my expense :)- 1) Its not just Marxist but a Marxist Classical concept: investment drives the economy; expectation of future profit drives investment; current profit rates *help* drive those expectations (all this in the 'long run'). Hence the big focus on profit rates. Bourgeois categories (as you put it) just don't have the same role for profit (to be picky, they haven't got profit at all in the 'perfect market' model). Depending on the flavor of neoclassical economics the long run is driven by (disembodied) technical change/population growth and blah blah. 2) BUT to be a mechanic you need to know what's under the hood. e.g. is the profit rate rising because labor has been squeezed or because of something going on in the physical capital (see #3)? A marxist will measure the labor squeeze in terms of 'surplus value' but any other measure would do (up to this point only!) [digression: Tonak's point was that the other authors were measuring something totally different called 'surplus' which Tonak/Shaikh say is a non-marxist concept, closer maybe to some Ricardian traditions, and a normative, subjective concept about what it should *really* take to produce something. It was this type of calculation that I was asking Tonak about.] So far this is still big tent: Classicals and Marxists together need to recalculate the standard format of the data. Neo-Classicals don't think in terms of labor-capital tradeoffs and don't seek to separate the components of the profit rate into labor vs capital and since N.C.s predominate the NIPA doesn't calculate in ways others can use. So one has to recalculate and re-categorize the date. [I won't touch the 'bourgeois data' reference. To me, there is data - calculated and categorized in accordance different frameworks, more or less. Or, I go pomo: There is no data in the world.] 3) But then you want to figure out what exactly is going on in the capital side of the equation. So you have to breakdown price effects, productivity (technological improvement), and the simple arithmetical lowering you get by just adding more of the same capital without technological improvement (the OCC issue). Some (neo-marxists?), like the Wolfe article I posted, don't see much in the OCC. But they still need to recalculate the NIPA data to get at all these other issues. [BTW, does anyone know if any serious Marxist EVER did say OCC = FROP = system collapses or was that just a straw man we were taught? Was it always clear that FROP was a tendency that weighs upon other, upward, pushes going on at the same time leading to a dynamic system in struggle? In any event, the point is that again one wants to measure both the tendency and the counter flows to see how the ebb and flow is going and conventional NIPA can't do it.] 4) All of this is for long period analysis. For short period analysis I think most Marxists and Classicals I would be satisfied with *some* version of 'pure' Keyensian (not neo-classical/Keynsian analysis). For this type of analysis the conventional NIPA data works, more or less (even neo-classicals do some customizing though). Am I right that, so far, you have tended to do more of the short period analysis (and damn well) and so maybe haven't felt the need to recalculate the NIPA categories? One CAN string along a series of short period analysis and for a while it is a practical solution for short term policy proposals (some Keynsians, like Paul Davidson, would say forever). But when deep fundamentals change ... aren't YOU going to want these recalculations? Paul At 04:14 PM 12/4/2003 -0500, you wrote: E. Ahmet Tonak wrote: Assuming that we're still interested in changing capitalism, I am. I would argue that Marx's categories help us to understand how the imperatives of profitability and capitalist growth operate, in theory and in practice. That is sufficiently large enough payoff (intellectual or otherwise) for me. As I've said before, and never been convinced to the contrary, I don't see how the intelligent use of bourgeois stats and categories doesn't accomplish the same task. Unless you're trying to make the argument that rising OCC = FROP = system collapses as profits go to 0. But no one makes that anymore, right? Doug
Estimating the surplus - Turkey (Cem Somel)
E. Ahmet Tonak wrote: I am very glad that my good friend Cem was able to share his important and meticulous work with the English-speaking world. His article has so many insights regarding policy shifts in Turkey and their implications for Turkish economy at large. Having said that, I should point out that because his article is based on the notion of economic surplus rather than surplus-value many of our earlier criticisms of those empirical works based on economic surplus are applicable here as well (you may review those in ShaikhTonak, 1994:202-209). Specifically and in order to point out how dramatic the empirical sense one may get based on these two different approaches I'd like to compare some preliminary estimates of the rate of surplus value (calculated by my student Kaan Parmaksiz based on ShaikhTonak methodology in 1998) with rate of economic surplus as reported in Cem's piece (Table 1). The rates start with approximately the same 1981 value, 1.29 and 1.20 for the rate of surplus value and that of economic surplus respectively. But, that point on until 1988 they behave very differently, i.e. the rate of surplus value increases by 103% while the rate of economic surplus decreases by 19%! This is the period which was characterized by Yeldan (1995) as surplus extraction through wage suppression. ... The interesting thing is that the dramatic difference in the behavior of the above-mentioned rates also existed between our US (s/v) and Stanfield's rate of economic surplus: during 1965-69 our rate declined by 4.2% as his increased by 9.7%! This sounds interesting. Is it possible to give a bit more detail? For example can one generalize about the major categories or sectors accounting for the divergence (I realize this is hard given two different theoretical approaches)? Paul
Re: US: manufacturing
Eubulides wrote: In the past two decades, manufacturing productivity grew at double the ace of overall productivity growth. . . . This increase in productivity has enabled the economy to grow faster without inflation and has been passed through to workers in the form of higher [inflation-adjusted] wages, says a report published by the Manufacturing Institute, an arm of the NAM. I read a recent report on Canada that said its upsurge in productivity was almost entirely the result of a shutdown (and job export) of labour intensive, low productivity firms rather than any improvement in average productivity. i.e. the average productivity rose because of the elimination of low productivity firms while higher productivity firms had relatively stagnant productivity. To what extent is this true of the US? Paul Phillips, Economics, University of Manitoba
Rates of profit: Where goes the US economy?
