Friday, December 31, 2021

Dare I Disagree With David Ignatius?

 In today's Washington Post, intel columnist David Ignatius had a ten question multiple choice quiz about what will happen in 2022. He provided his own answers at the end, effectively forecasts.  Many I agree with and some, speculative about tech developments and such like, I have no opinion on.  However on two very important ones I think I disagree with him, if not overwhelmingly so.

One of these was about prospects for Iran and the US and others to put back together the JCPOA nuclear deal that Donald Trump removed the US from.  I am burned as I expected Biden to quickly rejoin the deal with minimum fuss once he got back in office. But he did not do so, insisting on demanding all sorts of extra things out of Iran about missiles and this and that.  No deal has been made and now Iran has a hard line government.  Yes, formal negotiations have been restarted in Vienna, but to me they do not seem to be going anywhere, and Iran has now substantially expanded its nuclear capability.  Ignatius forecasts that Iran will negotiate a deal under pressure from Russia and China.  I am afraid I am skeptical, although I would love to see it.

The other one, where I am forecasting a more optimistic outcome has to do with the current Russia-Ukraine situation.  Bottom line for Ignatius is pessimistic, that Russia will make cyberattacks on Ukraine that lead to people freezing this winter, will allow the Donbas separatists to attack Ukrainian forces and expand their territory of conrtrol, and then create broader chaos in Ukraine that will justify a full-scale invasion by Russia of Ukraine.

I think a more optimistic answer is more likely, although certainly not certain. This one says that Putin will gradually pull troops back after some sort of sufficiently face-saving deal is cut.  This seems to be what people in Ukraine think, although maybe the generally astute Ignatious knows better. But I hope he is wrong for this coming new year.

Snovem godem (Russian for Happy New Year), you all!

Barkley Rosser

Thursday, December 30, 2021

Memorializing Memorial

 On Tuesday, the Russian Supreme Court ordered the dissolution of the International Memorial Foundation, the oldest human rights group in Russia, founded in the final years of the Soviet regime by Andrei Sakharov, to investigate crimes carried out by the Stalin regime. They were officially labeled a "foreign agent" in 2016. They are being dissolved for sllegedly failing to follow through on the many requirements that an organization labeled that is supposed to do.

On Wednesday a lower court in Moscow ordered the dissolution of its companion group, the Memorial Human Rights Center. That will go to appeal, so may be awhile before the final order for its dissolution comes. But that looks pretty inevitable.  It was actually labeled a foreign agent  in 2014, but it is being banned as a supposed terrorist organization. It supports current victims of political oppression, with somewhat over 400 people on its current list.  Several of those have been labeled as "terrorists," so supporting them supposedly makes this branch of Memorial a terrorist organization.

A major question arising from these decisions, which have brought a storm of protest from human rights organizations around the world, such as Amnesty International, is what will happen to the unique set of records and data these groups, especially the first, have gathered.  These include the personal records of over 60,000 victims, as well as data on 3 million victims, as well as details about the gulag camps.  Perhaps more telling is that there are also records on 42,000 people who secretly helped the Stalin regime engage in their activities.  Reportedly the current government does not want those names publicized.  This really says a lot about this decision and what is going on there more generally right now.

At least for the moment it does not look like Russia will invade Ukraine.

Snovem godem (happy new year in Russian), you all.

Barkley Rosser

Wednesday, December 29, 2021

A Free Market is Always Full of Cheap Ideas


I may have scoffed in the past at the notion of "the marketplace of ideas" but I am coming around to think that maybe it's not such a bad metaphor. Back in the days of primitive economy, families, clans, tribes produced and consumed their own subsistence. If a surplus was produced beyond what was to be set aside for contingencies, it might be given as a gift to a neighboring group, setting up the obligation of a reciprocal gift.

Eventually, gift exchange was supplemented and/or supplanted by barter. What was traded, though, was still the superfluous produce after the group had met its own needs. Production for markets only gradually encroached upon production for need that incidentally produced a surplus. In societies dominated by capital, superfluous production became a condition for necessary production.

In such societies, "superfluous" speech -- advertising, propaganda, entertainment -- also became a condition for communication of "truth" -- or at least "news." Thus, the metaphor of the "marketplace of ideas" is not so outlandish -- it just doesn't mean what Oliver Wendell Holmes presumably thought it meant. There is no "one man, one voice" competition. Instead, monopolies of word and image determine what will be heard and seen the most. As A. J. Liebling wrote, "freedom of the press is limited to those who own one."

Social media has created the illusion that anybody can become a celebrity in a viral heartbeat, as if the circuits of social media amplification were not as dominated by advertising, propaganda, and entertainment as any television network. What the competition of the market tests, though, is not the "truth" of ideas but their marketability. That is to say, their superfluity relative to truth.

Paul Samuelson On Knut Wicksell

 Something I have been dong for several years now is serving as Senior Coeditor of the Fourth Edition of the New Palgrave Dictionary of Economics, with the original one published back in 1894 in London (my coeditors are Matias Vernengo and Esteban Perez). As part of this effort, a multi-year project, I have been reading cover-to-cover, the entire Third Edition, coedited by Steve Durlauf and Larry Blume, which came out several years ago.  It is 15 volumes, just shy of 15,000 pages, with about 3800 entries, with at least 37 Nobel Prize winners contributing to them.  I have been at this for two and a half years and am nearing the end, possibly finishing even before New Year's, although maybe just a bit shy.

Entries are still there from the 1890s, with quite a few written by F.Y. Edgeworth. Some of these old ones are biographical entries about now totally obscure figures from Britain in the late 1800s.  Even for ones not by Nobel Prize winners, there are many entries that are written by people about things that are named for those people themselves, e.g. "Bowen's cost disease," and many more. Certain topiics, obvious prominent ones, have multiple entries as updates have been added to later editions.  This new one will definitely have some of those. Probably in the coming year, this project will become my leading professional research activity, although I shall not completely shut down other activities, and I shall continue to edit the Review of Behavioral Economics.

Anyway, from time to time I have come across entries by prominent people from which I have learned a lot. Often I do not see those coming.  One did yesterday along those lines, a biographical entry on Knut Wicksell written by none other than the late Paul Anthony Samuelson, last thing I expected.  But Wicksell is a curious and complicated figures, and I learned a lot from this entry, although I have increasingly heard or seen various people citing him for this and that.  It seems he was both at the fountainhead of many intellectual streams as well as combining apparently contradictory ideas.

Why Samuelson came to write this entry I think has to with Wicksell's primordial role in the Cambridge capital theory controversies. Dating back to the 189s, and essentially predating both J.B. Clark and Cobb and Douglas, Wicksell thought seriously about aggregate production functions and their connections with income distribution.  Clark, of course, famously posed the marginal productivity theory of factor income distribution, and Cobb and Douglas cooked theirs up in the 1920s as a way to supposedly explain the then apparent constancy of capital and labor shares in the US economy (which has not held for some time now as the capital share has risen, see Piketty among others). Wicksell actually had an early version of the Cobb-Douglas production function, but also independently developed the marginal productivity theory of factor income distribution.  However, unlike Clark or Cobb and Douglas, he was aware of potential problems with all this. ones that were later highlighted in the Cambridge capital theory controversies.

