text:
Hemlock for economic students
Chomsky on public education
Defunding a program is the best way to promote privatization. He discusses here public education, but you can go down the line. The idea of voucherizing Medicare is basically a way of defunding it, worsening its quality and eventually move to private health (you get it if you pay for it). And on education note that while Chomsky is right that it worked well and is being defunded and privatized (think charter schools), it is also true that the system was always unequal and favored the middle class, since the value of housing determined the quality of the public schools.
Short excerpt from Requiem for the American Dream, which I highly recommend.
By Matias Vernengo - April 30, 2016 2 comments: Links to this post
Labels: Neoliberalism, Noam Chomsky, Privatization, Public education
Ilene Grabel on capital controls
New paper on the resurgence of capital controls. From the Abstract:
The startling resuscitation of capital controls during the global crisis has substantially widened policy space in the global north and south. The paper highlights five factors that contribute to the evolving rebranding of capital controls. These include: (1) the rise of increasingly autonomous developing states, largely as a consequence of their successful response to the Asian crisis; (2) the increasing confidence and assertiveness of their policymakers in part as a consequence of their relative success in responding to the global crisis at a time when many advanced economies have and still are stumbling; (3) a pragmatic adjustment by the IMF to an altered global economy in which the geography of its influence has been severely restricted; (4) the intensification of the need for capital controls during the crisis not just by countries facing fragility or implosion, but also by those that fared "too well"; and (5) the evolution in the ideas of academic economists and IMF staff. The paper explores tensions around the rebranding of capital controls. These are exemplified by efforts to develop a hierarchy in which controls on inflows that are a last resort and are targeted, temporary, and non-discriminatory are more acceptable than those that are blunt, enduring, discriminatory, and that target outflows. In addition, tensions have increasingly focused on whether controls should be used by capital-source rather than just capital-recipient countries.
Read full paper here.
By Matias Vernengo - April 29, 2016 No comments: Links to this post
Labels: capital controls, Grabel
Slow recovery continues
In the first quarter the economy slowed down grinding nearly to a halt. Real Gross Domestic Product (GDP) slowed to a 0.5% annual growth rate in the first three months of 2016, according to the Bureau of Economic Analysis (BEA). By the way, federal government spending has been a drag on growth. And here in lies the problem. Don't expect any stimulus this year, and very unlikely that this would change significantly any time soon. The problem isn't secular stagnation, it is rather short-term inaction.
Labels: BEA, Secular stagnation, Slow recovery
Bankers and economic theory
From the BBC Yes, Prime Minister comic series. True, most bankers never quite learned Keynes, and then had to learn the stuff from some other Milton.
By Matias Vernengo - April 29, 2016 1 comment: Links to this post
Fabio Petri on non-substitution theorems
Sometimes there is simple and right
New paper by Professor Petri, which is always worth reading, titled "Nonsubstitution Theorem, Leontief Model, Netputs: Some Clarifications." From the abstract:
The nonsubstitution theorem concerns long-period technical choice and relative prices, and was so understood in its first (1951) formulations, but the modern advanced micro textbooks that present it do not make this clear, rendering the theorem impossible to understand for students. These modern presentations derive from a reinterpretation of the Leontief model as a 'timeless' economy in Walrasian equilibrium, capable of positive production in spite of zero initial endowments of all inputs except labour: an unacceptable interpretation, made possible by a use of netputs, to describe the economy's production possibilities, that is illegitimate in this case even from a strictly neoclassical perspective. The notion of a 'timeless' economy disappears from the textbook presentations of the Leontief model and of the nonsubstitution theorem, but the result is that the nature of the model and of the prices to which the theorem refers is not clarified, inevitably leaving students utterly confused. This note remembers the true nonsubstitution theorem, points out that it had been correctly enunciated by Samuelson (1961), and suggests that the current inability to present it in a correct way is due to the absence of the notion of long-period prices from the theoretical horizon of contemporary neoclassical value theory. The paper opens with clarifications on the meaning of the Leontief model which prepare the ground for the discussion of the problem with netputs.
Labels: Long term method, Petri, Sraffa
Some brief thoughts on technical change
Engelbart's mouse
I have discussed some of these issues before (here, for example, or here). But it is the last week of my intermediate macro class, and I often end up with some discussion of growth. Mostly the Solow model, and some alternative demand-led growth model. I do only the simple models, Joan Robinson's banana model and Thirlwall's balance of payments constraint, to contrast with neoclassical supply constrained stories of growth.
But in the middle of that discussion, supply constraint versus demand led growth, a conversation about the nature of technological change is always inevitable. No, I'm not going to talk about Kaldor-Verdoorn now. There are two interesting aspects of technology that are often misrepresented in mainstream models.
First, in the Solow model technology is akin to a public good, meaning is non-excludable and non-rivalrous. So technology is relatively easy to acquire, difficult to preclude others from obtaining it, and the access to it by one group does not limit its availability to others. That, by the way, is the reason patents and copyright are supposedly needed, to preclude technology to spread too easily and to provide the incentive for innovators.
However, technology seems to be considerably more difficult to acquire than what the canonical neoclassical model presumes. I always tell students that technology acquisition resembles building IKEA chairs. You have the blueprint, but even then it is hard to interpret it, and the first one is always a bit wobbly, while the process of building new chairs implies that by the time you are done with the last (perhaps the third or fourth one) the process is completely mastered.
The second element of technology that is often misrepresented, and this also true of some neo-Schumpeterians, is the role of the entrepreneur, the innovator. There is overpraise of their role in the process of technological change. The flash of genius which allows the innovator to transform the whole world is glorified. In reality, technological change is a slow process, in which several flashes are necessary to eventually produce any significant change.
For example, I asked my students what made Bill Gates the wealthiest man on the planet. Only one, by the way, said Windows, the operating system that followed DOS, and that was in every PC, after his contract with IBM (yes that contract, and the fact that he could pile his other software with the operating system, is the real source of the wealth). The operating systems were bought from another company, and essentially copied from Apple. And yes, Steve Jobs got most of his ideas from a visit to Xerox Parc. So the names of the several people that were central for the development of the graphical interface with multiple windows on a screen are hardly household names.
Walter Isaacson's The Innovators, which does overall a good job of showing that technological progress is a team sport, even if he does also idealize the role of innovators (yeah, it's in the title) tells the story of one of the them, Douglas Engelbart. About him he says (and yes there is a bit of hero worship in this):
"Over the next six years, culminating in 1968, Engelbart went on to devise a full-fledged augmentation system that he called 'oNLine System,' or NLS. In addition to the mouse, it included many other advances that led to the personal computer revolution: on-screen graphics, multiple windows on a screen, digital publishing, blog-like journals, wiki-like collaborations, document sharing, email, instant messaging, hypertext linking, Skype-like videoconferencing, and the formatting of documents. One of his technocharged protégés, Alan Kay, who would later advance each of these ideas at Xerox PARC, said of Engelbart, 'I don't know what Silicon Valley will do when it runs out of Doug's ideas.'"
Most of the time the several innovators needed to produce significant change are forgotten, and do not reap the financial benefits of their own innovations. In particular, because many times is difficult to sort out who had the original idea, where one innovation finishes and when the other starts. Technology more often than not develops as a result of a series of small steps, rather than by big leaps. Histories of technology should emphasize the role of institutions, like Bell Labs, and in particular for modern capitalist societies the role of the state.
Labels: growth models, Technical Change
On the blogs
Why not full employment? -- Chris Dillow on the abandonment of full employment as a policy goal. Personally, I'm not sure workers don't demand full employment now. I think they do, as they did back in the 1960s. But the conditions that allowed that to be an acceptable policy to the elites have changed significantly
Robert Lucas – Keynesian? -- ProGrowthLiberal at EconoSpeak. Yeah, sure it all depends on definitions, but it's a stretch
Enough central bank jazz hands… Why Labour should democratise the Bank of England -- Paul Mason's talk that has been all over the blogosphere. A quote if I may: "Under the Conservatives, monetary easing has been used simpy to offset the hit to the economy caused by fiscal tightening. Labour should, in future, use monetary policy to create fiscal space." Literately from Marriner Eccles book (see here)
What's the matter with Kansas at the Rick Smith Show
More on the GOP failure in Kansas. Rick Smith Show podcast here.
Keynes (1883-1946)
NYTimes Obituary here
Labels: Keynes
Tom Palley on Inequality and Growth
New paper published by PERI. From the abstract:
This paper examines the relationship between inequality and growth in the neo-Kaleckian and Cambridge growth models. The paper explores the channels whereby functional and personal income distribution impact growth. The growth – inequality relationship can be negative or positive, depending on the economy's characteristics. Contrary to widespread claims, inequality per se does not impact growth through macroeconomic channels. Instead, both growth and inequality are impacted by changes in the underlying forms and pattern of income payments. However, inequality is critical at the microeconomic level as it explains differences in household propensities to consume which are at the foundation of neo-Kaleckian and Cambridge growth theory.