Fred (and all others interested in commenting), Thanks very much for a useful post. It also gave me a chance to revisit your '97 RRPE article which gives valuable perspective (I mistakenly recalled it only analyzed data to the end of the '80s) and see that you find that the fundementals have not changed much since then. If it is any help to the list I have tried to summarize how (in my view) you, Dumenil Levy, and Wolff compare on the assessment of the current rate of profit. [Excuse the simplistic abbreviations of complex issues and arguments. I also realize the large limitations here, and that authors are using mutually incompatible data and categories to tell their 'story' (and that these choices greatly influence the outcome). But, to the extent possible on a mail list, it is a comparison of those 'stories' that I am trying to promote for discussion among us. I also hope to help mobilizing an awareness and desire for greater research of these issues.] 1) Similarities I think everyone agrees that at least since around the early '80s there has been a limited up tick in the profit rate (and you usefully warn us again that the up tick is very limited). In fact, despite the disparate approaches, Wolff, Dumenil Levy, and yourself all broadly concur - profit rates are back to about where they were in the early '70s. I also think everyone agrees that at least a big part of this increase is due to a shift in shares from labour to capital (increase in the rate of surplus value). That leaves the next question: are there also any OTHER factors that have contributed to this weak rise in the profit rate? Is something additional going on 'under the hood'? If so, this could have important consequences both for the description we give and the strategy decisions of a movement. 2) Differences A. Wolff answers no - there is a shift from labour to capital and there are no other big factors. But, as you have pointed out in comments on Wolff's previous work, he has been an exponent of wage-profit squeezes (a bit like the late David Gordon) and never found much significance to the composition of capital (if I recall right, this was in your AER comment on Wolff, and in the Introduction to the book you co-edited with him, but also perhaps a logical extension of your comments on Weisskopf's work in the '80s? Very good work BTW.). B. Dumenil and Levy (using data to 2000) answer, partly yes. Again, we are only talking of a limited rise in the rate of profit - but they do refer to a period of recovery with profit levels comparable to 1970 for the business sector overall and mid '70s for most select categories (although this is still only 60% of the post-war golden age average RoP). In addition to the shift in shares from labour to capital they DO find some of the increase in RoP due to the composition of capital (p.455 for a summary). D L trace this to an increase in the productivity of capital in the 'non-capital intensive corporate sector' that then shows up in the non-corporate business sector as a reduction in the relative price of capital (pp.456-7, the conclusions, and the appendix devoted to this question). In the past, DL have tended to find that the composition of capital is significant and in long wave patterns, so this new work goes along the same lines. C. Moseley (see post below) also answers partly yes, something more than the shift in shares from labour to capital is going on: - that there is an overarching drag on profits, i.e. the ongoing rise in non-productive. While thisrise in non-productive labor has slowed, it continues and so long as it does so, long term prospects for profits are grim. - that there is only a small change in the composition of capital. - that the current weak up tick is largely due to the change in shares favoring capital (and brace for more of the same). Hope this helps. Paul Fred Moseley writes: So I would say that the US economy is still not out of the woods so far as the rate of profit is concerned. Therefore, in terms of the strategic importance of our assessment of the medium-term direction of the US economy that you mention, I think workers will continue to face strong persistent attempts to restore the rate of profit - by wage cuts, pension cuts, speed-up, moving to low-wage areas around the world, etc.. In other words, the attacks on the living and working standards of US workers in recent decades is not over and will continue. I think that is the nature of the challenge that we face. According to Marx's theory, one of the main reasons for the prior decline of the rate of profit was a very significant increase in the ratio of unproductive labor to productive labor (in addition to an increase in the composition of capital). Furthermore, according to Marx's theory, the main reason why the rate of profit has only partially recovered is that the ratio
Rates of profit: a recent article
