Re: Created Unequal by James Galbraith
Dear Jim: This, as I understand it is one of the main thesis's of the book. That a major redistribution of income has occurred since 1970 towards those who recieve income from interest rather than from labour. He also identifies the "transfer state" as the other area of change in income redistribution. I don't have the book in front of me know, but one of his most insightful graphs to me was the one that showed 16% of income is recieved from interest by the very rich and 16% of income is redistributed to the poor, the elderly, the handicapped for a total of 32%. In the 1960's, only 3% of income was earned through interest and 3% redistributed through transfers. This growth in "interest" income comes from the pocketbooks of the middle class, those who have credit. Following this logic is the angst of the middle class who still earn their income through labour and wages and find that interest and taxes which fund the transfer payments are both taken from their earnings. This leaves them with less. The neo-cons, with their call for tax relief are responding to only one half of the problem, high taxes which fund transfer payments while keeping the middle class in the dark about the other half of the problem, the amount of their income which is going to pay interest. His solution to the transfer payments problem is to go back to a full employment policy that he claims was in effect from 1945 till 1970. More people working means less transfers to those who are not working. His solution to the interest problem is to raise wages, the logic being that we cannot save or have disposable income when are wages are too low and we compensate by using credit which increases the wealth of those who use capital to gain interest rather than using capital for the investment in capital goods production. Rspectfully, Thomas Lunde -- >From: Jim Dator <[EMAIL PROTECTED]> >To: Thomas Lunde <[EMAIL PROTECTED]> >Subject: Re: Created Unequal by James Galbraith >Date: Mon, May 31, 1999, 5:23 AM > > Does Galbraith discuss the role of the rapid expansion of easy consumer > credit during the time frame of his analysis? > > >
Re: Created Unequal by James Galbraith
Thank you very much for that explanation. It was not clear to me from what you originally sent that this was so, but now I see it could not have been otherwise. I will definitely have to get the book to read more now. Do you (or anyone else on this list) have additional sources to recommend about the role of consumer credit in both fueling the current economy, and skewing it in the way Galbraith/Lunde demonstrate? I, too, feel this is the big dark secret that is never discussed in these terms (to my knowledge) in the general press, or politics.
Re: Created Unequal by James Galbraith
Whoever you vote for, the economic power - and with that the political control, stay in the same place, with the biggest companies and corporations. You can only effect political power, if you take over the economic control. You have to take into collective ownership the most powerful blocks in the economy, such as banks, multinationals. Sounds slightly radical - some of it has been done in the past when there were large and enthusiastic majorities for it. It can be done, this time under democratic control and not to prop op the rest of the private approprietive system. We produce collectively, time is ripe now to distribute collectively. Will there be someone with academic credentials to admit reality? Eva > Whether we have a DD system or a Representative System, the will of the > people is constant. Security is the goal of all people. People continually > vote for more security, medicare, unemployment insurance, pensions and other > supports. Elected governments continually promise security. And then - yes > you guessed it, the ideology of laissez-faire capitalism subverts the > politicians into other directions from which they recieved a mandate to act. > We then turf the buggers out because the next group convincingly sings the > theme song of security only to be subverted once again. The real question > is which ideology should be dominant - democracy or capitalism. The people > continually, whether marxists, socialists or capitalists, at their human > individual level, continually opt for more security. The problem to me > seems less in how we elect them, but rather in how we can make them produce > the effects they promise. > > Respectfully, > > Thomas Lunde [EMAIL PROTECTED]
Re: Created Unequal by James Galbraith
