Tuesday Nov 3rd 7-9pm
The Centre for Environment & Sustainability (UWO) presents: Dr. Peter Victor –
"Managing Without Growth: Slower by Design, not Disaster"
Venue: Middlesex College Room 110
Growth, expansion, greater wealth – these have long been the standard policies of governments and business. But is growth effective in eliminating world poverty, solving unemployment, protecting the environment and contributing to individual happiness? What would happen to world economics if we had a no growth policy? Dr. Peter Victor will address these issues and others in his upcoming lecture as part of the E&S Special Lecture Series. An economist and Professor in Environmental Studies at York University, Dr. Victor has worked on environmental issues for nearly 40 years. Dr. Victor was one of the original founders of ecological economics and was the first President of the Canadian Society for Ecological Economics.
A reminder: Dr. Victor will be the guest author for E&S Reads – 10:30 to Noon, Nov. 3, 09 – Kresge Building Room 106. This is an excellent opportunity for a intimate discussion with the author. Copies of "Managing Without Growth" are available in the Bookstore.
Everyone is welcome to both events.
Presented by: The Centre for Environment and Sustainability, The Global and Ecosystem Health Interest Group at the Schulich School of Medicine & Dentistry and The McConnell Family Foundation.
Sunday, November 1, 2009
Friday, October 30, 2009
A revolution is not a change in management. It is a change in man.
Forty years ago many writers and thinkers and poets (and even economists) talked of a revolution that was coming. The 'Age of Acquarious', the 'Limits to Capitalism', 'The Greening of America', the 'New World New Mind', the 'Limits to Growth' and 'The End of Certainty' etc.
One of these writers, Carl Rogers [1], wrote about the increasing disbelief in the democratic process in the early 1970s. He also stated unequivocably 'that a revolution was coming', not 'a gun carrying army with banners, not in manifestos or declarations, but through the emergence of a new kind of person, thrusting up through the dying, yellowing, putrefying leaves and stalks of our fading institutions.'
This new kind of person, Rogers wrote, would have the following traits:
** deep concern for authenticity against the climate of half-truth, exaggeration, scandal, sensation and double talk, or talk without meaning at all;
** an opposition to all highly structured, inflexible and impersonal institutions;
** fundamental indifference to material comforts and rewards, although accustomed to affluence [2];
** deep desire for close personal associations, not confined to the old 'familiar areas', with all others excluded;
** a rejection of national and racial discrimination;
** deep distrust of science and established truth with is so much in the 'head' that in fact it suppresses truth;
** strong desire for self-knowledge including dreams, mediation, mysteries and psychic phenomena, and for feeling and understanding rather than 'knowledge' which seems to have no real social value;
** a feeling of closeness to nature, an identification with it, and a desire to act in no way against it;
** an awareness of living in an ever-changing process in which he or she is vitally alive and willing to risk;
** a trust in one's own experience as a validation of life.
Unfortunately governments and political parties have continued to enforced authoritarian and capitalist hegemonies around the world. They "themselves need transformation almost as much as most of the people who elect them, or comprise them. That hegemony is central in control, bureaucratic in form, relying upon leadership, and embarassed at the very idea of liberation" wrote the ousted left-wing radical of the Australian Whitlam Labor Government, Jim Cairns. [3]
Rogers and Cairns were writing words as a silent plea for the world to find the individual and group strength to counter the zero sum game of imperialism, corporatism, and the coups and wars that go with it. Their predicament was dire and so eloquently put in a song by Simon and Garfunkel:
Decades earlier George Orwell appeared to mirror this message when he wrote despairingly that "Traditions are not killed by facts."
[1] 'The Man and His Ideas', Richard I Evans (ed), EP Dutton and Co Inc New York, 1975. As quoted by Jim Cairns (former Australian Deputy Prime Minister in the early 1970s) in 1976 book entitled 'Oil in Troubled Waters'.
[2] "An important question here is whether affluence is needed to produce the new, emerging person." wrote Jim Cairns
[3] Jim Cairns.1976. 'Oil in Troubled Waters'. Page 151.
[4] Lyrics in the song: 'The Sounds of Silence'. Sung by Simon and Garfunkel
One of these writers, Carl Rogers [1], wrote about the increasing disbelief in the democratic process in the early 1970s. He also stated unequivocably 'that a revolution was coming', not 'a gun carrying army with banners, not in manifestos or declarations, but through the emergence of a new kind of person, thrusting up through the dying, yellowing, putrefying leaves and stalks of our fading institutions.'
