The Minsky Moment In Eastern Ukraine

 Oh, I cannot resist taking that phrase from a recent Economist article about the separatist Donbass republics, the Luhansk Peoples' Republic (LPR) and the Donetsk Peoples' Republic (DPR). The official recognition by V.V. Putin of their independence brings about the end of the Minsk II Accord negotiations that have been going on since 2015. These accords were supposed to bring peace to eastern Ukraine, but they failed to do so. This recognition brings them to an end, the Minsky Moment, as it were (which is also being associated with sharply falling financial markets around the world, if not full-blown Minsky level collapses).

This recognition, accompanied by a completely off-the-wall speech by Putin, who seems to be consumed by bizarre and unfortunate fantasies about history, has opened the door for the open entry of Russian military into the LPR and DPR. Of course Russian military forces have been in them this whole time since they were established in 2014. Indeed, it is widely thought that the masked men who initially seized government builidings that set these republics up back then were mostly actually Russians. But all of this has been deniable, the official line out of Russia that they were all locals.

I note that both sides blame each other for the failure of the Minsk Accords.  These were negotiated through the Normandy 4 venue with France and Germany involved as well as Russia and Ukraine, and a bit, Belarus. These republics were supposed to remain part of Ukraine, but have a high level of autonomy. Apparently what put the Ukrainian government off was that they could have separate authority over Ukrainian foreign policy, as well as the ongoing presence of Russian military.  On the other side, the Russians denied they had military there and complained about the Ukrainians not accepting that autonomy.  And, of course, there was ongoing low grade warfare along the boundaries of control.

Those boundaries are now a major matter.  Putin recognizes that these republics claim to consist of the total oblasts bearing their names.  But the current reality is that these republics each controls only about a third of its respective oblast. This opens the door to a possible Russian military attack on the portions of those oblasts not under the control of the republics.  Probably the most important place to get conquered in that case would be port of Mariupol, a part of the Donetsk oblast.

The US and NATO allies have issued some initial economic sanctions as a result of this latest development.  Russia will not be able to raise or trade irs debt on western markets. Certain individuals have been forbidden from operating in western markets. Two banks have been targeted, one associated with the Russian military and VEB.  Finally, and most significantly, Germany has canceled the NordStream 2 natural gas pipeline.  This leaves many other possible sanctions that can be used if Russian troops further advance into Ukraine.

Barkley Rosser

Herbert Marcuse and Planned Obsolescence

"Our whole economy is based on planned obsolescence, and everybody who can read without moving his lips should know it by now. We make good products, we induce people to buy them, and then next year we deliberately introduce something that will make those products old fashioned, out of date, obsolete. Planned obsolescence is the desire to own something a little newer and a little better a little sooner than is necessary. It isn't organized waste. It's a sound contribution to the American economy." -- Clifford Brooks Stevens (designer of the Oscar Mayer Wienermobile)

Herbert Marcuse was concerned with two kinds of obsolescence in writings spanning from 1963 to 1979. One was the obsolescence of theories -- such as Freudianism and Marxism -- which, however, did not invalidate those theories but rather demonstrated the regression of social possibilities since those theories were proposed. The second kind of obsolescence, which Marcuse deplored, was planned obsolescence -- a term that Marcuse never elaborated upon but instead included in almost a dozen lists, often coupled with militarization, advertising, and waste. The two kinds of obsolescence were related, with planned obsolescence standing as part of the syndrome that made Marx, Freud, and socialism obsolescent. 

This is a minimalist introduction to the research project that I am currently engaged in. Ultimately, it is related to my earlier posts on free time and also related to the impasse I had reached a couple of weeks ago in writing about free time and dialogue. Marcuse's repetitive lists, I would suggest, were symptomatic of another impasse. I imagine that Marcuse sensed the elements in his lists were the components of a totality -- a totalitarian totality. But he was unable to articulate that totality because, in part, it seemed self-evident. 

Vance Packard had written two popular and compelling books about planned obsolescence and the "hidden persuaders" of advertising. The U.S. was deeply embroiled in counter-insurgency military operations in Vietnam. Rachel Carson's Silent Spring had made environmental destruction topical. Isn't it obvious how all that fits together? Not really.

