[PEN-L:5160] Re: the exploding Pinto and Gingrich
I don't have an exact figure to give in answer to Doug Orr's question but I do have a very interesting story to tell concerning exploding Pintos. In the period 1978-79, I worked as an assembler at Ford Motor Company's Metuchen (New Jersey) Assembly Plant where we built Ford Pintos and Mercury Bobcats. Anyway, I worked mostly on the rear underbody line in the Chasis Department. The person who installed gasoline tanks, who was a UAW Local 980 official, told me that he was told by an engineer about the problem BEFORE they built the first Pinto. My friend asked the engineer: "For God's sake, if you know there's a problem, why don't you fix it now?" The engineer told him that they had costed out how much money it would cost to change the design (I believe he said 50 cents per car) and management determined (multiplying 50 cents times X-many million Pintos that the Company planned to sell) that the cost was too high! I often think of this story when I hear about externalities and the arguments for and against deregulation. On Fri, 19 May 1995, DOUG ORR wrote: > It is amazing how pieces of important info. slip away. Gingrich wants to > limit the maximum product liability award to $250,000. If I remember correctly, > when Lee Iaccoca wrote his memo deciding to continue to sell Pintos that he > knew would explode into flames in a collision, he used an estimate of > $250,000 per affected car as a likely settlement amount and concluded that > at that cost, it would be more cost effect to let people burn. Does anyone > out there remember the exact amount he used in his calculations? > > Thanks, > Doug Orr > [EMAIL PROTECTED] > >
[PEN-L:5159] More trouble coming in Mexico
MEXICAN DEBT LOOMING AS AN EXPLOSIVE PROBLEM According to figures by Mexico's Treasury Secretariat, as of March 31, 1995, debt service has increased in a very significant way: Total external public debt outstanding (3/31): $87.5 bn dlls. Total external debt service payments (1Q): $ 9.5 bn dlls. Total internal public debt outstanding (3/31): $29.4 bn dlls. Total internal debt service payments (1Q): $ 3.2 bn dlls. As a percentage of Gross Domestic Product, in the last three months the total public debt has increased from 35 to 52.3%. So despite the upbeat talk from Mexican and U.S. government spokespeople, it appears that it's just a matter of time until the country's debt crisis explodes again. Source -- MEXPAS: Bulletin # 22, Information
[PEN-L:5158] Review of Goldsmith's The Trap
IN THESE TIMES -- APRIL 3,1995 MONEY ISN'T EVERYTHING -- By Art Hilgart How is it," Sir James Goldsmith asks, "that nearly two hundred years after the birth of the Industrial Revolution, which produced humanity's greatest period of economic expansion, the absolute number of those living in misery, both material and social, has grown exponentially?" This is a rather interesting question, especially considering its source. Goldsmith, a man who epitomizes the modem paper capitalist, accumulated a very large fortune before tuming 50, mostly through corporate takeovers, stock speculation and generous rewards for not taking over companies. He consolidated his holdings and gave up business for politics in 1987, forming l'Autre Europe, a European Parliament coalition of assorted leftists and conservatives from several countries opposed to the growing power of Brussels. If it seems a little out of the ordinary for an ex-Master of the Universe to rhetorically question the justice of capitalism in its golden age, that is because Goldsmith is himself a bit of an odd fish, a character of seemingly contradictory inclinations. A vigorous proponent of national distinctiveness, Goldsmith is himself cosmopolitan. French-bom, Goldsmith observes with delight that the English think he is French and the French think he is English. While he describes his religious views as a blend of the Far East and Native American, he notes that Catholics think he is a Jew and Jews think he is a Catholic. A financial speculator, he was the darling of socialist prime minister Harold Wilson, who was ultimately responsible for Goldsmith's knighthood. In The Trap, which reprises a series of interviews with Yves Messarovitch, the economics editor of Le Figaro, Goldsmith decries the brand of globalism now purveyed by transnational corporations and First World governments. It is a globalism that, in his view, subordinates human interests to the unlimited pursuit of profit by transnational corporations and that, through