There is nothing wrong with equal responsibility taken for family income, if the responsibility for housekeeping and childrearing is also shared, not only by fathers, but also by society, such as shorter working hours, cheap and excellent public nursery-schools and after-school childcare, cheap public restaurants, etc. Not attainable in the present system. Research results do not support your claim that stay-home mothers and absantee fathers mean good family life, on the contrary. Eva > > I couldn't agree more and of course it is not only immigrants but the > massive entry into the labour force of women - not that women shouldn't work > but that, in a large number of cases they didn't work in the 50's and 60's > but were - in many cases - forced into work in the 70's by the deliberate > sabotage of wages which made the one income family obsolete in most cases > for a middle class lifestyle. These people wanted the best for their > children and made the necessary adjustments in their family life to provide > income, often at the very expense of that family life. Penny wise and pound > foolish perhaps as we look at the social dysfunctions in our society. > > Respectfully > > Thomas Lunde > > -- > >From: Steve Kurtz <[EMAIL PROTECTED]> > >To: [EMAIL PROTECTED] > >Subject: Re: Created Unequal by James Galbraith > >Date: Sun, May 30, 1999, 9:46 PM > > > > > Hi Thomas & all, > > > > Thanks for the clear, informative review. I've interacted with JG, and > > he has shied away from my questions about the impact of the sharp rise > > in the size of the labor force since WWII. I'm *not* disputing any of > > the factors described in the review; I'm suggesting that at the same > > time that technology and globalization have empowered capital and > > entrepreneurship at the expense of labor, the sharp rise in population > > has added to the woes of the lower and middle classes. Demand for > > housing and services rise, while wages are supressed. > > > > Policy and values don't operate in a vacuum. Industries desire for a > > passive, compliant labor supply has resulted in a continual high level > > of immigrants. In the US, this has finally been grasped by many in the > > African American, Latino, and other minority communities. Their wages > > and opportunities for self-improvement are directly impacted by > > immigration policy. Of course much of the migration pressure stems from > > global overpopulation. But numbers are a factor in wellbeing in North > > America nonetheless. Consider also the recent explosion of sprawl > > articles and discussions. > > > > Cheers, > > Steve > > > > (excerpt from TL) > >> All of these changes had the effect of breaking down > >> the structures of solidarity that had held the American middle class > >> together for the first quarter-century after the end of World War II. > >> > >> The new instability of macroeconomics gave a powoerful boost to investment > >> and techology, both in absolute terms and as compared with consumption. > >> With each recession, waves of older factories disappeared. With them went > >> the hard-won, high-paying jobs of the traditional blue-collar workforce. > >> But with each recovery, firms faced an imperative to replace lost capacity, > >> and to do it in the most cost-saving, labor-saving, technologically advanced > >> way available at that moment in time. Waves of layoffs were followed by > >> waves of investment. But the new investments were never designed to relieve > >> the distress of the previously unemployed. They were designed instead to > >> substitutue entirely for them, and this they accomplished. > >> > >> At the same time, incomes policies were abandoned. The idea that all > >> society should benefit equally from national productivity gains was replaced > >> by an ideology of the market, in which winner-take-all and the > >> devil-the-hindmost. Minimum wages were allowed to fall in real terms; > >> safety net social expenditures came under assault. There began a cult of > >> the entrpreneur, > > > [EMAIL PROTECTED]
Re: Created Unequal by James Galbraith
So, the answer is yes, and the explanation for the failure of the welfare-state was far from adequate... We might as well go for something new if we have to go against the tide... We are running out of time, we cannot repeat past mistakes. Eva > > > > > the suggestion is to go back to keynesian economy, isn't it? > > Dar Eva: > > Far be it for me after reading one difficult book to answer this question > definitively. And yet, you have hit the nail on the head. Galbraith argues > that it was movement from a Keynesnian economy to a monatarist policy that > removed the goal of full employment from the economic equation. The > monetarist with their Nairu which made unemployment a deliberate part of > economic policy effectively destroyed the concept of full employment, one of > the main planks of the Keynesians. With that decision, came the following > consequences, high transfer payments to the unemployed, lower wages because > of surplus workers and income transfers from the middle class to the > capitalist class which had capital to loan. > > > But that came to an end in the 70s due to unsustainable public borrowing > > and cuts in profits/recession, didn't it? > > Thomas: > > I don't know. Which came first, the chicken or the egg. Did we borrow more > because unemployment went up and new social services were put in place to > alleviate and compensate those who were unemployed. Was it because the > lords and masters of government didn't follow Keynesian Theory which said > stimulate in downturns and pay back in good times and they just forgot to > pay back? Was it macroeconomics in terms of the basic price in energy in > 1973? Was it the elimination of work because of computerization? Think, > would we still have full employment if we had not invented the computer? > Possibly. > > > Now we reached