Labels: Demand-led Growth, inequality, Palley
Some thoughts on the impeachment and the right wing turn in Brazil
Riding the coup bike without the military
Brazilian President Dilma Rousseff has been impeached. The vice-president, Michel Temer, will assume the presidency temporarily while she is judged by the Senate. While the final outcome is still uncertain, it is very unlikely that she will return to office. This closes the long cycle of the left in Brazil, which started with the election of Luiz Inácio Lula da Silva to the presidency in 2002, and that led to the election and re-election of the candidates of the Workers' Party (PT in the Portuguese acronym) since then. The roots of the current crisis are deep, and are not simply associated to corruption or to discontent with economic the poor performance of the country.
Protests started as far back as June 2013. The spark for those protests came from the cost of public transportation in São Paulo and other major cities, and the groups initially connected to the organization of the movement were clearly associated to left of center positions. On the other hand, as the protests gathered momentum the range of demands increased, to include spending with the 2014 World Cup and the Olympics and against corruption in general, with an increasing number of right wing groups linked to the popular demonstrations. In other words, there was a broad range of demands, and the groups associated with the popular protests had a mixed political character, from left of center movements to right wing libertarian groups, some of which were funded by the Koch brothers.
Many saw the 2013 protests as the beginning of the end of PT's dominance in Brazilian politics. And it was true that some elements on the left were part of the protests, and that, in a range of issues from the economic to the social, PT had failed to live up to the expectations. It is important to note there were many reasons to be disappointed with PT's achievements, since the party had accepted conservative economic policies early on in the 2002 "Letter to the Brazilian People," in particular putting fiscal discipline and inflation at the center of the economic agenda. And Brazil's economic performance was below the average for Latin America for most of the 2000s, with growth of about 3.5% per year between 2003 and 2014, which would be considered mediocre by the standards of the other BRICs that were lionized in the media as the next big thing in the world economy.
Further, the problems were not just in the economic front. Brazil was much slower, and considerably less effective than other left of center governed countries in the region in dealing with the human rights record of the military dictatorships. Something that also was to some extent expected by left of center groups. To make things worse, the security policies maintained a pattern of abuse of human rights, discrimination and racism, which have a long history in Brazil. The 'pacification' policies is in many cases were just part of a pattern of criminalization of poverty and state sanctioned killings of slum ('favela') dwellers. Not surprisingly the 2013 protests had a strong component of left wing participants.
On the other hand, in spite of the poor economic performance and the limitations of the human rights policy record, the expansion of formal employment, the doubling of the minimum wage, the expansion of the social programs, among them the Bolsa Família, the implementation of affirmative action policies and the expansion of public education, have led to a significant reduction of inequality over the last ten years, even if it is hyperbolic to suggest, as many social analysts have done and the mainstream media repeated ad nauseam, that a new middle class has emerged as a result. On the strength of the social record of her policies, Dilma won a narrow reelection in 2014, with the promise to expand social spending, to promote economic growth and to stand against banks' greediness, reducing interest rates. After the reelection, however, the government did a 180-degree turn, appointed a Finance Minister, Joaquim Levy, who came from one of the largest banks in the country, and adopted austerity policies, fiscal adjustment and higher interest rates to control inflation. Growth, not surprisingly, collapsed with a decline of GDP of about 3.8% in 2015.
Protests intensified in the streets, while the corruption charges, in particular those associated with the scheme of bribes and payments at the State oil giant Petrobras, within the so-called Car Wash ('Lava Jato' in Portuguese) Operation, taking center of stage. A few things should be noted in this context. Corruption is not limited to the government or the parties in its coalition, and in fact it is clear from the investigation that corruption at the state oil company goes back many years, certainly all the way to the government of Fernando Henrique Cardoso of the Brazilian Social Democracy Party (PSDB in Portuguese), a right of center party, in spite of its name. Interestingly enough, while Aécio Neves, the PSDB candidate that lost the last election in 2014, has been named in the corruption scandal, president Rousseff seems to be completely untainted by accusations of corruption. More importantly, the central issues related to corruption are the structural ones. That is the elements that make corruption a necessary feature to manage the country, like the need to buy votes in congress to pass legislation, something that has made the Brazilian Democratic Movement Party (PMDB in Portuguese) an essential element for governability. In fact, PMDB is at the center of all corruption scandals and the beneficiaries of the impeachment, including the Vice-President, are members of that party.
Clearly, the impeachment of Dilma Rousseff is not about corruption, and the actual process hinges on the delay in the payments to public banks (the so-called 'pedaladas'), which in the view of some imply the government is borrowing from public banks, which is against the Law of Fiscal Responsibility, but not on the corruption scandal per se. Note that this fiscal accounting devices were a common practice, even in previous governments, were never questioned, and can hardly be considered a crime that requires the impeachment of the president. Further, although her government is highly unpopular, since even left of center groups have been protesting, and more so since she embraced the austerity policies after reelection, it is not true that the impeachment is popular. Public manifestations against the impeachment have been as large, if not larger, than pro-impeachment protests, and the country remains essentially evenly divided, as it was during the 2014 election. In that sense, the impeachment is certainly not about the preservation of democratic institutions.
Socioeconomically speaking the poorer and the afro-descendants tend to be against impeachment, and that was reflected in the votes in Congress, to a great extent because these groups were the main beneficiaries of PT's social policies, and real wage increases. On the other hand, the middle class and the business groups, as represented by Federation of Industries of the State of São Paulo (FIESP in Portuguese), have been decidedly in favor. There is a clear class, and that in Brazil means race too, component to the impeachment process. So there are good reasons to believe that the impeachment represents a modern type of coup, based on the utilization of media for the mobilization of public opinion, and for bringing down a government, that, even if moderately, has reduced inequality in one of the most unequal countries in the world. The impeachment is about social class and inequality, and the possibility of a left of center project.
Labels: Brazil, Class warfare, Impeachment, inequality
Moody's upgrades Argentina credit rating status
Mainly because of their "expectation that Argentina will settle holdout creditor claims which will result in a lifting of court injunctions and clear the way for Argentina to access international capital markets." Fair enough, access to capital markets would lift the balance of payments constraint, even if the agreement is a complete surrender to the Vultures demands. But the most interesting argument for the improvement in the credit rating is that it results from "economic policy improvements since the Macri administration took office last December." So what happened since December (btw, mostly what I said it would).
The figure above from The Economist shows that inflation went up, and the economy was thrown into a recession. Fiscal deficits will likely increase, in spite of spending cuts, and reduction in public employment, since with the recession revenue will fall (Moody's expects the deficit to be about 5% GDP).
And yes fiscal deficits in domestic currency are mostly irrelevant for the discussion of ability to pay foreign obligations in dollars (the only reason to care is if the deficits are caused by more spending, and lead to current account deficits, which do increase the needs for foreign currency, which is not the case in Argentina now). Actually, I also think that the economy will eventually improve (that was the plan all along), just in time for the next presidential election.
The problem of course is that growth will accelerate very likely with an increase in current account deficits, as much as it happened during the Menem years in the 1990s. A more depreciated currency will do very little to solve that problem, which will likely be possible because the government will push ahead with international borrowing. Foreign debt driven growth essentially. But we know what tends to happen with this kind of policy.
There is a long history of external debt cycles in the country. This kind of frivolous economic policies, that push short term political gains (Macri's reelection like Menem in the past) at the expense of sustainable policies (it's the current account, not the fiscal idiot!) is what should be termed populism. Current account populism that is.
PS: Moody's does not even say anything about Macri's name appearing in the Panama papers.
Labels: Argentina, austerity, Credit Rating Agencies, Vulture Funds
What's the matter with Kansas?
In 2010 Tea Party favorite Sam Brownback was elected governor and he had Republican majorities in both houses of its legislature. The GOP program was put in place. What happened, you ask?
The result of the GOP tax cuts is significantly lower employment growth than in the national economy. By the way, lower income tax and higher sales taxes, a very regressive tax policy, has led to a persistent overestimation of revenue, and tax shortfalls that led to spending cuts, which in part explains the employment problems (see here). And that is essentially the same program that the 3 national candidates are defending this year. Supply-side economics has been debunked several times, but it surprisingly survives. Zombienomics.
Labels: Kansas, Supply-side Economics, Tax cuts
New York Times on the Brazilian coup... I mean impeachment
So for the correct view (yes, it was a coup) see Laura Carvalho here. As she says:
The impeachment process of President Dilma Rousseff started as a retaliation by the speaker of Brazil's lower house of Congress, Eduardo Cunha, indicted for taking as much as $40 million in a kickback scheme at the state-owned oil company Petrobras. Cunha, whose name is also tied to the Panama Papers, initiated the impeachment process shortly after a public announcement by government allies that they would not stop investigations in the Congressional ethics committee that could lead to his removal.
And, as I noted before the actual farce in Congress last Sunday, Dilma is accused of something trivial, delays in payments to public banks, which is certainly not an impeachable crime. The opposite view here, for what is worth.* Hard to agree with the criminalization of fiscal policy. With that criteria several heads of state should be impeached, including in the US (see IMF on this, which suggests that there are several ways to improving fiscal accounts through accounting devices).
It's also important to note that Obama and his State Department have been silent about this coup in a crucial country in the region.** Mark Weisbrot speculated about Obama's role in all of this. He said:
The massive spying on Brazil — and especially state-controlled oil company Petrobras — that Edward Snowden and Glenn Greenwald revealed in 2013 also points in this direction [Washington's support to undermine Workers' Party government]. It could be a coincidence that all this information about Petrobras was gathered by the U.S. government just prior to the scandals at the company; or perhaps Washington shared some information with its allies in the Brazilian opposition. And there is no doubt that the biggest players in this coup attempt — people like former presidential candidates José Serra and Aécio Neves — are U.S. government allies.