the indiscriminate use of technology, transforms people into disposable commodities. Goldsmith questions a fundamental premise of ortholox economics, the idea that the primary objective of society is growth in gross national product (GNP). One pitfall of endowing growth figures with too much evaluative significance, he notes, is that they can give a misleadingly incomplete picture. Any money transaction will boost GNP, regardless of whether it truly represents an augmentation of social well-being. Growth in prison building and nuclear waste disposal boosts GNP, as does transferring child care from families to paid workers. More importantly, GNP growth is indifferent to the distribution of wealth. Not only in the Third World but in England, France and the United States, poverty has grown along with GNP. Goldsmith blames this growing maldistribution of income in large part on free trade among nations and the industrialization of agriculture. Traditionally, free trade theory has rested on Ricardo's principle that aggregate production and consumption are maximized when each country produces goods for which it is best suited. Nations with abundant coal resources, for example, should export steel because they can produce it more cheaply than countries without coal. A country's prosperity rests on its ability to identify and exploit such "comparative advantages." Goldsmith observes that this principle is becoming less relevant in modern economies because the important factors in modern comparative advantage - - money and technology -- are now universally transferable. Intemational competition has thus been reduced to a search for cheap labor. The clothing trade illustrates his point: many "American" clothing manufacturers now move equipment back and forth between countries like China and Guatemala in their quest for the lowest costs. This competition for work creates downward pressure on wages globally -- including those of workers in the First World -- and brings in its wake the grinding poverty and urban slums so common throughout the world. Part of the solution to this problem, says Goldsmith, is to allow the free movement of capital and technology, but not goods. If Ford wants to sell cars in Mexico, then it should be required to build plants in Mexico and make the cars there, with access to patents, know-how and funding from anywhere; the U.S. market, in the meantime, should be served with cars made in the United States by American workers. This may be in the strictest sense less efficient, but it serves the human needs of both countries. Mexican industry would have a chance to develop, and American labor would preserve its living standards and working conditions. In modern economies, lower production costs do not necessarily lead to lower prices. Patents, copyrights and trademarks confer monopoly pricing power on sellers, and the latest GATT agreements extend this control over prices globally. In an asid
[PEN-L:5157] Debunking the IMF
AFRICA REPORT, November-December 1994 DEBUNKING THE MYTH BLAME FOR AFRICA'S CONTINUING ECONOMIC DECLINE, THE AUTHORS ARGUE, CAN BE LAID AT THE DOOR OF THE WORLD BANK, THE INTERNATIONAL MONETARY FUND, AND THE WESTERN DONOR NATIONS THAT HAVE ENTHUSIASTICALLY SUPPORTED THEIR STRUCTURAL ADJUSTMENT PROGRAMS. THE FAILED POLICY MUST BE HALTED, THE AUTHORS CONTEND, AND ECONOMIC REFORM LENDING REORIENTED TO STRENGTHEN PRODUCTIVE ACTIVITIES OF THE POOR -- PARTICULARLY WOMEN, WHO DO 80 PERCENT OF THE AGRICULTURAL WORK IN AFRICA -- AND TO ENSURE SMALL PRODUCERS ACCESS TO CREDIT AND INPUTS. By DOUG HELLINGER and ROSS HAMMOND 0ne of the great myths of the past decade is finally being put to rest. Last year, U.S. Treasury Undersecretary Larry Summers presented to the House of Representatives evidence that poverty was sharply increasing in Africa. Not only was the number of poor people on the rise, but those already poor actually were becoming poorer. The Treasury provided statistics for this tragedy that unfolded during the 1980s, the so-called "decade of adjustment" in which the World Bank and the International Monetary Fund were fully engaged in dictating economic policies across the continent. News of Africa's economic decline may not have come as a surprise to most people. And the Treasury's acknowledgment of reality was small consolation to the people of Africa and to the many African governments, NGOs, and UN agencies that had been citing, for over a decade, the damaging effects of structural adjustment. But the significance