In particular that controversy involved much discussion of "Wicksell Effects" (which has its own separate entry written by Edmund Burmeister). These arise from the problem that any aggregate of capital must be a value category, price times quantity, as there is no such thing as "leets" or an actual aggregate capital, unless one wants to make capital simply be time, or something like that.  But Wicksell was onto that issue as well, as we shall see shortly. In any case, he was aware of the possibility of "capital paradoxes," if not precisely the reswitching case that got much attention later due to Sraffa and Joan Robinson. He had the more general case, that there could be a "perverse" relation between the rate of interest (or marginal rate of profit) and the aggregate capital-labor ratio.  This would be due to price effects going "the wrong way." These perverse price effects are what have come to be called "Wicksell effects" and if they are strong enough, they can bring about the overall capital paradox. 

I give Samuelson credit for pulling lots of pieces together in a fair-minded and largely sympathetic way, even though he was viewed as the big "loser" in the Cambridge capital theory debates.  But indeed, Wicksell did more that I was aware of. although knew about some of what Samuelson wrote about, and he managed to show how it all sort of hangs together in an odd sort of way.

So, Samuelson argues that in his first book in 1893 Wicksell produced a micoeconomic general equilibrium model that essentially combined Walras and Bohm-Bawerk, especially the latter's average-period-production version of capital, which would become the main Austrian theory of capital, and which Bohm-Bawerk used to criticize Marx's labor theory of value, which Wicsell also rejected. Samuelson argued in effect that along with Alfred Marshall and his fellow countryman and professional rival, Gustav Cassel, he was one of the big three essential founders of neoclassical economics, although with Irving Fisher following in his footsteps on some of this quite closely.

More than either of those, Wicksell would use his microeconomic theory to develop his macroeconomics theory, which was hugely influential on both the proto-Keynesian "Swedish Svhool" (or "Stockholm School") as well as on major Austrian business cycle theories especially those of von Mises and Hayek. This came about as he derived the idea of the "natural rate of interest" out of his micro theory (something I had not previously realized fully), that which is an equilibrium in which the financial markets are stable (assuming no government action), with this part of a general equilibrium.  From this it was easy to argue that a "too low" interest rate could "overstimulate" the macroeconomy while a "too high" one could depress it, and indeed the Austrians would use this to blame central banks for causing business cycles by pushing interest rates up and down arbitrarily, thus leading to fluctuations that did not need to happen.

The "Swedish School" focused less on that and more on forms of aggregate demand, with Wicksell's input to this coming from seeing that there could be endogenous unemployment, which would reduce production.  He was playing in a lot of ballparks and combining theories that others later would separate to argue about: Keynesians versus Austrians effectively. 

A completely separate strand I was unaware of but of great interest to Samuelson personally had to do with the concept of public goods, or more properly speaking "collective consumption goods," with Samuelson writing the definitive textbook papers on this topic in 1954.  But he long argued that this idea came from certain Swedish economists, notably Erik Lindahl.  But Lindahl apparently got it originally from Wicksell, with Lindahl one of Wicsell's few students. So Wicksell was also the originator of this idea.

Indeed, apparently for all his ultimate influence, for most of his career, in contrast to his rival Cassel, he was an outsider, only briefly holding a professorship at Lund when Lindahl was his most prominent student. He was constantly in trouble for his radical leftist political activism, despite not being a Marxist. He was a strict pacifist, and involved with many social causes, including womens' rights. At the end of his life in the 1930s, he apparently lived in Stockholm where he became a kind of informal hovering influence over the Stockholm School and an advocate of its expanding welfare state, although with no professional position at that time. He was himself poor much of his life due to his poor employment situation arising from his political activism, a real outsider, and also because so many of his economic ideas were so far ahead of anything anybody around him knew of or understood for so long.

Indeed, looping back to the capital theory debates, Samuelson emphasizes for all his Walrasian and Austrian neoclassicism, and his analysis of the marginal productivity theory of factor income distribution, he did not see this as showing any sort of "optimality" much less social justice.  He was well aware that a laissez-faire equilibrium outcome might be not only inefficient because of problems like no markets for public goods, but because of unfair and unequal income distribution.

Barkley Rosser

Addendum, Dec. 29: I have now read three more entries on Wicksell in the Palgrave, and I must correct certain comments I made in the above post, which I shall do here without changing that post.  

Samuelson's entry is titled, "Wicksell and Neovlassical Economics." This was followed by Ed Burmeister's entry, "Wicksell Effects," then the actual rather long biographical entry by G.C. Uhr, the person who in 1951 coined the term "Wicksell effects," and then an entry on "Wicksell's Theory of Capital" by Massimo Pivetti. I shall add both corrections as well as additional material from these entries and going back to look again closely at Samuelaon's entry.

On his life, my biggest mistake was to claim he lived into the 1930s.  He lived from 1851 to 1926, so he did  not serve in person as an adviser to the leaders of the "Stockholm School who would advise the Swedish Social Democratic governments in bringing about modern Swedish welfare state, which Wicksell fairly well predicted in a book on socialism published in 1905 (never translated into English). He proposed a mixed economy, along with the welfare state and fair taxation, he allowed for nationalizations of monopolistic firms while supporting private firms or cooperatives in more competitive markets such as agriculture.

He was 50 years old before he got his professorship at Lund in 1901, where he remained until retirement in 1916, when he moved to Stockholm. Thus it was this final decade of his life, ending in 1926, when he acted as the senior adviser to the rising economists such as Hammerskold, Palander, Lundberg, and Ohlin, who would in the 1930s become famous and influential as the Stockholm School. Prior to 1901 Wicksell was indeed barely able to make ends meet, and had trouble publishing his various books due to his outsider political and religious radicalism and activism, which extended to issues of population control as he was a fan of Malthus and also Mill's feminist positions. He actualy did not get his PhD in economics at Uppsala until 1895, with some objecting to allowing his extremely important 1893 book as a thesis.

I have three further comments on his ideas. Onw is that indeed he was aware of environmental issues as part of his critique of laissez-faire capitalism. 

Another is that he only occasionally allowed for aggregate capital. He viewed labor and land as the fundamental factors of production, and his production theory involved dated quantities of these factors, with capital arising heterogeneously in each period as tied to these dated quantities of those factors, this drawing on his Austrian influence, which came from Carl Manger whose lectures he attended in Vienna in the 1880s. The role of time and the rate of interest thus arose as the necessary component tying all this together.

Finally I need to slightly modify the matter of how he saw aggregate demand varying. His theory of changes in employment involved variations in land-labor ratios, with him drawing critically on Ricardo's theory of rent. Indeed, his major work translated into English in the 1930s (along with his influential Lectures in Political Economy from 1906) was titled Rent, Value, and Capital. As it was, while much of his focus in his discussion of the natural rate of interest was on the price level, he also recognized that it was only when the economy was in full general equilibrium with the interest rate at its natural rate that there would also be full employment. If the interest rate was above that then indeed there could be unemployment. His followers in the Stockholm School, such as Ohlin, would extend this to more clearly formalize this as involving fluctuations in aggregate demand in a proto-Keynesian way.