Marcuse acknowledged Packard's books as belonging to the studies of "vital importance... which are frequently frowned upon because of simplification, overstatement, or journalistic ease." He went on to acknowledge that, "the lack  of theoretical analysis in these works leaves the roots of the described conditions covered and protected, but left to speak for themselves, the conditions speak loudly enough (emphasis added)." Perhaps that explains why Marcuse left "planned obsolescence" to speak for itself. But it is not a good explanation.

In the last chapter of Philosophie des Geldes, published in 1907, Georg Simmel provided what could have been a more than adequate basis for a theoretical analysis of planned obsolescence. Walter Benjamin studied with Simmel in 1912. In his methodological addendum to "The Paris of the Second Empire in Baudelaire," Benjamin presented an argument that seems almost a paraphrase of Simmel's analysis. Benjamin wrote:

Taste develops when commodity production clearly surpasses any other kind of production. The manufacture of products as commodities for a market ensures that the conditions of their production—not only societal conditions, in the form of exploitation, but technological ones as well—will gradually vanish from the perceived world of the people. The consumer, who is more or less expert when he gives an order to an artisan (in individual cases, he is advised by the master craftsman himself), is not usually knowledgeable when he acts as a buyer. Added to this is the fact that mass production, which aims at turning out inexpensive commodities, must strive to disguise bad quality. In most cases, mass production actually benefits when the buyer has little expertise. 

 In Philosophie des Geldes, Simmel had written:

Custom work, which predominated among medieval craftsmen and which rapidly declined only during the last century, gave the consumer a personal relationship to the commodity. Since it was produced specifically for him, and represented, as it were, a mutual relationship between him and the producer, it belonged, in a similar way as it belonged to the producer, also to him. Just as the radical opposition between subject and object has been reconciled in theory by making the object part of the subject's perception, so the same opposition between subject and object does not evolve in practice as long as the object is produced by a single person or for a single person. Since the division of labour destroys custom production — if only because the consumer can contact a producer but not a dozen different workers — the subjective aura of the product also disappears in relation to the consumer because the commodity is now produced independently of him. 

Although there is no documentation, Michael Löwy speculates that Benjamin and Marcuse "probably" met, either in Berlin or Paris. Adorno was close friends with both Benjamin and Marcuse. One-Dimensional Man concludes with a quote from Benjamin, "It is only for the sake of those without hope that hope is given to us."

One of my goals in this investigation will be to develop a theoretical analysis of planned obsolescence from Simmel's analysis of the "preponderance of objective culture over subjective culture that developed during the nineteenth century.

What got me interested in revisiting Marcuse's writings from the 1960s and 1970s was a tweet that mentioned how Marcuse had been citing a passage from the Grundrisse long before the "fragment on machines" became "famous."  In Soviet Marxism (1958) , Marcuse cited a passage that can be found on pages 708-709 of the Penguin English translation. Here is Marcuse's 1958 translation:

For true wealth is the developed productivity of all individuals. Then, no longer labor time but free time (disposable time) is the measure of wealth. Using labor time as the measure of wealth places wealth itself on the foundation of poverty . . . and makes the entire time of the individual into labor time, thereby degrading him to a mere laborer, subsuming him under his labor. The most highly developed machinery therefore forces the laborer now to work longer than the savage did, or longer than he himself did with the most primitive, the simplest tools.

In One-Dimensional Man (1964), Marcuse cited a passage excerpted from the text that corresponds to pages 704-706 of the Penguin edition. He cited the same excerpt again in "Obsolescence of Socialism" (1965) and "Obsolescence of Marxism" (1966):

As large-scale industry advances, the creation of real wealth depends less on the labor time and the quantity of labor expended on the power of the instrumentalities (Agentien) set in motion during the labor time. These instrumentalities, and their powerful effectiveness, are in no proportion to the immediate labor time which their production requires; their effectiveness rather depends on the attained level of science and technological progress; in other words, on the application of this science to production. ... Human labor then no longer appears as enclosed in the process of production – man rather relates himself to the process of production as supervisor and regulator (Wächter und Regulator). ... He stands outside of the process of production instead of being the principal agent in the process of production. ... In this transformation, the great pillar of production and wealth is no longer the immediate labor performed by man himself, nor his labor time, but the appropriation of his own universal productivity (Produktivkraft), i.e., his knowledge and his mastery of nature through his societal existence – in one word: the development of the societal individual (des gesellschaftlichen Individuums). The theft of another man’s labor time, on which the [social] wealth still rests today, then appears as a miserable basis compared with the new basis which large-scale industry itself has created. As soon as human labor, in its immediate form, has ceased to be the great source of wealth, labor time will cease, and must of necessity cease to be the measure of wealth, and the exchange value must of necessity cease to be the measure of use value. The surplus labor of the mass [of the population] has thus ceased to be the condition for the development of social wealth (des allgemeinen Reichtums), and the idleness of the few has ceased to be the condition for the development of the universal intellectual faculties of man. The mode of production which rests on the exchange value thus collapses...