of Summers' submission to the Congress was that it is the Treasury that has been the greatest proponent of adjustment programs and that it will be the U.S. government, and clearly not the Bank and IMF bureaucracies, that will have to signal a shift in direction if fundamental change is to come to the international financial institutions (IFIs). The Treasury is, in fact, now quietly discussing the need for a change in policy, at least in the case of Africa. As a step in that direction, the U.S. government, under pressure from NGOs at the United Nations Summit for Social Development preparatory committee meeting in New York in August, recommended to the Secretariat that the formulation of structural adjustment programs be opened to the active participation of "representative organizations of civil society." At least lip-service was also paid to integrating gender-equity and poverty-reduction objectives into these policy programs and to increasing small-farm productivity to satisfy local food needs. At this point, these are but words on a page. Will they be translated into action? To do so would constitute a shift in emphasis, if not course, in U.S. foreign policy. It would also eventually require fundamental turnabouts in institutions that have been so intimately involved as architects of Africa's economic disaster that they have gone to great lengths to mislead the public and policy-makers about the reality and causes of the crisis. The Bank's Tale Although the IMF, the U.S. Agency for International Development (U.S.AID), and other donors have also been involved in the Africa cover- up, it was the World Bank that led the way. Last March, the Bank released yet another in a series of public relations initiatives entitled, Adjustment in Africa: Reforms, Results, and the Road Ahead. In this volume, it claims that adjustment is working in Africa and that countries that have most closely followed its advice have grown the fastest, directly contradicting even its own internal 1992 draft study entitled, "Why Structural Adjustment Has Not Succeeded in Sub-Saharan Africa." Given the Bank's sorry record on the continent, this most recent release and its companion case studies were not well-received. The BBC questioned the Bank's self-interest in evaluating its own policy prescriptions, while The Economist accused the Bank of "complacency" on the issue of poverty and stated that it "desperately needs to see success," whatever the reality on the ground. One of the strongest reactions came from the British charity, Oxfam, which condemned the report as a "blend of half-truths, over-simplifications, and institutional propaganda" and claimed that the Bank "has lost any claim to intellectual and political credibility." Last year, Oxfam condemned the "fundamental failure" of structural adjustment programs in Africa "either to create a platform for sustained economic recovery, or to enable the poor to benefit from market reforms." Even where adjustment programs have led to modest increases in economic growth, says Oxfam, "there is no evidence that they have substantially reduced poverty levels, or reduced trade deficits and inflation to sustainable levels. Moreover, their 'success' has been based on substantial aid transfers, rather than on investment-led recovery." Of the six countries that the Bank now puts forward as adjustment "successes" -- Ghana, Tanzania, the Gambia, B
[PEN-L:5156] Re: Usury & Exploitation
This discussion may be a waste of time for others, but luckily it isn't for me. (As he reminds me often, I can't speak for Gil.) It allows me to add some important clarifying touches to a paper that I'm finishing, one that tries to explain (rationally reconstruct) the Marxian theory of exploitation in mainstream terms without reducing that theory to mainstream ideology. It is helpful to have a dialogue with someone who knows mainstream microeconomics much better than I do. Thanks, Gil. I apologize to the list for any repetition. But it's very easy to delete this without reading it. On Fri, 19 May 1995, Gil Skillman writes: 1. >>Re Jim's most recent comments... I go back to the bottom line: Jim asserts that some form of subsumption... is necessary for the extraction of surplus value in Jim's sense of the term. This is a very strong claim. Nobody, certainly not Jim, has established this claim on grounds which do not presuppose the conclusion.