Sunday, December 26, 2021

A Looming Anniversary Passes

 Yesterday was the 30th anniversary of the end of the Soviet Union.  I previously posted here about this looming anniversary, arguing that the large troop buildup of Russian troops on the Ukrainian border along with the many strong demands being made by V.V. Putin of various parties reflected his high awareness of this looking anniversary, which has been only barely mentioned or noticed in the western media.  

As it is, the anniversary passed without an invasion. Not only that there are reports from such sources as NPR, France 24, The Hill, and some other sources, although not yet such places as the NY Times or the Washington Post, that Putin has ordered a withdrawal of something like 10,000 of those troops out of about 104,000 reportedly there. This certainly still leaves a large enough contingent to carry out a serious invasion, if he wished, and certainly to continue threatening one.  However, these same reports say that after an especially tense time this past Wednesday, Dec. 22, which included phone calls with German Chancellor Scholze and President Biden, Putin gave an end of year speech the following day that while still issuing various threats and demands, also indicated that there may be diplomatic discussions about all this in early January. It looks like a very dangerous moment has passed without a major war breaking out.

I get the earliest edition of WaPo, and today's said nothing about any of this, including even Putin's speech three days ago, and certainly nothing about the anniversary that just passed. It had two stories on Ukraine and Russia.  One was about how a war could easily happen navally in the Sea of Azov, where borders are ill-defined with both nations having ports on it, but Russia dominating it, and Ukraine basically having no navy.  The story recounted numerous incidents initiated by Russian naval vessels against various Ukrainian ships, most of them commercial vessels.

The other was about internal Ukrainian politics, particularly about how Ukrainian President Zelensky is apparently going after some oligarchs, something the article admitted is popular there.  But the tone of the article was basically that he is nuts to be doing this in the face of a possible Russian invasion. No mention of any pullbacks or warming by Putin. The story recounted as something quite astounding that apparently in Kyiv nobody is all that worried about a Russian invasion, something I noted in my earlier post. It may be these people are foolish, but so far it is looking like their lack of fear of an impending invasion seems justified.  I hope that continues to be the case, whatever else happens there.

Barkley Rosser

Friday, December 24, 2021

It's A Wonderful Life: Faux Populism

 Somewhere I never saw a full version of this classic, Its a Wonderful Life, but here it is on Christmas Eve, an official Christmas classic. I was always suspicious of it, from all I had heard, but it looks less worth than I had heard. I mean, really, local bank owner gets into real estate problems? And the well-intentioned owner is somehow some great hero? He is offered total control of local monopolies. Heck, today's WaPo noted that the real hero is the wife, played by Donna Reed, Indeed she saves the day in many ways, including the final money pile-on to save him.

OK, so now I have finally seen the whole thing, but, I think I got the bottom line already above. 

Merry Christmas, you all

Barkley Rosser

Wednesday, December 22, 2021

RIP Sharon L. O'Hare

 I know, I know, my part of this blog is increasingly resembling an obituary column. But, heck, people I know who are conneted to econ keep dying, although this one was not as well known as others. Sharon Lyn O'Hare was a former student of mine 40 years ago at James Madison University, and while she never finished her PhD at Boston College, she was a decade later a colleague of mine in our department for five years. After then she left academia and ended up holding a high position in the City of Richmond government, director of its Office of Economics and Management, before retiring early.

She moved back to her home, Staunton, VA, 25 miles southwest of here, where her mother, Nancy O'Hare, lived also an old friend and former Speech and Pathology prof at JMU as well as a former mayor of Staunton, with Nancy still alive.

Anyway, Sharon died last Friday at age 59 after falling in her home and fracturing her skull.  I am about to go attend her funeral in Staunton in a few minutes.  She was not just a former student and colleague but also a good friend.  I find this one hitting me harder personally than some of these.

Anyway, Merry Christmas, you all.

Barkley Rosser

Friday, December 17, 2021

Whole Lotka Shakin' Goin' On

In a 1967 festschrift for Maurice Dobb, Richard Goodwin published an influential paper, "A Growth Cycle" on the "class struggle" model of cycles in economic growth. I only became aware of this famous paper because it had occurred to me that the dynamics of relative surplus population, necessary labour time, and socially necessary labour time might resemble a Lotka-Volterra predator-prey model.

Painting by Richard M. Goodwin
Goodwin's model dealt ultimately with the relationship between wages and profits, which seems like a logical place to start. But I think it is wrong. In my view -- and interpretation of Marx -- a more fundamental disequilibrium exists between labour capacity and employed labour power. There is always a relative surplus population (industrial reserve army) in capital and fluctuations in its size regulates the supply and demand for labour power and thus the value of the aggregate "wages fund."

I suspect that profits (or surplus value?) could be brought into a labour capacity/socially necessary labour time model through something like a predator/prey/parasite analysis, with surplus value being "parasitic" rather than "predatory." The implication of my alternative model is unusual -- "class struggle" appears in it as endogenous to labour -- the counterpart to competition between firms.

I don't do mathematical modeling so if there is anyone who does and finds these comments of interest, I would love to see what you come up with.

Thursday, December 16, 2021

George Floyd and Jesus

 I am commenting on:

A painting at Catholic University depicting Mary holding Jesus, with the latter's face resembling that of George Floyd, has been stolen.  It aroused all kinds of controversy.  

When I was growing up, my father was teaching and pursuing his doctorate in physics at CUA. Many are the Saturdays I spent running around the sub-basement of the physics building while he was working.

My parents were Catholics and raised us as Catholics, too. But they, and we children as a consequence, were inspired by the activist church that emerged after Vatican ll and left the Church when all that faded. It was a heady time.  I remember in particular playing guitar at Mass and singing a song whose scriptural lyric, quoting Jesus, might well be heeded by those who find the painting in question offensive. 

"Whatsoever you do to the least of my brothers, that you do unto me."

Sunday, December 12, 2021

A Looming Anniversary


The possibility of a Russian invasion of Ukraine is now front page news, with little sign that Putin is going to move his massive military buildup by the border back anytime soon, even if he does not invade.  After the phone call this past week between him and Biden, supposedly lower level negotiations have started, but it is unlikely Putin is going to be given anything dramatic that he has been demanding, such as a written guarantee Ukraine will not join NATO, something that polls now say 58% of Ukrainians support in the face of the ongoing threats and invasions and annexations and other provocations that Putin keeps indulging himself in, with a loud stream of propaganda over the past year that involves simply questioning there being any legitimacy to a Ukrainian state separate from Russia at all.  What did Putin think all this noise would bring about in Ukraine? Is he actually deluded about popular opinion there?

Yes, there are almost still some areas under Ukrainian military and political control in eastern Ukraine where Russian speakers dominate and who might prefer to be under Russian control, either as part of a separatist republic like the current Russian-supported Luhansk and Donetsk republics, or as part of Russia itself as Crimea has become effectively since its annexation, although that remains unrecognized by most of the rest of the world.  Perhaps Putin will insist on invading some of those territories presumably adjacent to those currently existing republics, thus expanding the territory under his effective control before backing off.  But, perhaps he will prefer just to keep everybody on a long term state of high alert for various reasons. Presumably he is aware of which areas would be more willing to accept such control, given that clearly the vast majority of Ukraine would oppose it, which would make ruling such territory very difficult, even if he were to conquer it, which he probably could if he really pushed it, although this would surely bring a major economic cost in being shut out of the international SWIFT financial system, which would certainly make life difficult for his crony oligarch pals.

