Jobs Guarantee vs. Work Time Reduction

Max Sawicky says Matt Bruenig is wrong about the Job Guarantee idea. Sandwichman wrote about this back in 2009, so I'm reposting a condensed and edited version of it here and will add further reflections on Max's and Matt's points.

2009:

Would a Minsky-inspired "job guarantee program" be an economically feasible response to that jobs crisis? Randal Wray is probably the best-known current advocate of such a program. In August 2009, Wray posted a brief description of the idea along with some references for further reading. 

The Sandwichman's familiarity with the debate around the job guarantee idea comes largely from a discussion in Robert LaJeunesse's book, Work Time Regulation as Sustainable Full Employment Strategy, in which LaJeunesse sought to show why work time regulation would be superior to a jobs guarantee.

LaJeunesse's main objection to the job guarantee idea is that it expands work and consumption instead of questioning the compulsion for and ecological sustainability of perpetual, artificially-induced economic growth. Peter Victor's book, Managing without Growth, and the Sustainable Development Commission's report, Prosperity without Growth?, give persuasive evidence in support of such criticism.

While the Sandwichman agrees wholeheartedly with LaJeunesse's ecological critique, he also has microeconomic concerns about job guarantees. There are three aspects that particularly trouble me.

First is the historical precedent that explicitly "make work" jobs have always carried a stigma. This was true of the 19th century workhouse in Britain and of WPA jobs during the Great Depression.

Second, the necessity for some kind of administrative overhead -- managers, planners and staff -- must necessarily lead to the creation of a bureaucratic empire whose denizens will have a stake in the continuation and expansion of their institutional niche.

Finally, a job is not simply about the exchange of a certain amount of time and effort for a paycheck. Some kind of learning and social interaction goes on in the workplace. Not all of it is directly tied to the work. What kind of informal culture of "lifers" and "transients" is likely to emerge in the "buffer world" of guaranteed jobs? What's to prevent the lifers (as well as the administrators) from devising schemes to divert the efforts of enrollees to their private interests?

2015:

Matt argues that Guarantee Jobs are inclined to be "low-capital, short-term jobs that are not that important to do." He suggests it would be preferable to establish targeted public works programs, "which can be ramped up and down cyclically as needed," which, of course, was precisely the idea behind the Public Works Administration established during the Roosevelt New Deal.

Max argues that an Employment of Last Resort (ELR) program could be designed that complies with Matt's targeted public works program. He thinks that "Matt’s notion of how an ELR system could work is too narrow."

Sandwichman thinks the discussion could be better informed by attention to 1. what happened, in the long run, to the New Deal public works program and 2. what are the alternatives to a job creation program -- especially a a work-sharing program and permanent reductions in the hours work, what John Maynard Keynes called the "ultimate solution" for unemployment.

"...the full employment policy by means of investment is only one particular application of an intellectual theorem. You can produce the result just as well by consuming more or working less. Personally I regard the investment policy as first aid. In U.S. it almost certainly will not do the trick. Less work is the ultimate solution (a 35 hour week in U.S. would do the trick now)."

Essentially Inarticulate: slouching "towards a radical democratic politics"

It is precisely this polysemic character of every antagonism which makes its meaning dependent upon a hegemonic articulation to the extent that, as we have seen, the terrain of hegemonic practices is constituted out of the fundamental ambiguity of the social, the impossibility of establishing in a definitive manner the meaning of any struggle, whether considered in isolation or through its fixing in a relational system. -- Ernesto Laclau and Chantal Mouffe, Hegemony and Socialist Strategy: Towards a Radical Democratic Politics

Clearly I'm not… that’s not where I am, because, you know, people... like... leave high school and go to college and they like… [inaudible, interviewer talks over] -- Marissa Johnson on Sarah Palin

For reasons unknown (but time will tell) Sandwichman's ear instinctively hears Laclau and Mouffe's monologue being spoken by the character Lucky from Waiting for Godot.

"Articulation" plays a privileged role in Laclau & Mouffe's analysis, in opposition to -- or, one might say, as the antithesis of -- "essentialism." Essentialism was reductivist (bad); its "last redoubt" was the economy. By elevating class struggle as the presumed locomotive of history, so the story goes, Marx and Engels had sidelined other differences such as gender, race or nationality.

Essentialism and articulation remain key terms within the burgeoning academic-activist intersectionality complex. Instead of presiding as the determining difference (even if only in the "last instance"), class -- often relabeled as poverty -- has been demoted to the status of a residual effect of the other, formerly subordinate, differences, which are, of course, legion.