<< Saying that something is a "strong claim" simply implies the question "strong by what standards?" This question is made less vague if we ask "what is Gil's alternative hypothesis?" Gil's _null_ hypothesis, i.e., the one he's trying to _disprove_ is mine, i.e., that coercion is a necessary to the existence and persistence of capitalist exploitation. His _alternative_ hypothesis, if I may make an effort at mind-reading, would be the following: AH1: People are willing to be "exploited" voluntarily under a competitive market system, with no relations of coercion either structural or instrumental, i.e., no subjection of labor by capital of any kind.(*) (This is the conclusion of Roemer's models, in which the scarcity of means of production is sufficient to allow capitalists to "exploit" workers.) The validity of AH1 depends on what we mean by "exploitation." More importantly, this meaning helps distinguish my view from Gil's. Since, as I've discovered, Gil thinks that the distinction between primary and secondary exploitation is crucial, let's bring it in to help. Start with the latter, on which there is no disagreement, as far as I can tell. If I remember correctly, Gil and I have _always_ agreed that no coercion at all is needed for much or most secondary exploitation, what Marx termed "the redistribution of surplus-value" and others have called "unequal exchange" to occur, except on the basic level of the state preserving property rights. Voluntary exchange under competitive markets is sufficient. I am sure that Gil remembers my analogy here: those rentiers who hold government bonds need not engage directly in any kind of coercion to receive interest incomes. The government's police force and IRS will do the coercive job for them. For more on "secondary exploitation," see part 2. But in order for there to be _redistribution_ of surplus-value (or more generally a surplus-product), a surplus has to be produced. It is this "primary exploitation" where I think coercion (subjection) is needed. Further, secondary exploitation is _dependent on_ the existence of coercion: without primary exploitation, i.e., the creation of a surplus-product, secondary exploitation is simply the redistribution of a fixed quantity of products. So let's restate what I think of as Gil's alternative hypothesis, which shows the _true_ basis of our differences. AH2: People are willing to _produce_ a surplus-product and voluntarily turn it over to others for a competitive market system, with no subjection of labor by capital of any kind. This is what I consider to be "a very strong claim." Further, nobody, certainly not Gil, "has established this claim on grounds which do not presuppose the conclusion." In his recent work, Gil relies on the neoclassical principal/agent literature, which _assumes_ that profits exist in the mythical "full information" economy. Since the P/A problem is not necessarily neoclassical, so Gil substitutes Roemer's Walrasianization of Marx for this neoclassical tradition. But Roemer's view of the origins of the surplus is based on poor theorizing or simply assuming that a surplus-product is produced (as in the "isomorphism" theorem). Gary Dymski and I criticized Roemer's main models in Economics & Philosophy in 1989 and Roemer, in essence, agreed that we were right. He totally agreed that the center-piece of his theory -- the scarcity of means of production -- had no theoretical explanation and then turned to the Marxian tradition that he had scorned (including Rosa Luxemburg) for an explanation. At the time, neither of us were impressed enough by the "isomorphism" theorem to think that it was worth talking about. I've criticized the isomorphism theorem several times in this debate and do not feel like repeating my arguments further. So I'll just leave what I think of as the true statement of Gil's alternative hypothesis (AH2) as a statement of our disagreements. Perhaps it will stimulate Gil to explain why workers voluntarily choose to create a surplus-product in
[PEN-L:5155] the exploding Pinto and Gingrich
It is amazing how pieces of important info. slip away. Gingrich wants to limit the maximum product liability award to $250,000. If I remember correctly, when Lee Iaccoca wrote his memo deciding to continue to sell Pintos that he knew would explode into flames in a collision, he used an estimate of $250,000 per affected car as a likely settlement amount and concluded that at that cost, it would be more cost effect to let people burn. Does anyone out there remember the exact amount he used in his calculations? Thanks, Doug Orr [EMAIL PROTECTED]
[PEN-L:5154] CBPP and CTJ?