This new kind of person, Rogers wrote, would have the following traits:
** deep concern for authenticity against the climate of half-truth, exaggeration, scandal, sensation and double talk, or talk without meaning at all;
** an opposition to all highly structured, inflexible and impersonal institutions;
** fundamental indifference to material comforts and rewards, although accustomed to affluence [2];
** deep desire for close personal associations, not confined to the old 'familiar areas', with all others excluded;
** a rejection of national and racial discrimination;
** deep distrust of science and established truth with is so much in the 'head' that in fact it suppresses truth;
** strong desire for self-knowledge including dreams, mediation, mysteries and psychic phenomena, and for feeling and understanding rather than 'knowledge' which seems to have no real social value;
** a feeling of closeness to nature, an identification with it, and a desire to act in no way against it;
** an awareness of living in an ever-changing process in which he or she is vitally alive and willing to risk;
** a trust in one's own experience as a validation of life.
Unfortunately governments and political parties have continued to enforced authoritarian and capitalist hegemonies around the world. They "themselves need transformation almost as much as most of the people who elect them, or comprise them. That hegemony is central in control, bureaucratic in form, relying upon leadership, and embarassed at the very idea of liberation" wrote the ousted left-wing radical of the Australian Whitlam Labor Government, Jim Cairns. [3]
Rogers and Cairns were writing words as a silent plea for the world to find the individual and group strength to counter the zero sum game of imperialism, corporatism, and the coups and wars that go with it. Their predicament was dire and so eloquently put in a song by Simon and Garfunkel:
People talking without speaking
People hearing without listening
People writing songs that voices never share
Noone dare
disturb the sound of silence
Fools said I
you do not know
Silence like a cancer grows
Hear my words that I might teach you ...
Take my arms that I might reach you
But my words like silent raindrops fell...[4]
Decades earlier George Orwell appeared to mirror this message when he wrote despairingly that "Traditions are not killed by facts."
[1] 'The Man and His Ideas', Richard I Evans (ed), EP Dutton and Co Inc New York, 1975. As quoted by Jim Cairns (former Australian Deputy Prime Minister in the early 1970s) in 1976 book entitled 'Oil in Troubled Waters'.
[2] "An important question here is whether affluence is needed to produce the new, emerging person." wrote Jim Cairns
[3] Jim Cairns.1976. 'Oil in Troubled Waters'. Page 151.
[4] Lyrics in the song: 'The Sounds of Silence'. Sung by Simon and Garfunkel
Dismantling the Economy
During the New Deal, the government left a legacy of buildings, parks, and public spaces. Gray Brechin deserves great credit for documenting this achievement.
http://livingnewdeal.berkeley.edu/
In contrast, the U.S. is engaged in wasteful spending on war and bailouts that will leave a pitifully small legacy. What king of legacy will Obama leave?
I remember when the United States was going to prosper as an information economy, based on the premise that we are either the smartest or the best educated in the world. To ensure success in achieving this vision, the country is engaged in a massive defunding of education. California, of course, is the leader in this respect.
Presumably, imposing requirements multiple choice tests and scripted teaching in the poor neighborhoods will be all we need, once we can break the teachers' unions.
In line with the steady undermining of information in the information economy, the University of California is making some questionable choices. Here is one that has not been widely publicized:
California is contemplating a $10 billion bond to finance a massive statewide water project. One would assume that the state would want to have access to as much information for guidance in such matters.
Yet the University of California is getting ready to mothball its valuable Water Resources Center Archives, which a Sacramento Bee article observed, "For decades it has served as a shrine for engineers, lawyers and academics working to understand and improve the management of water, California's most precious resource." The problem is that the school cannot afford the $230,000 annual cost, probably equal to a couple of superfluous vice presidents.
Weiser, Matt. 2009. "UC Archives on Water Imperiled." Sacramento Bee (26 October): p. B 1.
http://www.sacbee.com/378/story/2281137.html
http://livingnewdeal.berkeley.edu/
In contrast, the U.S. is engaged in wasteful spending on war and bailouts that will leave a pitifully small legacy. What king of legacy will Obama leave?
I remember when the United States was going to prosper as an information economy, based on the premise that we are either the smartest or the best educated in the world. To ensure success in achieving this vision, the country is engaged in a massive defunding of education. California, of course, is the leader in this respect.
Presumably, imposing requirements multiple choice tests and scripted teaching in the poor neighborhoods will be all we need, once we can break the teachers' unions.
In line with the steady undermining of information in the information economy, the University of California is making some questionable choices. Here is one that has not been widely publicized:
California is contemplating a $10 billion bond to finance a massive statewide water project. One would assume that the state would want to have access to as much information for guidance in such matters.
Yet the University of California is getting ready to mothball its valuable Water Resources Center Archives, which a Sacramento Bee article observed, "For decades it has served as a shrine for engineers, lawyers and academics working to understand and improve the management of water, California's most precious resource." The problem is that the school cannot afford the $230,000 annual cost, probably equal to a couple of superfluous vice presidents.
Weiser, Matt. 2009. "UC Archives on Water Imperiled." Sacramento Bee (26 October): p. B 1.
http://www.sacbee.com/378/story/2281137.html
Workers' Ownership and Management and Work Sharing
If indeed, as the kurzarbeit evidence from Germany suggests, work sharing or other methods of reducing work hours during a recession preserves jobs, then it should be of interest what sorts of economic systems and organizations might lead to more of this. One form that has long been suggested as having this character is worker managed and worker owned firms, more conventionally called "cooperatives." The literature on this is simply huge, and a good summary can be found in John P. Bonin, Derek C. Jones, and Louis Putterman, "Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet?" Journal of Economic Literature, 1991, 31, pp. 1290-1320. Indeed, in such enterprises owner-manager-workers are more likely to share the pain of a fall in demand by a shared cutback. These firms also tend to show greater short-term productive efficiency through flatter managerial hierarchies and the worker-owners monitoring each other for shirking.