the same "result" through a re-hashed > > monetarist and then neo-liberal avenue. > > What would be the new feature in this > > suggestion of renewed state intervention in re-distribution? > > Thomas: > > If the governments (plural) had constantly raised the minimum wage, for > example, in Ontario were I reside, it is $6.85 Canadian which is about $4.25 > American to try and get a baseline number. In 1968, Galbraith states the > minimum wage was equivalent to $6.50 American in 1994 - probably about $7.00 > American in 1999 giving us poor, a shortfall of approximately $3.75 less for > every hour worked than I would have made in Ontario in 1968. This amounts > to a shortfall of $150 a week or $600 a month for a person working for > minimum wage. > > Now, if all the working poor were working making an extra $600 a month, this > would constitute a "state intervention". My logic says that would make a > considerable difference from the current situation. > > > How come the word "capitalism" was not mentioned? > > Non-virtual profits are falling - there is not enough to > > re-distribute. Is the mechanism - markets/profits is working? > > The global markets are limited - there is, I'm afraid, the > > classic contradiction. > > Do you really think it can be fixed? > > Thomas: > > Well of course there is another answer to the comment "not enough to > redistribute" and that is there is no demand because 50% the people have > very little disposable income. And Galbraith argues, to me quite > successfully, it is because the working poor after rent, grocery's and > transportation costs are broke. And of course all those on welfare, > pensions, disability, etc have in most cases not seen any COLA increases > while small quarterly inflation figures constantly add up over the years. > My mother who is on governemt pension got her COLA increase for the last > year, I think it was $.52. That is not realistic, is it? > > Galbraith also argues that it is not just full employment that is necessary > but that prices should also be managed to some degree. Part of the problem > of low profits is that competition - that highly touted good - has taken all > the profit out of goods production. With little or no profit in the > production of goods, then the corporate tax contribution is almost nil, > which leaves governments to make up the shortfall through borrowing or > taxing labour income even more. I am not against profits, as long as > profits are taxed fairly. In the 60"s, government income was roughly equal > with 50% coming from labour income and 50% coming from corporate profit > income. The ratio is now, 80% labour income and 20% corporate income. > > As to virtual profits earned by speculation, when times are good, they > reinvest and do not declare any profits and when they lose, they claim their > loses and do not pay any taxes or greatly reduced taxes. One of the > thoughts I had was that labour should have the same option. If I get laid > off a good paying job and take a lesser paying job, why can I not deduct my > loss of income as a valid income loss just like business and spe
Re: Created Unequal by James Galbraith
-Oorspronkelijk bericht- Van: Steve Kurtz <[EMAIL PROTECTED]> Aan: [EMAIL PROTECTED] <[EMAIL PROTECTED]> Datum: lundi 31 mai 1999 19:26 Onderwerp: Re: Created Unequal by James Galbraith >Greetings again, > >Thomas Lunde wrote: > >> As to virtual profits earned by speculation, > >I have debunked this misconception on prior occasions. Trading in >futures, options, and other leveraged instruments (which is the usual >method of determining just who are speculators in financial markets) is >a zero sum game. Losses and profits net out. How many investors are nowadays buying (and holding on to) stocks for the dividends they produce? Nowadays stocks are bought primarily because their value is expected to rise. Between 1990 and 1993 the capital involved in the international financial circuit has tripled to $3 trillion (Newsweek, October 3, 1994). In ten years the value of the most traded stocks (as shown in the Dow Jones index) rose by 246%, while in that same period the economy expanded by just some 30% (average growth rate of 2.6% over the ten year period). Then how do you account for that? Hardly a zero sum game. The fact is you are calling speculators only a certain type of short term high risk speculators, while actually practically the whole market is speculating. >A lesser gain is not the same as an outright loss. It is more akin to an >'opportunity loss'. Wasn't that one of the things transnational companies wanted to be refunded for in the MAI propositions? Regards Jan Matthieu Flemish greens
Re: Created Unequal by James Galbraith