Can someone tell me how to get on the mailing list for the Center for Budget and Policy Priorities and the Center for Tax Justice. I keep finding references to the work, but it is usually several months after the release. I would like to get it in a more timely fashion. Thanks, Doug Orr [EMAIL PROTECTED]
[PEN-L:5153] Follow-up re NSF Funding Crisis
>From another list - Doug Henwood >Please feel free to scroll to mid section of this post where action >directives can be found. APA has developed a letter that can be used as >a format for your own letter, should you desire to forward one. There >are also other suggestions noted that might also be fairly simply to >follow. > >Tammy Mann, Ph.D. >SPSSI Fellow >202-336-6068 >[EMAIL PROTECTED] >*Forwarded Message Follows >* > American Psychological Association > Science Advocate Network > > >! LEGISLATIVE ACTION ALERT ! > > House Budget Resolution Targets Social, Behavioral >and Economic Sciences at NSF > >The House and Senate Budget Committees approved the spending >blueprint for FY 1996 last week. This budget resolution >determines the size of the federal budget for FY 1996, sets >out spending priorities and provides guidance to the House and >Senate Appropriations committees on how the federal budget >should be allocated. The House and Senate budget resolutions >are accompanied by report language that goes into more detail >on the fiscal assumptions made by the Committees in arriving >at the recommended budget numbers. > >Included in the House Budget report language is the following >statement regarding the recommendations for NSF: "This >proposal assumes that while science and technology must >contribute to the immediate fiscal reality, they must also >provide for the opportunities that must be developed in the >future. In order for the technological revolution to >continue, a strong, fundamental science is needed. Therefore, >the proposal assumes that basic research should be >prioritized. For instance, NSF CIVILIAN RESEARCH AND RELATED >ACTIVITIES WITH THE EXCLUSION OF SOCIAL, BEHAVIORAL AND >ECONOMIC STUDIES [capitals added] and the critical >technologies institute, can be provided at their current >levels plus three percent growth. No reductions are assumed >to NSF basic research in the physical sciences. Education and >Human Resources can be maintained and Academic Research >Infrastructure is assumed at President Clinton's requested >level." > >Rep. Robert Walker Throws Fuel on the Flames > >This disturbing language from the House Budget Committee was >followed by statements from Rep. Robert Walker (R-PA) at a >news conference on May 11, where he was quoted as saying that >the "social, behavioral and economic STUDIES" [capitals added] >at NSF were fields that NSF had "wandered into . . .[to be] >politically correct." Since Rep. Walker is Chair of the House >Science Committee that authorizes NSF, is a top Republican on >the House Budget Committee, and part of the House Republican >leadership -- his remarks were taken very seriously concerning >House Republican plans for behavioral and social science at >NSF. > > * > * APA Mobilizes * > * > > >In immediate response to these developments, APA has done the >following: > > > --- SENT THE FOLLOWING LETTER TO REP. WALKER --- > > >The Honorable Robert S. Walker >Chair >House Science Committee >2320 Rayburn House Office Bldg. >Washington, DC 20515-6301 > >Dear Mr. Chairman: > >I am writing on behalf of the American Psychological >Association (APA), a scientific and professional organization >of 132,000 psychologists, to object to your characterization >of the behavioral and social sciences at the National Science >Foundation (NSF). In the May 12 Washington Post you were >quoted as saying that the "social, behavioral and economic >studies" (italics added) at NSF were fields that NSF had >"wandered into . . .[to be] politically correct." I would >like to assure you that the behavioral and social sciences at >NSF were not inadvertent additions meant to satisfy someone's >notion of "political correctness." > >NSF support for basic research in the behavioral and social >sciences is long-standing, and its importance to the >scientific knowledge base has long been recognized by the >wider scientific community that supported the creation of SBE. >The Social, Behavioral and Economic Science (SBE) Directorate >was created as a separate entity in 1991 in recognition of the >maturity of the behavioral and social sciences, and to provide >greater focus on the research base in these sciences. This >research had been supported at NSF for more than 40 years -- >long before the formal organization of these sciences into a >Directorate. > >This followed extensive discussion both within NSF and within >the research community regarding the merits of creating SBE. >There was agreement in the biological, behavioral and social >science community that this was the best way to support this >valuable research. In none of the many discussions and >meetings held on the creation of SBE was there any hint of the >impetus being "political correctness."