What's next? That's the important question. In terms of the economic policy expect more fiscal adjustment, including cuts in social programs (Delfim Neto, which had supported the Workers' Party for most of their governments, today refers to recipients of the Bolsa Familia program as parasites; sign of things to come).
* I'll try to have something longer on this later, but in my view the deep causes of the impeachment are ultimately related to class warfare. The improvement in the minimum wage, and the share of wages in income, ultimately caused the reaction from the elites and a good chunk of the middle class.
** Glenn Greenwald on this here.
Labels: Brazil, Laura Carvalho, Weisbrot
Brazilian growth during the Workers' Party adminstration
Overall from 2003 to 2016 about 2.4%. If the last two years (2016 being an estimate are not counted) it's 3.5%.
The collapse does not explain the impeachment (on this more later). It's more the result of the Workers' Party administration already caving and accepting the austerity policies promoted by the opposition.
Labels: Brazil, Impeachment
Prebisch's dynamic theory
New paper with Esteban Pérez published in ECLAC Review; for now only the Spanish version is available, but soon there will be an English version (they always release it later).
Labels: Business cycles, center-periphery, Economic Development, Prebisch
Regress in Macroeconomic Knowledge Over the Past 83 Years Blogging -- Brad DeLong on Raghuram Rajan. And the problem isn't debt overhang, low productivity or lack of more aggressive and unconventional monetary policy. It's fiscal policy stupid!
Neoliberalism – the ideology at the root of all our problems -- George Monbiot on Neoliberalism. I'm not sure Keynesianism needs a new program, but if you need one a Green New Deal should make Monbiot happy
Clinton vs. Sanders on Big Banks -- Bill Black and Paul Hodes on the Real News Network
Kalecki's Fable
By Jan Toporowski (Full paper published by ROKE here)
Following the death, in 1935, of the Polish military dictator Józef Piłsudski, his regime continued under a group of his military cronies, known as the 'colonels', who increasingly modeled their regime on that of Mussolini in Italy. One of the colonels, who was responsible for economic development, wanted to understand the economic principles behind government stabilization. He called in Kalecki's colleague from the Institute for the Study of Business Cycles and Prices (Instytut Badań Konjunktur Gospodarczych i Cen), Ludwik Landau, to explain the principles behind the 'new economics'. Landau had just been fired from the Institute and was now working at the national statistical office, Główny Urząd Statystyczny (see Kalecki 1964 [1997]; Landau 1957).
Landau explained at length the principles of effective demand and credit cycles underlying levels of output and employment at any one time. The colonel had evident difficulty in grasping this. So, finally, Landau explained by telling the following story:
In an impoverished Jewish shtetl in Eastern Poland, whose residents were mired in debt and living on credit, a wealthy and pious Jew arrived one day and checked into the local inn, taking care to pay his hotel bill in advance. On Friday, to avoid breaking the Sabbath injunction against carrying money, he handed over to the inn-keeper for safe-keeping a $100 note. Early on Sunday, the wealthy and pious Jew left the inn before the inn-keeper had had a chance to return the banknote.
After a few days, the inn-keeper decided that the wealthy Jew was not going to return. So he took the $100 note and used it to clear his debt with the local butcher. The butcher was delighted and gave the note for safe-keeping to his wife. She used it to clear her debts with a local seamstress who made up dresses for her. The seamstress was delighted, and took the money to repay her rent arrears with her landlord. The landlord was pleased to get his rent at last and gave the money to pay his mistress, who had been giving him her favours without any return for far too long. The mistress was pleased because she could now use the note to clear off her debt at the local inn where she occasionally rented rooms.
So it was that the bank-note finally returned to the inn-keeper. Although no new trade or production had occurred, nor any income been created, the debts in the shtetl had been cleared, and everyone looked forward to the future with renewed optimism.
A couple of weeks later, the wealthy and pious Jew returned to the inn, and the inn-keeper was able to return to him his $100 note. To his amazement and dismay, the wealthy Jew took the note, set fire to it, and used it to light his cigarette. On seeing the inn-keeper's dismay the wealthy Jew laughed and told him that the banknote was forged anyway.
Landau finished his story and waited for understanding to seize the colonel. Beads of sweat appeared on the colonel's forehead, from the intellectual effort at comprehension. Finally, as if he had stumbled on the explanation, the colonel exclaimed: 'Ah, I knew from the very beginning that there was something wrong with that Jew. Of course, the money was forged!'
Kalecki's conclusion from this was that unfortunately too many people think like the colonel, and very few people understand the story as we do.
M. Kalecki, ''Ludwik Landau – Economist and Statistician'', in J. Osiatyński , Collected Works of Michał Kalecki Volume VII, Studies in Applied Economics 1940–1967, Miscellanea, (The Clarendon Press, Oxford (1964 [1997])) 325-329.
L. Landau, Wybór Pism, (Państwowe Wydawnictwo Naukowe, Warszawa 1957).
Labels: Debt, Endogenous money, Kalecki
Kicking Away the Ladder, Too: Inside Central Banks
Last January the Association for Evolutionary Economics (AFEE) sessions at the Allied Social Sciences Association (ASSA) meetings revolved around the theme of "Inside Institutions," meaning that within institutions there are many actors with different sets of interests, so one must look under the hood, so to speak, of the institution itself to understand its actions. My paper followed my previous discussion of the historical evolution of central banks, and a brief discussion within the Argentine Central Bank. From the abstract of my paper:
Central banks are evolving institutions. In developed countries, particularly in Britain, central banks were used as instruments of the state to finance government and to promote economic development. However, once they went up the economic ladder, advanced economies kicked it to preclude developing countries from climbing it, too. It is in this context that the modern independent central bank, concerned with inflation targeting alone, which harkens back to the Victorian era, should be interpreted. This paper analyzes the recent evolution of the Argentine central bank in this broad historical perspective.
Download full paper here.
PS: This are the proofs and there are some mistakes. And yes, it should say seventeenth century in the first paragraph.
Labels: central banks, Heterodox Central Bankers, Institutionalism
Latin American corner: When will they ever learn?
By Naked Keynes (Guest Blogger)
The latest IMF World Economic Outlook (April 2016) projects stagnation in World Growth (3.1% and 3.2% in 2015 and 2016) both in advanced economies (4.0% and 4.1% in 2015 and 2016) and emerging market and developing economies (1.9% and 1.9% for 2015 and 2016). The prospects for 2017 are hardly any better with an estimate of 3.5% for global output and continuing stagnation of advanced economies. But things could get worse.
The current outlook scenario depends on very optimistic assumptions which as mentioned in the report (p. 18) are "subject to sizable downside risks." These include: (i) improved conditions for economies under stress; (ii) successful rebalancing in China; (iii) improved economic activity in commodity exporters; (iv) resilient growth (whatever this may mean) in emerging and developing economies other than commodity exporters.
The stagnation and possible reduction in world growth is not traced to transitory shocks or disruptions, or god forbid to demand conditions. It is rather traced directly to the production function (the core of mainstream economic theory) and more precisely to a decline in potential GDP levels and growth due to population aging, slow growing investment and total factor productivity (See also IMF, WEO, April 2015). This reasoning with its specific conditions not only applies to developed economies but also to developing economies including Latin American economies. In the case of Latin American economies the slow growth is traced to weak productivity and investment caused by government intervention.
The IMF assessment has two major and dangerous implications for future growth.
The first is that demand policies and more generally counter cyclical policies are simply out of the question. Government and economics agents must adapt to lower potential GDP (natural GDP) levels and growth. The IMF is thus restating its case for pro-cyclicality (contractionary policies) during a slowdown. Counter-cyclicality is only justified to rein in spending during an upward or boom phase of the economic cycle.
The second is that the only way to revamp growth is through supply side policies which even if successful (something unlikely as illustrated by the experience of Latin America) could take years to implement. It is not coincidental that the IMF WEO third chapter is titled Time for a Supply-Side Boost? Although the chapter focuses on advanced economies, mainstream economists in Latin America are preaching exactly the same policies for developing countries.
In short, the policy proposals point to reinforcing the fundamental failures of capitalist economies: continuing and self-fulfilling low growth, unemployment and poverty, inequality, and instability. When will they ever learn?
By Unknown - April 13, 2016 No comments: Links to this post
Labels: austerity, IMF, Latin America
A Terse Elucidation of Marx's Concern with Alienation in the Mature Writings
By David Fields
Note: The references below are drawn from The Marx-Engels Reader, edited by Robert C. Tucker.
Is Marx's concern with aspects of alienation subsumed in his mature writings? To suggest so is a falsity. Marx's depiction of the proletariat becoming, in the Hegelian sense, emancipated from the objective conditions of estranged labour, is not withered as the analysis moves toward the technical conditions of production. Marx's humanism is still apparent.
In Wages, Labour, and Capital, Marx explicates that labour power is a life activity (204). It is the manifestation of human creativity, so that when it is sold as a commodity, a worker, in fact, sacrifices his life; the "product of his activity is no longer the object of his activity" (204-205). Life, as such, no longer has meaning.
