deep doo-doo ?
Someone sent a post recently wondering if self-dubbed progressive economists had anything of worth to contribute to a concrete discussion about the current conjuncture of U.S. capitalism. I'm not an economist, but in the spirit of the question posed, and from my vantage point as a resident of California, I ask the following: 6.8 % growth in final quarter of 1993, yet largely "jobless" growth, as companies restore profits by downsizing, merging, and then feel con- fident to start getting production up to speed again. (Is it an export- led recovery ? I don't know. The trade deficit is worse than ever, but I don't know what another answer would be ... cheap credit led to a wave of refinancing mortgages and other loans, but that's hardly an answer ...). Anyway, if the "recovery" has peaked, and we're headed for a slide sometime in the next year or so, can anyone imagine an outcome other than total social chaos, especially in a place like CA., where AFDC has been cut 40 % in the last five years, and a draconian prison- building and generation-imprisoning legislation is on its way ? When the next national plunge hits, I have a hard time imagining anything but a conflagration that will make L.A. `92 look like chump change ... Any takers ?
Laura D'Andrea Say
The spirit of Jean-Baptiste Say must be haunting the corridors of the CEA. Did anyone else notice this gem from the new Economic Report of the President (Feb 94)? quote Box 3.4 - Why productivity growth does not cause unemployment. Productivity growth need not cause an increase in unemployment because, as productivity rises, more goods can be produced with the same number of workers. This means a cost saving, which must result in either increased profits, increased wages, or lower prices. If profits or wages increase, those benefiting from the increase will increase their spending. If prices fall, consumers' incomes will go further and they will buy more. In any case, the increased spending will lead to the purchase of more goods and services, which will create new jobs offsetting losses from the productivity increase. If the new jobs created are not equal in number to the jobs lost, there will be a tendency for wages to change to equate supply and demand for labor. Nonetheless, in the short run some workers are likely to have to change jobs...[which] can be a traumatic experience for the established worker. endquote The authors of this gem seem not to have consulted table B-47 at the back of the very volume these words appear in, showing nonfarm productivity up 15.9% between 1982 and 1983Q3, and real compensation up 6.6% (a number inflated by health benefits). The contrast for manufacturing would be much more vivid. Doug Doug Henwood [[EMAIL PROTECTED]] Left Business Observer 212-874-4020 (voice) 212-874-3137 (fax)
Turing Test
I would like to again raise a topic that continues to underlie the discussion on GE Theory. Sensibly rising to some bait, Gil contended in response to one of my postings that the Roemer type models actually produce rather than merely "simulate" radical results. I think this is worth pursuing. I remember an analogy from grad micro defending utility theory in the following manner. Imagine a sealed clock. One can observe the movement of the clock's hands in front of its dial. One cannot see the mechanism which drives the hands. The observer hypothesizes a mechanism inside the clock which is capable of producing the observed movements. The observer has now explained the movement of the clock's hands for all practical purposes. It may still be possible to present alternative mechanisms for driving the clock's hands but one cannot contend that they are any more correct than the first mechanism. This metaphor stands as long as the clock remains sealed. However, if we extend the metaphor in the following way, the matter changes drastically. Suppose you wanted to alter the way the clock's hands moved. The observer would then have to intervene in the working of the clock's mechanism. It would then be crucial to have not just a model of the hands' movements, but the correct model of these movements. Having somehow ascertained the working of the clock's mechanism, it would become clear that only one model produced the movements. The other model(s) merely simulated the mechanism driving the hands. Pen-llers will have seen where this argument is driving. The point is not merely to explain the world, the point is to change it. This is what gives urgency to the discussions surrounding bastard Marxism. Terry McDonough
AB 2451 - California to Put All Government Info On-line
*** Please repost *** DATE: March 8, 1994 TO: Interested Parties FROM: Assemblyman Tom Bates (D-Oakland) RE: Legislation to bring California on-line I am writing to ask for your support of Assembly Bill 2451, which I have introduced in the California Assembly. It requires that all state public information, which is currently computerized, be available free to the public via the Internet. This bill will be voted on by the Assembly Committee on Government Operations within a few weeks. A copy of the bill is attached. I believe this legislation will help make government more efficient and more accessible. Governor Pete Wilson has said, *Each time a person must set aside time during regular working hours to visit a government office, there is an economic loss to society. Each time that visit is prolonged because of long waiting lines...the loss is compounded.* I agree. Under A.B. 2451, citizens will be able to obtain state information directly at their place of work, local libraries, at schools or in their own homes. Legislative bills are currently available on the Internet thanks to groundbreaking legislation authored by Assemblywoman Debra Bowen. This bill builds on that first measure and expands the information available. You can do three things to support this effort. 