Probably the most dramatic expansion he could do and maybe even sort of get away with, although I think it would itself probably bring that expulsion from the SWIFT system, would be to conquer Kharkiv (Ukrainian name, "Kharkov" being the Russian name). This is the second largest city in Ukraine after the capital, Kyiv ("Kiev" Russian name), at about 1.5 million. This is a city with a majority Russian speakers, although I do not know current sentiment.  As it is, it nearly joined to become another separatist republic when Luhansk and Donetsk did. A "local" separatist group did briefly seize control of the city hall, what happened in Luhansk and Donetsk, but unlike in those cities, after a few days the local police, not the Ukrainian military, removed them, and that was that. It and its surrounding province and remained fully a part of Ukraine, without any of the fighting happening there since. But that would be a big prize for Putin.  As it is, the city of Donetsk, which is in the separatist territories, is officially the fifth largest city of Ukraine at about 900,000, a major center of heavy industry. 

So, why is he doing this now?  One reason, rarely mentioned in the media reports, is this looming anniversary, which I am sure is very much on his mind: Christmas Day.  It was 30 years ago on December 25, 1991, that the Soviet flag was lowered over the Kremlin in Moscow and the Russian flag was raised. Putin has on more than one occasion declared that event to be "the worst socio-political catastrophe in world history," or words to that effect, surely a completely absurd statement. But he seems to take it seriously, and many reports do note his desire to somehow undo "the end of the Cold War," even as these reports somehow fail to note this looming 3oth anniversary of that end.

A front page story in today's Washington Post by its main Moscow correspondent, Robyn Dixon, lists six reasons why Putin is making this push.  The first is effectively this "redo the end of the Cold War" one, even as she fails to notice this looming anniversary as probably a factor in that. 

The second is the ongoing claim reinforced by Putin's long June essay on the issue that Ukraine "is not even a state," that it is or should really be at most "a protectorate" of Russia, if it even should be independent at all.  This is clearly historically absurd even if it is true that prior to the 20th century there was at most only briefly anything resembling a separate and independent Ukrainian state. Of course when one goes back far enough in time to when there was first a unified Russian-Ukrainian state, it was ruled out of Kyiv, not out of Moscow or St. Petersburg, a detail Putin and his spokespeople prefer to ignore.  But even acknowledging several centuries of Russian rule over Ukraine, even in those periods there were parts of modern Ukraine that Russia never ruled, notably the highly nationalistic western part that was ruled alternately by Poland and Austria at different times. I think even Putin is not keen on trying to rule those unruly anti-Russians there.

The third is the "security buffer" argument. Of all of the ones in this list this may have some credibility.  But Putin's own aggressive actions against Ukraine have, as already noted, turned most of Ukrainian public opinion against Russia, with a full 72% viewing Russia as a "hostile power" and pushing toward exactly those outcomes Putin does not want: Ukraine joining both the EU (62% in favor) as well as NATO (58%). He has brought about exactly what he does not want, and no amount of phony claims that the current Ukrainian government is run by a bunch of Nazis will undo that.

The fourth is essentially the fuller more explicit version of what is in the first one, the "One Russia" argument, that Ukraine really is not or should not be a separate state, and that it and Belarus should be part of Russia, or at least that Ukraine should become as subordinate to Russia as Belarus currently is. This has at times, including in Putin's June essay, involved making clearly false claims that there is not even a separate Ukrainian language or culture. However, more precisely there is the other possibly justifiable argument of admitting that there are two languages (at least) and that Russia needs to protect Russian speakers who are supposedly discriminated against and oppressed by the Ukrainian government. This was the bottom line justification for the annexation of Crimea and the support for the current separatist republics.  Again, this might be used to justify conquering some more territory in the eastern region, but that argument will not extend very far.

Then we have the "exporting chaos" argument, one that clearly has zero justification. This is based on the lie that the Ukrainian government is a total mess and not functional, when in fact it is currently democratic and fighting local corruption, if not fully successfully.  This becomes its real threat to Putin, a neighboring example of such a state, democratically run with full civil freedoms, a looming contrast to what is going on in Russia, where conditions are poor with mismanagement of the pandemic leading to a newly intensified lockdown in much of the country, and reports of Putin's poll numbers reaching new lows as he kills off or imprisons any credible rival. Of course the fake claim that the Ukrainian government is run by Nazis is part of all this, fitting in with the security buffer argument ("the Great Patriotic War!!!), although there are certainly some neo-Nazi groups operating in Ukraine who have at times had influence on governments, although not on the current one. And, of course, a Great Patriotic War abroad is always a good way to distract citizens from local problems and unhappiness, although there are some indications this may not be as popular as this stuff was in the past.  

Finally there is the claim of "Echoes of Russia's Imperial History." This may sell in Russia, but it does not do so anywhere else.  Allowing nations to claim as theirs whatever they once ruled at some time in the past when they were at their greatest power peak of expansionary rule is a recipe for total global war, given how many of such claims are totally in conflict.

I shall close by noting another unpleasant point that pretty much everybody ignores.  It is that in fact both the US and UK promised to "defend the territorial integrity of Ukraine" in the 1994 Budapest Accord, the other parties to which were Russia and Ukraine. This was the agreement that went along with Ukraine giving up its nuclear weapons to Russia.  Neither the US nor UK followed up on that when Russia seized control of Crimea and then annexed it. As it is, based on that Accord, maybe NATO has no grounds for defending Ukraine against a Russian invasion, but both the US and UK are already derelict in failing to do so previously, and will be even more so if they do nothing if Russia further invades, although probably the only thing that will happen in that case will be an imposition of much more serious economic sanctions.  In any case, I hope there is no invasion, and I hope Putin can hold himself back from doing so without making too much more tension. Heck, one virtue of being an authoritarian leader is that one can change the narrative and policy at any time one wants to.  This whole aggressive move has his been his doing without any substantial provocation by outside parties.  He can just stop doing it if he chooses at any point without any threat to his rule, I think.  I hope he decides that. Although I am sure this is going to go on at least past this looming anniversary and probably into next year sometime on the best of possible outcomes.

Barkley Rosser

PS: I just noticed that spell check does not like the currently correct "Kharkiv" but seems to prefer the Russian "Kharkov."  Gag.

Friday, December 10, 2021

More Partsanization Of The Environment

 The Environmental Protection Agency was founded during the presidency of Republican Richard Nixon, if perhaps with some lack of enthusiasm. The first national cap and trade (or "tradable emissions permits") system, for SO2, was instituted during the presidency of Republican George H.W. Bush. In 2008, Republican John McCain had an alternative plan to that proposed by Democrat Barack Obama for dealing with global warming, not all that different, mostly perhaps in scale.  Likewise even in 2012, while he was less specific, Republican Mitt Romney still at least gave lip service to doing something about this matter.