In "Obsolescence of Socialism" Marcuse claimed that in Capital, Marx had "repressed this vision, which now appears as his most realistic, his most amazing insight!" I am aware of only one source that discusses that extraordinary claim "Changes in Today’s Workplace and in Critical Social Theory: Marx, Marcuse, and Postone" by Russell Rockwell (2016). Rockwell cites portions of the same passages that undermine Marcuse's interpretation and mentions, in passing, that Marx "merely quotes an anonymous pamphlet, published in 1821." My position is that there was nothing "mere" about Marx's quotation of the pamphlet. The pamphlet provides a key to deciphering the so-called "fragment on machines" as well as two earlier fragments that are intimately connected to the passage Marcuse quoted from.

Trying To Make Sense Of The Confusion

 On the one hand Russian media is telling Russians that Russian troops will leave Belarus when exercises there end on Feb., 20, coinciding with the end of the Winter Olympics, and also sends out videos of troops supposedly being pulled back. OTOH, US officials declared based on reported satellite evidence that 7,000 more troops have gone to "the Ukrainian border" with a chance of Russia invading Ukraine very high, as US personnel are removed, and the US embassy is moved from Kyiv to L'viv in far western Ukraine.  I also  note that previously Russian media was blasting away about US troops in Ukraine and threats to Belarus and Russia.  US advisers were removed last weekend, and that coincided with the pivot to peaceful sounding media in Russia, although much of this is also tied to ongoing focus on the Winter Olympics, where the Russians have generally been doing very well. Can any sense be made of these apparent contradictions? Maybe

The video of Russian troops being withdrawn were shown crossing the bridge Putin has had built connecting Crimea with Russia proper, so not quite on the Ukrainian border and not in Belarus, but also emphasixing Russian intention to hang on to Crimea, with the newly built bridge connecting it to Russia peoper highlighted.

I do think that given how loudly it has been broadcast to the Russian people, Russian troops will largely be withdrawn from Belarus when the exercises end on Feb. 20.  They posed the greatest threat to Kyiv itself, if there were to be an invasion, with Kyiv not too far from the Balarusan border.  But while pulling back troops from Belarus may make Kyiv a bit more secure, it in fact does not remove the threat of a possible invasion .  There are about 159,000 Russian troops somewhere near the Ukrainian border supposedly, with where the new 7000 went not clear. But there are only about 35,000 Russian troops in Belarus for the exercises. So they could be withdrawn completely and there would still be well over 100,000 Russian troops near the Ukrainian border, with the Russia-Ukraine border much longer than the Belarus-Ukraine one, even if the latter is nearer Kyiv.

David Ignatius has written that "it is unclear what Putin's endgame is," and I fully agree.  I do not know.  He has made many demands, while always stating he was not going to invade. Some of those demands always looked out of the question, such as pulling troops and weapons out of former Soviet republics and Warsaw Pact members now in NATO.  But his ongoing demand about keeping Ukraine out of NATO remains on the table, and there remains the ongoing matter of the status of the separatist republics in Donbas. I do not know what he will accept to not engage in some sort of military action later with the troops still near Ukraine, even after he pulls out of Belarus, if he does.

Zelensky ran on having a referendum on joining NATO. But without resolution of the Donbas republics issue, he cannot have that in a serious way. And he has recently said that "joining NATO may be just a dream." But that may not satisfy Putin.