The logic of Black Lives Matter co-founder Alicia Garza's complaint about "some weirdo populist economic determinism" follows from the critique that an economic class analysis inherently subordinates other forms of oppression to the presumably primary difference of class. The characterization tends toward the hyperbole that class analysis is inherently reductivist and thus must be eschewed in favour of some other analysis of (more essential?) categories of difference. This game of identity musical chairs is not debatable as any and all objection can be disallowed as "condescending weirdness."

There was a Polish joke about how under capitalism man exploits man but under communism it is the other way around. One might paraphrase that to say that under orthodox Marxism, class struggle subordinates all other differences but identity politics does just the reverse. Another variety of essentialism enters through the back door because the framing concept of "articulation" has proven to be incoherent -- it is essentially inarticulate.

Bow Down, Weirdo Populist Economic Determinism

"What choice was there for the workers between the fascist costume drama and a socialism that urged them to regard their own working clothes as a costume?" -- Harold Rosenberg, "Pathos of the Proletariat"

It shocked and confused many of my American friends when Black Lives Matter activists confronted Bernie Sanders, first at Netroots, and then again in Seattle. Didn't they realize Sanders was the candidate with the best anti-racism record? Was this some kind of agent provocateur action? Hillary? Soros? Cointelpro?

The only thing that should come as a surprise is that the actions and their motives would be surprising. The pattern and the analysis has been out there for years... decades. In a 2009 essay, "The limits of anti-racism," Adolph Reed noted the "visceral and vitriolic anti-Marxism" that prevails among many activists who make identity the cornerstone of their political strategy.

Reed characterized anti-racism as consistent with a "left" neoliberal ideology which "looks suspiciously like only another version of the evasive 'we’ll come back for you' (after we do all the business-friendly stuff) politics that the Democrats have so successfully employed to avoid addressing economic injustice."

It would not be useful to absolve political Marxism of all responsibility for this state of affairs, however. Identity politics is only the latest iteration of what Harold Rosenberg termed "destiny politics" way back in 1949:

"Primarily, destiny-politics consists of a demonic displacement of the ego of the historical collectivity (class, nation, race) by the party of action, so that the party motivates the community and lays claim to identity with its fate and to its privileges as a creature of history."

For party, substitute movement... for movement substitute hashtag... and, finally, for hashtag substitute activists, founders, executive directors or scholars. But whereas political Marxism proceeded from the imperialistically homogeneous image of the Proletariat as universal subject, identity politics culminates in the fragmentation of multiple -- or multiplicative -- sites of oppression: class, race, gender, disability, sexuality. Through this "intersectional lens," the notion of a heroic, revolutionary subject of history is translated into that of an abject, anti-heroic victim of oppression:

"Thus, if one is poor, black, elderly, disabled, and lesbian, must these differences be organized into a hierarchy such that some differences gain prominence over others? What if some differences coalesce to create a more abject form of oppression (e.g.. being poor. black, and disabled), or if some differences support both privilege/invisibility within the same oppressed community (e.g., being black, homosexual, and male)?" -- Nirmala Erevelles, Disability and Difference in Global Contexts

The "pathos" in the title of Rosenberg's essay refers to one of the three modes of persuasion analyzed by Aristotle, the other two modes being "ethos" and "logos." Ethos seeks to persuade through the character of the author, logos through the use of reasoning and pathos by appealing to the readers' emotions. The irony that Rosenberg highlighted is that what was argued to be a historical process of development and "awakening" has been transformed into a rhetorical process of persuasion. The erstwhile revolutionary subject of history had already been demoted within political Marxism to a mere personification.

"As a liberating program Marxism founders on the subjectivity of the proletariat. So soon as it declares itself, rather than their common situation, to be the inspiration of men's revolutionary unity and ardor -- how else can it offer itself simultaneously to the French working class and to non-industrial French colonials? -- Marxism becomes an ideology competing with others. When fascism asserted the revolutionary working class to be an invention of Marxism, it was but echoing the Marxist parties themselves." -- Rosenberg

Of course identity politics and intersectionality cannot and do not inspire "revolutionary unity and ardor" to both "the French working class" and "the colonials." What they can do, though, is offer a moral (or moralizing) surrogate for the absent class struggle. Understandably, in this ideological frame, inherited from political Marxism, the foundering of the class struggle offers to those "not fooled by the illusion" an occasion for hubris. Bow down, weirdo populist economic determinism!