While he is not outright denying that global warming is happening as the more extreme members of his party argue, incoming Republican Governor of Virginia, Glenn Youngkin, supposedly a moderate Republican, has nevertheless announced his intention to remove Virginia from its participation in the not widely publicized Regional Greenhouse Gas Initiative (RGGI) of which Virginia has been the southernmost participating states, the others including most of those to its northeast. This is indeed a cap and trade system for greenhouse gases. This RGGI is probably more open to criticism by those who argue that it has been too weak, too ineffective in substantially reducing greenhouse gas emissions in the states participating in it. But at least it is pushing in the right direction and provides an institutional foundation for doing more.

So it really sticks out that incoming Governor Youngkin wants out of it. Why?  Oooh, he will save Virginia taxpayers money, actually people who pay for electricity.  The estimate he provided yesterday (as reported in today's Washington Post metro section) is about $52.44 per average customer per year in utility bills, with him complaining that the RGGI is not really doing anything.  He promises an alternative, but gives no hint of what that might be. As it is, this strictly short term possible monetary gain is likely to be offset, possibly more than fully offset, by other monetary costs that will probably increase, such as higher flood insurance for people living in the state, quite aside from the broader issue of global warming.

Anyway, this seems to be a further degradation of the Republican Party.  Here we have a supposedly moderate Republican, who clearly feels he must indulge the irresponsibility of the Trumpist/extremist wing of his party, in going against the long-running more responsible past of members of his party with respect to environmental policy.  It may be that Youngkin will not be able to do this by executive order, or may be delayed in doing so. But that he wants to and will probably try to is simply sad in my view.

Barkley Rosser

Thursday, December 9, 2021

Disposable time as a common-pool resource IX -- Disposable time as a model for environmental governance

Not only could disposable time be regarded as a common-pool resource similar to other common-pool resources, but it could stand as the single most far-reaching and democratically vital model of a common-pool resource. Donald Stabile alluded to something in this vein when he noted that, "Human labor is also the primary constituent of the society whose values must be part of any criterion of social evaluation. The appropriate starting point in any policy directed at social costs is with those imposed on labor."

In "Accountants and the Price System: the Problem of Social Costs," Stabile focused on the perspective introduced by John Maurice Clark in his Studies in the Economics of Overhead Costs. Clark argued that labor should be considered as an overhead cost of doing business rather than as a variable cost of the employing firm because the cost of maintaining the worker and his or her family in good stead has to be borne by someone, whether or not that worker is employed. "If all industry were integrated and owned by workers…," Clark explained, "it would be clear to worker-owners that the real cost of labor could not be materially reduced by unemployment."

Commenting on the efforts by some accountants during the 1970s to change the way social costs were accounted for on the corporate account books, Stabile concluded that those accountants had not developed useful concepts for examining social costs. To explain why they had failed, Stabile relied on the perspective on social costs set forth by Clark and by K. William Kapp in which analysis of the social costs of labor is central to a process of social evaluation. Such an outlook was missing from the works of social cost accountants, "Market values are a weak thread from which to hang a whole system of value," Stabile argued, "but accountants cling to it doggedly. Without an alteration of this basic tenet of accounting, social cost accounting cannot develop into a criterion of social value." 

Returning to Clark's example of the hypothetical state where all industry is integrated and owned by workers, there is an instance of a non-market process of social evaluation whose results can be worked out with little hesitation, unemployment would be regarded as sheer waste rather than as an unfortunate but necessary measure for accumulating surplus value. Social accounting for unemployment would come to a very different assessment of economic "efficiency" than would a narrowly financial one from capital's perspective.

Simply regarding disposable time as a common-pool resource would not automatically result in managing work as a commons. It is instead an important preliminary step that offers a rich conceptual framework for guiding the development of concrete policy proposals, research agendas, strategies and experiments. Such strategies and proposals can borrow from and combine experience in the governance of resources such as fisheries, forests and watersheds alongside lessons from trade union movements of the past and present and from feminist struggles for recognition and valuing of caregiving work.

Innovations that result from synthesizing such diverse experiences may seem disturbingly unfamiliar from the traditional perspective of viewing labour as a commodity. That is why it is important to not only foster an understanding of disposable time as a common-pool resource but in the process to not lose sight of what the traditional perspective entails and what is the relationship between the two views. In some of the most visionary lines of the Grundrisse, Marx rhapsodized about a future beyond the social contradictions of capital in which wealth is measured by the quantity of alienated labour time that capital is able to accumulate. In contrast to grim scenario, Marx briefly outlined a society in which disposable time become the measure of wealth:

For real wealth is the developed productive power of all individuals. The measure of wealth is then not any longer, in any way, labour time, but rather disposable time. Labour time as the measure of value posits wealth itself as founded on poverty, and disposable time as existing in and because of the antithesis to surplus labour time; or, the positing of an individual's entire time as labour time, and his degradation therefore to mere worker, subsumption under labour.

The degradation of individual to "mere worker" has its counterpart in the degradation of the earth to "mere resources," to be extracted, refined, and manufactured as quickly and extensively as possible into commodities. Conceiving of disposable time as a common-pool resource establishes a framework for understanding and resisting both forms of degradations.

Wednesday, December 8, 2021

Disposable time as a common-pool resource VIII -- An ecological subject

In "Foundations for Environmental Political Economy," John Dryzek explored the prospects of an environmentalist economic subject, "Homo ecologicus," as an alternative to the traditional rational actor or economic man. Dryzek criticized previous efforts at positing an ethical, environmentalist subject, saying they were flawed by wishful thinking and reductionism. The alternative Dryzek proposed instead was based on his Ostrom's case study work on managing common-pool resources. 

The alternative political economy would be one that can account for instrumental rationality – even deploy it in its proper place – but that also can point to alternatives grounded in something firmer than wishful thinking. Dryzek's alternative doesn't rely exclusively on subjectivity but also considers inter-subjectivity and communicative rationality. In Ostrom's work, what distinguished the successful case studies was communication and interaction between individuals. Participants learned to identify whom to trust, discern the effects their actions will have on others and on the shared resource, behave more "straightforwardly" toward each other and build institutional arrangements for resolving conflicts. This alternative subject, then, is habitually inclined toward social cooperation rather than atomistic individualism.

Successful institutions of the type identified by Ostrom rarely come into being through explicit contracts. More often they evolve through long periods of informal, collective learning about what works and what doesn't. Another approach to these institutions would involve more deliberate experimentation with institutional innovations. For such institutional reconstruction to take place, however, it is essential, Dryzek cautioned, that participation "move beyond the narrow community of political economists and political theorists and into society at large." Evaluating disposable time as a common pool resource could be one such deliberate experiment.

Tuesday, December 7, 2021

RIP Sir Geoffrey C. Harcourt

 Yes, Geoff Harcourt died yesterday at age 90, not sure what of. It seems I am writing too many of these recently, but his passing deserves notice.  He is most famous for his book from 1972 Some Cambridge Controversies in the Theory of Capital, which expanded on an earlier JEL paper on the topic. This has long been viewed as the clearest general discussion of that topic there is, although many people were involved in those controversies, from Piero Sraffa Joan Robinson through Paul Samuelson and Robert Solow, to quite a few others, including Don Harris, father of current US VP Kamala Harris, with even me getting in on it in some later stages with a few articles. But he wrote the definitive work, which may also have been so definitive because he explained the whole thing so well.