A useful article on U.S. profit rates, from a marxian perspective, has been published recently by Ed Wolff (What's behind the rise in profitability in the US in the 1980's and 1990's? in the July issue of the Cambridge Journal of Economics vol 27; write me off list for those needing an e-version). 1) To my knowledge, this is only the second (!) published article that provides a marxian perspective on the 'big picture' of the US economy\profit rates since the 1950's AND assesses the last 10-20 years in that context. In January, we briefly discussed this issue and I drew attention to the other article by Dumenil and Levy in the RRPE. There is also the (unpublished?) useful pamphlet by Jim Devine ( http://bellarmine.lmu.edu/~jdevine/talks/newOhio.htm ) and very good earlier work by Shaikh and Tonak, Mosely, and a very few others. In fact, many of the key authors, on this key subject, subscribe to Pen-l. Jim Devine is thanked as an ASSA commentator to the paper (comments Jim?). Anyone aware of any other recent articles? 2) Three points struck me about the Wolff article: - Using somewhat different methods than D L, the Wolff article confirms the view of early '80s to '97 as a period of rising rate of profit - weak and perhaps atypical of other periods but still rising. Wolff is cautious not to draw large conclusions (as were D L), but his breakdown of the factors that contributed to the profit rise are long term and 'structural' in nature. It seems to me that a context of rising profits (unless you believe it is over) will have strategic importance to our assessments of the medium term directions of the US economy - and the types of challenges we will face. - Wolff also concurs with D L that one major cause of the profit rise was a shift in shares away from labor and to profit. [Fred Mosely may have some comments about this.] Both articles attribute labor's loss to real wage gains lagging behind productivity gains. Wolff points out that consumer good prices rose faster than the GDI inflator; without this effect profit gains would have been wiped out. He says this may reflect larger productivity gains in the capital goods and export goods sector. - Wolff emphasizes the impact of changes in the sectoral composition of production and employment. He tracks the shifts from sectors of high Capital\Labor ratios and high Organic Compositions of Capital to sectors of low ratios (moving to more profitable sectors). For Wolf, this shift in employment to labor intensive sectors is the other main cause of the rise in the profit rate in the current period. Because of shifts towards investing in sectors with low organic composition of capital (and also because of increases in labor productivity in producing capital, and recently the relative cheapening of capital), Wolff does not find a significant change in the organic composition of capital for the economy as a whole over the last 50 years (i.e. no rising rate of OCC; tendency for a falling rate of profit). 3) To my recollection, the D L article and the Wolf article each tend to track with the orientation of their previous work. D L tend towards finding strong effects at the level of productivity of capital and the OCC. This also lends itself to long wave theory. Wolf has tended more towards finding profit squeeze effects (now capital squeeze ?) and has tended to discount any tendency towards rising OCC's\falling rates of profit (that then meet their offsetting tendencies). Whichever one prefers, I found it useful to read both articles as companions. I would be grateful to hear comments or insight for anyone on the list. Paul
Re: Karl Marx on the role of public debt and taxation in primitive accumulation - an insufficiently noticed passage
I wrote a fairly substantial paper on the role of public finance in primitive accumulation with respect to Canada and the finance of the First World War. First, Marx is quite explicit on the role of war finance in spurring primitive accumulation via debt finance and subsequent non-progressive taxation. For example, in Canada the war was financed by printing money causing rapid inflation and profit inflation which profits were used to buy government bonds which paid handsome interest financed by indirect (sales) taxation. Thus, a transfer from the general public to the wealth holders which served to consolidate monopoly capitalism. My paper documented and quantified the process. Unfortunately, the journals I submitted the article to turned it down, largely from the readers comments, because they did not understand (or accept) the concept of 'primitive accumulation'. Ah well. Paul Phillips, Economics, University of Manitoba Jurriaan Bendien wrote: How do we think in the present context, of the "system of national debts", the "modern system of taxation", and the "international credit system", "which often conceals one of the sources of primitive accumulation in this or that people."