Marx asks a pertinent question: "And the worker, who for twelve hours weaves, spins, drills, turns, builds, shovels, breaks stones, carries loads, etc.-does he consider this twelve hours' weaving, spinning, drilling turning, building, shoveling, stone breaking as a manifestation of his life, as life" (205)? The answer is a resounding no: "On the contrary, life brings for him where this activity ceases, at table, in the public house, in bed […] The twelve hours' labour, on the other hand, has no meaning for him as weaving, spinning, drilling etc., but [only] as earnings […] If the silkworm were to spin in order to continue its existence as a caterpillar, it would be a complete wage-worker" (205).
Another example is Marx's attention to commodity fetishism: "In production, men not only act on nature but also on one another. They produce only by co-operating in a certain way and mutually exchanging their activities. In order to produce, they enter into definite connections and relations with one another and only within these social connections and relations does their action on nature, does production, take place" (207). This actuality is mystified given that "the noble reproductive [labour] power that the worker surrenders to the capitalist [for sustenance]" (209) is the mechanism that generates the "means of employment" (210), of which labour, which by definition "possesses nothing but its capacity to labour" (208), socially depends on. This social dependency is the force that manufactures 'false consciousness for "to say that the worker has an interest in the rapid growth of capital is […] to say that the more rapidly the worker increases the wealth of [capitalists], the richer will be the crumbs that fall to him" (211).
In Marx's Grundrisse, there are more examples of where Marx alludes to alienation. For instance, Marx begins his analysis with a scathing critique of Enlightenment ideology: "The [rational] individual [who] belongs among the unimaginative conceits of the eighteenth-century Robinsonades […,] which brings natural independent, autonomous subjects into relation and connection by contract", is an "ideal whose existence is [systematically] project[ed] […] by [the] detach[ment] [of the individual] from [his] natural bonds" (222). Hence, "forms of social connectedness confront the individual as mere means toward his private purposes, as external necessity" (223). And to suggest that material production, of which forms the bedrock of society, is determined "by isolated individual[s] […] is as much as an absurdity as is the development of language without individuals living together and talking to each other" 223). Society "does not consist of [isolated] individuals, but expresses the sum of interrelations, the relations within which […] individuals stand" (247).
In continuance with a concrete understanding of the nature of commodity fetishism, Marx indicates that the unity of production, distribution, and consumption is a mystification that clouds the reality that the worker is inherently an agent in production, of which the worker's social position determines its pattern of distribution, and ultimately its pattern of consumption (223-234)…the unperceived "mutual interaction" that consummates the capitalist system as an "organic whole" (236).
Furthermore, Marx discerns that when labour exchanges with capital in the selling of labour power, a worker "divests himself" of his "vital forces" to the submission of superfluous "forced labour", surplus value, of which work in production is in excess of that which is necessary for the means for "mere subsistence", to generate a "general form of [capitalist] wealth (247-249). This facet of capitalism is striking for that it inevitably blinds the worker from realizing that his social condition is, indeed, a relation of domination similar to that of slavery, or what Marx defines as "direct forced labour" (250). Work in capitalist production is "indirect forced labour" for that wealth generated from labour is not accumulated for the gratification of overlords, but exploited to foster general industriousness that generates the means of employment, the means of subsistence, of which labour, by definition, socially depends on. Workers are nothing else than soulless cogs in a wheel, an "alien person", whose objective social conditions appear as separated, independent, and of another kind (252-253).
Examples of Marx's adherence to the thesis of alienation are also prevalent in Das Kapital. We again see commodity fetishism highlighted: "A commodity is […] a mysterious thing, simply because in it the social character of men's labour appears to them as an objective character stamped upon the product of that labour; because the relation of the producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves, but between the products of their labour. This is the reason the products of labour become commodities, social things, whose qualities are at the same time perceptible and imperceptible by the senses" (320). Commodities thus appear, according to Marx, as a social hieroglyphic (322), an alienating state of existence where one "cannot decipher the peculiar social character of the labour that produces them […] in the same way [that] light from an object is perceived […] not as the subjective excitation of the optic nerve, but as the objective form of something outside the eye itself" (321).
Marx also rehashes his argument, albeit in condensed form, of labour power as a life-activity that is ultimately dispossessed in capitalist exchange. When a capitalist purchases labour power for capitalist production, "the labourer, instead of being in a position to sell commodities in which his labour is incorporated, must sell that very labour-power, which exists in his living self" (337). Workers are free in the double sense; on the one hand, "as a free man, [the worker] can dispose of his labour power as his own commodity, on the other hand […] he has no other commodity for sale, which is short of everything necessary for the realization of his labour power". This is an estrangement whose unadulterated existence makes the so-called rational-maximizing individual a self-perpetuating mythological understood form of social life (324).
In hindsight, Marx's interest with the social conditions of alienation is not abandoned as he matures. To suggest that this is indeed the case would be to assume that there is supposedly an epistemological break between Marx's early and later writings. This, however, would ignore a critical comprehension of Marx's work as a totality.
Originally posted on URPE Blog
By David Fields - April 13, 2016 No comments: Links to this post
Labels: Marx, Marxian Economics, Marxism, Marxist Humanism, Marxist Sociology, Political Economy
Maurice Obstfeld and the IMF push structural reforms
The new World Economic Outlook (WEO) is out, now under the direction of Maurice Obstfeld, after the retirement of Olivier Blanchard. They suggests many reason for why the global economy has been Too Slow for Too Long, as the title of the report indicates. In the forward Obstfeld tells us that part of the solution would be to promote:
"structural reforms in product and labor markets [since this] can be effective in boosting output, even in the short term, and especially if coupled with fiscal support. Tax reform, even when budget neutral, can create demand if well targeted, while simultaneously improving labor force participation and enhancing social cohesion."
So the idea is to liberalize labor markets, and reduce the costs of hiring labor (wink, wink, nudge, nudge, they mean reduce benefits).
So this pretty much confirms that nothing much has changed at the IMF. For more go here.
Labels: IMF, Obstfeld, Structural Adjustment
On the Panama Papers at the Rick Smith Show
A Short Account of The Rise of Neoliberalism
Between roughly the early 1940's and early 1970's, the financial architecture of the world economy centered on a US engineered Keynesian accumulation agenda, as a response to the devastation wrought by the Great Depression. The capitalist institutional structure, or social structure of accumulation (Kotz, McDonough, and Reich, 1994), rested on finance being subservient to the promotion of industrial enterprise. With socially-engineered capital-labor compromises in core-capitalist countries, neo-colonial governing institutions in the periphery, and the Bretton Woods system (along with the Marshall Plan), the immediate post-World War II era was a so-called 'golden age' of 'regulated capitalism'.
By the late 1960's, nevertheless, capital movements began to undermine the Bretton Woods preoccupation with capital controls, as US officials began actively encouraging the growth of the Euromarket—the pool of unregulated dollar reserves concentrated in the City of London. Moreover, with traditionally marginalized segments of the population in core capitalist countries demanding social, political, and economic rights, and national liberation movements in the periphery overthrowing oppressive governments, calls for expanded role of the state in meeting citizen's needs dramatically circumscribed global capital accumulation. Pressures for higher nominal wages spawned wage-price spirals. Consequently, the rate of profit fell in core capitalist countries (Dumenil and Levy, 2004: 24).
The globalization of finance became the means for international financial markets to allow industrial enterprise to rebuild the conditions for future profitability. From the 1970's, activity in financial markets began to rise relative to non-financial economic activity, reflecting not international traded goods and services, but speculative capital flows. Foreign exchange transactions in the world economy rose from $15 billion per day in 1973 to $80 billion in 1980 and $1,260 billion in 1995 (Kotz, 2008). In this sense, the inherent conflict between financial and non-financial capital became relatively obsolete.
Speculative capital flows, however, began to undermine the capacity for the US to guarantee the convertibility of dollars into gold at fixed parity (Triffin, 1960). In 1974, Nixon closed the gold window and loosened capital controls. This marked the end of the Bretton Woods arrangement and the breakdown of the social structure of accumulation that specifically rested on material expansion.
The deregulation of financial markets established a global market of mobile financial capital, yet Keynesian inspired institutional arrangements remained intact, especially the maintenance of cheap money policy for aggregate demand management. As such, hyper-inflationary crises stemming from labor militancy, coupled with international capital movements, turned real rates of interest negative by the mid 1970's. Although the US became a financial hegemon (cf. Fields & Vernengo, 2013), so to speak, in the sense that its currency became a global fiat money standard, allowing the US to borrow in international markets in its own currency (and essentially perform macroeconomic policy on a global scale), without the friction of gold, price instability undermined real rate of return. As a result, global commitment to deflationary policies was marked by the appointment of Paul Volker as the chairman of the US Federal Reserve in 1979.
The Volker 'shock', as it came to be known, reflected the complete shift from finance subservient to industry to industry subservient to finance with the imposition of fiscal and monetary discipline as the means to constrain the capacity of national governments to pursue expansionary policies (that ultimately favor the working class). The high real interest rates set in motion an increasing financial-market orientation of US-led global capitalism. As interest payments, as a factor in capitalist investment (with respect to expected future earnings), rose substantially from 1980 to 1982, leading to the worst recession (at the time) since the Great Depression, a new organization of capitalism was introduced. Capital would no longer rest on production, sales, and growth, but on a speculative strategy of 'downsize and distribute' for immediate short-term maximization of shareholder value (Campbell, 2004; Lozonick & O'Sullivan, 2000).