Ideology and Economic Facts

Letter from Friedrich Engels to Franz Mehring, July 14, 1893, excerpt:

Ideology is a process accomplished by the so-called thinker consciously, it is true, but with a false consciousness. The real motive forces impelling him remain unknown to him; otherwise it simply would not be an ideological process. Hence he imagines false or seeming motive forces. Because it is a process of thought he derives its form as well as its content from pure thought, either his own or that of his predecessors. He works with mere thought material, which he accepts without examination as the product of thought, and does not investigate further for a more remote source independent of thought; indeed this is a matter of course to him, because, as all action is mediated by thought, it appears to him to be ultimately based upon thought. 

The historical ideologist (historical is here simply meant to comprise the political, juridical, philosophical, theological – in short, all the spheres belonging to society and not only to nature) thus possesses in every sphere of science material which has formed itself independently out of the thought of previous generations and has gone through its own independent course of development in the brains of these successive generations. True, external facts belonging to one or another sphere may have exercised a co-determining influence on this development, but the tacit presupposition is that these facts themselves are also only the fruits of a process of thought, and so we still remain within that realm of mere thought, which apparently has successfully digested even the hardest facts. 

It is above all this semblance of an independent history of state constitutions, of systems of law, of ideological conceptions in every separate domain that dazzles most people. If Luther and Calvin “overcome” the official Catholic religion or Hegel “overcomes” Fichte and Kant or Rousseau with his republican Contrat social indirectly “overcomes” the constitutional Montesquieu, this is a process which remains within theology, philosophy or political science, represents a stage in the history of these particular spheres of thought and never passes beyond the sphere of thought. And since the bourgeois illusion of the eternity and finality of capitalist production has been added as well, even the overcoming of the mercantilists by the physiocrats and Adam Smith is accounted as a sheer victory of thought; not as the reflection in thought of changed economic facts but as the finally achieved correct understanding of actual conditions subsisting always and everywhere – in fact, if Richard Coeur-de-Lion and Philip Augustus had introduced free trade instead of getting mixed up in the crusades we should have been spared five hundred years of misery and stupidity.

Circular Reference Warning: The Productivity Quotient

Peter Frase has a post about the perennial "robots will take all our jobs" debate in which he makes, almost in passing, the crucial point that productivity growth is not only connected to technology but also to wages and control over working conditions. Employers are discouraged from replacing workers with robots as long as workers are cheaper and more obedient than the machines.

The point I would like to add and emphasize is that we are not just talking about cause and effect (let alone mere correlation) in the relationship between productivity and employment terms. This is instead a matter of reference from one thing to the other in the construction of the indexes. Productivity is a ratio between the monetary value of output and hours worked. Productivity increases if the same value of output is produced in fewer hours, regardless of whether that change was produced by technological improvements, increased work effort or by layoffs of redundant workers. Productivity growth declines if GDP growth is constrained, again regardless of what specifically is limiting GDP.

Productivity is the quotient. So when Dean Baker says "productivity growth has slowed sharply in the last decade," there are many ways to parse that number. Productivity growth has slowed because the numerator, GDP, hasn't been growing as fast as before. Or, productivity growth has slowed because the denominator, hours of work, is not declining. Or some combination, again regardless of the reasons for the changes in the components.

It's not just about the machines. It's also about the cost of replacing workers with machines compared to the level of wages. It's also about the performance of GDP relative to its potential. High levels of unemployment and underemployment can thus impose a constraint on "productivity growth" such that the resulting slow growth doesn't appear to present a threat to employment. But that is like the parricide throwing himself on the mercy of the court because he is an orphan. Or as Excel's circular reference warning explains:

One or more formulas contain a circular reference and may not calculate correctly. Circular references are any references within a formula that depend on the results of that same formula. For example, a cell that refers to its own value or a cell that refers to another cell which depends on the original cell's value both contain circular references.

Professor Richard J. Jensen Strikes (Out) Again

The Teen Who Exposed a Professor’s Myth

Miller opened up Rebecca’s thesis. He quickly realized all of the academics too busy to take on Jensen couldn't have done it better than a 14-year-old.

Before he was denying the existence of "no Irish need apply" advertising, Professor Jensen claimed that core, long-term unemployment during the Great Depression resulted from workers' shirking and stinting and the adoption by employers of "efficiency wage" policies to counter the willingness of "most workers (most of the time)... to coast a little."

The problem with that hypothesis, as Sandwichman pointed out a while ago, is that so-called shirking and stinting are treated variously as efficiency gains or efficiency losses depending on whether they are being performed by workers or by "entrepreneurs and investors." I know it's a subtle distinction. Ask a 14-year-old.