The literature also cites possible disadvantages, perhaps a tendency to be reluctant to hire more worker-owners, possible tendencies to engage in ignoring externalities and trying to gain monopoley power, and so on. With a few exceptions, such as the Mondragon cooperatives, these firms rarely become very large, with financing a big issue. A few countries have tried to encourage them, but by and large they remain scarce in most economies, a vision, but not much of a widespread reality.
The literature also cites possible disadvantages, perhaps a tendency to be reluctant to hire more worker-owners, possible tendencies to engage in ignoring externalities and trying to gain monopoley power, and so on. With a few exceptions, such as the Mondragon cooperatives, these firms rarely become very large, with financing a big issue. A few countries have tried to encourage them, but by and large they remain scarce in most economies, a vision, but not much of a widespread reality.
Issue Lab
Issue Lab:
Job Sharing: Tax Credits to Prevent Layoffs and Stimulate Employment
Contributing Organization(s): Center for Economic and Policy Research
Author(s)/Creator(s): Dean Baker
The unemployment rate is expected to average 10.2 percent for 2010, 9.1 percent for 2011, and 7.3 percent for 2012. With this in mind, this Issue Brief describes a job sharing tax credit, designed to provide a quick and substantial boost to the economy. It would use tax dollars to pay firms to shorten the typical workweek, while keeping pay constant. This should cause employers to want to hire additional workers. A rough estimate of the impact of this tax credit is between 1.3 and 2.7 million jobs created.
Thursday, October 29, 2009
Comprehensive Assessment
foothillsmike October 17th, 2009 at 2:49 pm:
Only So Much Work to Go Round
This idea cannot withstand a nanosecond of thought.
The idea that a fixed quantity of work exists, to be parcelled out among workers, is the so-called lump-of-labour fallacy. It is depressing that supposedly responsible governments continue to pretend to be unaware of the old 'lump of labour' fallacy: the illusion that the output of an economy and hence the total amount of work available are fixed.
The notion that there is a fixed amount of work to be shared out, so that shorter hours for all must mean more jobs, is widely derided by economists as the 'lump of labour' fallacy. The idea of the 35-hour week, derided by many economists as the 'lump-of-labour fallacy', is that if employees work less, companies, spurred by tax concessions, will hire more. Although mocked by economists as a prime example of the 'lump-of-labour' fallacy – the idea that there is only so much work to go around – the government claims that it had created 240,000 jobs by the end of 2000. But to conclude from this that overall employment will decline is to succumb to the lump-of-labour fallacy: the long-disproved idea that there is only a fixed amount of output (and hence work) to go round.
France's own Frédéric Bastiat had pointed out two centuries ago that there is no limit to the work that needs doing. Debunking the 'lump of labour fallacy' before it was even given that label, he suggested that to parcel out the limited amount of work available, people should be required to use only one hand, or even to have a hand chopped off. But -- the lump of labour fallacy strikes again -- the amount of work to be done is not fixed. The quantity of work is not fixed: such a notion is known to economists as the 'lump-of-labour' fallacy.
The lump of labour fallacy also lies behind paranoia about jobs being 'stolen' by low-wage countries. The accusation that migrants steal jobs is a version of the 'lump of labour' fallacy -- that there is only so much work to go around. In effect, export pessimism involves a fallacy of its own -- a 'lump-of-trade' fallacy, akin to the idea of a 'lump of labour' (whereby a growing population is taken to imply an ever-rising rate of unemployment, there being only so many jobs to go round).
This is a classic lump-of-labour fallacy (the idea that there is a fixed quantity of work and that if you take a job it is at my expense). Economists call this the 'lump-of-labour' fallacy. Economists call this the lump of labour (or sometimes the lump of output) fallacy.
The lump of labour fallacy is often to blame for confusion about whether productivity growth (due to more efficient working practices or to new technology) is a good or bad thing. Luddism is also commonly linked to the lump-of-labour fallacy in economics, which first-year students are taught to refute and according to which, as the demand for labour is fixed in the short run, labour-saving machinery is bound to 'kill jobs'. But the assumption that this results in fewer jobs rather than more output (and hence more goods, and more job-stimulating demand, in a beautifully virtuous circle) is based on an economic fallacy known as the 'lump of labour': the notion that there is only a fixed amount of output (and hence work) to go round.
If new technology or foreign competition do lead to net job losses it will not be because the lump of labour has become a fact rather than a fallacy, but because labour is not sufficiently mobile between sectors and regions, or because relative wages have failed to adjust. Nearly all of these mistakes boil down in the end to the most enduring of all economic fallacies: the idea that there is only so much output to be produced, or capital to be invested. (Europe is currently preoccupied with the 'lump of labour' version of this mistake, see page 18.)
A recent piece accused conservatives of embracing the 'lump of labour fallacy', the mistaken claim that there is a fixed quantity of work which governments must strive to allocate equitably. Hmm. Are those arguments entirely incorrect? Yes, entirely. The first is a myth. In fact, the paper he cited did not commit the lump of labour fallacy.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Every sentence in the above article came from one of the 17 Economist articles published over the past 12 years deriding the chimerical lump-of-labour fallacy. The article used all sentences in those articles that included the phrase "lump of labour" and used each sentence only once.