If the monetary authority increases and maintains high interest rates for long periods of time, then for given nominal wages and given nominal exchange rates, there will be falls in real wage and appreciations in the domestic currency. Tight monetary policy will be sustainable, if, and only if, the depression of real wages is accepted, i.e. there is an absence of real wage resistance, and if exporting industries affected by currency appreciation do not have the power to react. The US was victorious in this capacity through successful attacks on labor, along with institutionalizing the so-called Washington Consensus (cf. Meeropol, 1998; cf. Pollin, 2005).
Originally posted on URPE Blog.
Campbell, A. (2004): "The Birth of Neoliberalism in the US: A Reorganization of Capitalism." in A. Saad-Filho & D. Johnston (ed.) Neoliberalism: A Critical Reader. London and Ann Arbor, MI: Pluto Press
Duménil, G. & D. Lévy (2004): Capital Resurgent. Boston: Harvard University Press.
Fields, D. & M. Vernengo (2013): "Hegemonic Currencies during the Crisis: The Dollar versus the Euro in a Cartalist Perspective." Review of International Political Economy, 20(4): 740-759
Lazonick, W. & M. O'Sullivan (2000): "Maximizing shareholder value: a new ideology for corporate governance." Economy and Society, 29(1): 13-35
Kotz, D. (2008): "Neoliberalism and Financialization." Political Economy Research Institute, University of Massachusetts Amherst, mimeo
Kotz, D., McDonough, T. and Reich, M. (1994) (eds.): Social structures of accumulation: The political economy of growth and crisis. Cambridge: Cambridge University Press.
Meeropol, M. (1998): Surrender: How the Clinton Administration Completed The Reagan Revolution. Ann Arbor, MI: University of Michigan Press
Pollin, R. (2005): Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. London and New York: Verso
Triffin, R. (1960): Gold and the Dollar Crisis: The Future of Convertibility. New Haven, CT: Yale University Press
Labels: Economic History, Financialization, Neoliberalism, United States
A Brief Sketch of the Classical-Keynesian Perspective
From a Classical-Keynesian perspective (Bortis, 1997, 2003), rates of interest regulate rates of profits (Panico, 1980, 1985), and, thus, real wages are endogenously determined. The presence of financial instruments, which represent titles to future flows of income, makes it so that the actual center of distributive conflict in capitalism lies not in the technical conditions of production, but is rather governed by the real rate of interest, which is a conventionally-determined exogenous variable that reflects the relative powers of finance capitalists vis-à-vis industrial capitalists & labour (Pivetti, 1985, 1991, 2001).
The rate of profit, as a ratio, has a significance, which is independent of any prices, and can well be 'given' before the prices are fixed. It is accordingly susceptible of being determined from outside the system of production, in particular by the level of money rates of interest. (Sraffa, 1960: 33)
In this sense, high real rates of interests induce industrial capitalists to prefer short-term speculative financial investment, instead of long-term productive real investment, since access to credit is expensive. Consequentially, industrial capitalists center attention on the pursuit of immediate surplus value realization, via speculation, in order to handle the burden of costly interest payments—the social cost being nominal wage suppression, which, by implication, exhibits an enlargement of the reserve army of labour.
[…] the credit system, which has its focus in the so-called national banks and the big money-lenders and usurers surrounding them, constitutes enormous centralisation, and gives this class of parasites the fabulous power, not only to periodically despoil industrial capitalists, but also to interfere in actual production in a most dangerous manner— and this gang knows nothing about production and has nothing to do with it. (Marx 1894: 544-45)
Along these lines, heterodox growth and distribution models have been put forward (cf. Hein, 2008), highlighting the need for a redistribution of income from finance/industrial capitalists to labour (Lavoie and Seccareccia, 1999) and making unemployment the primary policy target (Smithin, 2004). Underpinning these models are works that incorporate Keynes' principle of effective demand and Sraffian price theory in a long-period analysis of capital accumulation (Park, n.d.; Cesaratto et al. 2003). These studies pay considerable attention to the extent to which the Hicksian supermultiplier concept effectively explicates the degree to which induced consumption and investment, via the accelerator, determine average levels of total output (Serrano, 1995) and, thus, normal capacity utilization (Amadeo, 1986; Trezzini, 1998), with the richness of a framework inspired by Kaldor and Pasinetti (Docherty, 2012) that meticulously constitutes the palpability of Kalecki's famous aphorism that 'capitalists get what they spend…workers spend what they get'.
Originally published in the URPE blog.
Amadeo, Edward J. 1986. "Notes on Capacity Utilisation, Distribution and Accumulation." Contributions to Political Economy 5(1):83–94.
Bortis, Heinrich. 1997. Institutions, Behaviour and Economic Theory: A Contribution to Classical-Keynesian Political Economy. Cambridge: Cambridge University Press.
Bortis, Heinrich. 2003. "Keynes and the Classics: Notes on the Monetary Theory of Production." In Modern Theories of Money: The Nature and Role of Money in Capitalist Economies, (eds.) Louis-Philippe Rochon and Sergio Rossi. Cheltenham, UK: Edward Elgar.
Cesaratto, Sergio, Franklin Serrano, and Antonella Stirati. 2003. "Technical Change, Effective Demand and Employment." Review of Political Economy 15(1):33.
Docherty, Peter. 2012. "Long Period Interest Rate Rules in a Demand-Led Kaldor-Pasinetti-Sraffa-Keynes Growth Model." Journal of Post Keynesian Economics 34(3):521–46.
Hein, Eckhard. 2008. Money, Distribution Conflict and Capital Accumulation: Contributions to 'Monetary Analysis'. Basingstoke: Palgrave Macmillan.
Kalecki, Michal. 1971. Selected Essays on The Dynamics of the Capitalist Economy 1933-1970. Cambridge: Cambridge University Press
Kaldor, Nicholas. 1955. "Alternative Theories of Distribution." The Review of Economic Studies 23(2):83–100.
Kaldor, Nicholas. 1966. "Marginal Productivity and the Macro-Economic Theories of Distribution: Comment on Samuelson and Modigliani." The Review of Economic Studies 33(4):309–19.
Lavoie, Marc, and Seccareccia, Mario. 1999. "Interest Rate—Fair." In Encyclopedia of Political Economy, vol. 1, (ed.) Phillip Anthony O'Hara. London: Routledge.
Marx, Karl. 1894. Capital Vol. III. New York: International Publishers.
Panico, Carlo. 1980. "Marx's Analysis of the Relationship between the Rate of Interest and the Rate of Profits." Cambridge Journal of Economics 4(4):363–78.
Panico, Carlo. 1985. "Market Forces and the Relation between the Rates of Interest and Profits." Contributions to Political Economy 4(1):37–60.
Park, Man-Seop. n.d. "Towards a 'Classical-Keynesian' analysis of Effective Demand in the Long Period." Retrieved May 8, 2014.
Pasinetti, Luigi L. 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth." The Review of Economic Studies 29(4):267–79.
Pasinetti, Luigi L. 1974. Income Distribution and Growth. Cambridge: Cambridge University Press
Pivetti, Massimo. 1985. "On the Monetary Explanation of Distribution." Political Economy: Studies in the Suplus Approach 1(2):73–104.
Pivetti, Massimo. 1991. An Essay on Money and Distribution. London: Macmillan.
Pivetti, Massimo. 2001. "Money Endogeneity and Monetary Non-Neutrality: A Sraffian Perspective." In Credit, Interest Rates and the Open Economy, (eds.) Louis-Philippe Rochon and Matias Vernengo. Cheltenham, U.K: Edward Elgar.
Serrano, Franklin. 1995. "Long Period Effective Demand and the Sraffian Supermultiplier." Contributions to Political Economy 14(1):67–90.
Smithin, John. 2004. "Interest Rate Operating Procedures and Income Distribution." In Central Banking and the Modern World, (eds.) Marc Lavoie and Mario Seccareccia. Cheltenham, UK: Edward Elgar.
Sraffa, Piero. 1960. Production of Commodities by Means of Commodities. Cambridge: Cambridge University Press.
Trezzini, Attilio. 1998. "Capacity Utilisation in the Long Run: Some Further Considerations." Contributions to Political Economy 17(1):53–67.
By David Fields - April 08, 2016 1 comment: Links to this post
Labels: Classical-Keynesian Political Economy, Conventional Rate of Interest, Endogenous money, Income distribution, Long term method, Sraffa, supermultiplier
Tom Palley on Inequality, the financial crisis and stagnation
From the abstract:
This paper examines several mainstream explanations of the financial crisis and stagnation and the role they attribute to income inequality. Those explanations are contrasted with a structural Keynesian explanation. The role of income inequality differs substantially, giving rise to different policy recommendations. That highlights the critical importance of economic theory. Theory shapes the way we understand the world, thereby shaping how we respond to it. The theoretical narrative we adopt therefore implicitly shapes policy. That observation applies forcefully to the issue of income inequality, the financial crisis a nd stagnation, making it critical we get the story right.