Homo Socialis, A Big Special Issue Of ROBE

I do not do this much, folks, but I am going to flagrantly advertise the special target issue of the Review of Behavioral Economics (ROBE) that has just come out on the web.  It is much longer than usual, and is in fact two issues in one, the first and second issues of our second volume.  Much effort has gone into it, and it has a major target article, followed by 14 commentaries by a distinguished multi-disciplinary group, with rejoinders by each of the coauthors of the original article, which had been 8 years in the writing, so I have been told.

The target article is "Homo Socialis: An Analytical Core for Sociological Theory" by Herbert Gintis and Dirk Helbing, and it is very provocative with a lot in it.  I shall not give the titles of the commentaries, but will list their authors in alphabetical order, which is how their commentaries appear in the issue: Catherine Eckel and Jane Sell; Mauro  Gallegati; Robert L. Goldstone; Michael Hechter; Geoffrey M. Hodgson; Alan G. Isaac; Paul Lewis; Siegwart Lindenberg; Michael W. Macy; Andrzej Nowak, Jorgen Anderson, and Wojciech Borkowski; Paul Ormerod; Vernon L. Smith; Ulrich Witt; David H. Wolpert.

Much effort has gone into this, and I  must thank publisher Zac Rolnik for tolerating such a long issue.  However, I think that this is a very special achievement that deserves proper attention.

One can access the issue at www.nowpublishers.com/rbe .

Barkley Rosser
Editor-in-Chief, Review of Behavioral Economics

Dean Baker: "Don't Blame the Robots"

"An important fact often left out of discussions on productivity and jobs is that the length of the workweek and work year is not fixed."

The Future of Work: Don't Blame the Robots

Dean nails it.

US Public Opinon From 59-31% to 32-58% On Iran Nuclear Deal

That is what has happened to public support versus opposition to the recently negotiated Iran nuclear deal between May 30 when the deal was announced until today, according to the Washington Post.  Every nation on the planet, including somewhat critical Saudi Arabia, except for Israel, has publicly supported this deal, and the UN Security Council has voted 15-0 for it.  The alternative is not a continuation of, much less a tightening of, the economic sanctions that the Israelis point to as most endangering them due to Hiabullah probably getting more military support from Iran.  But, who cares?  GOP congresspeople have called John Kerry names and said that he was "bamboozled" and other much less complimentary things.  The usually scholarly Thomas Sowell has declared the deal to the "worst foreign policy action in world history," with the 1443 Ming dynasty decision not to send out long ocean expeditions being second.

On top of that, we have had relentless ads on TV that have wildly misrepresented the deal to the point of outright lying.  About the only good thing I can see in this complete breakdown of intelligence and knowledge on the part of Americans is that it looks like enough Dems in Congress will back it to make Obama's veto stick, although the legislation to annul it will strongly pass both houses.  All Obama needs is one branch, and with Adam Schiff, the ranking Dem on the House Intelligence Committee supporting it, it might be the House, even if Chuck Schumer goes against and takes enough Dems in the Senate with him to override the veto.

Of course, no GOPsters will support it, even though various senior GOP foreign policy figures have come out in favor of it, such as Brent Scowcroft. But then, he was not enthusiastic about invading Iraq, so what kind of Republican foreign policy adviser is he?  And, I suppose it is not even worth bothering noting that most of these Congresspeople did not even read the agreement before they came out four square against it.

My only concern is this new poll, with an August recess now between us and the voting.  My only hope is that there are enough Adam Schiffs, and that also these views by the public are not all that strongly held, which the large switch between late May and now suggests, that the Adam Schiffs will hold in sufficient numbers. 

I do happen to think that this vote is one of the singlel most important things that will happen during the entire presidency of Obama.  If this fails, it will indeed be a major disaster, with horrific results that could lead to war, one that could easily make Iraq look like a cakewalk.  Let us hope that good sense will prevail among enough of those voting to make it stick.

I am reminded of an earlier hysteria, now almost completely forgotten.  I am talking about the 1979 move by Jimmy Carter to give the Panama Canal to Panama.  At the time this was very vigorously denounced over huge parts of the political spectrum, and public opinion opposed it.  As Teddy Roosevelt had put it, it was ours because we stole it fair and square!  But, the Panamanians were unhappy and riots and such were going on.  The opponents, however, were sure that Communist China and Cuba would somehow seize control of it by turning Panama commie, or whatever.  Doom was at hand, and our economy would get strangled as these nefarious powers would block the canal to traffic, or at least to traffic involving the US.