Hi Jan, Jan Matthieu wrote: > > How many investors are nowadays buying (and holding on to) stocks for the > dividends they produce? Nowadays stocks are bought primarily because their > value is expected to rise. In my outline & essay on this subject I exclude direct investment in equity markets. They are growth facilators, and are not a zero sum game. I agree that the motivation is capital appreciation, not dividends; however much of the money invested stays long term in retirement accounts, mutual funds, and pension funds. This has always been called 'investment' rather than speculation. I also agree that the pricing of the US equity market in general is ridiculously high, perhaps 300%. When savings are needed for emergencies and necessities (next bad recession), a serious bear market is likely in my opinion. (snip) > Then how do you account for that? Hardly a zero sum game. I think I explained this above. > The fact is you are calling speculators only a certain type of short term > high risk speculators, while actually practically the whole market is > speculating. As far as % of all capital committed long term vs short term (few weeks-months), I don't think you are correct. However the prices make it seem like all speculation. There is little savings in bank accounts these days; wait till the money is needed. Recall the 80s when the Japanese economy was king of the hill; in '89 the Nikki Dow was 39,000, real estate prices in Tokyo were astronomical, and a canteloupe was US$40. Then their economy collapsed. The Nikki has rallied this year from 14,000 to 16,000! Y2K may begin the end of the US mania. > >A lesser gain is not the same as an outright loss. It is more akin to an > >'opportunity loss'. > > Wasn't that one of the things transnational companies wanted to be refunded > for in the MAI propositions? Probably! Rational corporate executives will try to maximize profits & externalize costs. I'm not supporting the system or its main players - the superrich 400. But humans will seek security (as Thomas Lunde said)in whichever way they think it is most readily available. They are currently deluded into buying overvalued stocks. I don't blame Joe & Jane public; they don't know they are setting themselves up for a fall. Steve
Re: From a "A Cathedral" of Public Policy to a Public Policy "Bazaar"
>Hi Ed: > >Good points but --- the whole idea of this information age and governance is >not necesarily to compete with the experts but for the interested and - >hopefully intelligent poster to give input and broaden the debate by sharing >their opinions and viewpoints. ... A common area or arena where >debate can take place in which those who have interests, ie the experts and >policy wonks and lobbyists have to justify their choices by critique by the >citizen. ... but now those decisions are made in the backroom and >not even the stakeholders who will be affected by the decisions have input >other than to present proposals which disappear into a black hole - hardly >acknowledged - never debated. > >but for the first time since the invention of representative democracy, a >technological methodology makes possible the idea of a blending of direct >democracy with representional democracy. ... we have to admit that their will be >changes and we - living now at the start of the Internet Age will be the >pioneers who experiment. And that, to me is the key word - experimentation >and when you experiment in the scientific sense, failure is an appropriate >response which will eventually lead to success or other directions. All good points, Thomas. But I'm a bit of a cynic living in some kind of limbo. I have no use for direct democracy and have, I'm afraid, lost much of my faith in representational democracy (though it is still the best thing we have). Perhaps the internet will enable us to arrive at some better form of governance, some means of debating policy issues that will lead to policy serving people, and remove us a little further from the problem of people being made to serve policy. Ed Weick
Re: FWD: (1 of 1) Blueprint to the digital economy ;
Dear RF: Well, you have opened a Pandora's box with this question. I learn by reading and observing and making statements which others challenge or agree with, mostly on Lists. I have shied away from E Commerce so far as it just hasn't, in my opinion got a form - a definition and it seemed premature to try and assess what changes it will make in the Capitalistic Model. That it will have a major effect is undeniable. Will it change work patterns - will we stay at home and order everything in - can we stop building highways and cars? Will being a Courier driver be the growth opportunity for future employment? I don't know and in a way, I'm almost afraid to know - things are bad enough now without doubling the army of the unemployed by making most conventional distribution systems such as stores and clerks obsolete. I'm still trying to figure out what went wrong in the industrial age. Respectfully, Thomas Lunde -- >From: "RF Pearse (716) 475-6010" <[EMAIL PROTECTED]> >To: Tom lunde <[EMAIL PROTECTED]>, Eva Durant <[EMAIL PROTECTED]> >Subject: FWD: (1 of 1) Blueprint to the digital economy ; >Date: Mon, May 31, 1999, 8:44 PM > > > Tom/Eva > > How will the new information age models > (e-commerce - Digital Business) > affect your industrial age economic models? > > (see attached) >
Re: Created Unequal by James Galbraith