Bibliography
"Cranks and Proud of It." Economist, 1/20/96, Vol. 338 Issue 7949, p86, 2p
"Eat Your NAFTA." Economist, 11/13/93, Vol. 329 Issue 7837, p15, 2p
"The End of Work?" Economist, 9/28/96, Vol. 340 Issue 7985, Supplement p19, 3p
"Europe Hits a Brick Wall." Economist, 4/5/97, Vol. 343 Issue 8011, p21, 3p
"Everyone Cross." Economist, 2/5/00, Vol. 354 Issue 8156, p47, 2/3p
"Frederic Bastiat." Economist, 7/21/01, Vol. 360 Issue 8231, p64, 1p
"Grinding the Poor." Economist, 9/29/01, Vol. 360 Issue 8241, Special section p10,
“Labours lost.” Economist, 6/15/02, Vol. 363 Issue 8277, p78, 1p
“Myths and reality.” Economist, 2/28/04, Vol. 370 Issue 8364, p53, 2/3p
"One Lump or Two?" Economist, 11/25/95, Vol. 337 Issue 7942, p67, 2p
"One Lump or Two?" Economist, 10/25/97, Vol. 345 Issue 8040, p17, 2/3p
"The One-handed Economist." Economist, 11/15/03, Vol. 369 Issue 8350, p62, 1p
"Room for Improvement." Economist, 3/16/02, Vol. 362 Issue 8264, p69, 3p
“Sharing the burden.” Economist, 11/13/93, Vol. 329 Issue 7837, p18, 2p
"Short Measure." Economist, 1/31/98, Vol. 346 Issue 8053, p79, 1/2p
"Thirty-five Hours of Misery." Economist, 7/17/04, Vol. 372 Issue 8384, p13, 2p
"A World without Jobs?" Economist, 2/11/95, Vol. 334 Issue 7901, p21, 3p.
It is my thought that the typical work week should be reduced from 40 hours.James K. Galbraith October 17th, 2009 at 2:52 pm In response to foothillsmike:
Sacre bleu! The French tried this.Well, here's a comprehensive assessment.You may not agree with the author's conclusions but Anders Hayden gives sources so you can dig deeper if you're not satisfied.
I haven’t seen a comprehensive assessment, but I don’t think that it worked very well as employment policy. It does change patterns of social life … but it’s not very clear that Americans want to spend more time at home.
Drawing on existing survey and economic data, supplemented by interviews with French informants, this article examines the 35-hour week’s evolution and impacts. Although commonly dismissed as economically uncompetitive, the policy package succeeded in avoiding significant labor-cost increases for business. Most 35-hour employees cite quality-of-life improvements despite the fact that wage moderation, greater variability in schedules, and intensification of work negatively impacted some—mostly lower-paid and less-skilled—workers. Taking into account employment gains, the initiative can be considered a qualified success in meeting its main aims.But there are two sides to every story: the comprehensive assessment and the relentless media boilerplate that creates an impression of what the truthy truth might be. So below is a reprise of my arrangement of sentences from 17 articles over 12 years in The Economist that tell people what to think without them actually having to do the thinking.
Only So Much Work to Go Round
This idea cannot withstand a nanosecond of thought.
The idea that a fixed quantity of work exists, to be parcelled out among workers, is the so-called lump-of-labour fallacy. It is depressing that supposedly responsible governments continue to pretend to be unaware of the old 'lump of labour' fallacy: the illusion that the output of an economy and hence the total amount of work available are fixed.
The notion that there is a fixed amount of work to be shared out, so that shorter hours for all must mean more jobs, is widely derided by economists as the 'lump of labour' fallacy. The idea of the 35-hour week, derided by many economists as the 'lump-of-labour fallacy', is that if employees work less, companies, spurred by tax concessions, will hire more. Although mocked by economists as a prime example of the 'lump-of-labour' fallacy – the idea that there is only so much work to go around – the government claims that it had created 240,000 jobs by the end of 2000. But to conclude from this that overall employment will decline is to succumb to the lump-of-labour fallacy: the long-disproved idea that there is only a fixed amount of output (and hence work) to go round.
France's own Frédéric Bastiat had pointed out two centuries ago that there is no limit to the work that needs doing. Debunking the 'lump of labour fallacy' before it was even given that label, he suggested that to parcel out the limited amount of work available, people should be required to use only one hand, or even to have a hand chopped off. But -- the lump of labour fallacy strikes again -- the amount of work to be done is not fixed. The quantity of work is not fixed: such a notion is known to economists as the 'lump-of-labour' fallacy.
The lump of labour fallacy also lies behind paranoia about jobs being 'stolen' by low-wage countries. The accusation that migrants steal jobs is a version of the 'lump of labour' fallacy -- that there is only so much work to go around. In effect, export pessimism involves a fallacy of its own -- a 'lump-of-trade' fallacy, akin to the idea of a 'lump of labour' (whereby a growing population is taken to imply an ever-rising rate of unemployment, there being only so many jobs to go round).
This is a classic lump-of-labour fallacy (the idea that there is a fixed quantity of work and that if you take a job it is at my expense). Economists call this the 'lump-of-labour' fallacy. Economists call this the lump of labour (or sometimes the lump of output) fallacy.