Re: Karl Marx on the role of public debt and taxation in primitive accumulation - an insufficiently noticed passage
Jurriaan, Do you want me to e-mail you a copy? (as a Word Perfect attachment) Paul Jurriaan Bendien wrote: That is pretty amazing. I supposein America ithas to be sexy, yet civilised,and use the right words. In the USA, I have noticed you always have to keep it verysimple, especiallyif you are talking about anything bigger than an individual, because otherwise they just do not understand it. This is one factor which explainswhy the US Government gets away with crimeand mass murder, mostAmericans do not understand it, it is too difficult for them, all they can think of issex and Jesus Christ andstuff like that, even the American Presidents are like that. I think most American do not feel any social responsibility for corporate crime and government crime, it's not their problem as far as they are concerned. But I would quite like to read your paper anyhow. Actually,I did not write this bit: do we think in the present context, of the "system of national debts", the "modern system of taxation", and the "international credit system", "which often conceals one of the sources of primitive accumulation in this or that people." Chris Burford wrote that. I just posted the bit from Marx's Capital, it seemed relevant since the Christian genocide-for-profit thingis happening again. I have often had this fantasy of being a scholar againand writing more stuff, but I remember how academics and public servantsripped me off, and basically, when I visit a university, I do not like the smell, and I feel relieved when I am out of there again. I am more an extra-mural type really. Jurriaan
Re: cronysm? What cronyism?
This is a joke, no? Paul Phillips Eubulides wrote: washingtonpost.com No 'Cronyism' in Iraq By Steven Kelman Thursday, November 6, 2003; Page A33 There has been a series of allegations and innuendos recently to the effect that government contracts for work in Iraq and Afghanistan are being awarded in an atmosphere redolent with the stench of political favoritism and cronyism, to use the description in a report put out by the Center for Public Integrity on campaign contributions by companies doing work in those two countries. One would be hard-pressed to discover anyone with a working knowledge of how federal contracts are awarded -- whether a career civil servant working on procurement or an independent academic expert -- who doesn't regard these allegations as being somewhere between highly improbable and utterly absurd. The premise of the accusations is completely contrary to the way government contracting works, both in theory and in practice. Most contract award decisions are made by career civil servants, with no involvement by political appointees or elected officials. In some agencies, the source selection official (final decision-maker) on large contracts may be a political appointee, but such decisions are preceded by such a torrent of evaluation and other backup material prepared by career civil servants that it would be difficult to change a decision from the one indicated by the career employees' evaluation. Having served as a senior procurement policymaker in the Clinton administration, I found these charges (for which no direct evidence has been provided) implausible. To assure myself I wasn't being naive, I asked two colleagues, each with 25 years-plus experience as career civil servants in contracting (and both now out of government), whether they ever ran into situations where a political appointee tried to get work awarded to a political supporter or crony. Never did any senior official put pressure on me to give a contract to a particular firm, answered one. The other said: This did happen to me once in the early '70s. The net effect, as could be expected, was that this 'friend' lost any chance of winning fair and square. In other words, the system recoiled and prevented this firm from even being considered. Certainly government sometimes makes poor contracting decisions, but they're generally because of sloppiness or other human failings, not political interference. Many people are also under the impression that contractors take the government to the cleaners. In fact, government keeps a watchful eye on contractor profits -- and government work has low profit margins compared with the commercial work the same companies perform. Look at the annual reports of information technology companies with extensive government and nongovernment business, such as EDS Corp. or Computer Sciences Corp. You will see that margins for their government customers are regularly below those for commercial ones. As for the much-maligned Halliburton, a few days ago the company disclosed, as part of its third-quarter earnings report, operating income from its Iraq contracts of $34 million on revenue of $900 million -- a return on sales of 3.7 percent, hardly the stuff of plunder. It is legitimate to ask why these contractors gave money to political campaigns if not to influence contract awards. First, of course, companies have interests in numerous political battles whose outcomes are determined by elected officials, battles involving tax, trade and regulatory and economic policy -- and having nothing to do with contract awards. Even if General Electric (the largest contributor on the Center for Public Integrity's list) had no government contracts -- and in fact, government work is only a small fraction of GE's business -- it would have ample reason to influence congressional or presidential