Dear Thomas, TL: > Your argument about "natural/material" value, rather than token value has > some merit. I would appreciate your comments in the context of Galbraith > (not in quote) who gives these figures. 10% are employed in the knowledge > sector, 10% in the manufacturing of goods and 80% in the providing of > services. A 'cradle to grave' analysis of many service occupations may surprise you. Fast food is called a 'service' industry. Think about the calories used to serve a hamburger: pump and transport water for irrigating fields, manufacture & transport petro-based fertilizers, pesticides & fungicides, run harvest machines, transport workers to & from fields, transport grain, process grains into cattle feed(incl transp. of employees), transport the feed to feedlots. Cowboys drive trucks now, the calves must be transported & have water pumped to them, waste removed...Then cattle shipped to slaughterhouses, electricity used to butcher, run conveyors, deliver via refrigerated trucks, warehouses, grinding & shaping patties, lighting and climate control at all processing stages, transporting patties to food outlets, transporting workers to food outlets, climate control, refrigeration, dishwasher machines, disposable napkins, mimipacks of salt/pepper/ketchup/relish, waste removal in restaurants... How would JG classify the above? What % "manufacturing of goods"? > Yes their may be limits on the amount of phospate or oil but in truth, it > seems that when it comes to employment most of us are exchanging human > energy for other humans satisfactions rather than hard manufactured goods. Waste sinks don't differentiate the human purpose or classification of the behavior producing the overload of pollutants! The electricity running our computers is made by converting resources into usuable energy and waste products, incl heat. And all we're producing is hot air. :-) > What does a lawyer, accountant, dance instructor Think of their locomotion, on job energy requirements, and infrastructure manufacture, maintenance, deterioration... required for their work. No element escapes as pure; to think requires calories! >, janitor or lawn service cleaning/fertilizing/pesticide/herbicide/fungicide chemicals, energy to run the waxing machine, vacuum, lawn mowers, leaf blowers.. > employee create in terms of the limits of "natural/material" goods, other > than some small amount of supplies in paper or fuel or use of a building. It's not what the workers "create", it's what is utilized in the total process of existing as the most consumptive species on earth, no matter what the occupation. Not small. Huge. Include the manufacture of the buildings, transport & manufacture of all furniture, decor, plumbing, wiring, ducts, furnaces, air conditioners, continual energy usage, depreciation and replacement if every item involved. > In fact, if we went to a durable model of goods rather than a planned > obsolence model of goods, we could extend the life considerably of the > "natural/material" world. Yes, we could improve the situation somewhat. Have you heard of "Factor Four", or "Factor 10" These refer to improvement via clean technology of conservation and waste reduction. I wish it were as easy as you imply. Regards, Steve
Re: Created Unequal by James Galbraith
At 13:06 -0400 5/31/99, Steve Kurtz wrote: >Dear Thomas, > >re: >> The real question >> is which ideology should be dominant - democracy or capitalism. The people >> continually, whether marxists, socialists or capitalists, at their human >> individual level, continually opt for more security. The problem to me >> seems less in how we elect them, but rather in how we can make them produce >> the effects they promise. > > >I agree with you here. George Soros has come to the same conclusion, at >least the way I read you both. > William Greider in *Who Will Tell the People?* points out that the intermediary institutions that connect the citizenry with their representatives have been weakened (as in the case of labor unions) or taken over by the power elite (the media). Without institutions of this kind, the voters are limited to an up or down vote every four years. A representative government, by itself, is no panacea for the abuses of power. The problem is to either rebuild the existing intermediary institutions or come up with new ones - I believe it was Robert Theobald who called for "social entrepreneurship". Robert Putnam of Harvard has done considerable work on voluntary civil institutions: http://epn.org/prospect/putn-cor.html Tom Lowe _ Tom LoweJudge a moth Jackson, Mississippi by the beauty of its candle [EMAIL PROTECTED] -Rumi http://www.jacksonprogressive.com
Re: Created Unequal by James Galbraith
Durant wrote: > Non-virtual profits are falling - there is not enough to > re-distribute. (snip) > The global markets are limited - there is, I'm afraid, the > classic contradiction. > Do you really think it can be fixed? I agree with Eva here! But it is not *just* markets & profits that are limited Fiat money is valued by what it can buy now, & how it is perceived relative to other currencies going forward. Thus all credits/tokens are in a sense 'virtual'; and the natural/material perpetual pie (gross & per capita) shrinks daily. Redistribution of tokens may be desirable in the views of many, but it would at best be temporary, short term 'symptomatic' medicine. Physical limits are real, and humans have already hit the wall in the opinion of many scientific experts. Steve
A litle help please?