1. Write/fax the Assembly Government Operations Committee today. The bill will be considered in committee soon, within a few weeks. Letters/faxes should be addressed to: Hon. Curtis Tucker, Jr. Chairman, Assembly Government Operations Committee State Capitol Sacramento, CA 95814 Greeting: Dear Chairman Tucker and Members of the Committee: You can fax direcly to the committee at 916-327-3517. Please fax me a copy at 916-445-6434, 510-428-1599 or mail it to Assemblyman Tom Bates, State Capitol, Sacramento, CA 95814. An email address is being set up now. 2. Join the Electronic Town Hall Meeting. Tell me what you think about this legislation. CPSR is hosting a discussion on this bill and other related California legislation and policy. My staff and I will be following and participating in the discussion. To subscribe to the list [EMAIL PROTECTED] send the following email message: subscribe calgovinfo your name here, no brackets to: [EMAIL PROTECTED] To send a message to the calgovinfo listserv, mail to: [EMAIL PROTECTED] The list is currently un-moderated and public. 3. Help spread the word. Please repost this memo to other newsgroups and individuals. - BILL NUMBER: AB 2451BILL TEXT INTRODUCED BY Assembly Member Bates JANUARY 4, 1994 An act to add Article 3 (commencing with Section 11720) to Chapter 7 of Division 3 of Title 2 of the Government Code, relating to information technology. AB 2451, as introduced, Bates. Information technology. Existing law establishes the Office of Information Technology in the Department of Finance and imposes on the office various duties concerning the use of information technologies within state government. This bill would require the office to develop a plan by January 1, 1996, for free statewide computer-assisted public access to government information that has been computerized and is subject to public disclosure. The bill would require implementation of the plan to begin no later than January 1, 1996, and that the plan be operational no later than January 1, 2000. The bill would require the office to make various reports to the Legislature during the development and implementation of the plan. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Article 3 (commencing with Section 11720) is added to Chapter 7 of Division 3 of Title 2 of the Government Code, to read: Article 3. Public Access to Government Information 11720. The Legislature finds and declares that it is essential to good government that information that is available to the public under the California Public Records Act, the Ralph M. Brown Act, and the Bagley-Keene Open Meeting Act be made available to the citizens of the state, irrespective of where they reside, in a timely manner, and at the least possible cost. It is the intent of the Legislature that this goal shall be achieved by the enactment of a plan that implements the following strategic goals outlined in the report issued by the Office of Information Technology in the Department of Finance entitled "Strategic Direction for Information Technology in California State Government 1993-1999": (a) To bring government closer to the people. (b) To enhance the value of government services. (c) To make government more responsive to changing public needs. (d) To reduce the cost of government. 11721. (a) The Office of Information Technology in the Department of Finance
Nummi
My grad seminar in worker participation was covering Levine and Tyson's paper in Blinder's "Paying for Productivity," and we realized that their key example of a successful workplace with participation is the GM-Toyota Nummi plant. There's a little sleight of hand, however; when they get to the 'Interaction of Firm and Environment' section, they rename the plant Munni, and claim it has gains-sharing (a key ingrediant for successful participation according to LT). Does anyone on the pen-l network know whether Nummi has any form of gains-sharing? Does anyone know the basis of pay there (I thought it was a pay-for-knowledge system). Help either over pen-l or to [EMAIL PROTECTED] would be most appreciated. Cheers, Bob Drago
Re: deep doo-doo ?
I'm beginning to get the feeling that California's soon-to-be-massive prison-building project is a bizarre substitute for the WPA and other public-works projects: think of all the prison guard jobs there will be, not to mention jobs as cooks, skip-tracers, wardens etc. The construction of prisons will involve many construction workers and there will be all sorts of multiplier effects. These jobs are relatively low-skill (say, compared to the jobs that Robert Reich wishes Amurricans to train for) and thus training costs will neither be high nor will strain the gutted community college and state university systems (not to mention the University of California, whose criminology program is too cerebral for the state's ideal prison guard). The three-strikes-and-you're-out program will mean that the construction program will last far into the future. The neglect of (more accurately the attack on) the cities and the schools will assure a steady stream of blue-collar criminals to be incarcerated, a stable over-use of existing prison facilities, and a constant demand for new prisons. As a side-benefit, there will be constant demand for the services of the national guard, to put down prison revolts and to round up new prisoners. One problem that may arise is that the demand for prison services may rise much too fast relative to the supply. But there are all sorts of unused military bases, libraries, and schools that could be turned into temporary prisons. (The supply of these will increase due to the cut-backs needed to pay for the new and improved prisons.) Whole neighborhoods such as South Central Los Angeles could also be turned into temporary prisons, giving a needed Keynesian stimulus to a stagnant economy. Recently the L.A. TIMES reported that earthquake-related funds flowing into the area has encouraged the area to recover earlier: think about the effects of a *permanent* program of prison-building, one that may be similar to the Vietnam-era military build-up in terms of relative magnitude! Every cloud has a silver lining! One problem that may shed tears on this rosy scenario is the globalization of production. So far, prison-guard jobs are not of the sort that are exported to other countries (being what Reich terms "in-person services"). But our financially-strapped state government (along with the bond-holder-friendly federal government) will look to economize where possible. It is quite possible in the near future that a country like China will demonstrate its comparative advantage in the provision of prison services. Given declines in communications and transportation costs, which facilitate international transactions, it is quite possible that prisoners will be exported to China (especially given the possibilities of prison over- population in California and the U.S. as a whole). This would mesh with the recent down-sizing of prisoners' civil rights and the imminent harmonization of legal standards world-wide. In this case, the Keynesian benefits of the up-and-coming prison industry to California would be quite limited in the long run. California's leaders, such as Governor Pete Wilson, should be looking into future alternatives: for example, what are the possibilities for exporting contract labor to other countries? in :-) solidarity, Jim Devine BITNET: jndf@lmuacadINTERNET: [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (off); 310/202-6546 (hm); FAX: 310/338-1950