Needless to say, nothing of the sort has happened.  The canal is even being expanded, and the Chinese might build another one through Nicaragua. And Panama has had one of the highest GDP growth rates in Latin America, doing very well thank you, and having friendly relations with the US for quite some time.  Carter was completely right, and this was a very wise move, alhtough I have never ever heard a single one of those people forecasting imminent doom ever admit that they were totally wrong and sould apologize to him and congratulate him.

Somehow, assuming that the deal goes through and is successful in keeping Iran from obtaining nuclear weapons (and maybe even getting more cooperative about some other matters in the MENA areas), I also doubt that any of those engaging in their wild denunciations now will apologize or even admit that they were wrong.  Something bad will happen in the future if we do not bomb, bomb, bomb Iran ASAP, just you wait and see, maybe when the hyperinflation also appears...

Barkley Rosser

Brent Crude Price Below $50 Per Barrel First Time In Six Months

This is according to the Wall Street Journal as of 9:59 PM BST, which I think was just before 4 PM this afternoon in the eastern US, just over an hour ago.  Brent is the main international price, which has been several dollars above the main US price, West Texas Intermediate (WTI) for a long time, with WTI having fallen below the $50 per barrel price some weeks ago.

The article pinpoints two signal items in this sharp price decline today.  The first is that US oil production is at record levels.  The other is on the demand side, with slowdowns in demand from Brazil and India noted, but the really big item a piece of information released today by the Chinese government, and I quote:

"Chinese manufacturing fell to a two year-low, according to data released Monday [today]."

To those, such as anne over on Economists View, who think that all is just hunky dory in China and that the 7% growth rate reported for the second quarter is credible, well, it is not.

My own private sources say that the Russians think Chinese growth is now more in the 4-5% range, and I note that not only are the Russians currently making lots of deals with, and friendly with, China, but they are also very experienced in the arts of data manipulation that it appears the Chinese are engaging in again.

OTOH, on Econbrowser is a guest post by Jeffrey Frenkel who argues that what burst the Chinese stock bubble in June was a tightening of margin requirements by Chinese regulatory authorities. So, they goosed the bubble up, and since it has fallen they have engaged in extraordinary actions to slow its slide.  But they may well have been the parties who triggered the peak and the subsequent decline by their own actions.

Barkley Rosser

Workers Were Doing Fine Until We Took Over

The Team Republican economist response to rising inequality appears to be denial. First up was Martin Feldstein:

Any adult who was alive in the US during these three decades realizes that this number grossly understates the gains of the typical household. One indication that something is wrong with this figure is that the government also estimates that real hourly compensation of employees in the non-farm business sector rose 39% from 1985 to 2015.

Feldstein is talking about the mean whereas most of this debate is over the median but let’s read on:

With the traditional definition of money income, the CBO found that real median household income rose by just 15% from 1980 to 2010, similar to the Census Bureau’s estimate. But when they expanded the definition of income to include benefits and subtracted taxes, they found that the median household’s real income rose by 45%.

Let’s see – if we cut taxes a lot while increasing transfer payments, then we can get a boost to disposable income. So much for fiscal responsibility. But let me turn this over to Laura Tyson:

Over the last 35 years, real wages in the United States failed to keep pace with productivity gains; for the typical non-farm worker, the latter grew twice as fast as the former. Instead, an increasing share of the gains went to a tiny fraction of workers at the very top – typically high-level managers and CEOs – and to shareholders and other capital owners. In fact, while real wages fell by about 6% for the bottom 10% of the income distribution and grew by a paltry 5-6% for the median worker, they soared by more than 150% for the top 1%.

The chart provided by David Dayen bears out Dr. Tyson’s first sentence:

Perhaps for this reason, the wage/productivity chart has been under attack, with economists and pundits trying to explain away the gap as something not fundamental to our economic story. But Mishel, the originator of the chart, is pushing back, arguing that critics “are denying reality through technical arguments and sleight of hand.”... Harvard economist Robert Lawrence makes the gap disappear in several ways.

Dayen discusses each of Lawrence’s tricks here but let’s note that Greg Mankiw hearts what Lawrence even as it includes this:

when the numbers are measured more comprehensively—when wages are broadly defined as compensation to include benefits, comparable price indexes are used to calculate differences in wage and output growth in constant dollars, and the output is measured net of depreciation—the puzzle of lagging wages disappears, at least for 1970–2000. While prior to 2000 blue-collar workers fared especially poorly, constant dollar labor compensation for all workers actually kept pace with output.

2000? Jeb’s other brother became President right after that hiring Team Republican as his economic adviser. So the Team Republican reply is that we can massage the data in such a way that it appears that workers were doing fine until we took office. Oh yea – Jeb should definitely run his campaign on this message.