As for the republics themselves, the lower Duma has passed a bill recognizing them as independent states, and has urged Putin to do it, as he has in the past for Abkhazia, South Ossetia, and Transniestria, although almost nobody else recognized any of those.  He has held back so far on recognizing Lunansk and Donetsk. But perhaps doing that and bolstering them more, with perhaps helping them increase their territories, along with other agreements on types and placements of various arms in eastern Europe.  But, again, I do not know what Putin really wants, or maybe we know what he wants, a resurrection of the Soviet Union and the Warsaw Pact. But that is not going to happen. So, we are back to how much of what he wants will he be willing to take if he can get it to really pull back, not just from the exercises in Belarus. To that, I do not know the answer.

Barkley Rosser

Things Getting Very Worrisome

 Yes, signs regarding a possible Russian invasion of Ukraine have gotten much worse in the last few days. I am hearing from my wife that Russian media are now claiming there are lots of US troops in Ukraine. Such a claim, not even backed up by some fake video, would clearly serve as an excuse for an invasion. There are also reports out of the Russian media that Putin feels that he was not treated well in Beijing. Apparently he was shunted off to some side airport when he landed, with only the Russian ambassador there to meet him.  This may help explain some reports of Xi not being impressed with his "overbearing manner,=" despite their superficially friendly joint communique. This suggests that Xi may not be able to hold him back, although maybe he can hold him back until at least the Winter Olympics are done.

As it is, the date for that is Feb. 20, which coincides with the conclusion of the exercises in Belarus. Supposedly the Russian troops there will go home after then, but that conclusion time looks like a highly likely time to invade, if indeed that is what is coming. Clearly markets are more worried, with Brent crude price passing $95 per barrel a sign, even as there are rumors of a renewed Iran nuclear deal happening.

My concern is that Putin seems to have become highly isolated to the point of becoming deludional. Reportedly he thinks like Bush before invading Iraq that he will be welcomed as a "liberator" if he invades, at least by native Russian speakers.  But it is pretty clear now that would/will not be the case. People in Kharkiv have no interest in living lives like people in the separatist Donbas republics, where conditions are basically awful. Since Zelensky came to power, the economy has been generally improving with clearly reduced corruption levels, and with most Russian speakers not supporting the aggressive actions by Putin, although in Crimea they may be mostly satisfied more or less. 

The invasion and annexation of Crimea was popular in Russia. But there are many indicators an invasion of Ukraine now would not be popular there.  It also looks that it would not be welcomed by many of Putin's cronies, who would suffer substantial financial losses due to economic sanctions such as shutting off access to SWIFT settlements, or even losses of real estate in UK and elsewhere. There are even elements of the military openly opposing an invasion, notably retired General Ivashov.

Besides these reports about Russian media claiming US troops in Ukraine and Putin annoyed at his reception in Beijing, there are also lots of reports that Putin's own position in Moscow is not secure, that many around him want him out.  It even may be that this possible invasion is partly going on to distract from that and to keep people in line. But a failed invasion could trigger his overthrow.  The leading candidates to replace him are either hardline Defense Minister Shoigu, who has been advocating the invasion, with cynics saying he has been pushing it precisely to get Purtin out so he can come in, or especially if the invasion becomes a big mess, the current Prime Minister, Mitushkin.

Anyway, I have become much more worried about the current situation. It is not unreasonable of President Biden to be urging US citizens to leave Ukraine at this time, unfortunately, although maybe reason will still prevail in the head of V.V. Putin, which is what matters here totally.

Barkley Rosser

Can Ukraine Become A New Austria?

 In this Sunday's Washington Post, columnist David von Drehle suggests that a way out of the difficult Russia/Ukraine situation would be for Ukraine to become like what happened with Austria in 1955 and since; it formally became officially neutral, not joining either NATO or the Warsaw Pact, and has remained so since.   For Ukraine this would in effect grant Putin his demand that Ukraine not join NATO, although it would not involve pulling NATO back from such nations as Poland the Baltic states as he has also demanded.

It is easily forgotten that for ten years after WW II Austria was like Germany was iniitially: chopped into four zones of control, one of those in the east being Soviet, which included Vienna, but with Vienna, like Berlin, also chopped into four zones of control. In Germany, of course, at the end of the 40s the three parts of Germany plus those of Berlin controlled by US, UK, and France, combined to form German Federal Republic, aka West Germany, with the remnant Soviet parts becoming the German Democratic Republic, aka East Germany. Such an outcome did not happen in Austria, where the parts all remained separate until Austria was unified in 1955 with the agreement it would become a neutral state.