Re: real world contributions
Recently someone posted a msg asking for an increase in real world relevance on PEN-L. This is always a valid request, but a little off the mark. It is true that for the past couple of weeks, much of the discussion has focused on how to analyze Nike and GE vs. Sraffa. The latter addresses a long-running intellectual debate in progressive econ on value theory. Since many on PEN-l are intellectuals, such an interest is to be expected. If that was ALL PEN-l ever discussed, we would have a really problem. But it isn't. The discussion of Nike has a real world application. Many on PEN-L teach progressive econ, in an environment that is hostile to that type of thought, using books that denegrate that type of thought. Finding ways to discredit mainstream theory is critically important to what we do everyday. I doubt there is one teacher one PEN-L that did not benefit greatly from the Nike discussion. But beyond that, looking further back in PEN-L discussions, there have been very useful debates on the impacts of NAFTA and how to organize in its wake. It is now much clearer to all involve that NAFTA is not about trade, but about special rights for Capital, to the detriment of all other sectors of the economy. May of the gains won thru organizing labor and other groups, from the 30' thru the 70's have been reversed. So what is the concrete response recommended by progressive economists? Organization now has to be on a global scale. Capital has destroyed national sovereignty, so organizing on that level will no longer work. What to attack? The special rights of Capital. If TQM creates efficiency gains, force these gains to be shared amoung all sectors of society, not just Capital. How to do this? Organize labor across borders. Organize environmentalists across borders. Organize all NGO's across borders. Is seeing this as a solution enough? Obviously not, we have alot more to do to figure out how to actually accomplish this. But seeing the limitations of organizing that does not cross borders is the first step. One more example. SEveral months back, there was a detailed discussioon on the nature of the evolution of financial markets world wide. The real world recommendations from that discussion? Financial markets are stripping the ability of democratically elected gov'ts to function for their people (assuming that they even wanted to). The way to address the issue? Democratize financial markets. Abstract? Yes, but many members have put forward concrete politiacl proposals to move in that direction. Books have been published, bills introduced (and likely to fail without grassroots organizing), and coalitions being built. Fianlly, today Jim Devine posted a msg that I believe casts a brand new light on the role of the "war on crime" in the U.S. Not only is it a way to destroy civil liberties, but it is also a way to replace the cold war as a mechanism for the gov't to manage the inherent tendency toward crisis in the macro economy. With this new understanding, the entire dialog on the left conserning the logic of the war on crime is likely to shift. That is quite a contribution. Could progressive economists do more. Yes, there is always more to do. But, PEN-L is helping us do it, and do it better, and that is enough for me. Doug Orr [EMAIL PROTECTED]
Pen-L and Pen-Net
In the spirit of Jim Devine's posting on California being knee-deep in the big doo-doo and looking to a prison lead construction boom I offer the following, based on the principle that if you cannot stop them you can always subvert them. Don't look at prisons and prisoners as occuring at the opportunity cost of schools and students, look at the process as an alternative form a enrolment in a public institution. As a friend in D.C. says, when a student goes to jail, the "system" has not lost the person, it is just a transfer to a better/worse institutional setting. He see parole supervision as a possible form of distance education! So, look to the potention here. Lots of people with lots of time on their hands, mostly stuck in little cells (quite like the study carrels in the library). Jim proposes that maybe we could "export" them to China to use China' s comparative advantage (static or dynamic Jim?) in cost efficient prison care. Nooo Jim, then they would compete with our own license plate operation. They are idea candidates for the information highway. Pen-L should join with those who would see a Pen-Net movement (Motto: Modems for Cons2Prose). With very limited geographic mobility and lots of time on their hands, we could put them all on the network. They could do cross boarder provision of dataservices, they could teach courses based on the skills that landed them in jain, the could form networks of prison-yard lawyers, they could write CAD-CAM applications for this and that. No incarceration without communication. The possibilities are endless and should we wake up and think that jailing everyone is folly, it will be easy to retool the places as schools - if anyone could tell the difference. Sam Lanfranco (York U on a bad day) [EMAIL PROTECTED] CANADA
Re: real world contributions
