>I was referring to the fact that the actual exchange rates fluctuate a lot;
>the PPP exchange rates wash out a lot of the noise. Maybe a simple weighted
>average of all the actual exchange rates would do better.
>
>>But that is because of the non-marketed component.
>
>Right.
>
>in pen-l solidarity,
>
>Jim Devine
I have stayed out of this discussion because it has tended to be a bit
technical, but it does occur to me that one of the liabilities of
abstracting out "performance" criteria in the standard manner of
professional economists is that they are completely inadequate to
understanding questions of social justice. When Michael Perelman raised the
original question of what US capitalism was doing "right", I interepreted
the word ironically although I am not sure he meant it in this manner.
To really get a handle on the questions that matter, it seems that a more
systematic approach is required, one that very possibly falls outside the
boundaries of the professional economics discipline. For example, do
economics departments take up the question of income distribution, or is
that a matter for "sociology"? In a sense, doesn't dividing the university
into political science, economics and sociology "disciplines" make it
difficult to answer these questions? By segmenting our understanding of
society, it is easier to obfuscate the real problems.
GDP certainly seems like a dubious measurement in itself. After all, the
period of the steepest growth in recent Central American history was the
1970s when El Salvador and Nicaragua were being turned into cattle ranches
to satisfy the beef market in a rapidly expanding fast-food industry. These
"optimistic" figures disguised the misery of peasants who were being driven
off their land and who streamed into Managua or San Salvador to scrape by
as peddlers.
The other problem with standard measurements of economic performance is
that they fail to get to the heart of the system, which is of a cyclical
nature. In the 1960s, Brazil was the country that bourgeois economist
pointed to as the next entrant into the advanced capitalist ranks. It was
the South Korea of its day. And it was true that Brazil was making great
leaps in steel production, etc. However, the debt crisis of the 1970s wiped
out many of these gains, just as is taking place in South Korea now.
Louis Proyect