[PEN-L:5152] Re: Usury & Exploitation
Re Jim's most recent comments on this subject, I go back to the bottom line: Jim asserts that some form of subsumption (formal, real, or "macro") is necessary for the extraction of surplus value in Jim's sense of the term. This is a very strong claim. Nobody, certainly not Jim, has established this claim on grounds which do not presuppose the conclusion. Further, the claim is implausible. If it's true, why isn't it the case that interest capitalists must subsume industrial capitalists in order to extract their piece of surplus value in modern capitalism? Similarly, why don't landlords have to subsume industrial capitalists to achieve the same outcome? Finally, contrary to Jim's suggestion, there is indeed a coherent historical-materialist explanation for the possibility of capitalist exploitation via circuits of capital or ground rent which do not presuppose the subsumption of labor under capital. This explanation suggests, in direct opposition to Jim's (unproven) representation, that rendering producers "free in the double sense" (i.e. what Jim calls "macro" subsumption) makes exploitation harder, not easier, because capitalists cannot in that case demand collateral for loans, where they could do so in the era of usury and the putting-out system. Without this "stick", it becomes strategically much harder to get producers to cough up surplus product in return for access to capital. Gil Skillman
[PEN-L:5151] Re: Brits, NZ, and inequality
On Tue, 16 May 1995, Jeff Oman wrote: > The sequence is as follows, more inequality reduces > >incentives to save (or to accumulate human capital) to the less > >favoured by the distribution. The amount of savings and human capital > >that is lost is not compensated by the savings and human capital of > >the rich ones. > > > You mean tinkle-down doesn't work? ; ) > Jeff Oman > > Exactly. What I found is that poor people becomes poorer in time, since most of their capital returns (wether physical or human) go, in fact, to rich people. The reason behind, I suppose and I am trying to prove, has to do with institutions, in that the stability they provide also generates inertia in the way income is distributed. MOst empirical evidence is closer to this approach than to trickle-down, but most theory (neoclassical theory) goes the other way. I think that if development theory can go anyway, this is it. Macario
[PEN-L:5150] Re: Justice
I agree that being a Marxist worth anything--i.e., a practical revolutionary not just a Kathedersozialist--requires that we manifest appropriate virtues, including justice, in our personal lives, and that these virtues be broadly compatible with those of our comrades. Note that "compatible" doesn't mean "the same"; we just have to be able to get along in a way that fosters mutual respect and consideration and wins the respect of those whgom we seek to organize. I don't think that there's a specifically Marxist set of virtues, though--just the ordinary ones, tinted red by our choice of sides. The public schools question hits home for me, as I believe in the public svchools, but we just decided to send our daughter to a private first grade. Our local school, largely poor working class, is as far as we can tell a fine school to which we'd be happy to send her, but it's too poor to sustain a latchkey program. School starts at 9.15 and ends at 3.30, and there's no way we can manage the pickup and dropoff, not with a working Mom and a Dad in first year law school. Hannah was accepted at an "alternative" lottery school, public, which had a latchkey, but janis and I were deeply unimpressed by both the school and the latchkey, both on the bottom end of mediocre, minimally acceptabvle if tgere was nothing else, but no more than that. So we decided to keep herin private school for a year to see if an opening comes along at a better alternative school OR if after I finish One-L my schedule is more flexible and we can arrange flextime for Janis, so we can swing the neighborhood school. So, did we do wrong? I don't think so. N.B. we pay property taxes which support the public schools and vote for every levy. I don't think it is a failure of virtue to want the best for your kids. Caring about your own kids is a virtue--someone who regards everyone's kids as just as important to him or her as his or her own is either a fanatic or neglectful. _How_ yhou care about them matters--if by a "good" school for then you really mean "all white," you're indulging in closet or not so closet racism. But you also don't help the public schools, the anti-racist struggle, or your own kids by sending them to a crumby, much less a dangerous school, merely because it is public. Sometimes virtues lead to conflict--our values don't always point in the same direction. The virtue of being a good parent and that of being a good antiracicist and socialist may indicate different choices inb a matter of where you send your kids to school. It did for us, and though we made what we thought was the right choice, we feel the conflict and we'd rather send Hannah to a public school, other things being not even equal but adequate. Well, I thought I'd mention it. --Justin Schwartz On Fri, 19 May 1995, bill mitchell wrote: > Curtis offered much more than is here: > > [deletions] > > The book's fallacy lies in thinking that virtuous people will > >grow up to become a virtuous society. On the contrary, as > >Reinhold Niebuhr taught us, there is a "basic difference between > >the morality of individuals and the morality of collectives." > >Virtuous people grow up to hold news conferences putting > >corporate concerns ahead of the common good. > > > [deletions] > > > > I guess that