Many today only know of this period after the war if they see Carol Reed's film based on Graham Greene's novel from 1949, The Third Man, with Orson Welles in it, a great film for sure.  I remember visiting Vienna in 1958 and seeing lots of war damaged buildings then, since rebuilt.

That all sounds nice.  There is a problem, however. In 1955 the Soviet Union had not annexed a portion of Austria, and it agreed to let the part of Austria it controlled become a part of this newly neutral Austria. As it is today, Russia has invaded Ukraine twice, annexing one portion of it, Crimea, an act still unrecognized by practically any other nation, although Belarus's Lukashenka seems to be now referring to it as a done deal, if not officially so. And then we have the Russian-supported Donbass republics, also unrecognized as independent by anybody, not even Russia itself so far. 

So, to have any sort of equivalence to Austria, Russia would have to undo its annexation of Crimea and return it to Ukrainian control as well as withdraw support for the Luhansk and Donetsk republics.  Neither of these seems to be ready for proposal by Putin, especially the Crimean annexation, which was and remains popular in Russia, even if an invasion of Ukraine now looks not to be too popular.  And indeed, many think the diplomatic outcome he might accept is not withdrawing, but in fact regularizing and gaining acceptance of the status of the separatist republics.  

An Austrian outcome might well be the best possible one around, but as of now it does not look like Putin is about to offer anything that would look like what the former Soviet Union offered in 1955 in th case of Austria.  This looks like mostly nice talk, but not a likely outcome.

Addendum: Prior to WW I Austria was the core of the Austro-Hungarian Empire. After the war it became an independent republic with roughly its current borders.  in 1938 Hitler made it part of Germany with the Anschluss. Thus at the end of WW II it was separated from Germany and chopped up into those parts as was Germany. This is what presaged the 1955 deal that put it back together as an officially neutral state.

From the beginning of the UN, not only was the USSR a member of it, but also two of its parts, the Ukrainian SSR and the Byelorussian SSR, a deal Stalin cut when the organization was formed, although only the USSR held the Security Council seat, those two were only in the General Assembly. When USSR broke up, Russia inherited the USSR's Security Council seat.

There are three agreements regarding how Russia should deal with Ukraine, although two of those were signed by the USSR, not Russia per se. The first of those is indeed the UN Charter, with any member of the organization supposed to respect the sovereignty and territorial integrity of fellow members, with Ukraine actually such a member from 1945 on. Of course this is an agreement Russia did not sign itself, but supposedly is supposed to follow UN rules. 

Austria would join the UN in 1955 and agreeing not to join NATO. In 1975, the USSR would sign the Helsinki Accords, which allow nations to join whatever organization they wish to.  It is this agreement that is why NATO nations refuse to allow Russia to forbid Ukraine from joining NATO. However, as Austria and Finland have chosen not to, so Ukraine could choose to promise not to, if it were given sufficient motivation to do so by Russia.

Finally, there is the Budapest Accord of 1994, signed by US, UK, Russia, and Ukraine, when the latter gave up its roughly 2000 nuclear weapons. In that one Russia itself promised to respect the sovereignty and territorial integrity of Ukraine.  

Barkley Rosser

"What they create [in their free time] has something superfluous about it."

I am finding it difficult to proceed with writing about free time because I am not having enough opportunity to talk out these questions with people in person.

Surgery Tomorrow

 I shall be having a parathyroid removed tomorrow at University of Virginia hospital. Will be going over this evening to avoid freezing fog.  So, I shall be out of commission for awhile.

Barkley Rosser

Again One Of The Top 100 Economics Blogs

 I note that on 1/19/22 The Intelligent Economist released its annual list of the top 100 economics blogs.  Both Econospeak and Angry Bear, which we feed into, are on the list, us again as one of the financial economics blogs while AB is in the general economics section.  They again say we are not for beginners due to the "complexity" of things we post and talk about.

Barkley Rosser

The Arctic Hare and Walter Benjamin's program for a proletarian children's theater

The hare was a child so badly treated and offended by the other people because he had such long ears that he went off to live alone.

When he sees someone, he puts his ears back; for when he hears a man's call, he thinks they are talking about his long ears. He doesn't have a tail because he didn't have one before.