decisions. Second, though campaign contributions have no effect on decisions about who gets a contract, decisions about whether to appropriate money to one project as opposed to another are made by elected officials and influenced by political appointees, and these can affect the prospects of companies that already hold contracts or are well-positioned to win them, in areas that the appropriations fund. So contractors working for the U.S. Education Department's direct-loan program for college students indeed lobby against the program's being eliminated, and contractors working on the Joint Strike Fighter lobby to seek more funds for that plane. The whiff of scandal manufactured around contracting for Iraq obviously has been part of the political battle against the administration's policies there (by the way, I count myself as rather unsympathetic to these policies). But this political campaign has created extensive collateral damage. It undermines public trust in public institutions, for reasons that have no basis in fact. It insults the career civil servants who run our procurement system. Perhaps most tragically
Social Democrats Win in Saskatchewan
This was entirely unexpected as the ultraright was widely expected to win. (The 'Saskatchewan' party was a kind of amalgam of the discredited -- due to corruption -- Conservative Party and the Canadian Alliance Party which in Canada is known as the Canadian Republican Party -- an alliance of Christian fundamentalism with far right, pro-American integration, neoliberals and corporate capital.) The NDP is hardly radical but, at its core, remains reformist and seems to be in the process of recusitation and leaning to the left -- perhaps, more important, it is gaining support from young people and giving hope to the environmental movement. Coming, as I do, from Manitoba with a second NDP andministration, I realize how much better life is under the social democrats, as conservative as they may be, as it is under the neoliberals as I am now in British Columbia. (In Conservative/neoliberal country, being old becomes a crime. It is disgusting.) Small victories, but sweet nevertheless. Paul Phillips, Economics, University of Manitoba NDP majority in Saskatchewan Last Updated Thu, 06 Nov 2003 0:24:15 REGINA - Saskatchewan voters have returned NDP Premier Lorne Calvert to power in an election thriller, giving the government a fourth straight term. "They said it couldn't be donewe did it!" said a jubilant Calvert. The New Democrats won 30 of the 58 seats in the legislature. The Saskatchewan Party won 28, while the Liberals were shut out. Lorne Calvert Thirteen cabinet ministers were re-elected, as well as leader Calvert. The NDP went up about seven per cent in the popular vote. The NDP showed early gains by taking key rural seats from the Saskatchewan Party, credited to a concentrated late-campaign push. "The momentum changed, the momentum came to New Democrats, the momentum is now with Saskatchewan," said Calvert. People say they want change and have entrusted our party to lead that change, said the premier. "We will build a better Saskatchewan for Saskatchewan families. That is our pledge," he said. Calvert campaigned on a promise not to sell Crown corporations, boost health care, continue a series of small tax cuts and reduce student loan debt. Elwin Hermanson The Saskatchewan Party made inroads with urban voters by taking three seats in Saskatoon. The Saskatchewan Party had advocated corporate tax cuts, a review of Crown corporations and a work-for-welfare program. Saskatchewan Party leader Elwin Hermanson won his own riding of Rosetown-Elrose, with two-thirds of the popular vote. "Obviously we're disappointed," said Hermanson. "Let's remember, friends, that the Saskatchewan Party is still a young party," he said "we don't need to hang our head." Campaign workers, supporters, and voters can feel proud, he said. Calling it a "beachead," Hermanson commented on the party's success in winning four urban seats, and especially noted its three victories in Saskatoon. "We have been a good opposition in the past and we intend to be even a better opposition in the future." He also commented on the collapse of the Liberal party, saying it was obvious that Liberal support moved to the NDP and not the Saskatchewan Party. The Liberal party was shut out of the legislature, including leader David Karwacki. "This is not the result we were hoping for," said Karwacki. Karwacki, who had said he would not take part in a negative campaign, thanked Liberals for running a campaign "with dignity." Voter turnout was 70 per cent, up eight per cent from the record low turnout in 1999. Written by CBC News Online staff
election results
I didn't give the actual results. Here they are from the Globe and Mail which headlined its article something like "NDP squeeze by in Saskatchewan" If Bush had anything like this support ... Paul Phillips Economics, University of Manitoba (BA, MA, University of Saskatchewan!) Party Votes % of vote Leading Elected Total New Democratic Party (Saskatchewan) 189742 44.6% 0 30 30 Saskatchewan Party 167348 39.3% 0 28 28 Saskatchewan Liberal Association 60256 14.2% 0 0 0 Western Independence Party 2781 0.7% 0 0 0 New Green Alliance 2504 0.6% 0 0 0 Independent (Saskatchewan) 1988 0.5% 0 0 0 Progressive Conservative Party of Saskatchewan 666 0.2% 0 0
Re: The concept of methodological individualism
For an in-depth critique of neoclassic (and other) streams of thought from
an institutionalist position, see Geof frey Hodgson's, "How Economics Forgot
History."