Doug, thanks for praising my "war on crime" piece. I know you got it, but the way you praise my item might give someone the impression that my think-piece was totally serious. A lot of it is a big joke, even though some of it is very serious. If I could write well, I'd see in the league with Swift's modest proposal. Though prison-construction does create jobs (all else constant), I don't believe the rosy scenario. That's because California likely will be unable to afford the effects of "three strikes and you're out." It's true that capital expenditures of this sort don't show up in the California budget deficit, but the state has to worry about its bond rating. Other types of spending can be cut, but they've already been cut to the bone. It's hard to imagine that cutting other programs could go forever. Even if they were cut, that hurts the availability of jobs. in pen-l solidarity, Jim Devine BITNET: jndf@lmuacadINTERNET: [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (off); 310/202-6546 (hm); FAX: 310/338-1950
crass commercial announcement and request for help
A little over a year ago, I posted a msg on some research I was doing on private sector pension funds. Several PENers responded with requests for the paper. The research got side tracked, the paper delayed and I lost the list. If you were on the list, please contact me again. The crass commercial announcement: I am working on a paper (this time it is really a draft of a paper) that looks at the structure of private sector pension funds and predicts that many of these funds will go into PLANNED default as the baby boom generation ages into retirement. The paper starts from the premise of profit maximization, looks at the incentives involved, looks at current legal avenues available and predict wide spread defaults. At the heart of the paper is the concept of strategic bankruptcy. It ends with a too short section on policy to prevent this outcome. I will be presenting this paper at the EEA meeting in Boston. I chose to present there because a lot of PENers are on the east coast and attend those meetings. I am posting this message to draw your attention to the session. It is an eclectic session on Labor, at 9:00 am on the first day, so it is easy to miss. Since I have been developing these ideas in relative isolation, I am eager to get as much feedback as possible, even if it is that you think the idea is wrong. End of crass commercial announcement. (Hope to see you on March 18!) Doug Orr Eastern Washington Univ [EMAIL PROTECTED]
EU update
An update: Negotiations with Austria, Sweden and Finland were brought to a "successful conclusion" on March 1, 1994. The Norwegian talks are set to resume on March 8. The agreed upon date for accession will be January 1, 1995 supposing that referenda and parliamentary approval is forthcoming in the new members. The reason for the protracted negotiations with Norway is not primarily a conflict between Norw. gvt. and EU (with Spain as the most recalcitrant). The main reason is that the Norw. YES gvt. is also negotiating with the Norw. people, i.e. they have to appear as die-hards in Brussels to try to influence the stable and very well-informed NO majority in our country (due to 20 years of EU discussions in NOrway, and especially the struggle in 1972 when a majority of 53.5% voted NO to membership, the average Norwegian knows more about the workings of the EU system than the average EU citizen). If there had been a YES majority on Norway, the gvt. would have given in in the negotiations several days ago: The right-wing "social-democrat" gvt. are willing to sell their own grandmothers to sit at the table with Kohl, Mitterand and Major. The date for our referendum is not decided. Opininion polls show approx. 30-32 % YES and 45-50% NO, and the NO lead has been stable for a couple of years, in spite of extreme skewedness in media resources (TV,radio and 95% of newspapers are YES). In Sweden there also has been a stable NO majority, although only with a lead of say 5%, but in spite of a similar unfair media situation there. My prediction is that Norway, hopefully Sweden will stay out of this monstrosity, the EU, along with Switzerland and Iceland which do not apply for membership. Finland, I think, will join. The Finnish people are desperate due to 20% unemployment, and also not so thouroughly informed on the EU since this is a relatively new topic there. BTW, there is an interesting conflict on the dates of the referendums. The Norw. gvt. (which is YES) wants our referendum to be the last, in the hope that Finland and Sweden will vote YES, and then use this to goad a YES from the doubters in Norway. The Norw. NO movement has proposed to organize referendums on the same date in Finland, Sweden, Norway, which of course is ignored by the respective YES gvt.'s. - Trond Andresen ([EMAIL PROTECTED]) Department of Engineering Cybernetics The Norwegian Institute of Technology N-7034 Trondheim, NORWAY phone +47 73 59 43 58 fax +47 73 59 43 99 - End Included Message -
Laura D'Andrea Say
The spirit of Jean-Baptiste Say must be haunting the corridors of the CEA. Did anyone else notice this gem from the new Economic Report of the President (Feb 94)? quote Box 3.4 - Why productivity growth does not cause unemployment. Productivity growth need not cause an increase in unemployment because, as productivity rises, more goods can be produced with the same number of workers. This means a cost saving, which must result in either increased profits, increased wages, or lower prices. If profits or wages increase, those benefiting from the increase will increase their spending. If prices fall, consumers' incomes will go further and they will buy more. In any case, the increased spending will lead to the purchase of more goods and services, which will create new jobs offsetting losses from the productivity increase. If the new jobs created are not equal in number to the jobs lost, there will be a tendency for wages to change to equate supply and demand for labor. Nonetheless, in the short run some workers are likely to have to change jobs...[which] can be a traumatic experience for the established worker. endquote The authors of this gem seem not to have consulted table B-47 at the back of the very volume these words appear in, showing nonfarm productivity up 15.9% between 1982 and 1983Q3, and real compensation up 6.6% (a number inflated by health benefits). The contrast for manufacturing would be much more vivid. Doug Doug Henwood [[EMAIL PROTECTED]] Left Business Observer 212-874-4020 (voice) 212-874-3137 (fax)
Gesell money system - anybody interested?