Whither Kazakhstan?

 Should I not be posting on the ongoing threat by Putin against Ukraine that is current dominating the news? Nobody is talking about Kazakhstan.  Yes, that is right, which means maybe somebody should, if just to sort of check up on what was The Big Crisis very recently.

So indeed it looks that the uprising that cost quite a few lives and resulted in a lot of damage is completely over, along with having several thousand people get arrested.  The Putin people are all praising him for bringing it to and end by sending in a couple of thousand troops that guarded a few buildings not under attack. But it looks that the Kazakhani security forces pretty much put the uprising down themselves prior to any of those forces arriving.  Crucial was the "shoot to kill" order put out by President Tokayev, which was carried out, with several hundred dead in the end.

One loose end is what really caused this and was there a major role by outsiders? The latter was claimed by the Kazakhstani government, but their only "evidence" of this was a completely goofball story about a jazz musician who entered Kazakhstan from Tajikistan. There have been vague reports that the CIA was training people in the countryside who poured into the cities, especially Almaty, and caused the worst trouble.  It does seem that indeed people did come in from the countryside, but nobody has provided any evidence of this supposed training.

The hard fact is that it seems nobody was expecting this or even vaguely predicting it. The widespread view was that the place was one of the more competently run former Soviet republics, despite lots of corruption and inequality. But most of them have that.  Its real per capita income had risen more rapidly than in almost all others, and it had risen in the ranking of these with each other.  It looked well off and stable. What happened?

I think this may have been an example of the "revolution of rising expectations," that we sometimes see upheavals in places where things are improving because people have hopes of them improving a lot more and demand it.  This really does look like a spontaneous outbreak against this entrenched corrupton and inequality that spread suddenly, but then after getting pretty fierce, was fairly easily put down, being spontaneous and not well organized.

What does seem to have come out of it is that Tokayev has cemented his power, especially against former president and "Father of the Nation," Nursultan Nazarbaev. The latter was removed from his position as leading the National Security Council, and the security chief, Kassimov, an ethnic Uighur, was removed from his position and arrested, with him reportedly a close ally of Nazarbaev. The premier was also replaced, and the security forces are being reorganized.  It is probably the case that the real import of Putin sending some forces, now reportedly being removed, is that he signaled his support for Tokayev in this power struggle, with Tokayev apparently having attending the KGB higher academy for a while during the Soviet period.

The most recent development is that after disappearing for awhile, Nazarbaev has resurfaed. He has publicly denied that there was a power struggle or any differences.  But it looks that he is accepting his loss of position and allies.  He has been around and knows what he needs to say to preserve what he can of his standing and power.

Oh, on the Ukraine matter, I do not know what will happen, but here is an action Putin can probably get away with without getting sanctions imposed on him, but that will also allow him to save face, given that the US and NATO will not meet his demands.  He can recognize the independence of the Luhanks and Donetsk separatist republics, something he has also done for South Ossetia, Abkhazia, and Transdniestria, even though nobody else has recognized them. He can also supply them with a lot more arms and maybe some deniable green men to allow them to expand their territory of control somewhat in a couple of places, with an obvious one to have them retake the Sea of Azov port they briefly held of Mariupol.  Probably Putin can get away with these moves, which will provide him with face.

Barkley Rosser

How intelligence was distributed among the animals

Illustration by Tom Seidmann-Freud

In the beginning, none of the animals was endowed with intelligence. When they saw a hunter coming towards them who wanted to kill them, they stopped, looked at him and were shot. So our Lord sent someone who put all the senses in a sack and put it under a big tree. The weasel noticed this, ran to the hare, told him about it and said: "Brother hare, let's go there, and if you want to take the sack, I'll give you good advice." 

When the hare tried to carry the sack, he could not lift it and went away. The weasel tried again a second time, but the sack was too heavy. Then a dove, perched on a branch and said, "hand it over." Instead, the weasel dragged the sack away and leaned it against a tree. Then he picked it up and carried it home. When he got the sack home, he opened it and saw there was nothing inside but mind. He went to the hare to tell him about the sack and told him, "don't tell the other animals about it; I will give you a little understanding, but keep the rest in my cave. If anything else comes along, I'll give him a little too." 