Feynman Has Something to Say About “Is Consistent With”

Time to go on the warpath again (see here, here and here) against the standard line in econometrics: this study “supports” my theory because the results “are consistent with” it.  Specifically, it goes like this:

1. Set up a model.
2. Derive an implication from your model.
3. Select/create a data set.
3a. Modify/transform the data set according to assumptions from your model.  (optional)
4. Apply causal inference tests.
5. If the result is consistent with the implication from Step 2, claim support for your model.
5a. If the result is not consistent, keep it secret and then go back and tweak the model or the data set.  Rinse and repeat until the result is consistent.

For the vast majority of the economics profession, this is regarded as a scientific procedure.  Richard Feynman would beg to differ.

I found this choice RF quote from Paul Romer’s post about Feynman Integrity:

It’s a kind of scientific integrity, a principle of scientific thought that corresponds to a kind of utter honesty–a kind of leaning over backwards. For example, if you’re doing an experiment, you should report everything that you think might make it invalid–not only what you think is right about it: other causes that could possibly explain your results; and things you thought of that you’ve eliminated by some other experiment, and how they worked–to make sure the other fellow can tell they have been eliminated. 

Details that could throw doubt on your interpretation must be given, if you know them. You must do the best you can–if you know anything at all wrong, or possibly wrong–to explain it. If you make a theory, for example, and advertise it, or put it out, then you must also put down all the facts that disagree with it, as well as those that agree with it. There is also a more subtle problem. When you have put a lot of ideas together to make an elaborate theory, you want to make sure, when explaining what it fits, that those things it fits are not just the things that gave you the idea for the theory; but that the finished theory makes something else come out right, in addition.

You don’t have to look hard to see that Feynman’s view of science is rather far removed from usual econometric practice.  Note in particular the obligation of the research to report “other causes that could possibly explain your results”.  If there are plausible theories other than yours that “are consistent with” those little significance asterisks you’re so proud of, you need to specify them.  The more of them there are, and the more plausible they are, the less claim your particular model has on our acceptance.  Of course, there’s also a responsibility to report all the empirical strategies you tried that didn’t give you the results you were looking for.  These are not “blind alleys”; they are possible disconfirmations, and you owe it to yourself and your readers to report them and explain why you think their negative verdicts should be set aside—if in fact they should.

Finally, Feynman’s subtle problem is familiar to anyone who reads widely in the econometric literature.  The researcher encounters a problem, creates a theory to explain the problem and then tests the theory (or tries to produce results “consistent with” it), and when it works claim a sort of victory.  But at a deep level this is a type of overfitting that impedes the ultimate purpose of scientific investigation, to develop an understanding of the world we can rely on in new situations.

Not all econometric work is guilty of the sins Feynman describes.  There’s lots of good stuff out there!  But there’s also a lot of deceptive stuff and no filter that tries to uphold scientific standards.

Izvestia Publishes Front Page Threat Against The Life Of Sergei Guriev

Yes, you read that right.  This has just come out.  Front page story.  Not only has his life been threatened, but the story also has threatened the lives of his wife, economist Yekaterina Zhuravskaya, and their two children.

For those who do not know who he is, Guriev was the Rector of the New  Economic School in Moscow until over a years ago when he was pressured to resign and left Moscow for Paris, where his wife and family have been.  Zhuravskaya and Guriev have  been visting at Sciences Po.

The immediate cause of this outburst was a speech Guriev gave recently in London denouncing the invasion and annexation of Crimea by Russia.  The article stated that this speech "put him and his family in danger."  Really.  This is what things have descended to.

Oh yes, the article says more.  It contains a more  general denunciation of him, claiming that his PhD was written by ghosts and that everything he did was  funded by US  agencies.  It is a full court press.

I  shall further note that I know Sergei personally, and that I published a paper by him when I was editing JEBO.  He has a long and impressive vita, and these accusations are like the worst of the old Soviet Union, completely unacceptable.

I wish him and his family all the best in this very dangerous situation.

Barkley Rosser

Sorry, Anti-Free-Choice Activists, A Fetus Is Not A "Baby"

The release and publicizing of doctored videos of Planned Parenthood people talking about selling and distributing and accesing of organs from aborted fetuses has been turned into a new rampage by the anti-free-choice crowd to both defund Planned Parenthood, which provides many clearly useful health services beyond abortion, and also to energize presidential candidates trying to hustle their way into the hearts of all those Iowa and other evangelicals, who are somehow under the delusion that the Bible calls abortion, "murder," which it most certainly does not.