Labels: Financial Crisis, inequality, Palley, Secular stagnation
The student loan crisis
The student loan situation is critical, and the WSJ (subscription required) suggests that there are increasing worries that a large number of borrowers will default. The numbers are indeed concerning with 43% in default already, delinquent or in postponement as shown below.
This has had strange implications. But while I think that the increase in student loan debt is part of the increasing inequality in the country, and one might add, the increasing costs of college education, that forces kids to borrow large amounts for a shot at a better life, it's unlikely that it would lead to a short run crisis, and a recession. In contrast to the sub-prime and mortgage based borrowing, student loans are about the possibility of future income, not short run consumption. So I would not expect a collapse of current consumption, if the default rate increases significantly. And I doubt that there is a large bank, like Lehman, that would go under if a large number of borrowers default (of course I might be wrong on that).
At any rate, that does NOT mean that the problem is minor. Quite the opposite. By reducing the ability of people to spend earlier in life, and delaying other normal commitments like, for example buying a house, the increase in the student debt burden might be drag on long term growth prospects. That's why a bailout of students is necessary, and a permanent solution for the cost of college education is needed.
Labels: Student debt
Economists don't read (enough) books
So Ann Petiffor twitted a link to a post on why economists do not read Polanyi's The Great Transformation (or the other GT; yes the one is Keynes' General Theory) The author, Marko Grdesic, basically suggests that economists do not read books, period.* I would add, let alone Polanyi that was always at the fringes of mainstream economics. He estimates that about 3 percent of economists have read Polanyi. That reminded me of a story that Eichengreen had told me about a course he taught based on reading books, since he thought that graduate students in economics do not read them anymore, and, even worse, do not quite get the point of writing books. He was nice to twit the link to the current version of the course. I taught in Utah a course that was not directly based on books, but instead on what I referred to as unresolved issues in economic history. These are the ones that involve the big questions, the ones economists do not deal with anymore, at least not often (as discussed yesterday). In a way, I think that the inability to read and appreciate books is also connected to the reduced ability to engage in the big questions.
* He points out that: "one economist said, 'I haven't read Polanyi, nor have I read Smith, Keynes, Hayek, Schumpeter, or Friedman'." Yes, we noticed it.
Labels: Economic History, Eichengreen, Pettifor, Polanyi
Year of the Outsider: Why Bernie Sanders' Democratic Rebellion is so Significant
By Thomas Palley (Guest blogger)
2016 was supposed to have been the year of Jeb Bush versus Hillary Clinton: the year when the established Bush dynasty confronted the upstart rival Clinton Dynasty. But the year of the insider has turned into the year of the outsider. On both sides, voters have unexpectedly given vent to thirty years of accumulated anger with neoliberalism which has downsized their incomes and hopes.
Though the Republican rebellion has been more clear-cut in its dismissal of insider candidates, it is Bernie Sanders' Democratic rebellion that is of potentially far greater historic significance.
Read rest here.
Labels: Bernie Sanders, Neoliberalism, Populism
Big Think and the nature of capitalism
Jack Goody was one of those rare thinkers that tried to think big. Not common in economics anymore, and less clear in other social sciences, as somewhat narrowly defined techniques take over the breadth of historical understanding. I've only read before his The Theft of History, somewhat iconoclastic book in which he debunks the idea that individualism, democracy and freedom were somehow invented by modern Western society.
I started reading now his Metals, Culture and Capitalism. There are already some interesting things associated to his emphasis on iron, rather than precious metals, in the trade interaction between the West and the Rest. Note that this suggests, probably against the grain of Goody's concern, that the metallurgic advantages of the West, played an early role in the so-called Rise of the West.
But what caught my eye is the following quote:
"In this piece I have covered a long period of time and will undoubtedly have got some things wrong, although I hope my references will usually bear me out. On few, perhaps none, of the subjects am I expert, but the expert does not always see the wood for the trees. One reason for my taking a long time-span is that historians have taken a much too restricted view of their subject and this has prevented them from going back to the commonalities which join us both to the Near and the Far East of what is essentially one continent. For this reason I would question the history cultivated in part of that region, in Europe since the eighteenth, but especially the nineteenth and twentieth centuries when the west led the way in many things. They emphasised the development of 'capitalism' as a new mode of production in Europe (an idea not limited to Marxism) and have therefore overlooked the commonalities of which I have spoken."
First of all, there is the admission that to think big it requires to deal in areas that one is not a specialist, and that leads to mistakes. But most of the mistakes are not central to the argument in my view (see for example, the discussion with Brad DeLong related to David Graeber's book on debt; see comments section).
The second and more relevant point is that he seems, as much as Gunder Frank in ReOrient, to suggest that the notion of mode of production is problematic, and that the very idea of capitalism should be questioned. While I find revisionism with regards the timing and the causes of the Rise of the West (including the work of Gunder Frank, but even more Pomeranz and Bin Wong) relevant to understand the limits of conventional views on the subject, both that it happened much recent than normally thought and that demand forces might have played a role, I find the dismissal of the notion of capitalism problematic (I discussed some of that here). In extremely simplified way, one could argue that it's capitalism that is behind the Rise of the West.
Labels: Capitalism, Eurocentrism, Goody, Gunder Frank, Mode of production, Pomeranz, Wong
How Much Has Global Economic Power Really Shifted? -- C.P. Chandrasekhar and Jayati Ghosh suggest that less than you might think
Prime-Age Workers Re-Enter Labor Market -- Dean Baker on the job numbers
Economic Rationality Explains Everything and Nothing -- Geoffrey Hodgson on rationality and utility maximization
Labor market numbers at the Rick Smith Show
Payroll employment rose by 215,000 in March
That's more or less the same pace of growth as before, and suggests that the slow recovery continues. The unemployment rate ticked up to 5%, since the labor force participation rate increased from previous month. (but still below the pre-recession level, as shown below). So in this case, a slightly higher rate of unemployment is not a bad thing. It means more people are confident they can find jobs.
Notice that manufacturing employment has declined for the third month in row. This also might add to Yellen's reasons for being dovish, as discussed earlier this week.
PS: Report here.
Labels: Manufacturing, Slow recovery
Summers on secular stagnation, the ISLM, and the liquidity trap
Two short clips from Lawrence Summers talk at the ASSA meeting in San Diego. So he first says that secular stagnation is more plausible now...
A brief note on Venezuela and the turn to the right in Latin America
So besides the coup in Brazil (which was all but confirmed by the last revelations , if you had any doubts), and the electoral victory of M...
What is the 'Classical Dichotomy'?
Fields, David (Forthcoming), "Classical Dichotomy," Edward Elgar Encyclopedia on Central Banking , edited by L.P. Rochon et...
MMT and its Discontents: Again (Wonkish and Longish)
Modern Monetary Theory (MMT) has been in the news again, and for good reasons. I actually had a post with the same title back in Februa...
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Steve Harvey is Bringing Home the Bacon and Cooking it With Ease
by Jessica White April 28, 2016 September 28, 2017 806
(Image: Manuel Llaneras Photography)
This weekend, catch an all-new episode of Our World with Black Enterprise featuring entertainment powerhouse and television personality Steve Harvey. Tune-in as Harvey talks about his latest entrepreneurial venture with friend, and Alabama businessman, Greg Calhoun. Together, they have joined forces to employ those living in the Southern region of the U.S. Harvey shared with Our World's correspondent Patricia Césaire, that his company HarCal, an investment group that produces Easy Bacon for the general market and a latex glove manufacturing business, was developed to create opportunity for thousands of people.
[Related: Steve Harvey and Shark Tank Producer Mark Burnett Team Up For Business Competition Series]
Greg and I care about people. Greg and I are trying to build a legacy. What better way to do that than open up manufacturing right here in America? A lot of our jobs are created in rural America…HarCal is in the creating opportunity business.
A business that is sure to continue growing years to come. Calhoun shared in his one-on-one, that HarCal's projected revenues for 2016 are expected to reach $70 million with the dynamic duo at the helm. "Steve moves people! I move products!"
In our "From The Corner Office" segment we profile Bruce Gordon, former president of Verizon Communications Retail Markets Group. He talks about the importance of pushing diversity on corporate boards for the benefit of not only the consumers, but for the corporation itself.
From there, we highlight a culinary program helping at-risk youth learn the skills that will help them advance in some of America's professional kitchens and restaurants.
Our World with Black Enterprise can also be seen on UP television stations. Check your local listings and visit www.blackenterprise.com/ourworld for additional time and station information.
[Below: Watch Video]

redpajama_set_name: RedPajamaCommonCrawl


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Dato Seri Dr Ahmad Zahid Hamidi
Dato' Seri Dr. Ahmad Zahid Hamidi (considered 4 January 1953) is a Malaysian authority who has been Deputy Prime Minister of Malaysia since 2015 in the Barisan Nasional coalition relationship of Prime Minister Najib Razak. He has in addition been Minister of Home Affairs since 2013, and he to this point filled in as Minister of Defense from 2009 to 2013. He is the Member of the Parliament of Malaysia for the Bagan Datoh body electorate in Perak and a man from the United Malays National Organization (UMNO) political party.