So the hare got some of the mind, and the weasel told him, "if you take your share with you, note the following: if you sleep during the day, open your eyes. If someone comes and thinks you would be a good bite for him to eat, he will think you are awake and go away again. But if you lie down and do not sleep, close your eyes. If someone sneaks up and wants to grab you, jump up and run into the forest. That much sense is enough for you." 

The weasel kept all the rest for himself and surpasses all the animals of the field in intelligence. If someone wants to catch him, he jumps into his cave. If you dig open the cave, he escapes from behind. That's why he's called the king of the mind. Little intelligence was distributed among the other animals and they have nothing more to this day.

A Flip In Oil Markets

 A long time ago, sometime before the 2008 crash, prices of Brent crude oil and West Texas Intermediate (WTI) crude ran close to each other.  WTI would from time to time would exceed Brent, with them kind of bouncing around as they moved along. This changed with the financial market crash of 2008, with Brent becoming chronically higher than WTI, nearly always by several dollars per barrel. For various reasons arbitrage did not operate fully to bring those prices back together again.

But today for the first time in well over a decade it happened.  The Brent price declined while WTI did not, with WTI at $86.90 per barrel with Brent at $86.79. I am not sure what has brought this about or how long it will last, but this is something we have not seen this for a long time.

Barkley Rosser

Bragging

 An article about me and my wife, Marina, has just come out at the cover story at Madison Magazine, the alumni magazine of James Madison University, where I work.

www.jmu.edu/madisonmagazine

.

Barkley Rosser

Fight for 15!!

 Tyler Cowen links to a an NBER working paper with an excerpt from the paper:

 “Under only the efficiency channel, the optimal minimum wage is narrowly around $8, robust to social welfare weights, and generates small welfare gains that recover only 2 percent of the efficiency losses from monopsony power.”

 A measly $8 ?  So much for the "efficiency" channel. What are the other channels? Here is the abstract:

It has long been argued that a minimum wage could alleviate efficiency losses from monopsony power. In a general equilibrium framework that quantitatively replicates results from recent empirical studies, we find higher minimum wages can improve welfare, but most welfare gains stem from redistribution rather than efficiency. Our model features oligopsonistic labor markets with heterogeneous workers and firms and yields analytical expressions that characterize the mechanisms by which minimum wages can improve efficiency, and how these deteriorate at higher minimum wages. We provide a method to separate welfare gains into two channels: efficiency and redistribution. Under both channels and Utilitarian social welfare weights the optimal minimum wage is $15, but alternative weights can rationalize anything from $0 to $31. Under only the efficiency channel, the optimal minimum wage is narrowly around $8, robust to social welfare weights, and generates small welfare gains that recover only 2 percent of the efficiency losses from monopsony power.

So, we need a $15 minimum to maximize the welfare benefits when we take both channels of welfare gains, the efficiency and redistribution effects, into account.

What bothers me about Tyler's selective quoting is that utilitarian arguments for redistribution are about efficiency. They are arguments that a redistribution of income can increase overall utility. I know, I know: Pareto. We're not allowed to make anybody worse off. But why do we defer to Pareto on efficiency? Someone who hadn't been brainwashed with the Paretian stuff would not see much of a difference in kind between situations where redistributing, say, labor would increase overall production  and one in which redistributing income would increase overall happiness. Both are inefficient, arguably.

And, on an ad hominem note, Pareto was a fascist!

Fight for $15!

( The paper is NBER working paper #29662, by David Berger, Kyle Herkenhoff and Simon Mongey)

"I shall Defend The Rights Of Parents"

This is what new Virginia Governor Glenn Youngkin said when he made an executive order on the first day of his term to ban school systems from having mask mandates. Some systems will not go along, including that in Arlington and mine in the city of Harrisonburg. He claims to be defending the rights of parents, somehow not noting that he is violating the rights of parents who do not want their children be forced to be in school with unmasked children, thus raising their chances of getting Covid-19.

He also ended the mandate that all state workers be vaccinated. This affects me personally. Indeed, a message has come from the president of my university, which is a VA state one, that there is now no vaccine mandate. My own safety will now be compromised, thanks to our new governor.

Of course he has gone on Fox News to brag about this handiwork of his.  Will he be running for president as some suspect in 2024?

Barkley Rosser