From Adelaide, Australia originally and to which he returned for the later years of his life, he spent much of his career at Cambridge University in UK, becoming for several years the President of Jesus College there. I first met him on a visit there in 1973, just after his most famous work was published, and I found him engaging and personable, a genuinely nice guy.  And I have never heard anybody dispute that judgment.  I saw him a number of times in later years, and had not reason to change my judgment on that matter, always very friendly and outgoing.  He was one of those rare economists who had some of his  children follow him the profession. Most of us are such cranky types our children want nothing to do with it.

He wrote on many topics regarding Post Keynesian economics (or post-Keynesian economics as he preferred to spell it), while his work on the Cambridge capital theory controversies was the most famous.  However, I would like to note a special element of his career.  I am not going to dredge through the gory details, but Post Keynesian economics has been rife with splits and controversies, some of these becoming both heated and personalized, with national characters involved.  

There have been as many as six different schools of it identified, with the Modern Monetary Theory a more recent addition.  But I note three older ones that split to some degree along national lines and where the arguments became very heated.  At the most extreme opposite ends were the Americans who following Paul Davidson have emphasized the idea of uncertainty coming from Keynes.  At its opposite end are the "neo-Ricardian" Sraffians based mostly in Italy, but also with many in Britain, incuding in the past at Cambridge, notably Sraffa himself from Italy at Cambridge. They emphasized comparing long-run equlibria, with an emphasis indeed on the capital theory controversies, making it look that Harcourt would be in their camp. But he may have been more in a more strictly based camp, the neo-Kaleckians. But the later leader of the neo-Ricardians was Pierangelo Garegnani from Italy.

Anyway, during the 1980s for quite a few years there was summer camp for Post Keynesians where many of these would show up in Trieste, Italy. I never attended one of these, but I heard about them. This is where these debates became open and heated and personalized, with Davidson and Garegnani especially duking it out. I was told that it came to pass that when a prominent person from one side would give a seminar, those from the other camp would go out to hang out on the beach.  In any case, apparently there at these camps, it was Geoff Harcourt, liked and admired by everybody, who made the greatest efforts to overcome these differences and make peace, if not adjudicate intellectual rights or wrongs. For better or worse, he was unable to overcome the personalistic feuding.  But some of us know that he tried with the best intentions, and it was something so very typical of him.

Of course he had reached a substantial age, but I know that he was still putting out a few papers from time to time up until very recently.  He will be missed.

Barkley Rosser

Disposable time as a common-pool resource VII -- Common-pool property rights

Two key features of Ostrom's analysis: the distinguishing of a spectrum of separable property rights rather than monolithic "ownership" and the use of a grid that classifies goods according to how difficult it is to restrict access to them and the extent to which one person's use of a good subtracts from what is left available for others. Schlager and Ostrom identified a bundle of property rights pertaining to natural resources that they defined as follows:

  1. Access: "The right to enter a defined physical property."
  2. Withdrawal: "The right to obtain the "products" of a resource (e.g., catch fish, appropriate water, etc.)."
  3. Management: "The right to regulate internal use patterns and transform the resource by making improvements."
  4. Exclusion: "The right to determine who will have an access right, and how that right may be transferred."
  5.  Alienation: "The right to sell or lease either or both of the above collective-choice (management and exclusion) rights."
The labour-as-a-commodity view actually restricts the scope of the wage earner's property right to the right to sell all the other rights (alienation!), while a common-pool resource perspective could grant access and withdrawal while retaining the three collective-choice rights.
Ostrom's matrix of goods is illustrated in the following diagram:
I've added "disposable time" to Ostrom's examples of common-pool resources to reflect Hodgskin's observation that skilled workers are the product of many years of unpaid care work ("under the strong influence of natural affection and parental love"). It would be extremely difficult to exclude potential beneficiaries from the resulting "good" (skilled labourer). A similar "common-pool resource" designation follows from looking at income employment as the "good" from the perspective of the worker.

A Racist Screed in the New York Times

Really bad, misguided, even malicious writing serves a purpose, showing in extreme form the faults that, more subtly expressed, can pass under the radar.  That’s my reaction to this execrable column from today’s New York Times on the violation the author felt when her front lawn mini-library was perused by a white couple.

In a nutshell: Erin Aubry Kaplan lives in a historic black neighborhood, Inglewood just outside LA, and wants to sustain it against the forces of gentrification.  She also loves books.  Uniting these passions, she places a small library-on-a-post in front of her house, the sort that passers-by can scan, add titles to or take titles from as they wish.  She hopes it would provide a sense of community among her black neighbors.  But then she sees two young whites stopping to check it out.  She wrote this article to express her horror that her offering, which she placed on her own property, was being “taken” by the forces of gentrification and whiteness, threatening the future of a neighborhood she values, but also her realization that the defense of black spaces requires much more than individual action.

The first problem with the piece, probably obvious to everyone except the woman who wrote it, is that, on the basis of the information she gives, there is no reason to assume that the white couple is any wealthier than she is.  Hell, she doesn’t even know their credit rating.  If the problem with gentrification is that working class people are pushed out of their homes and communities, it’s about money, not race.  Upper-income perusers of books who happen to be black could be vectors of the process just as readily as upper-income whites.

Deeper, however, is the problem of assuming a zero-sum relationship between the well-being of different groups, racial or otherwise.  (This is something I’ve written about earlier.)  If white people have the opportunity to live in a desirable neighborhood, like the Inglewood Kaplan is striving to build, ipso facto black people have less.  Those book-sniffing whites, by their very presence, will make the area inhospitable to black homeowners or at the least deplete their social capital.

Now of course, it is entirely possible that a particular white couple with plans for redeveloping Inglewood and the resources to carry them out, could be a mortal threat.  Or that whites hostile to the customs that have evolved over generations of black settlement could, if numerous and disrespectful enough, destroy the neighborliness Kaplan values.  But neither can be inferred from the sketchy story she tells, and the underlying assumption that more opportunity for some always has to signify less for others is pernicious.

Finally, there is an unspoken assumption that neighborhood improvements like mini-libraries cumulatively add up to gentrification, replacing long-time residents with better-healed newcomers.  If that were true, then it becomes an argument for resisting any such enhancement, whether it be more attractive landscaping around someone’s house, curbside swales, local bakeries with fresh bread, mini-parks and the like.  Is that the implication?

The problem with gentrification is not that neighborhoods get too many amenities; it’s that they are amenities that cater to the rich and drive up housing values beyond the reach of those who aren’t—in an economy bifurcated between those with too much money and those with too little.  (See this earlier discussion.)  Instead of even a smidgeon of clarity about these issues, what we get instead is a screed that truly justifies the label of reverse racism, a term usually invoked by those defending the existing racial order.  This, like the antisemitism of old, is the socialism of fools.

It is also revealing that such a dreadful essay would be published by the Times, which apparently considers it within the realm of reasonable debate.  That too is a statement.