From the get-go in his political work, Zahid Hamidi awas a Senator and head of Bank Simpanan Nasional before changing into the pioneer of UMNO's adolescence wing. In 1998, Zahid stood firm contrary to Prime Minister Mahathir Mohamad, requiring a conclusion to cronyism and nepotism in the Malaysian government. Dato Seri Dr Ahmad Zahid Hamidi, seen as an associate of removed Deputy Prime Minister Anwar Ibrahim, was therefore gotten and held in prison under the Internal Security Act. In any case, in 1999, Ahmad Zahid Hamidi was welcomed after a short time into the UMNO overlay, granting that Anwar had put him up to raising statements of cronyism and nepotism and guaranteeing that Anwar had used his position as Finance Minister to control business opportunities to Zahid.
After the 2004 race, Zahid changed into a Deputy Minister in the relationship of Abdullah Ahmad Badawi. While a Deputy Minister, Zahid explored for and was given the level of Doctor of Philosophy from Universiti Putra Malaysia.
After the 2008 choice, Zahid Hamidi changed into a Minister in the Prime Minister's Department. He was named Minister of Defense in April 2009. Ahmad Zahid Hamidi was designated as Minister of Home Affairs in 2013, supplanting Hishamuddin Hussein. Hishamuddin took Ahmad Zahid Hamidi's past position at the Ministry of Defense.
In July 2015, he was doled out as Deputy Prime Minister in a pro reshuffle
Dato Seri Zahid Hamidi Family
Dato Seri Zahid Hamidi was considered on 4 January 1953 in Bagan Datoh, Perak, Malaysia, the eldest successors of nine teenagers (seven adolescents and two young ladies) in the family. In 2013, Ahmad Zahid Hamidi revealed to the Indonesian media that he is of Javanese drop, his father, Raden Hamidi Abdul Fatah, being neighborhood of Kulon Progo Regency, Yogyakarta, while his maternal granddad started from Ponorogo in East Java and married his Malaysian Malay grandmother. His father kicked the can on 8 August 2014 at Hospital Angkatan Tentera (HAT) in Wangsa Maju Kuala Lumpur. On 1 October 2011, his mother, Tuminah Abdul Jalil passed on of a stroke and heart burden in where she grew up Sungai Nipah Darat, Bagan Datoh. She was hospitalized at the Hospital Angkatan Tentera, Tuanku Mizan, Kuala Lumpur.
His daughter, Nurul Hidayah Ahmad Zahid, has the close-by TV demonstrate Inspirasi Ramadhan and is joined with the Rejimen Askar Wataniah as a volunteer.
He was raised by a Malaysian Chinese non-endless father, Chen Jin Ting and sold set yogurt together for quite a while with his brief family when he was in review school. His father was not enormously arranged and would cycle from his home at Simpang Tiga, Hilir Perak to around three kilometers away offering set yogurt. Chen Jin Ting was hitched with his non-wearisome mother, Guo Jin Luan. His father later passed on in 1999, more than ten days after the general choice. Following requests that he was against Chinese, he granted "Am I undermining to Chinese when I have a Chinese fleeting father?"
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This Month's Meeting is Wednesday the 18th at the Nebraska Outdoor Education Center in Lincoln. Click Here For Directions.
Our April club meeting will feature long time club member, and Professor of Earth & Atmospheric Sciences at the University of Nebraska Mark Anderson. Mark will be discussing the weather and weather safety. Doors open at 6:30 and meeting starts at 7:00. We have a great raffle this month and our fly of the month is the ubiquitous Woolly Bugger. Check our Fly of the Month tab!
April is also the time forour annual Spring Fling! Saturday the 21st we'll be at the Kiewit Lodge at Mahoney State Park from 8:30am to 4:00pm. Our featured guest this year is Jeff Currier, world renowned fly fisherman, artist, and author. Check SPRING FLING for all the details.


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Synchronized Swimming Offers Opportunity, Community for Swimmers Across Metro
Caroline Hardy, Managing Editor|March 15, 2019
"One, two, three, four, five, six, seven, eight," chant the seven members of Blake's extended synchronized swimming team routine. Amidst the blanket-like humidity and roar of the short team in the water of the John Hartmann Pool, these swimmers learn their routine of nearly four minutes with ease, using practiced teamwork and an almost inherent instinct of what is to come.
With practice six days a week for nearly three hours, these girls know the sport and each other. Now in its fifth year, the Blake Synchronized Swimming team has grown to include three other schools, Benilde St-Margaret's, Eagle Ridge Academy, and Robbinsdale Armstrong Senior High School, and fourteen girls. As the only synchronized, or synchro team comprised almost entirely of private schools, the Blake team continues to navigate the nuances of a unique multi-school co-op which reflect the unity and trust found in the greater Minnesota high school synchro community.
"You would really think that synchronized swimming would be more of a private school sport, because of the stereotypes that private school kids have money, and synchro is one of the most expensive sports that you can do, and it's quite interesting that public schools in the state of Minnesota have a monopoly, almost, on synchronized swimming," explains Josie Lagerstrom '18.
A swimmer since her sixth-grade year, Lagerstrom started the Blake synchro team after transferring from Edina Public Schools her freshman year, working with Athletic Director Nick Rathmann to find a coach and enough swimmers.
The news of a new team quickly spread to other private schools around the metro. Benilde-St. Margaret's Senior and Blake Synchronized Swimming Captain Kara Gerads has been swimming on a club team for the past seven years. Without a team to swim for in high school, Gerads attempted to co-op with the longstanding St. Louis Park Public Schools synchro team. Gerads was unable to do so, due to a concern raised by St. Louis Park about mixing a private and public school team. Then, Gerad's mother learned about the Blake synchro team, now in its second year.
"She called our athletic director and asked if there was any way that he could do it, thinking that it would be a 'no,' but he said, 'let me contact the athletic director at Blake, and see what he says.' That same day, my mom emailed me, and said 'Kara, you're co-oped with Blake for synchro! Do you want to go to practice tonight?' And that night, I was in the pool, swimming for Blake," explains Gerads, "It was like a day-long thing."
Synchronized Swimming combines flexibility, precision, athleticism and musicality as swimmers perform individually and together in the pool without ever touching the bottom, creating an incredibly demanding sport where success rides on looking effortless. Captain Casey Stocking '20 explains that "A lot of people think that synchro is just an artistic sport, that 'oh it doesn't count,' but we actually spend a lot of time speed swimming and doing breath control work and dryland."
Since 2015, the team has expanded to co-op with two other schools, with ranges of one to three swimmers coming from another school. Driving to Blake and competing for a different school is no small effort for a busy high school student, but "the people who are choosing to co-op with Blake already know what synchro is and are really passionate about it, and that's why they want to do it in the high school season," says Gerads.
Simultaneously, the team has been gaining returning swimmers from Blake, many of whom were part of the first season. Together these two groups have allowed the team to have a growing and robust core, as well as many extremely skilled swimmers with club experience. For three-year swimmer Lily Liu '22, this variation in skill level and school is beneficial. "I think it's really nice to have girls from other schools on the team because it feels like we are a big gathering of different schools and it helps make our team more diverse and interesting to swim with," she explains.
After placing seventh overall at State with only seven girls, tying with the longstanding Edina Public Schools synchro team of 60 plus girls, and placing into a new category, extended, the Blake team is heading and this season with high hopes.
"It would be really cool if we could go to state with our extended team. We started learning it today, it's really good," says Gerads.
However, success in the pool comes after long hours of practice and time together. "Synchro is such a mental sport. When you are swimming together in a routine, and the routine is getting really hard, and everyone is out of breath, you have to trust in each other that you are all going to keep trying your hardest, even though you are all exhausted. It's a really important team bonding experience," Gerads continues, "You go and into the team not knowing anyone. But, you're forced to make friends because you don't know anyone. So, either you're going to spend the whole season being miserable because you don't know anyone on the team, or you are going to have to be more outgoing than you normally would be so that you can get to know everyone on your team, and form that trust."
Caroline Hardy '20 and Josie Lagerstrom '18 consult with coaches before their state duet swim.
Even after this trust has been formed, the practical challenges of a multi-school team still exist. Co-op girls cannot enter the building alone for practice due to the new policy of key card entry into all Blake buildings, and the lineup of separate Spring Breaks makes practicing early in the season difficult. Socially, Gerads explains, "You talk about certain classes or teachers that you've had, and there's a disconnect, because half of the team knows what you are talking about, and half the team doesn't. So that's a problem."
Nevertheless, for many, these challenges are outweighed by the opportunity to swim. Stocking explains, "each individual small private school would not have the opportunity to have a synchronized swimming team, just because the amount of interest per school is smaller compared to other teams. So, it's amazing to field a team that gives other girls who wouldn't otherwise have a team a chance to swim."
This invaluable chance to swim for a high school team opens access to a unique statewide community of caring girls, parents and coaches, something the Blake team emulates on a miniature scale. "People who do synchronized swimming are some of the kindest people I've ever met," explains Lagerstrom, "You don't actually have to know any of these people doing synchronized swimming, but we support each other and respect each other, we want other people to do well."
Caroline Hardy
Casey Stocking
Josie Lagerstrom
Lily Liu
Caroline Hardy, Co-Editor-in-Chief | InDepth Editor
Hi, I'm Caroline! I'm a senior. In the past two years, I've edited Student Life and Features. I'm currently Co-Editor-in-Chief and I edit InDepth. My favorite...