I have changed computers from Microsoft to Macintosh. While using Microsoft, I was happy with Explorer, their web browser but now I am using 4.5 Explorer on the Macintosh and I find it a very cumbersome browser, not so much for web surfing, but this version of Outlook Express is archaic in addressing along with several other features. Is Netscape any better or Eudora? Thanks, Thomas Lunde
Re: Created Unequal by James Galbraith
-- >From: Colin Stark <[EMAIL PROTECTED]> >To: <[EMAIL PROTECTED]> >Subject: Re: Created Unequal by James Galbraith >Date: Sun, May 30, 1999, 10:36 PM > > To me the essence of this excellent Review is in the Summary paragraph > While the problem is clearly stated; the potential remedy of Direct > Democracy is unstated > > Colin Stark Dear Colin: Let me answer your implied question by quoting the first paragrapgh of an excellent book out from England called The Age of Insecurity by Larry Elliot and Dan Atkinson - two writers who actually can make all this stuff interesting and exciting - I highly recommend it. Quote PageVII The central struggle of our time is that between laissez-faire capitalism, which represents the financial interest, and social democracy, which represents democratic control of the economy in the interests of ordinary people. These ideologies are incompatible, in that at the heart of social democracy is the one economic feature specifically and unashamedly ruled out by the resurgent free market: security. Social democracy offers nothing if it does not offer security; the free market cannot offer security (to the many at least) without ceasing to be itself. Instead it provides security to the financial interest at the expense of the majority, upon whom is shifted the entire burden of risk and "adjustment" whenever ther system hits one of its peiodic crises. Thomas: Whether we have a DD system or a Representative System, the will of the people is constant. Security is the goal of all people. People continually vote for more security, medicare, unemployment insurance, pensions and other supports. Elected governments continually promise security. And then - yes you guessed it, the ideology of laissez-faire capitalism subverts the politicians into other directions from which they recieved a mandate to act. We then turf the buggers out because the next group convincingly sings the theme song of security only to be subverted once again. The real question is which ideology should be dominant - democracy or capitalism. The people continually, whether marxists, socialists or capitalists, at their human individual level, continually opt for more security. The problem to me seems less in how we elect them, but rather in how we can make them produce the effects they promise. Respectfully, Thomas Lunde > > "Behind the battering rams, behind the decisions to use them in this way, > behind the creation of the situations in which they could be used in such a > way, were political figures and policy decisions-decisions, for example, to > tolerate unemployment. The economy is a managed beast. It was managed in > such a way that this was the result. It could have been done differently. > It was not inevitable even given the progress of technology and the growth > of trade. It was, in sense, done deliberately. That is the real evil of > the time." > > * > At 01:11 PM 5/30/99 +, you wrote: >>A lengthy book review by Thomas Lunde >> >>Lower taxes scream the headlines of the business press in Canada. We are >>not competitive shout the neo-cons and their corporate masters. These and >>similar mantras have been bombarding us with relentless waves of media >>support. In fact whole political party platforms such as Reform have made >>this their guiding light. > > snip > >>Behind the battering rams, behind the decisions to use them in this way, >>behind the creation of the situations in which they could be used in such a >>way, were political figures and policy decisions-decisions, for example, to >>tolerate unememplyemnt. The economy is a managed beast. It was managed in >>such a way that this was the result. It could have been done differently. >>It was not inevitable even given the progress of technology and the growth >>of trade. It was, in sense, done delibertately. That is the real evil of >>the time. >
Re: Created Unequal by James Galbraith
Dear Steve: I couldn't agree more and of course it is not only immigrants but the massive entry into the labour force of women - not that women shouldn't work but that, in a large number of cases they didn't work in the 50's and 60's but were - in many cases - forced into work in the 70's by the deliberate sabotage of wages which made the one income family obsolete in most cases for a middle class lifestyle. These people wanted the best for their children and made the necessary adjustments in their family life to provide income, often at the very expense of that family life. Penny wise and pound foolish perhaps as we look at the social dysfunctions in our society. Respectfully Thomas Lunde -- >From: Steve Kurtz <[EMAIL PROTECTED]> >To: [EMAIL PROTECTED] >Subject: Re: Created Unequal by James Galbraith >Date: Sun, May 30, 1999, 9:46 PM > > Hi Thomas & all, > > Thanks for the clear, informative review. I've