The lump of labour fallacy is often to blame for confusion about whether productivity growth (due to more efficient working practices or to new technology) is a good or bad thing. Luddism is also commonly linked to the lump-of-labour fallacy in economics, which first-year students are taught to refute and according to which, as the demand for labour is fixed in the short run, labour-saving machinery is bound to 'kill jobs'. But the assumption that this results in fewer jobs rather than more output (and hence more goods, and more job-stimulating demand, in a beautifully virtuous circle) is based on an economic fallacy known as the 'lump of labour': the notion that there is only a fixed amount of output (and hence work) to go round.
If new technology or foreign competition do lead to net job losses it will not be because the lump of labour has become a fact rather than a fallacy, but because labour is not sufficiently mobile between sectors and regions, or because relative wages have failed to adjust. Nearly all of these mistakes boil down in the end to the most enduring of all economic fallacies: the idea that there is only so much output to be produced, or capital to be invested. (Europe is currently preoccupied with the 'lump of labour' version of this mistake, see page 18.)
A recent piece accused conservatives of embracing the 'lump of labour fallacy', the mistaken claim that there is a fixed quantity of work which governments must strive to allocate equitably. Hmm. Are those arguments entirely incorrect? Yes, entirely. The first is a myth. In fact, the paper he cited did not commit the lump of labour fallacy.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Every sentence in the above article came from one of the 17 Economist articles published over the past 12 years deriding the chimerical lump-of-labour fallacy. The article used all sentences in those articles that included the phrase "lump of labour" and used each sentence only once.
Bibliography
"Cranks and Proud of It." Economist, 1/20/96, Vol. 338 Issue 7949, p86, 2p
"Eat Your NAFTA." Economist, 11/13/93, Vol. 329 Issue 7837, p15, 2p
"The End of Work?" Economist, 9/28/96, Vol. 340 Issue 7985, Supplement p19, 3p
"Europe Hits a Brick Wall." Economist, 4/5/97, Vol. 343 Issue 8011, p21, 3p
"Everyone Cross." Economist, 2/5/00, Vol. 354 Issue 8156, p47, 2/3p
"Frederic Bastiat." Economist, 7/21/01, Vol. 360 Issue 8231, p64, 1p
"Grinding the Poor." Economist, 9/29/01, Vol. 360 Issue 8241, Special section p10,
“Labours lost.” Economist, 6/15/02, Vol. 363 Issue 8277, p78, 1p
“Myths and reality.” Economist, 2/28/04, Vol. 370 Issue 8364, p53, 2/3p
"One Lump or Two?" Economist, 11/25/95, Vol. 337 Issue 7942, p67, 2p
"One Lump or Two?" Economist, 10/25/97, Vol. 345 Issue 8040, p17, 2/3p
"The One-handed Economist." Economist, 11/15/03, Vol. 369 Issue 8350, p62, 1p
"Room for Improvement." Economist, 3/16/02, Vol. 362 Issue 8264, p69, 3p
“Sharing the burden.” Economist, 11/13/93, Vol. 329 Issue 7837, p18, 2p
"Short Measure." Economist, 1/31/98, Vol. 346 Issue 8053, p79, 1/2p
"Thirty-five Hours of Misery." Economist, 7/17/04, Vol. 372 Issue 8384, p13, 2p
"A World without Jobs?" Economist, 2/11/95, Vol. 334 Issue 7901, p21, 3p.
Since When Was Reductio A One-Way Street?
A self-styled "libertarian" clown (judging by the blog roll) plays reductio ad absurdum with my post, some questions on unemployment for economists. He's only playing with half a deck, though. The first mistake he makes (and it's a doozy) is to equate asking people questions with telling them to "shut the fuck up". On the contrary, when I ask a question, I'm actually inviting someone to speak.
The second mistake is to twist my point about the non-representation of the unemployed in forums on unemployment into a demand that only the unemployed should have a voice.
Based on those two total distortions, "Angus" proceeds to imagine some "logical extensions" of my argument, reductio ad absurdum: "Only the uninsured should have a voice in the health care debate." "Only soldiers should make our military decisions."
We'll no, Angus, that's not how you do a proper reductio. To do it right you must begin from your debate opponent's actual premise to show why his or her argument is absurd. If you first distort the premise, you've demonstrated nothing but your intellectual dishonesty and/or your incompetence.
So let me ask you a question, Angus, is it also your position that the Civil Rights Act of 1964 denied the right to vote to white folks because it upheld the right of African Americans to vote? That's how you do an actual reductio ad absurdum and not a phony one based on glibly distorting your opponent's position.
The second mistake is to twist my point about the non-representation of the unemployed in forums on unemployment into a demand that only the unemployed should have a voice.
Based on those two total distortions, "Angus" proceeds to imagine some "logical extensions" of my argument, reductio ad absurdum: "Only the uninsured should have a voice in the health care debate." "Only soldiers should make our military decisions."
We'll no, Angus, that's not how you do a proper reductio. To do it right you must begin from your debate opponent's actual premise to show why his or her argument is absurd. If you first distort the premise, you've demonstrated nothing but your intellectual dishonesty and/or your incompetence.