I am trying to establish an informal discussion group on the net on the topic described below. Please contact me if you are interested in such a group, or maybe only in the references given. I am very interested in the theories of what could be called the "neo-Gesellian" school, arguing that the compounding of interest an dividends is a prime cause for deep economic and ecological crises, and proposing alternative interest-free "neutral money" systems, originated by the German-Argentinian merchant and economic theorist Silvio Gesell (1862 - 1930) and later proposed by among others professor Irving Fisher during the great depression. Recent contributions are (Suhr 1989, Lietaer 1990, Kennedy 1991). The non-neutrality of money and Gesell's ideas are treated in respectively chapters 17 and 23 of (Keynes 1936). A zero-interest economy demands a solution to the seemingly unsolvable problem of stimulating excess cash to flow to the agent needing the most to be liquid, without the incentive of returns to the lender/saver/investor. The interest-free money concept is tailored to tackle this problem. Such a money system has gone under a lot of labels: "Schwundgeld"- which means "dwindling money", "neutral money", (Irving Fisher's) "stamp scrip". Keynes calls Gesell the "unduly neglected prophet" and admits that he (Keynes, that is) "treated his his profoundly original strivings as being no better than those of a crank". "The idea behind stamped money (Gesell's proposal) is sound", says Keynes, but he will not support Gesell all the way. See GT ch. 23, book VI. Suhr, however, argues IMO convincingly that Keynes' reservations vs Gesell were inconsistent with Keynes' own analysis of money's special characteristics. E-mail me if you are interested or just curious! Trond Andresen ([EMAIL PROTECTED]) Department of Engineering Cybernetics The Norwegian Institute of Technology N-7034 Trondheim, NORWAY phone +47 73 59 43 58 fax +47 73 59 43 99 --- References Kennedy, Margrit, 1991, Geld ohne Zinsen und Inflation, Goldmann Verlag, Muenchen. Keynes, John M.,1936, The General Theory of Employment, Interest and Money, Macmillan, London Lietaer, Bernard A., 1990, A Strategy for a convertible Currency ICIS Forum, International Center for Integrative Studies, New York, Vol. 20, No.3, pp 59-72. Suhr, Dieter, 1989, The capitalistic Cost-Benefit Structure of Money - An Analysis of Money's Structural Non-Neutrality and its Effect on the Economy, Studies in Contemporary Economics, Springer Verlag, Berlin Heidelberg.
Turing Test
I would like to again raise a topic that continues to underlie the discussion on GE Theory. Sensibly rising to some bait, Gil contended in response to one of my postings that the Roemer type models actually produce rather than merely "simulate" radical results. I think this is worth pursuing. I remember an analogy from grad micro defending utility theory in the following manner. Imagine a sealed clock. One can observe the movement of the clock's hands in front of its dial. One cannot see the mechanism which drives the hands. The observer hypothesizes a mechanism inside the clock which is capable of producing the observed movements. The observer has now explained the movement of the clock's hands for all practical purposes. It may still be possible to present alternative mechanisms for driving the clock's hands but one cannot contend that they are any more correct than the first mechanism. This metaphor stands as long as the clock remains sealed. However, if we extend the metaphor in the following way, the matter changes drastically. Suppose you wanted to alter the way the clock's hands moved. The observer would then have to intervene in the working of the clock's mechanism. It would then be crucial to have not just a model of the hands' movements, but the correct model of these movements. Having somehow ascertained the working of the clock's mechanism, it would become clear that only one model produced the movements. The other model(s) merely simulated the mechanism driving the hands. Pen-llers will have seen where this argument is driving. The point is not merely to explain the world, the point is to change it. This is what gives urgency to the discussions surrounding bastard Marxism. Terry McDonough
Nummi
My grad seminar in worker participation was covering Levine and Tyson's paper in Blinder's "Paying for Productivity," and we realized that their key example of a successful workplace with participation is the GM-Toyota Nummi plant. There's a little sleight of hand, however; when they get to the 'Interaction of Firm and Environment' section, they rename the plant Munni, and claim it has gains-sharing (a key ingrediant for successful participation according to LT). Does anyone on the pen-l network know whether Nummi has any form of gains-sharing? Does anyone know the basis of pay there (I thought it was a pay-for-knowledge system). Help either over pen-l or to [EMAIL PROTECTED] would be most appreciated. Cheers, Bob Drago
Re: real world contributions
Recently someone posted a msg asking for an increase in real world relevance on PEN-L. This is always a valid request, but a little off the mark. It is true that for the past couple of weeks, much of the discussion has focused on how to analyze Nike and GE vs. Sraffa. The latter addresses a long-running intellectual debate in progressive econ on value theory. Since many on PEN-l are intellectuals, such an interest is to be expected. If that was ALL PEN-l ever discussed, we would have a really problem. But it isn't. The discussion of Nike has a real world application. Many on PEN-L teach progressive econ, in an environment that is hostile to that type of thought, using books that denegrate that type of thought. Finding ways to discredit mainstream theory is critically important to what we do everyday. I doubt there is one teacher one PEN-L that did not benefit greatly from the Nike discussion. But beyond that, looking further back in PEN-L discussions, there have been very useful debates on the impacts of NAFTA and how to organize in its wake. It is now