What is a bit more disturbing is that the general media seems to be not only letting these candidates and politicians get away with calling aborted fetuses, "murdered babies," but that some of them are beginning to repeat this formulation as if it were simply a fact (although usually without the "murdered" in front).  Those awful people at Planned Parenthood are selling organs from aborted "babies."  This is certainly a dangerous trend and would constitute a complete redefining of words.

If the general media falls for this and gets this established, it will be like the succes story the organized right pulled when it got the media to talk about "death taxes" without any irony or explanation or modification, rather than as "estate taxes."  I mean, who can support "death taxes"?

So, let us be clear: a fetus is not a baby.  Go look in any dictionary.  A baby must be born live to become a "baby."  Prior to birth, it is a fetus after 8 weeks, it is a "fetus."  In the first 8 weeks it is an "embryo," although very early on after conception it is a "zygote," not sure what the official cutoff for that one is. But, there are plenty out there who think that aborting them is murder.

So, I am going to go into waters rarely swam in here on Econospeak, and I am not going to provide a bunch of precise quotes.  I am simply going to cite sources, giving the main arguments.  From a theological perspective, what is involved for most who argue about this is the time of "ensoulment."  (If you do not believe in souls, fine, figure out your own argument on this and why you think what you think about the broader issue, keeping in mind, is infanticide OK with you?  Personally am agnostic on all this soul stuff)

So, there is a wide range of views about this issue among both philosophers and theologians, with most starting at Aristotle, who thought it was 40 days for male embryos, and 89 days for female fetuses (sexist pig!) after conception. The range of views on this is simply enormous and wide.  Some Hindus (and some Buddhists) insist on the preexistence of the soul because of reincarnation, but wide differences and debates show up about when it enters, ranging from conception to birth and the taking of the first breath.  Some have argued that enters when the penis enters the woman's body to impregnate (really! although that one is definitely a rare view).  Many think it is at conceoption, with this the official doctrine of the Roman Catholic Church for most of its history, except during a period in the middle ages when Aristotle's view was accepted. Some say it is 40 or 80 or somewhere between 40 and 120 (a widely held view in Islam) days after conception.  One that had much sway in English common law was when "quickening" happnes, when the fetus first starts moving and can be felt (usually around 18-20 weeks in), with this showing up in Blackstone and in case law regarding when one can execute a convicted pregnant woman (yes before quickening, no afterwards).  Then there is "viability," can it survive outside the womb, with the 50% cutoff on that being more like 24 weeks into pregnancy. Then there are many (and when I believe in souls, this is what I think is most likely), at birth with the taking of the first breath, with many from many traditions taking this view.  Finally, at the furthest extreme have been some Jewish rabbis who have argued that the soul does not enter until a young child first says "amen."

Given that what people who support fully free choice regarding abortion, with the big dividing line being at birth, when a fetus becomes a baby (oh, and of course some of those ancient Greek philosophers thought that infanticide was acceptable under certain circumstances, something that I do not accept), let me make the case for that.  There are many passages in the Bible that support it, including in Genesis, Psalms, Job, and Ezekial, at a minimum.  These all involve God "breathing life" into people and thus providing them with spirit.  I note that the world "spirit" is tied to "inspire," which is also tied to breathing (and in Sansrkit, "atman," which is oversoul is linked to "atmosphere," or air).  There are numerous theologians and philosophers in various traditions who hold to some variant of this remark, and people who insist on saying that abortion before birth is "murder" are violating their religious freedom.

Finally, one further odd item, which is from Exodus, the only passage that arguably comes the closest to dealing specifically about the nature of the fetus as a being.  It discusses the punishment for a man who physically attacks a woman and causes a miscarriage, granted not the same as an intentional abortion, but in my mind at least a lot worse.  The punishment is that he is to pay a fine to the husband's family. Many Protestant fundamentalists have cooked up translationis that try to change this, but most Hebrew scholars insist that this is what it says.  This is in a part of the Bible that is very hard line about all kinds of things, with the famous passage about "an eye for an eye" very nearby this one.  Not all that far away we have people supposedly being needed to be stoned to death for not only murder, which clearly this induced miscarraige is not (thus clearly implying that the fetus is not a fully ensouled human baby), but for such ephemera as being a disobedient child, being a women getting married who is not a virgin, and being a married couple who have sex during the wife's period, not to mention homosexuality, of course.  All of those are worse than inducing a miscarriage in a pregnant woman by physically attacking her.  Really.