So let me ask you a question, Angus, is it also your position that the Civil Rights Act of 1964 denied the right to vote to white folks because it upheld the right of African Americans to vote? That's how you do an actual reductio ad absurdum and not a phony one based on glibly distorting your opponent's position.
Having A Kazurbeit With The Sandwichman
So, as part of semi-peacefulness around here, I shall join Sandwichman (and Milkshakeman?) in munching on some of that stuff at the greasy spoon truck stop, particularly the German food, taking a bite of their policy of shortened work hours during the recession known as kazurbeit, of which I do not know all the details. However, I am prepared to say that whatever those details, the apparent evidence suggests that during the past year, Germany has had a relatively low impact of its recession, as measured in decline of GDP, on its unemployment rate. I shall simply present some numbers below, without further comment beyond noting that state governments in the US have also been following something like this with the furlough policy, and also to note that this is something both neoclassicals and Austrians would like, not to mention advocates of cooperatives, as it involves preserving jobs by cutting wages. So, I am going to show for several countries, their 2009 decline in GDP as reported in the 10/10 Economist, along with the Sept. 2008 unemployment rate, and the most recently available unemployment rate (oh, and keep in mind that France largely gave up its limited work hours approach in 2005).
Country 2009 GDP decline Sept. 08 UR Recent UR
Germany -4.9 8.0 8.2 (Sept. 09)
France -2.1 7.9 9.9 (Aug. 09)
UK -4.4 5.5 7.9 (July 09)
US -2.9 6.1 9.8 (Sept. 09)
Netherlands -4.0 2.5 5.0 (Aug. 09)
Switzerland -1.7 3.4 4.1 (Sept. 09)
Country 2009 GDP decline Sept. 08 UR Recent UR
Germany -4.9 8.0 8.2 (Sept. 09)
France -2.1 7.9 9.9 (Aug. 09)
UK -4.4 5.5 7.9 (July 09)
US -2.9 6.1 9.8 (Sept. 09)
Netherlands -4.0 2.5 5.0 (Aug. 09)
Switzerland -1.7 3.4 4.1 (Sept. 09)
Rosser's Closet Sandwichman
Over at Mark Thoma's place the real Barkley Rosser channels the late Sandwichman:
"Ah, so much for the aggregate Cobb-Douglas production function! And we were all getting so used to applying it to everything in sight."
Are Those $250 Social Security Checks Just Pandering to Seniors?
David Leonhardt tries to make this case and he would have been well advised to start with this:
The argument would be that even with a zero nominal increase, Social Security recipients see an increase in real income during a period of deflation. Yes – there are the caveats about whether the CPI properly captures the cost of living for seniors especially if the relative price of drugs increases. But why did Mr. Leonhardt start his discussion by talking about the depressed economy and who would be most likely to consume any checks that the government may wish to extend?
Let’s think about the macroeconomic impact of a $14 billion one-time transfer payment in terms of a life-cycle model of consumption. This would be equivalent to a one-time increase in household wealth with the impact effect on consumption being equal to the increase in wealth divided by the number of remaining years of life for the individual receiving the check. If a young person were given $250, he would likely save most of it. If the $250 were given to the elderly instead, then more of the transfer payment would be consumed. Mr. Leonhardt seems to be unhappy with the President’s proposal but his reasoning here seems to be very confused.
The original Social Security legislation had not included an inflation adjustment, which meant benefits did not keep up with the cost of living. A decade later, Ms. Fuller’s checks were worth about 40 percent less in real terms than when she started receiving them. Congress finally increased benefits in 1950 and then continued to do so in fits and starts, sometimes faster than inflation, sometimes slower and usually in an election year. President Richard M. Nixon and a Democratic Congress brought some order to this process in 1972, by automatically tying the benefits to the movement of an inflation index in the previous year. The changes were part of the transformation, during the middle decades of the 20th century, in how this country treated the elderly. In the 1930s, they had little safety net and frequently struggled to meet their basic needs. Four decades later, they were the only group of Americans with guaranteed health care and a guaranteed income. All in all, it was certainly for the good. But by the 1970s, you could start to see the early signs of excess. In their bill, Mr. Nixon and Congress included a little bonus: the increase in Social Security payments could never be less than 3 percent, no matter what inflation was. In the 1980s, Congress reduced the floor to zero — meaning that benefits would be held constant if prices fell — but the principle remained the same: heads, it’s a tie; tails, Social Security recipients win.
The argument would be that even with a zero nominal increase, Social Security recipients see an increase in real income during a period of deflation. Yes – there are the caveats about whether the CPI properly captures the cost of living for seniors especially if the relative price of drugs increases. But why did Mr. Leonhardt start his discussion by talking about the depressed economy and who would be most likely to consume any checks that the government may wish to extend?
If you wanted to help the economy and you had $14 billion to bestow on any group of people, which group would you choose: a) Teenagers and young adults, who have an 18 percent unemployment rate. b) All the middle-age long-term jobless who, for various reasons, are not eligible for unemployment benefits. c) The taxpayers of the future (by using the $14 billion to pay down the deficit). d) The group that has survived the Great Recession probably better than any other, with stronger income growth, fewer job cuts and little loss of health insurance. The Obama administration has chosen option d — people in their 60s and beyond.