much clearer to all involve that NAFTA is not about trade, but about special rights for Capital, to the detriment of all other sectors of the economy. May of the gains won thru organizing labor and other groups, from the 30' thru the 70's have been reversed. So what is the concrete response recommended by progressive economists? Organization now has to be on a global scale. Capital has destroyed national sovereignty, so organizing on that level will no longer work. What to attack? The special rights of Capital. If TQM creates efficiency gains, force these gains to be shared amoung all sectors of society, not just Capital. How to do this? Organize labor across borders. Organize environmentalists across borders. Organize all NGO's across borders. Is seeing this as a solution enough? Obviously not, we have alot more to do to figure out how to actually accomplish this. But seeing the limitations of organizing that does not cross borders is the first step. One more example. SEveral months back, there was a detailed discussioon on the nature of the evolution of financial markets world wide. The real world recommendations from that discussion? Financial markets are stripping the ability of democratically elected gov'ts to function for their people (assuming that they even wanted to). The way to address the issue? Democratize financial markets. Abstract? Yes, but many members have put forward concrete politiacl proposals to move in that direction. Books have been published, bills introduced (and likely to fail without grassroots organizing), and coalitions being built. Fianlly, today Jim Devine posted a msg that I believe casts a brand new light on the role of the "war on crime" in the U.S. Not only is it a way to destroy civil liberties, but it is also a way to replace the cold war as a mechanism for the gov't to manage the inherent tendency toward crisis in the macro economy. With this new understanding, the entire dialog on the left conserning the logic of the war on crime is likely to shift. That is quite a contribution. Could progressive economists do more. Yes, there is always more to do. But, PEN-L is helping us do it, and do it better, and that is enough for me. Doug Orr [EMAIL PROTECTED]
Pen-L and Pen-Net
In the spirit of Jim Devine's posting on California being knee-deep in the big doo-doo and looking to a prison lead construction boom I offer the following, based on the principle that if you cannot stop them you can always subvert them. Don't look at prisons and prisoners as occuring at the opportunity cost of schools and students, look at the process as an alternative form a enrolment in a public institution. As a friend in D.C. says, when a student goes to jail, the "system" has not lost the person, it is just a transfer to a better/worse institutional setting. He see parole supervision as a possible form of distance education! So, look to the potention here. Lots of people with lots of time on their hands, mostly stuck in little cells (quite like the study carrels in the library). Jim proposes that maybe we could "export" them to China to use China' s comparative advantage (static or dynamic Jim?) in cost efficient prison care. Nooo Jim, then they would compete with our own license plate operation. They are idea candidates for the information highway. Pen-L should join with those who would see a Pen-Net movement (Motto: Modems for Cons2Prose). With very limited geographic mobility and lots of time on their hands, we could put them all on the network. They could do cross boarder provision of dataservices, they could teach courses based on the skills that landed them in jain, the could form networks of prison-yard lawyers, they could write CAD-CAM applications for this and that. No incarceration without communication. The possibilities are endless and should we wake up and think that jailing everyone is folly, it will be easy to retool the places as schools - if anyone could tell the difference. Sam Lanfranco (York U on a bad day) [EMAIL PROTECTED] CANADA
Debt crisis still hits the poorest
/* Written 2:10 am Feb 23, 1994 by [EMAIL PROTECTED] in igc:intl.economics */ /* -- "Debt crisis still hits the poorest" -- */ DEBT CRISIS STILL HITTING POOREST COUNTRIES The latest figures from the World Bank on the Third World debt situation show that the poorest countries are still burdened by external debt. By Ed Mayo The 1993/4 World Bank Debt Tables were launched in London in early December 1993 with a meeting between non-governmental organisations (NGOs) and World Bank staff. The Tables are the most influential regular report on Third World Debt, and, for the second year running, presented a remarkably upbeat picture of overall external financing for Third World countries. Like the previous year's Tables, the message essentially is that 'the Debt Crisis is over for all but the poorest countries'. If the Debt Crisis was defined by two simple criteria, net financial outflows and the extent to which countries were creditworthy in the eyes of international capital markets, the figures from the new Tables bear this out. Net flows of external finance rose to US$157 billion in 1992 (rising, in the event, well above the 1992/3 World Bank projection of US$89 billion). Governments in, for example, Mexico, Argentina, Colombia and China raised substantial funds in bonds from the international markets, and private sector borrowers were increasingly doing the same. Overall, private financial flows are up two-and-a-half times from 1990. For private finance, this represents a considerable turn- around. Some of the faces are the same as before (around 60% of private flows to Latin America, according to World Bank economist Ron Johannes, has been returned capital flight), but overall the private finance has been of a form and scale many countries have not seen before. The story has not been one of commercial bank financing. Private finance has grown strongest in the form of bonds, foreign direct investment and equity portfolio investment: up 273%, 180% and 344% respectively from 1990 - 1992. For the second year