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Hey Houston! I loved stopping by your beautiful city and visiting Houston Life. Let me tell you, I had too much fun with these hosts and I cannot wait to go back. Here's my segment where I'm sharing my favorite baby hear and gadgets.


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Brit Floyd at the Metro Radio Arena in Newcastle, UK
Concert Reviews, Rock, UK
A Few Moments With Louise Distras
Interviews, Rock, UK
Def Leppard Release Video For Cover of Depeche Mode's "Personal Jesus" via Billboard
Music Videos, Rock, US
Heal My Soul by Jeff Healey
Clutch Announce Details Of New Single And Forthcoming Studio Album
Artist Feature, Rock, UK
"Weird Al" Yankovic Announces Continuation of Mandatory World Tour in 2016
GenreBlues
Jack Bruce "Sunshine Of Your Love" Tribute Concert Screening at Curzon Mayfair in London, UK
Blues, Concert Reviews, UK
They say that "the cream always rises to the top" and in the case of Jack Bruce, nobody would dispute that during his musical lifetime he owned every word of this slightly overused phrase.
Filmed and recorded at the tribute show on the first anniversary of Jack's passing at The Roundhouse, London and organised by his family, tonight's screening also coincided with what would have been Jack Bruce's 75th birthday.
With most of the guests who took part in the show in attendance, along with Jack's family, the film got rolling to reveal that star-studded night of blues and jazz hued music and tipping of hats to a true, bona fide legend and his blistering bass playing and unique rangy vocals.
An ensemble cast of legends and emerging talent kicked off proceedings with a vintage video of Jack playing manic harmonica blues on Traintime. Then Mark King, proving himself to be somewhat of a renaissance man of musical styles, thumbed a cherry red Gibson bass on opening live track Hit & Run with Clem Clempson on guitar. Remaining onstage King was joined by former Scorpion Uli Jon Roth for a scorching take on I Feel Free and later on Badge.
Further highlights included Jethro Tull's Ian Anderson bringing his flute into play on Milonga and Bernie Marsden burning up and down his guitar neck on Don't Look Now. He was joined by fellow former 'Snake bassist Neil Murray on White Room.
Joss Stone brought her bare-footed vocals on Never Tell Your Mother She's Out Of Tune and Roxy's Phil Manzanera held sway on I'm So Glad.
However, the true highlight of this evening captured Ginger Baker rolling back the years with a peerless percussive performance on We're Going Wrong.
Filmed and directed by Jack Bruce's family members, some of whom performed superbly on songs during the evening's concert, with Nitin Sawhney directing the onstage music, the film is a heartfelt homage to one of the true greats of blues and jazz.
After the screening, there was a revealing Q & A, hosted by Edith Bowman, with most of the celebrity musicians who appeared in the film.
Ian Anderson recollects: "From Jack's earliest days with the Graham Bond Organisation, the Cream era and on through the various collaborations and solo work, he has continued to serve as a prime inspiration for me and thousands of other musicians, especially those whose performances graced this Roundhouse evening.
I first saw him play at the Nottingham Boat Club in 1966 and had the pleasure to work alongside him on collaborations several times in the final years."
Whilst Phil Manzanera adds: "Jack was a musical hero of mine, a true force of nature on and off stage, and became a great friend. I was delighted to be part of this powerful and moving tribute concert. I'd like to think that he was looking down on us all, with a wry smile, and thinking "Wow what talented kids Margrit and I have", for me, their performances were the concert highlights!"
Fellow legendary bass player Mark King opened up: "I was thrilled to perform at the memorial concert for dear Jack. It gave me the chance to say 'thank you' for a lifetime's inspiration, and I am so glad that those who couldn't be there can now share the love that we all have for this truly great musician. And those who were lucky enough to be there in person will now be able to experience that wonderful night all over again!"
But the poignant final words belonged to musical director of the evening Nitin Sawhney: "I felt deeply honoured when Natasha and Margrit asked me to musically direct this wonderful tribute show to Jack Bruce's fantastic body of work. Directing such a range of musical legends, who all came together to reproduce and perform the highlights of Jack's work, was an enormously inspirational experience. Everyone was determined to rise to the occasion and bring their own special talents to make this an unforgettable night and a fitting response to one of rock's greatest songwriters and icons. Thank you to all of Jack's amazing family for the privilege of bringing such an important evening to life."
In collective faux fear, all attendant musicians jokingly expressed their relief that Ginger Baker was unable to attend whilst looking quietly over their shoulders just in case…
Words: Paul Davies
Event Date: 14-May-2018
CreamCurzon MayfairJack BruceLondonSunshine Of Your LoveTribute ScreeningUK
HRH Announce The Line-Up For HRH Blues 5 in 2019
Halestorm Are About To Get Vicious
I began my career in journalism at the now defunct, pre-digital Smash Hits magazine, which was situated in London's Carnaby Street. After learning the ropes, I washed up at Vox Magazine, essentially the NME'S monthly magazine, as the Internet arrived into our lives. Thereon, I eventually graduated onto Q Magazine when people still treasured the magazine that they bought. My journalistic career since has been on newspapers at The Times, The Independent/i newspaper, Daily & Sunday Express and, ofcourse, National Rock Review.
A Few Moments With Broken Witt Rebels
Arejay Hale of Halestorm


Check out SullenTV's part 2 of the second stop of the Rockstar Inked Up World Tour in Sydney, Australia as Bernadette Macias caught up with some amazing artists such as Kegan Hawkins, Megan Massacre, Byron Drechsler and Katelyn Crane of MD Studios! Watch and Subscribe!
Kegan Hawkins "Tater Tatts" Has been tattooing for four years now. He currently works at Tribal Urge Newcastle N.S.W Australia.
Byron Drechsler is a very talented tattoo artist currently working at Frontyard Tattoo in south Australia.
Katelyn Crane: I grew up in the hard knocked streets of one of the safest cities of the country, Simi Valley CA. At 18 and came home with some tattoos on my hips that my mom had assumed I drew on myself before I broke the news. In 2005 my addiction of getting tattooed was in full swing and the only class I was passing in college was my art course when I asked my own tattoo artist, Mike DeVries if he could teach me what he knew. I had been travelling with him to conventions as just a collector and realized that the world I had been peeking into was something I wanted to devote my lifes work to. I've been working at his shop full time since 2008 and still grateful every day that I am able to do something that I love. I love the constant human interaction. My client's unique perspectives drive me to get better every day, to be able to more accurately convey what they see in their heads to what ends up going on their skin. I never wanted to be better than anyone else, just better than I was yesterday. Katelyn currently works at MD Studios with Mike DeVries.


QUVA PHARMA HOLDINGS, INC. is a business entity registered in the state of California under the legal form of FOREIGN STOCK. It can be found in the register by the DOS ID C3827267. The company was established and set into the register at 24th September 2015 and its current status is ACTIVE. Location address of this company is at 3 SUGAR CREEK CENTER 2ND FLOOR, LAND SUGAR, 77478, TX.
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Ironical enough article but this guys looks very tall!
As one of a handful of purebred Persians of most noble pedigree, and I am being humble, I do not know whether to be proud of, or put off by all these recent references to our exemplary imprints on the history of humanity.
First there was the 70 year coin. But I never thought a day would come when the the foreign minister of Islamic Republic of Iran, a regime that has trashed ancient Persian history and heritage, get into a spat with the U.S. Secretary of State over misappropriating the legacy of Cyrus the Great and Esther in the Old Testament.
It is certainly better news than the rest of the news.
And do not forget the 3 Persian kings/magi visiting baby Jesus. Forget about the government. Factually speaking, well bred Persians, were, and are just biblical-proportionally different.
Lux ex Tenebris is a Latin expression meaning light from darkness. Since ancient times knowledge is equated with light and truth, in a conflict with darkness, deceit and ignorance. There are related variations to the expression such as Fiat lux: let there be light, Lux et Veritas: light and the truth, and Lux Libertas: light and liberty.
Statute of Liberty is a great embodiment of truth, liberty and justice which are essential elements any democracy.
We are putting together the big picture, digging for the truth, solving some crimes, curious mysteries and addressing what has become a systemic problem.
It is about disrupting and holding accountable entrenched actors and conduct that have reared their ugly heads again and again over the years continuing to present.
This post is the 8th addendum to (previous limited information 9 posts) and integrated post for documentation and reference purposes. Information, context and statements were previously and contemporaneously documented and independently verifiable. Conclusions and assessments are self-evident or clearly marked and separately identified. Related efforts are not recent and have been ongoing for a significant period.
This post is the 7th addendum to (previous limited information 9 posts) and integrated post for documentation and reference purposes. Information, context and statements were previously and contemporaneously documented and independently verifiable. Conclusions and assessments are self-evident or clearly marked and separately identified. Related efforts are not recent and have been ongoing for a significant period.
This post is the 6th addendum to (previous limited information 9 posts) and integrated post for documentation and reference purposes. Information, context and statements were previously and contemporaneously documented and independently verifiable. Conclusions and assessments are self-evident or clearly marked and separately identified. Related efforts are not recent and have been ongoing for a significant period.