Let’s think about the macroeconomic impact of a $14 billion one-time transfer payment in terms of a life-cycle model of consumption. This would be equivalent to a one-time increase in household wealth with the impact effect on consumption being equal to the increase in wealth divided by the number of remaining years of life for the individual receiving the check. If a young person were given $250, he would likely save most of it. If the $250 were given to the elderly instead, then more of the transfer payment would be consumed. Mr. Leonhardt seems to be unhappy with the President’s proposal but his reasoning here seems to be very confused.
Bigness in Capitalism
In 1976 the former Deputy Prime Minister of Australia, Jim Cairns, wrote:
A few years ago "fifty of the world’s one hundred largest economies [were] multi-national companies and not countries." [2]
When a private company grows to a size exceeding that of nations how can its vast resources not be viewed as social property? After all, the technology that these huge transnational corporations use has been "assembled with direct subsidies, tax write-offs, and other benefits traceable to the public treasury. The social capital of the nation - its air, water, and mineral treasure - has been expended in the process." [3]
Some observers may see (in addition) that many, if not most, of the risks taken by these global 'enterprises' are also, in fact, 'social'. Recent evidence of this is the hundreds of billions of dollars in TARP bailout money given to the large banks and the trillions of dollars that have been added to the US Federal Reserve’s balance sheet at huge social cost.
Part of this huge windfall for the big banks has been put into the acquisition of smaller banks by banks "too large to fail." The result is [even] more financial concentration."… [4]
And so it goes. For how much longer can we remain prisoners of economic labels and false dichotomies. 'Private enterprise' versus 'socialism'.
Corruption thrives in societies where the lines between 'private' and 'public' are blurred. 'Bigness' provides the open invitation.
[1] Jim Cairns 'Oil in Troubled Waters' Widescope International Publishers Pty Ltd, Camberwell Victoria. 1976. pp 133-134
[2] “No Nonsense Guide to Globalisation” p55. As quoted in:
THE MONEY –GO –ROUND
GLOBALISATION AND THE DESTRUCTION OF FARMING
SUSAN ATKINSON
www.agribusinessaccountability.org/pdfs/276_Money-Go-Round.pdf
[3] Richard J Barnet and Ronald E Muller, 'Global Reach - the power of the multinational corporations' 1974. page 374
[4] Assistant Secretary to the Treasury blasts economic policy, misleading data
October 7, 12:07 PMLA County Nonpartisan ExaminerCarl Herman
http://www.examiner.com/x-18425-LA-County-Nonpartisan-Examiner~y2009m10d7-Assistant-Secretary-to-the-Treasury-blasts-economic-policy-misleading-data
* A useful summary is provided by Geoffrey Barraclough in 'New York Times Review' 27 June 1974, 23 January 1975, 7 August 1975.
"....outside Australia, the 'economic crisis', the 'oil-food crisis', or 'inflation' whatever it is called is seen to be capitalist and third-world wide, deep seated, crucial, and to be a depression, not just inflation. Finally, there is acceptance that conventional economic thinking cannot deal with it. It looks like the end of an era, but why has it come?
There are, it seems, two main reasons*. First, there is the development of bigness in capitalism. Capitalism was once a very large number of small factories, shops, farms and other production units. Yet now in the USA, and it is little different in Australia, some 2 percent of the companies control about 50 percent of 'gross national product' in some way or another....The other main reason for the end of the era is the fact that the thrid world for a time could raise the price of raw materials and food it supplies to corporate capitalism...."[1]
A few years ago "fifty of the world’s one hundred largest economies [were] multi-national companies and not countries." [2]
When a private company grows to a size exceeding that of nations how can its vast resources not be viewed as social property? After all, the technology that these huge transnational corporations use has been "assembled with direct subsidies, tax write-offs, and other benefits traceable to the public treasury. The social capital of the nation - its air, water, and mineral treasure - has been expended in the process." [3]
Some observers may see (in addition) that many, if not most, of the risks taken by these global 'enterprises' are also, in fact, 'social'. Recent evidence of this is the hundreds of billions of dollars in TARP bailout money given to the large banks and the trillions of dollars that have been added to the US Federal Reserve’s balance sheet at huge social cost.
Part of this huge windfall for the big banks has been put into the acquisition of smaller banks by banks "too large to fail." The result is [even] more financial concentration."… [4]
And so it goes. For how much longer can we remain prisoners of economic labels and false dichotomies. 'Private enterprise' versus 'socialism'.
Corruption thrives in societies where the lines between 'private' and 'public' are blurred. 'Bigness' provides the open invitation.
[1] Jim Cairns 'Oil in Troubled Waters' Widescope International Publishers Pty Ltd, Camberwell Victoria. 1976. pp 133-134
[2] “No Nonsense Guide to Globalisation” p55. As quoted in:
THE MONEY –GO –ROUND
GLOBALISATION AND THE DESTRUCTION OF FARMING
SUSAN ATKINSON
www.agribusinessaccountability.org/pdfs/276_Money-Go-Round.pdf
[3] Richard J Barnet and Ronald E Muller, 'Global Reach - the power of the multinational corporations' 1974. page 374
[4] Assistant Secretary to the Treasury blasts economic policy, misleading data
October 7, 12:07 PMLA County Nonpartisan ExaminerCarl Herman
http://www.examiner.com/x-18425-LA-County-Nonpartisan-Examiner~y2009m10d7-Assistant-Secretary-to-the-Treasury-blasts-economic-policy-misleading-data
* A useful summary is provided by Geoffrey Barraclough in 'New York Times Review' 27 June 1974, 23 January 1975, 7 August 1975.