running, these have exceeded funding from official sources. As a whole, the Third World now attracts 35% of total foreign direct investment. Indicators on the Rise At the same time, more cautious analysis might point to the fact that, in terms of total debt service, most countries are paying out to creditors no less than they did at the height of the crisis and overall debt stocks continue to rise. Total debt stocks for all developing countries reached US$1,662,173 by the end of 1992. Behind the aggregate figures lies a more varied picture with considerable regional variations. Most private financing went to middle-income countries in East Asia and Latin America. Exceptions include China, which attracted the highest amount of foreign direct investment and commercial bank flows, and a few other large low-income countries such as Indonesia. Sub- Saharan Africa again suffered substantial negative net flows from private sources. On the one hand, the Bank points out that much of the finance is better based than sovereign lending at the start of the Debt Crisis, equity investment, for example, implying a sharing of risk between borrower and creditor. But on the other, in the haste to give credit to the model of economic adjustment it has promoted for some time, the Bank rather plays down more changeable international factors such as low US interest rates. And, while the stockmarkets are booming, some observers recall the heady days in the 1970s of high profits, over-aggressive competition, poor information and fringe players. As one syndicate manager put it: 'People see you make one-and-a-half million dollars on an LDC deal, so they go out and get one.' But the Debt Tables, like the OECD (Organisation for Economic Cooperation and Development) external finance report which preceded it, represent 'a tale of two cities'. Barely is the good news over, when we hear of the poorest countries. Neither the World Bank nor the OECD say anything new about the severely indebted group of low-income countries. The statistics change year on year but all point to the same conclusion that, as the OECD puts it, 'debt obligations, even after restructuring, are still beyond their ability to repay.' And how much relief is enough? By the end of 1991 the group had received debt relief of US$22 billion (over half of which went to Egypt). New debt initiatives trumpet large sums -- in old money cancelled or new credit offered. But the annual debt service burdens remain excessively onerous, even though actual payments of principal and interest by severely indebted low- income countries (according to Ron Johannes) are around 40% of scheduled debt service, even after repeated rescheduling.
Japan in Crisis-Part1
/* Written 5:36 pm Mar 7, 1994 by [EMAIL PROTECTED] in igc:intl.economics */ /* -- "Japan in Crisis-Part1" -- */ From: Third World Network twn JAPAN IN CRISIS: PART ONE THE MAKING OF THE BUBBLE Japan today is in the grips of its most serious economic crisis since the 1930s. The crisis was caused mainly by the speculative mania in land and equities nourished by a regime of super-cheap credit and liberalisation. (First article in a two-part series on Japan's economic crisis) By Frederic Clairmont Third World Network Features Long brandished by the uncritical as the paragon of economic miracles, the typhoon now hammering Japanese finance capitalism is characterised by deflation, stagnation, frustration and erosion of self-confidence. Given the depth and pervasiveness of these self-reinforcing assaults, the prospects of a recovery are bleak. The yen's staggering surge since January is indicative not of the economy's strength, but of the fragility of its monetary and financial underpinnings. This conjuncture has shoved Japanese capitalism into its grimmest post-war depression; its spectre already ramifies beyond the island empire, dramatising the reality that the edifice of international capitalism and its wobbly foundations will be jettisoned into a universe of greater mass unemployment and accentuatedinter-imperialist rivalries. The latter now parades under the innocuous logo of trade friction. The juggernaut is on the roll. What we are therefore seeing is the pathological manifestation of a stagnationist/asset deflation quagmire that would make the 1930s puny in comparison. This article has two objectives: firstly, to probe the causes of the financial mania of the 1980s, designated as the Bubble, that triggered the financial crisis; and, secondly, its aftermath. Although we shall touch on the technicalia of the balance sheet, incursions into the shamanism and exotica of Japanese creative accountancy will be bypassed. The incongruity of the debacle At first sight it may appear incongruous to invoke the notion of crisis in an economy whose Gross Domestic Product (GDP) is more than twice that of Germany's ($2,859.0 billion vs $1,372.l billion) when perceived through the prism of certain key indicators: since 1975 it has retained its supremacy as the world's paramount creditor, buttressed by towering surpluses and enormous reserves; it is number one in the UNDP Human Development Index; in nominal per capita GDP it stands at the apex; the world's highest life expectancy, starting from among the world's lowest in 1945; first in the world's competitiveness scoreboard; the summit in world educational attainment; one of the world's lowest unemployment and criminal records, etc. Yet when homage is rendered to these triumphs of extraordinary social discipline, organisation and technology what one glimpses is an agonising psychological and economic malaise that runs deep, encompassing all social classes, all facets of the nation's existence. Thus, the concept of crisis is the mot juste, as the economy skids towards the edge of the cliff. The shadows of stagnation The Bubble's implosion at the end of the 1980s produced a deflation in asset values debouching on the most protracted cyclical downturn since the 1930s. This came on the heels of one of the most unrivalled growth performances in the annals of economic history: between 1950-1990 