Monday, December 6, 2021

Disposable time as a common-pool resource VI -- Withholding labour

Superficially, it might seem that the individual worker can deny access to an employer offering unsuitable terms. But it is here we need to factor in that peculiarity of labour-power noted by the silk weaver, William Longson, that a day's labour not sold on the day it is offered is "lost to the labourer and to the whole community." "If his capacity for labour remains unsold," Marx agreed, "the labourer derives no benefit from it, but rather he will feel it to be a cruel nature-imposed necessity that this capacity has cost for its production a definite amount of the means of subsistence and that it will continue to do so for its reproduction."

This contingency and urgency of employment effectively undermines the worker's option of refusing work. The option of refusing work at unsuitable wages or conditions is further undermined by competition from incrementally more desperate job seekers – a population Marx famously referred to as "an industrial reserve army," a more dramatic name for the relative surplus population he analysed in the Grundrisse.

The pervasiveness of unemployment from the paid labour force collaterally stigmatizes and marginalizes unpaid work. For example, "welfare to work" schemes require single parents of young children to take low-paid work that often forces them to depend on unsuitable childcare arrangements. Such rules discount the social value of parenting work but are enforced on the grounds that public assistance recipients are employable.

There are no barriers to entry to unpaid work and relatively few credentials awarded for doing it. Thus mobility from unpaid care work to paid employment is impeded. Work done outside the paid labour force rarely counts as work experience. Instead, the time away from paid labour depreciates accumulated skills and credentials.

TimeWork Web

I have added a whole bunch of stuff to the restored TimeWork Web and it looks like I am going to have to launch a sustained marketing campaign to generate traffic to it. Please excuse the self-promotion, but I think it's a pretty formidable accomplishment to sustain a research project for 26 years without any direct institutional support  (although there have been a few indirect sources of funding over the years).

The 2021 bicentennial of the publication of The Source and Remedy of the National Difficulties has served as the culmination of this research project. One day, perhaps, historians, Marxologist, ecological economists, degrowth advocates, shorter work time advocates, leisure scholars, and English Romantic literature scholars will come to realize why The Source and Remedy of the National Difficulties really does need to be "rescued from its oblivion" once and for all.

If, as Moishe Postone wrote, Marx's analysis in the Grundisse is 'the key to interpreting his mature critique of political economy," then Marx's well-documented appreciation -- and occasional criticism -- of The Source and Remedy is the key to interpreting his analysis of the historical specificity of value in the Grundrisse.

Sunday, December 5, 2021

Disposable time as a common-pool resource V -- Social costs and common-pool resources

 The basic idea behind common-pool resources also has a venerable place in the history of classical political economy and neoclassical economic thought. In the second edition of his Principles of Political Economy, Henry Sidgwick observed that "private enterprise may sometimes be socially uneconomical because the undertaker is able to appropriate not less but more than the whole net gain of his enterprise to the community." From the perspective of the profit-seeking firm, there is no difference between introducing a new, more efficient production process and simply shifting a portion of the costs or risks onto someone else, society or the environment. In fact, the opportunities for the latter may be more readily available.

One example Sidgwick used to illustrate this was "the case of certain fisheries, where it is clearly for the general interest that the fish should not be caught at certain times, or in certain places, or with certain instruments; because the increase of actual supply obtained by such captures is much overbalanced by the detriment it causes to prospective supply." Sidgwick admitted that many fishermen may voluntarily agree to limit their catch but even in this circumstance, "the larger the number that thus voluntarily abstain, the stronger inducement is offered to the remaining few to pursue their fishing in the objectionable times, places, and ways, so long as they are under no legal coercion to abstain."

Applying the same principle to the context of labour-power, "fishing in the objectionable times, places and ways" manifests itself in the standard practice of employers considering labour as a "variable cost." From the standpoint of society as a whole, unemployment is simply a way of shifting the overhead cost of labour onto society as a whole. John Maurice Clark discussed this cost-shifting aspect in the 1920s in his Studies in the Economics of Overhead Costs, especially his chapter on "labor as an overhead cost."

Disposable time as a common pool resource IV -- disposable time as a common pool resource

In his Grundrisse, Marx identified surplus labour time as a form of disposable time. That is to say that, under capitalism, it is labour time at the disposal of capital. "The whole development of wealth," Marx wrote, "rests on the creation of disposable time." "In production resting on capital," he continued three sentences later, "the existence of necessary labour time is conditional on the creation of superfluous labour time."

Although it strongly suggests surplus labour time -- and thus surplus value -- superfluous labour time is not identical to surplus labour time. In the Grundrisse, Marx discussed disposable time and superfluous labour time as characteristics of any human society, not exclusively historical capitalism. It is the unique characteristic of capitalism that it subordinates the performance of necessary labour to the production of surplus value. Thus, under capitalism, superfluous labour time takes on a new function, a large part of which is indeed the production of surplus value. But that is not all, as Marx explained two paragraphs later. In its drive to create as much surplus labour as possible and "to reduce necessary labour to a minimum," capital also has a tendency "to increase the labouring population, as well as constantly to posit a part of it as surplus population - population which is useless until such time as capital can utilize it." Superfluous labour time thus implies surplus population alongside surplus labour time.

Regardless of whether one works for a wage or is unemployed, the capacity to perform labour is the outcome of an intrinsically social, co-operative activity. As such, this capacity can best be understood, at least in part, as a "common-pool resource" in that it may most effectively be engaged, valued, enjoyed and protected as a collectively-shared asset rather than as a fragmented assortment of individualized units, which is the current model of labour-as-a-commodity. Relating the concept of a common-pool good to labour is especially apt in that it illuminates, as Burkett points out, "the parallel between capital's extension of work time beyond the limits of human recuperative abilities [including social vitality], and capital's overstretching of the regenerative powers of the land." However, there is also an important distinction between wealth, which can be accumulated and preserved, and those subsistence goods that must be consumed directly to sustain life and enable work to continue. Social production would cease if the producers themselves were denied the goods necessary to their sustenance. Therefore it would be logical to regard only the produce of disposable time, that is superfluous labour time, as goods held in common.


Saturday, December 4, 2021

Disposable time as a common-pool resource III -- Labour power as a common pool resource

 Human mental and physical capacities to work have elastic but definite natural limits. Those capacities must be continuously restored and enhanced through nourishment, rest and social interaction. Over the longer term that capacity for labour also has to be replenished by a new generation of youth, reared by the previous generation.

It is this combination of definite limits and of the need for continuous recuperation and replacement that, according to Paul Burkett, gives labour-power the characteristics of a common-pool resource. As Burkett explained, Karl Marx also regarded labour power not merely as a marketable asset of private individuals but as a "reserve fund for the regeneration of the vital force of nations." "From the standpoint of the reproduction and development of society," Burkett elaborated, "labor power is a common-pool resource – one with definite (albeit elastic) natural limits."

Here is where I would amend Burkett's definition to designate disposable time -- rather than labour power -- as the common-pool resource. The rationale for doing so is that the working day consists of two distinct parts, one of which is the labour time necessary to provide for the subsistence of the worker and the worker's family and represented by the wage. The second part of the working day is labour performed to create value that is taken by capital and is referred to as surplus labour time or surplus value. The proportion of surplus labour time to necessary labour time, however, is not a constant and changes with changes in the length of the working day and the productivity of labour.