interacted with JG, and > he has shied away from my questions about the impact of the sharp rise > in the size of the labor force since WWII. I'm *not* disputing any of > the factors described in the review; I'm suggesting that at the same > time that technology and globalization have empowered capital and > entrepreneurship at the expense of labor, the sharp rise in population > has added to the woes of the lower and middle classes. Demand for > housing and services rise, while wages are supressed. > > Policy and values don't operate in a vacuum. Industries desire for a > passive, compliant labor supply has resulted in a continual high level > of immigrants. In the US, this has finally been grasped by many in the > African American, Latino, and other minority communities. Their wages > and opportunities for self-improvement are directly impacted by > immigration policy. Of course much of the migration pressure stems from > global overpopulation. But numbers are a factor in wellbeing in North > America nonetheless. Consider also the recent explosion of sprawl > articles and discussions. > > Cheers, > Steve > > (excerpt from TL) >> All of these changes had the effect of breaking down >> the structures of solidarity that had held the American middle class >> together for the first quarter-century after the end of World War II. >> >> The new instability of macroeconomics gave a powoerful boost to investment >> and techology, both in absolute terms and as compared with consumption. >> With each recession, waves of older factories disappeared. With them went >> the hard-won, high-paying jobs of the traditional blue-collar workforce. >> But with each recovery, firms faced an imperative to replace lost capacity, >> and to do it in the most cost-saving, labor-saving, technologically advanced >> way available at that moment in time. Waves of layoffs were followed by >> waves of investment. But the new investments were never designed to relieve >> the distress of the previously unemployed. They were designed instead to >> substitutue entirely for them, and this they accomplished. >> >> At the same time, incomes policies were abandoned. The idea that all >> society should benefit equally from national productivity gains was replaced >> by an ideology of the market, in which winner-take-all and the >> devil-the-hindmost. Minimum wages were allowed to fall in real terms; >> safety net social expenditures came under assault. There began a cult of >> the entrpreneur, >
Re: Created Unequal by James Galbraith
-- >From: "Durant" <[EMAIL PROTECTED]> > > the suggestion is to go back to keynesian economy, isn't it? Dar Eva: Far be it for me after reading one difficult book to answer this question definitively. And yet, you have hit the nail on the head. Galbraith argues that it was movement from a Keynesnian economy to a monatarist policy that removed the goal of full employment from the economic equation. The monetarist with their Nairu which made unemployment a deliberate part of economic policy effectively destroyed the concept of full employment, one of the main planks of the Keynesians. With that decision, came the following consequences, high transfer payments to the unemployed, lower wages because of surplus workers and income transfers from the middle class to the capitalist class which had capital to loan. > But that came to an end in the 70s due to unsustainable public borrowing > and cuts in profits/recession, didn't it? Thomas: I don't know. Which came first, the chicken or the egg. Did we borrow more because unemployment went up and new social services were put in place to alleviate and compensate those who were unemployed. Was it because the lords and masters of government didn't follow Keynesian Theory which said stimulate in downturns and pay back in good times and they just forgot to pay back? Was it macroeconomics in terms of the basic price in energy in 1973? Was it the elimination of work because of computerization? Think, would we still have full employment if we had not invented the computer? Possibly. > Now we reached the same "result" through a re-hashed > monetarist and then neo-liberal avenue. > What would be the new feature in this > suggestion of renewed state intervention in re-distribution? Thomas: If the governments (plural) had constantly raised the minimum wage, for example, in Ontario were I reside, it is $6.85 Canadian which is about $4.25 American to try and get a baseline number. In 1968, Galbraith states the minimum wage was equivalent to $6.50 American in 1994 - probably about $7.00 American in 1999 giving us poor, a shortfall of approximately $3.75 less for every hour worked than I would have made in Ontario in 1968. This amounts to a shortfall of $150 a week or $600 a month for a person working for minimum wage. Now, if all the working poor were working making an extra $600 a month, this would constitute a "state intervention". My logic says that would make a considerable difference from the current situation. > How come the word "capitalism" was not mentioned? > Non-virtual profits are falling - there is not enough to > re-distribute. Is the mechanism - markets/profits is working? > The global markets are limited - there is, I'm afraid, the > classic contradiction. > Do you really think it can be fixed? Thomas: Well of course there is another answer to the comment "not enough to redistribute" and that is there is no demand because 50% the people have very little disposable income. And Galbraith argues, to me quite successfully, it is because the working poor after rent, grocery's and transportation costs are broke. And of course all those on welfare, pensions, disability, etc have in most cases not seen any COLA increases while small quarterly inflation figures constantly add up over the years. My mother who is on governemt pension got her COLA increase for the last year, I think it was $.52. That is not realistic, is it? Galbraith also argues that it is not just full employment that is necessary but that prices should also be managed to some degree. Part of the problem of low profits is that competition - that highly touted good - has taken all the profit out of goods production. With little or no profit in the production of goods, then the corporate tax contribution is almost nil, which leaves governments to make up the shortfall through borrowing or taxing labour income even more. I am not against profits, as long as profits are taxed fairly. In the 60"s, government income was roughly equal with 50% coming from labour income and 50% coming from corporate profit income. The ratio is now, 80% labour income and 20% corporate income. As to virtual profits earned by speculation, when times are good, they reinvest and do not declare any profits and when they lose, they claim their loses and do not pay any taxes or greatly reduced taxes. One of the thoughts I had was that labour should have the same option. If I get laid off a good paying job and take a lesser paying job, why can I not deduct my loss of income as a valid income loss just like business and speculators do? > > Eva > [EMAIL PROTECTED] Respectfully, Thomas Lunde >
Re: Created Unequal by James Galbraith
-- >From: Steve Kurtz <[EMAIL PROTECTED]> > Fiat money is valued by what it can buy now, & how it is perceived > relative to other currencies going forward. Thus all credits/tokens are > in a sense 'virtual'; and the natural/material perpetual pie (gross & > per capita) shrinks daily. Redistribution of tokens may be desirable in > the views of many, but it would at best be temporary, short term > 'symptomatic' medicine. Physical limits are real, and humans have > already hit the wall in the opinion of many scientific experts. > > Steve Dear Steve: Your argument about "natural/material" value, rather than token value has some merit. I would appreciate your comments in the context of Galbraith (not in quote) who gives these figures. 10% are employed in the knowledge sector, 10% in the manufacturing of goods and 80% in the providing of services. Yes their may be limits on the amount of phospate or oil but in truth, it seems that when it comes to employment most of us are exchanging human energy for other humans satisfactions rather than hard manufactured goods. What does a lawyer, accountant, dance instructor, janitor or lawn service employee create in terms of the limits of "natural/material" goods, other than some small amount of supplies in paper or fuel or use of a building. In fact, if we went to a durable model of goods rather than a planned obsolence model of goods, we could extend the life considerably of the "natural/material" world. Respectfully, Thomas Lunde >
Re: Created Unequal by James Galbraith
Dear Thomas, re: > The real question > is which ideology should be dominant - democracy or capitalism. The people > continually, whether marxists, socialists or capitalists, at their human > individual level, continually opt for more security. The problem to me > seems less in how we elect them, but rather in how we can make them produce > the effects they promise. I agree with you here. George Soros has come to the same conclusion, at least the way I read you both. Steve
Re: Created Unequal by James Galbraith
Greetings again, Thomas Lunde wrote: > As to virtual profits earned by speculation, I have debunked this misconception on prior occasions. Trading in futures, options, and other leveraged instruments (which is the usual method of determining just who are speculators in financial markets) is a zero sum game. Losses and profits net out. > when times are good, they > reinvest and do not declare any profits Also have corrected this before: In the US at least, re-investment of winnings has no effect on their taxability. > and when they lose, they claim their > loses and do not pay any taxes or greatly reduced taxes. Trading & investment losses are limited to US$ 3,000/tax year as deductions from taxable income (not from taxes themselves). Remaining losses can be rolled over to subsequent years. > One of the > thoughts I had was that labour should have the same option. If I get laid > off a good paying job and take a lesser paying job, why can I not deduct my > loss of income as a valid income loss just like business and speculators do? A lesser gain is not the same as an outright loss. It is more akin to an 'opportunity loss'. I agree that it can be painful; progressive tax brackets could in theory ameliorate this to some extent. Regards, Steve