real per capita incomes soared from $1,230 (1990 prices) to $23,970, an annualised growth of 8%. The economy's size today is about four times what it was in the early 1970s. The bursting of the Bubble was by no means the solitary catalyst in the fabrication of the upheaval. Sooner or later, with or without the Bubble, there would have been a rupture in the accumulation circuit. What the riseand apparel sector is one alarming segment, is a blunt reminder of what Japan faces at home and abroad for the rest of this decade, and beyond. What is true for chemicals and textiles today holds for electronics and automobiles tomorrow as offshore production grows. The ebullient capital spending of the 1970s and 1980s is ancient history. Foreign direct investment (FDI) which leapt from $7.7 billion in 1982, reaching its apogee of $67.5 billion in 1989, has steadily fallen, anticipated to slip below $12 billion in 1993. This stems from a colossal net inflow of long-term capital, and repatriation of foreign assets in a desperate bid to pump blood into its anaemic corporate balance sheets. A rising yen moreover will not shave in the short term, the current account surplus. Sharp currency alignments will not redress the trade gap. Compounding
Speech by Outgoing G77 Chair
/* Written 7:01 pm Mar 1, 1994 by [EMAIL PROTECTED] in igc:intl.economics */ /* -- "Speech by Outgoing G77 Chair" -- */ From: Third World Network twn G77 CHAIRMAN CRITICISES URUGUAY ROUND OUTCOME AS AGAINST THE SOUTH --- In his speech as outgoing Chairman of the Group of 77 (a negotiating grouping which today encompasses over a hundred developing nations), Luis Fernando Jaramillo of Colombia presents a sweeping critique of North-South relations. He traces the decline of the Third World in global affairs and the rising power of the Northern-controlled Bretton Woods institutions at the expense of the United Nations and multilateral processes. He concludes his review with a sharp analysis of the recently concluded Uruguay Round which he says provides a clear example of how the South has lost out in global relations. The following is the text of the speech presented in New York in January this year: ALMOST 30 years ago, when the Group of 77 was founded along with UNCTAD, multilateralism had a favourable climate and the international agenda was more and more responsive to the inclinations and needs of the developing countries. Today that context is markedly different. We have to face a much more complex and difficult environment. In contrast to the euphoria created by the end of the Cold War, the changes in Eastern Europe, the reforms of economic liberalisation, the new concepts of sustainable development and the conclusion of the Uruguay Round of GATT, the developing nations continue to face, at the dawn of the 21st century, a hostile international environment and a loss of economic and political standing in the so-called New World Order. While it is true that some progress has been observed in some developing countries, the list of adversities remains and in many cases has grown. The welfare of the majority of our peoples is either non-existent or stagnant at best. The deterioration of our human resources continues to be more pronounced. Despite signs of sustained growth on the part of some Asian countries and that several Latin American nations show certain symptoms of recovery, the general outlook for the developing countries continues to be uncertain and unstable. In the case of the African countries, the situation is sorrowful. There underdevelopment has its most alarming expression. There, human suffering has reached dimensions unknown in other parts of the world. It is there where the most chronic process of pauperisation can be observed. Far from being overcome, it has grown worse. It is expected that in 1994 once again the rate of economic growth will be below the rate of growth of the population. If these trends are not reversed, want, hunger, war and all its painful consequences will continue to be observed. We fail to understand why the international community does not take the measures nor allocate the resources necessary to help the African countries face the acute crisis they are experiencing. The international community is responsible in great part for this crisis. The dramatic changes that continue to occur in shaping a new world structure of power make our work much more complex. Instead of the so-called New World Order, we are witnessing the emergence of sources of profound economic, political and social disorder. In several countries new and obscure anti-democratic forces have emerged. At the same time, developing countries continue to be subjected to constant pressures to weaken or abandon our collective interest for constructing a truly free and just world. In the new balance of power, the relative situation of the developing world has worsened ostensibly. Any dissent of our countries from the position of the countries of the North is now labelled as confrontational, even by ourselves. In practice, we have less political influence and less priority in the international agenda. For years the Group of 77 has been involved in intense and complicated negotiations with the developed countries which have varied from the most minute issues, many a times of little consequence, to the definition of grand strategies and global development programmes. In truth, many of these have ended up as simple reference literature or have served to enlarge the archives of the United Nations. Whether consciously or unconsciously, the Group has accepted to be submerged in a scene of linguistic negotiations, procedural discussions, grandiloquent discourses and in the elaboration of an immense volume of resolutions, many of them having little, if any practical effect. Frequently we find ourselves lost in the trees without the perspective of the forest. The limited real impact and the scarce results in favour of the developing world bear no relation to the magnitude of efforts and the attrition of negotiations. No matter how excellent the conduct