Paul Phillips,
Economics,
University of Manitoba
Mario Jos de Lima wrote:
I agree to your points of view. An interesting aspect to be considered on
the british institutionalists, in contrast of the United States source
(Williamson, North, etc.), is its critical to the neoclassic thought and
effort to construct a dialogue with Marx.
- Original Message -
From: "Devine, James" [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Sent: Monday, November 03, 2003 2:22 PM
Subject: Re: The concept of methodological individualism
alas, I haven't read it. (He did have a very useful article in the JOURNAL
OF ECONOMIC LITERATURE, vol. 36, no. 1, 1998.) I do think that
institutionalist economics is important and has a lot to add. Also, I
interpret Marx as being an institutionalist. However, unlike some
institutionalists, he saw capitalism itself as an institution, i.e., an
organization that both was created by people (though not exactly as they
pleased) and creates people's ideologies, preferences, etc.
Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
-Original Message-
From: Mario Jos de Lima [mailto:[EMAIL PROTECTED]]
Sent: Monday, November 03, 2003 7:42 AM
To: [EMAIL PROTECTED]
Subject: Re: [PEN-L] The concept of methodological individualism
Dear Devine / what you think about - Geoffrey Hodgson - Economics and
Institutions - a manifesto for a modern institutional economics?
- Original Message -
From: "Devine, James" [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Sent: Monday, November 03, 2003 1:06 PM
Subject: Re: The concept of methodological individualism
alternatively, we could define "methodological
individualism" relative to
Levins Lewontin's description of the dialectical methodology:
(1) they see the different heterogeneous parts as determining the
character of the whole ("parts make whole").
(2) they also see a feed-back from the whole, which determines the
character of the parts ("whole makes parts").
Methodological individualism involves a willful ignorance
of the second
"moment," i.e., the way in which (say) the societal structure shapes,
limits, and actually determines our consciousness, tastes,
etc. (Given this
partial view, "All social phenomena can be explained in terms
of individual
persons and their states without reference to social facts or
states." )
btw, the interaction between (1) and (2) could (in theory)
form some sort
of static equilibrium, but for LL it's a dynamic process.
For those who enjoy methodological individualism, I
recommend Gandolfi,
Gandolfi, and Barash's ECONOMICS AS AN EVOLUTIONARY SCIENCE, where
Becker-style methodological individualism is married to the
selfish gene.
Jim
-Original Message-
From: andie nachgeborenen [mailto:[EMAIL PROTECTED]]
Sent: Sun 11/2/2003 7:48 PM
To: [EMAIL PROTECTED]
Cc:
Subject: Re: [PEN-L] The concept of corruption
There are at least two distinct senses of the term
"methodological individualism":
(1) All social phenomena can be explained in terms of
individual persons and their states without reference
to social facts or states (the nonreductive sense),
and
(2) All social phenomena can be explained _only_ in
terms of individual persons and their states without
reference to social facts or states (the reductive
sense), i.e., there are no explanatory social facts or
properties.
The first view is probabaly false and probaly
incoherent because the mental states of individuals
are social states at least in part. But it's a
harmless view if it is taken to say there is also
social analysis. The second view is not only false and
meaningless, but pernicious, and incompatible with
historical materialism.