Friday, December 3, 2021

Disposable time as a common-pool resource II -- Labour is not a commodity

 Labour was conventionally regarded as a private good by both classical political economists and conservative thinkers such as Edmund Burke, who argued, "labour is a commodity like every other, and rises and falls according to the demand." The counterpoint to that view, since the early 19th century is that labour (power) is not a commodity because it has characteristics that no other commodity has. Labour Economist Robert Prasch summarized these characteristics as: "(1) Labor cannot be separated from its providers. (2) Labor cannot be stored. (3) Labor embodies the quality of self-consciousness. (4) Labor is the one "factor of production" that most of us wish, in the end, to see well compensated."

The negative claim was officially endorsed in Section 6 of the U.S. Clayton Antitrust Act, passed by Congress in 1915. Hailed by American Federation of Labor president Samuel Gompers as a "Charter of Industrial Freedom," Section 6 proclaimed that "the labor of a human being is not a commodity or article of commerce." Nearly identical wording was incorporated into the Treaty of Versailles in 1919 as a guiding principle for the establishment of the International Labour Organization and reaffirmed as a first principle of the I.L.O. in 1944.

The everyday experience of working people, economic policies of governments, bargaining priorities of trade unions and theoretical models of economists would seem to conform more to the commodity model than the idealistic but nebulous proclamations of the Clayton Act and the Treaty of Versailles. But an early rationale for the rebuttal was outlined in 1834 by silk weaver William Longson in his evidence to the House of Commons Select Committee on Hand-Loom Weavers:

…every other commodity when brought to market, if you cannot get the price intended, it may be taken out of the market, and taken home, and brought and sold another day; but if a day's labour is offered on any day, and is not sold on that day, that day's labour is lost to the labourer and to the whole community…

Longson concluded from these observations of labour's peculiarities that, "I can only say I should be as ready to call a verb a substantive as any longer to call labour a commodity." 

Another formidable challenge to the notion of labour as a commodity had been articulated nine years earlier by Thomas Hodgskin in his Labour Defended Against the Claims of Capital. Hodgskin pointed out that the most important operation for the production of wealth, "the rearing of youth and teaching them skilled labour, or some wealth-creating art." As Hodgskin continued, "this most important operation is performed… without any circulating capital whatever," that is to say, without compensation in either money or goods. Instead, child rearing is performed, "under the strong influence of natural affection and parental love… through all the long period of the infancy and childhood of their offspring."

In both Longson's and Hodgskin's arguments, the unstated distinction between labour and labour power was crucial. No actual labour was performed in Longson's example. What the labourer offered on the market but was unable to sell was his or her capacity to work on that particular day. Similarly, what parents give to their children by bringing them up and teaching them skills is a capacity to labour, provided the opportunity arises to exercise that capacity. Wage labour per se only comes into existence after the capacity to labour has been purchased and combined by the employer with facilities, equipment, raw materials and direction.

Thursday, December 2, 2021

RIP David M. Grether

 I have only just now learned that Dave Grether died on Sept. 12 of causes unreported at age 82. He was an emeritus prof of econ at Cal Tech.  He received his PhD in 1969 from Stanford in econometrics. He soon was at Cal Tech where he spent the rest of his career, soon becoming an early figure in experimental economics, coauthoring papers with colleague, Charles Plott, whom many think should have shared the Nobel Prize with Vernon Smith for founding experimental economics. Dave's most famous paper was with Plott in 1979 in the AER on preference reversals, an anomaly in which people are seen to violate a standard axiom of rational preferences in economic theory, although they found that if people redo the experiment numerous times they tend to start behaving more like economic theory predicts. Cal Tech has since then been a leading location for experimental economics and still is.

Dave is perhaps less well known than some others partly because he moved heavily into administration. Cal Tech does not have a separate econ department, with it in a Social Sciences School. He served as its Director for a substantial period, and then would become Chair of the Humanities and Social Sciences Division, with him being widely praised in both of those positions. This latter position reflected that he had a very broad knowledge and view of things, apparently having a fully scholarly knowledge of history. Part of why Cal Tech became and remains a top location for experimental economics reflects his efforts in those positions.

I came to know him because another thing he did was to become a coeditor of the Journal of Economic Behavior and Organization (JEBO), the coeditor largely in charge of handling papers on experimental economics, with JEBO a leading outlet for such papers.  He was appointed to that position by the journal's founder, the late Dick Day, who just died a few months ago also. I edited the journal from 2001-2010, with Dave staying on as that coeditor until about two years before I stepped aside. I came to both respect him and also like him a lot, a very open-minded and wise person.

One thing he played a major role in was playing the key role in getting the first paper on field experiments by John List and Jason Shogren, a professor of his at U. of Wyoming where he got his PhD. At the time John was basically an unknown, although now he is at the U. of Chicago and widely viewed as near certain to get his own Nobel basically for publishing that paper. At a conference honoring Dave Grether, an organizer managed to inveigle a leading advocate of lab experiments to engsge in unpleasant criticism of John, that being at a time when the field experimentalists were challenging the lab folks for getting funding support from NSF for their experiments. John was put on a hot seat, from where he handled himself well.  But Dave was upset about this and went behind the scenes to make peace between the parties. He was that kind of guy.

Anyway, I am sorry to learn that he has passed, someone who played a more important role behind a lot of scenes than many realized. I shall miss him.

Barkley Rosser 

Disposable time as a common-pool resource I -- Introduction

About a decade ago, I wrote a short piece about "labour power as a common-pool resource" that got picked up by Michel Bauwens of the P2P Foundation and led to me being invited to a conference on the commons in Berlin put on by the Heinrich Böll Foundation. I would now like to amend that to regard disposable time as the common-pool resource in question. Much of my original rationale applies as well or better to the new formulation. I am assuming that all of this will be new to most readers.

Common-pool resource is a category of goods introduced by Elinor Ostrom in work for which she was awarded the Sveriges Riksbank Prize in Economic Sciences in 2009. For Ostrom, common-pool resources are goods that don't fit tidily into the categories of either private or public goods. They are like private goods in that their use by one consumer subtracts from how much is available for others. But they are like public goods in that it is difficult to exclude people from access to them. Some obvious examples are forests, fisheries, aquifers and the atmosphere. Ostrom distinguished between common-pool resources that are unregulated and "the commons," which is collectively self-managed. From this distinction came her criticism of Garrett Hardin's "Tragedy of the Commons," which assumed an unmanaged common-pool resource rather than a collectively self-managed commons.

Disposable time is a much older and more ambivalent concept. Usually people assume it refers to leisure, which they conceive of as recreation or idleness. Traditionally, though, leisure was associated with education, culture and self-improvement and was mostly an exclusive privilege of the upper classes. In part, disposable time embraces that older conception of leisure but universalizes it. But in his Grundrisse, Karl Marx added another dimension to disposable time by also associating it with labour time that was in excess of what was necessary for subsistence. Thus, labour time that is superfluous to what is necessary for the workers' subsistence could be at the disposal of capital for the production of surplus value.