the point of the above article as it relates to > >Bill Mitchell's post (see below) is that we as individuals have > >to do something MORE than simply practice personal virtues, or > >society isn't going to get any better. This something more > >surely involves actively promoting a good social democratic > >POLITICAL agenda as another PEN-ler pointed out in response to > >Mitchell's post. > > And of-course i agree. and did i not say that in the stream of > mails on this topic. > > but movements become corrupted unless the individuals have compatible > values. > > it also raises the general issue off whether being a marxist extends into > a personal code of conduct as well as the collective code of conduct and > organisation. personally i feel it does, but i know others definately don't > agree with me. > > we had this for example in the private/public school debate. progressives on > this list said "sure i believe in the public sector, but not for my kids". i > was and am implacably opposed to that view. how can your own children be > more important than all the rest of the kids? at what point does socialism > cease to work when the so-called progressives are willing to privatise gains > at the > obvious expense of the collective? > > there are many more examples and issues here. we can talk about it if people > like. tonight (late friday afternoon) i still have a mountain of things to do. > > kind regards > bill > ** > William F. MitchellTelephone: +61-49-215027 .-_|\ > Department of Economics +61-49-705133 / \ > The Universit
[PEN-L:5149] technological change and Africa today
In Trade, Development and Foreign Debt (London: Pluto Press, 1992) Michael Hudson explains the polarization tendencies in the world economy, so devastatingly demonstrated in Africa this decade: "The preceding pages have established that economic obsolescence in less developed countries is a direct function of more rapid rates of capital formation, research, development and general technological progress in the lead-nations. The problem is that resources that are not modernised will not be employed, unless prices for their output are supported by subsidies and trade barriers. These programmes may involve substantial economic overhead to support or modernise obsolete labour, land and capital. Not to undertake such public spending is to doom the least developed countries to a fate of world mendicancy. Yet IMF austerity programmes block such investment." (222-223) Hudson continues: "The logical international culmination of this polarization process was described in 1864 by the Rev. W Winwood Reade with regard to the African population: This vast continent...will finally be divided almost equally between France and England. In N Africa, France already possesses the germ of a great military empire. She will ally herself with the Mohammedan powers. With a more peaceful course, will colonize Angola by means of black emigrants, run a railway across Mozambique, and grow on the tablelands of Southern Central Africa the finest wool and cotton in the world. Africa shall be redeemed. Her children shall perform this mighty work. Her morasses shall be drained; her deserts shall be watered by canals; her forests shall be reduced to firewood. Her children shall do all this. They shall pour an elixir vitae into the vein of their mother, now withered and diseased. They shall restore her to youth and to immortal beauty. In this amiable task they may possibly be exterminated. We must learn to look on this result with composure. It illustrates the beneficient law of Nature, that the weak must be devoured by the strong. But a grateful Posterity will cherish their memories. When the Cockneys of Timbuctoo have their tea-gardens in the Oases of the Sahara; when hotels and guide-books are established at the soruces of the Nile; when it becomes fashionable to go yachting on the lakes of the Great Plateau; when noblemen, building seats in Central Africa, will have their elephant parks and their hippopotami waters, young ladies on camp-stools under palm-trees will read with tears THE LAST OF THE NEGROES, and the Niger will become as romantic as the Rhine." Hudson comments: "These quotations are not merely antiquarian documents of the past, they are scenarios for the future. Market forces may be cited to starve out populations unfortunate enough to have been left behind by the course of economic progress. Droughts and famine will be blamed on nature rather than on deforestation, inadequate irrigation expenditures, and related shortfalls in infrastructure spending by governments saddled with austerity programmes. The ultimate question is not whether third world labour is cheap enough but whether it is so low-priced as to deprive it of earning the income necessary to invest in education and related human-capital skills at a rate sufficient to make itself competitive in today's high technology world." (235-6) Rakesh Bhandari UC Berkeley
[PEN-L:5148] Re: profit-rate equalization