Additional Remarks:

For those who do not  believe in souls, or really do not know what to think, of course we can note that  indeed there is this gradual increase in development as various body parts, organs, activities within the fetus, and so forth increase as pregnancy proceeds, with public opinion, whatever is driving the various parts of it gradually shifting from a more solidly pro-free-choice position in the early stages to much less of such a position, especially one gets to the third trimester.  I certainly recognize this moral gradient that  things get more and more questionable the later one proceeds into pregnancy, and I must grant that most nations do put at least some sorts of restrictions on late term abortions, even if they do not outright outlaw them.  I do happen to support free choice in that final trimester, while recognizing that it is a hard choice.  I simply note that because it is, and would-be mothers themselves are aware of all this, that the number of late term abortions is very low, and most of them involve very unusual circumstances that should be decided upon by the pregnant woman and her doctor. So, I still support free choice, even in that morally more difficult time.

I also certainly grant that the videos look awful.  But so then do all those posters of aborted fetuses that show up on roadside posters here and there.  It is important to remember that these organs are being used for scientific research that can potentially help living people who have been actually born, and that this use of those organs has been approved by the would-have-been mothers, or so I understand anyway.  That the actual process is ugly, well, so are many other things that we live with and accept, or at least most of us, although we do not want to see them directly or even on videos..  

Barkley Rosser 

Are China's Problems Responsible For Recent Market Slides?

So, WTI oil has slid below$49 per barrel; gold has gone below $1100, although it jumped today. The US stock markets have been down in recent days for no obvious reasons, and some others are not looking so hot either.  Is there a common thread?  The big Greece crisis is over, although that could yet blow up, although I think most markets already know about that.

There have been lots of rumbling that problems in China might have something to do  with all that. There is no way to know this for sure, especially given China's long record of manipulating data.  Furthermore, serious observers are dismissing all this as a bunch of bad hype, most notably Dean Baker recently, accurately dumping on an incompetent story out of the NYTimes (who  seem to be pretending that they were secretly bought by Rupert Murdoch lately).  The Times had a story about the decline of the Chinese stock market, making a big deal about it.  Dean accurately noted that it is still above where it was in February, so the NYT looks pretty silly making such a big deal about it, especially since the Chinese stock market seems to have stabilized, as have the housing markets in Shanghai and Beijing, even if it is still falling in a lot of lower tier cities.

 I have tried to link to a report from just over a week ago by Pete Wargent, an Australian with an accounting background who reports from investing.com, but it did not work.  So, I am just going to lay out a bunch of reported data from a bunch of sources that suggests that while Dean is right about the NYTimes story, things are going on in China that are negatively affecting the world economy and are not being reflected in more aggregated statistics.  One reason I wanted to link to Wargent was not just his immediate report that capital flight from China has been steadily soaring, probably at least quadrupling from about two years ago, he linked to an older report laying out how the Chinese government messes with its GDP accounts, pointing out foreign trade data as one area where things get misreported.  He snarkily noted that China had just reported that the most recent  quarterly growth report was at 7%, just what the government had forecast, but...

So, what he noted is that while these aggregate number can say one thing, looking at more micro data can tell very different stories. Here are some numbers, each taken from a different source:

1.  In March, electrical power production (from all sources) was down 2% from a year before.
2.  In May, oil imports were down 11% from a year before.
3.  Truck sales have fallen by nearly a half between last year and now.
4. Capital flight numbers are accelerating, possibly more  dramatically than the quadrupling figure reported by Wargent.

So, maybe these are consistent with an aggregate 7% growth rate, but does not look like it.  Many outside observers are arguing that the Chinese GDP growth rate is more like 4%, with some saying that in the first quarter it hit zero or even lower, although picking up more recently.

A final point regards the stock market bubble story.  While Dean Baker sneered at the story from the NYTimes, an aspect not reported by them or him, but in Wargent reports and some other sources says that the methods used by the Chinese government in its efforts to halt the stock market slide (so far successful) were very extreme, including simply forbidding many stocks from being sold, and also forcibly confining stock dealers in rooms until they engaged in purchasing some stocks, with portions of  the market still shut down with no transactions allowed. So, the stock market is not at all really stabilized.  We are seeing the ugly side of the old Chinese system, trying to keep a lot of problems under control that they have not had to deal with.

Anyway, declines in oil purchases by them and rumors that the Chinese have guaranteed a gold price floor of $1000, well, I guess we do not know what is really going on with any of this, whether  or not declines in these and other markets are really due to a bigger slide in the Chinese economy than is being officially reported at the aggregate level, this cannot be ruled out.  But, I think there is reason to be concerned.

 Barkley Rosser