I wrote a paper on this a decade ago, Metaphysical
Individualism and Functional Explanation, Phil Science
(1993).
jks
--- Eubulides [EMAIL PROTECTED] wrote:
- Original Message -
From: "joanna bujes" [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Sent: Sunday, November 02, 2003 5:31 PM
Subject: Re: [PEN-L] The concept of corruption
Corruption is defined as "the abuse of public
power for private gain."
snip
The definition seems pretty good to me. What
Sharon and the Future of Israel
An earlier version of this article appears on www.swans.com. Paul Phillips Economics, University of Manitoba For Jews the Real Worry should be Sharon not Arafat by John Ryan The recently released text of the Geneva Accord seems about as good a deal as could be worked out for a Two-State Solution, unless its already too late for any such venture. Till now almost everything that had been put forward was an agreement to go on trying to agree - which led to disillusionment and nothing of lasting substance. The new proposal has dealt with all the difficult points - and both the Israeli and Palestinian participants have agreed to it. If Clinton appears at the official signing in Geneva in early November, as was reported, the proposal may not be so easy to dismiss. Secret negotiations, held mainly in Geneva and with the help of Swiss diplomats, have proceeded for more than two years between Israeli and Palestinian delegations, consisting largely of left-wing former and current politicians (including former cabinet ministers from both sides), retired Israeli military officers, writers, and academics. Contrary to the prevailing Israeli lament that there is no one to talk to, significant break-through negotiations have brought about a 50-page agreement on all major issues. Revelations of the highlights of the accord on October 12, 2003 brought forth mixed reactions -- from cautious optimism to outright fury. The Palestinian Authority appears to support the initiative, while Hamas and Islamic Jihad are expected to reject it. Although an early poll in Israel shows about 40 per cent support, the Sharon government has vigorously denounced it. Sharon has simply proclaimed that no agreement is possible if Arafat is involved, saying, This man is the greatest obstacle to peace. Therefore, Israel has committed to removing him from the political arena. Why this fixation on Arafat as an insurmountable problem? Arafat is a dithering old fool - corrupt and nave - filled with his own sense of self-importance. Hes now almost totally ineffectual, in extremely poor health, and may soon be off the scene from natural causes. Meantime, its astonishing that for Israel and most Jews in general, the major concern is about Arafat, to the exclusion of almost all other possibilities, including this new accord. From my perspective as a longtime observer of the Israel/Palestine saga, the real cause of worry for Israeli people, and all diaspora Jews, should be Sharon and his regime. For one thing, for what its worth, Arafat has apparently blessed the initiative. On the other hand, Sharon is apoplectic about it, calling it high treason, and Barak dismisses it as delusional. A Knesset member and leader of an Israeli political party has written to Israels attorney general demanding that the Israeli participants should be charged with treason and sentenced to death. Since Eichmann is the only person ever executed by Israel, does this demand for a death penalty indicate that for some Israelis even an unofficial peace proposal is comparable to the crimes of Eichmann? How is it that the Israeli government is so touchy about the prospect of a peace proposal? But, as Uri Avnery said, Thats no wonder, considering that there is no greater danger to Sharon and his grand design than the danger of peace. The Sharon government wouldnt dream of a One-State Solution nor would it agree to a realistic and viable Two-State Solution; so what are the alternatives for them? The first appears to be just a continuation of the status quo, i.e., continue with the repressive military occupation of the Occupied Territories. However, in a matter of less than ten years the Palestinians will outnumber the Jewish population. So if Israel continues as a democracy, it will cease to be a Jewish state since Jews will be in a minority. Alternatively, Israel or a Jewish state could survive as a non-democracy by militarily dominating a steadily enlarging Arab majority, deprived of civic rights, thereby becoming an apartheid regime. The second alternative: at an opportune time, Israel would conduct massive violent ethnic cleansing with tanks and troops in which the entire Palestinian population (about 3 million or more) would be driven out of biblical Greater Israel up to the Jordan River. Lacking an opportune time, a simple escalation of the present policy could starve the Palestinians of land, food, and a livelihood, leaving them no option but to go into exile, in the millions. However, both these approaches are actually war crimes under the Geneva Conventions. Nevertheless, either way, for Sharon this would be the completion of his grand design. But where would this leave Israel, and the Jewish diaspora? Taking over the Palestinian territories and incorporating them officially into the Israeli state would be an illegal land grab, in violation of international law (aside from
Iraq backpedaling: A big step
Front page, lead story NYT. http://www.nytimes.com/2003/11/02/international/middleeast/02ARMY.html U.S. Considering Recalling Units of Old Iraq Army WASHINGTON, Nov. 1 Some American military officers in Iraq are pressing to reconstitute entire units of the former Iraqi Army, which the top United States administrator in Baghdad disbanded in May. They say the change would speed the creation of a new army and stabilize the nation. Proposals under consideration would involve identifying former Iraqi officers and weeding out any still loyal to Saddam Hussein. Those who pass the vetting could then track down the troops who had served under them in order to re-assemble complete companies and battalions rapidly ... But the talks tacitly acknowledge that some officers view Mr. Bremer's decision to dismantle the defeated 500,000-member Iraqi Army as a mistake, one that has contributed to the instability and increasing attacks against United States forces in Iraq.