Ajit continues his discussion with me on value thus: - In Marx a theory of prices is needed to insure the reproduction of the system, which intails realization of the surplus. Thus prices occupy different places and significance in different theoretical structure, and so are 'abstract' concepts. Paul - I think that this is a highly questionable interpretation of Marx. It looks like Marx seen through the Sraffian problematic. But is does not sit with the way things are actually presented in Marxs writings in his published volume of Capital and in the Contribution to the Critique which contain extensive passages dealing with money, his concern is with questions like why quantities of social labour are expressed as prices, ie in the form of quantities of gold. This is part of the general argument that establishes that the prices of commodities are proportional to their labour contents, which leads on to the theory of exploitation. The theory of surplus value depends upon being able to translate price quantities ( including the price of labour power ) into quantities of time, and thus logically depends upon his earlier explanation of price. The question of reproduction and realisation is not gone into until volume II of capital, and it is here examined quite independently of prices. Prices are not returned to until volume 3 where he deals with how they may systematically diverge from values under the influence of private property in land and of competition between capitals. It is here introduced as a 'realist' accomodation to what Marx believed to be an empirical fact - a very narrow dispersion of profit rates. But it is dealt with quite appart from the treatment of reproduction. It is only later writers, who have tried to deal simultaneously with reproduction and the formation of an equal rate of profit and to derive rules for the formation of prices that would achieve this ___ This is the crux of the matter. In the *Contribution to the Critique* as well as the first chapter of *Capital*, the question of surplus does not arise because the system has only one class, the class of commodity producers/owners. Marx introduces the problematic of value in this context, where the problem is the allocation of the *total social labour* in order to fulfill the total needs or demand registered in the market. The framework is essentially the neo-classical framework of allocation of the *given* resources, where value or prices play the role of allocating the resource (the given social labour) such that supply matches demand. Marx's letter to Kugelmann of July 11, 1868 as well as his various comments such as "[Robinson Crusoe's problem] contain[s] all the essential determinants of value" could scarcely mean anything else. My thesis is that once *capital* and *wage labour* are introduced in the system, a fundamental *break* takes place in Marx's problematic. Marx's problematic shifts from a *scarcity* problematic to a *surplus* problematic. The fundamental assumption of the scarcity or allocative problematic that the resources or the total social labour is *given* cannot be maintained in his surplus framework. In a simple commodity producing economy the producer or the supplier of labour supplies labour in order to fulfill his/her needs, i.e. both the demand and supply decisions are rooted in the single individual and therefore, Say's law holds. The neo-classical economics maintains the same framework for the supply of labour in the capitalist economy as well, where the workers determine labour supply on the basis of their utility functions. But in Marx's framework the total real wage basket, on the one hand, is determined by social and historical factors, whereas the *supply of labour* is determined by the struggle between the two *classes* (i.e. the strength of the combatents). And this struggle determines the production of surplus--given the wage basket. As you can see, in this framework the *total social labour* is by no means *given*. It is an outcome of a class struggle. Before you could introduce the problematic of allocation, you have to deal with the production of surplus. Thus my statement that the problematic of value must be read in the context of the reproduction of the capitalist system that entails realization of the surplus. Cheers, ajit sinha
[PEN-L:5147] Re: Justice
Curtis offered much more than is here: [deletions] > The book's fallacy lies in thinking that virtuous people will >grow up to become a virtuous society. On the contrary, as >Reinhold Niebuhr taught us, there is a "basic difference between >the morality of individuals and the morality of collectives." >Virtuous people grow up to hold news conferences putting >corporate concerns ahead of the common good. > [deletions] > > I guess that the point of the above article as it relates to >Bill Mitchell's post (see below) is that we as individuals have >to do something MORE than simply practice personal virtues, or >society isn't going to get any better. This something more >surely involves actively promoting a good social democratic >POLITICAL agenda as another PEN-ler pointed out in response to >Mitchell's post. And of-course i agree. and did i not say that in the stream of mails on this topic. but movements become corrupted unless the individuals have compatible values. it also raises the general issue off whether being a marxist extends into a personal code of conduct as well as the collective code of conduct and organisation. personally i feel it does, but i know others definately don't agree with me. we had this for example in the private/public school debate. progressives on this list said "sure i believe in the public sector, but not for my kids". i was and am implacably opposed to that view. how can your own children be more important than all the rest of the kids? at what point does socialism cease to work when the so-called progressives are willing to privatise gains at the obvious expense of the collective? there are many more examples and issues here. we can talk about it if people like. tonight (late friday afternoon) i still have a mountain of things to do. kind regards bill ** William F. MitchellTelephone: +61-49-215027 .-_|\ Department of Economics +61-49-705133 / \ The University of NewcastleFax: +61-49-216919 \.--._/*<-- Callaghan NSW 2308v Australia Email : [EMAIL PROTECTED] WWW Home Page: http://econ-www.newcastle.edu.au/~bill/billyhp.html **