Wednesday, October 28, 2009
How To Fire A Tenured Faculty Member
We have heard that tenured professors have job security. Awhile ago I posted about the situation of Jonathan Goldstein, whose tenured position at Allegheny College was under attack because he was criticizing his administration. I think his position has been saved, but the hard fact is that administrators succeed in getting rid of uppity faculty all the time, although often it does not get widely reported. Thus, I recently gave a talk at an econ department where someone behaved in a highly and personally aggressive and unpleasant way to me (other members later apologized to me). However, I learned that this was not totally disconnected to the recent firing of a tenured friend of mine from that department for disagreeing with the university administration. I cannot speak further of this because the entire situation is under wraps due to court order. But I can say that my friend was indeed fired for disobeying certain arbitrary administrative rules, the sort of thing that was being thrown at Goldstein, which was simply a method for getting at him for criticizing them on other matters.
At my university there was an effort to fire a tenured prof who was criticizing the administration by eliminating his entire department. This led to a protest against this, which I was involved with. Some of us involved in this received letters from a member of the Board of Visitors above the administration, threatening us with loss of our jobs. Fortunately, this move to eliminate the department was ultimately countermanded, and the administrator causing the trouble was removed as a result of his connection with a murder/prostitution scandal. But I still keep a copy of that threatening letter in my desk, not to mention my membership in the AAUP current.
At my university there was an effort to fire a tenured prof who was criticizing the administration by eliminating his entire department. This led to a protest against this, which I was involved with. Some of us involved in this received letters from a member of the Board of Visitors above the administration, threatening us with loss of our jobs. Fortunately, this move to eliminate the department was ultimately countermanded, and the administrator causing the trouble was removed as a result of his connection with a murder/prostitution scandal. But I still keep a copy of that threatening letter in my desk, not to mention my membership in the AAUP current.
"The Panacea"
by Zombie Sandwich
American social thought is a toilet that hasn't been flushed in 60 years in a gas station restroom that hasn't been cleaned in 70. Jiggling the handle won't fix it. Americans never recovered from, nor acknowledged the nature of the affluence of the 1950s and 60s. Their technicolor ersatz-Eden was a gift of geography and Air Force bombardment, not the just reward for hard work and sacrifice. Ever since that epoch of illusion, an aberration has been taken for a benchmark.
Sandwichman's sin was to talk about what might have been as if there was still a possibility of its becoming. The eclipse of that possibility was chronicled 20 years ago in a crepuscular flurry of historical retrospectives whose collective title could have been "twilight of reason". Sandwichman lied. Knowingly. Americans have become so used to wallowing in their filth that they recoil in disgust at the thought of living without it. There has evolved an unrepentant political economy of muck. "Give Us More Shit!"
American social thought is a toilet that hasn't been flushed in 60 years in a gas station restroom that hasn't been cleaned in 70. Jiggling the handle won't fix it. Americans never recovered from, nor acknowledged the nature of the affluence of the 1950s and 60s. Their technicolor ersatz-Eden was a gift of geography and Air Force bombardment, not the just reward for hard work and sacrifice. Ever since that epoch of illusion, an aberration has been taken for a benchmark.
Sandwichman's sin was to talk about what might have been as if there was still a possibility of its becoming. The eclipse of that possibility was chronicled 20 years ago in a crepuscular flurry of historical retrospectives whose collective title could have been "twilight of reason". Sandwichman lied. Knowingly. Americans have become so used to wallowing in their filth that they recoil in disgust at the thought of living without it. There has evolved an unrepentant political economy of muck. "Give Us More Shit!"
Dean Baker is Shrill!
by Tom Walker
Dean Baker wrote:
Dean Baker wrote:
Okay, I'm not on vacation, but this is a BTP flashback. My original write-up of this NYT news article was way too positive. This article was essentially a diatribe against Germany's welfare state. To make its case, it turned an incredible success story -- Germany's relatively low unemployment rate -- into a failure.It is obvious that Dean Baker is on a mission -- the one policy that resolves all social ills. As such, he cannot listen to reason. Fine. Good luck, Dean. Work week reduction (or "work sharing") has never, anywhere, eliminated involuntary unemployment and underemployment; indeed, it has never had a significant effect. These schemes have not increased employment... This WILL NOT create many more jobs. If Dean's trying to engage in a dialogue with the New York Times, it might help if the tone of his blog entry was somewhat less snarky. Perhaps snark attracts more internet traffic, but it doesn't encourage dialogue.
The basic deal is that Germany adopted an explicit policy of encouraging employers to shorten work hours rather than lay off workers. The government allows unemployment benefits to be used to pay workers to cover most of the loss in wages due to the shorter workweek.
As a result, Germany's unemployment rate has barely changed in the downturn. Its unemployment rate at present is 7.7 percent. This is down from 7.8 percent earlier in the year. Germany's unemployment rate in 2007 was 8.4 percent, 0.7 percentage points higher than the current level.
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