Re: In defence of Krugman and against Alexander Cockburn: choice oftargets
Yea , I smoked a pipe for many yeares and enjoyed it -- until I became a victim of ashma and quit smoking. Now I find smoke of any sort a terrible hazard. More so for my wife for whom smoke of any sort triggers heart fibrilations that are potentially fatal. I think the tobacco companies deserve legal defence just as homocial murderers. No more, no less. But on the more important question of Krugman versus Stiglitz. To me there is no contest. Though I appreciate and forward Krugman's odd commentary, I tend to agree with his criticism is just neoclassic orthodoxy in critique of neoliberal ideology. It is just nice to see the mainstream agree will the few of us that critique the economic world from the real left. On the other hand, I think Stiglitz is a different 'kettle of fish'. First, as others have observed, he is not in the same game of personal aggrandizement. Second, along with his fellow nobel award winner (Akerlof) his economics is not orthodox and accepts both institutional frameworks and non-neoclassical frameworks -- e.g. assymetrical information, etc. -- . The beauty of Stiglitz's critique is that it allowed us to deveolop a non-orthodox analysis that we could present, not only to our students, but also to the general public. Without ideological baggage. In Solidarity, Paul Phillips. Louis Proyect wrote: Carl, I smoked a pipe for several decades before quitting -- and I would be afraid to add up how many thousands of dollars (not covered by insurance) I have spent on repairing (partly) the damage it did to my teeth. Right now, I've got a large gap in the front of my mouth (upper) which has cost me so far %3000 (for the implants) and will cost another thousand or two for the crowns on the implants. And it will cost me about $5000 to get the teeth below filled in. Trying to add it up in my head right now, I must have clsoe to $20,000 dental work in my mouth, counting only repair of the damage done by holding a pipe between my teeth. Carrol Mark Jones was a pipe smoker. Louis Proyect, Marxism mailing list: http://www.marxmail.org
Re: militias
The full article is curious when read closely. http://www.nytimes.com/2003/10/30/politics/30PREX.html It seems to me like the continuing saga of the Generals\State\CIA vs the Radicals over the need to 'backpedal' faster. The article does indeed start with a description of an effort to take current security guards give them a few weeks training and then put them on the front lines in the Sunni hot spots. They would swell the ranks of the what is called the Civil Defense Forces which are now a small group that occasionally patrol alongside the U.S. troops - in the future they would be sent out alone. It reads to me as desultory, half hearted description almost designed to look like it will fall short. Then comes what seems like another trial balloon: A major goal is to rapidly increase the number of militiamen, and one option under consideration is to recruit former soldiers from the disbanded Iraqi Army, a senior Pentagon official said Wednesday. This is the fifth or sixth time, over the last few weeks, an anonymous source says 'we are thinking of reversing our policy of eliminating the old military strata and recruiting them back'. Always just that tentative. Similar articles appear regarding recruiting the feared former secret police, the Mukhabarat (the first came in the Washington Post five days after the U.N. building was bombed). While this may sound like just Washington insider issues, in fact I believe the issues are quite large, for Iraq and for the larger vision of restructuring the third world. It is not just a question of bringing back a few people, but a question of which social strata should rule Iraq and hence just how subservient they should be. It is a bit analogous to the question of which social groups should be rehabilitated in post-war Germany and Japan. (Likely different outcome this time.) Paul At 10:05 AM 10/30/2003 -0800, you wrote: from MS SLATE'S news summary today: The New York Times leads with President Bush's apparent order to get more Iraqi police trained pronto. During what appeared to be an Iraq (re)assessment meeting with aides yesterday, Bush made it clear that [training] is not happening fast enough, one unnamed official recounted. As the Times describes it, Iraqis will be given a few weeks training then sent to the frontlines. also from that summary: The [Los Angeles Times's] Paul Watson gets on Page One with a piece saying that U.S.-supported militia in Afghanistan harassed and terrorized people in one village. They stand with the Americans, and when Americans leave an area, then the militias go by another route and rob the houses, said one villager. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
