Re: The ghost in the mirror
Doug Henwood wrote, >Tom Walker wrote: > >>The lesson of the Asian crisis is that the limit of fictional accounting has >>been reached. Humpty-dumpty has fallen off the wall. > >How do you know? Why can't the big boys restructure Asia into a nicely >subordinate region just like they did Latin America after its import >substitution strategies fell apart in the debt crisis of the early 1980s? >You may be right - I'm just wondering how you know the eggshell is >irreparably cracked. > >"Korea is now owned & operated by our Treasury - that's the positive side >[of this crisis]." - Rudi Dornbusch on CNBC, January 8. How do I know? Good question. I only know in the 'being acquainted with' sense rather than in the sense of 'understanding as fact or truth'. By Humpty-dumpty, I don't mean capitalism itself but the fabled "new golden era" of recession-proof autopilot capitalism. The booming stock markets and the Asian tigers were part and parcel of that golden era image. We seem to be entering an extremely precarious period in which frenzied bail-out packages and patch-up missions follow one upon another. It may or may not be possible for the big boys to restructure Asia into a nicely subordinate region. But even if it is possible, that "nicely subordinate region" is unlikely to also be a dynamic focus of economic growth. It's not unlikely that financial markets will stabilize -- but historical statistics strongly suggest they won't return to the anomolous boom of the last few years. In other words, if there's never been anything like it before, why should we expect it to become the norm? It's really laughable to see the "downward revisions" of 1998 economic growth forecasts put forward as reassurance that the impact of the Asian crisis won't be too severe. Economists' growth forecasts are about as reliable as a random pick from an historical table of growth stats. I recall seeing one study where over a period of time the random picks did slightly better. The downward revisions that are going to count are going to be in corporate financial statements and those corrections are going to be phased in over time (to whatever extent possible -- back when I was collecting school board statistics, there was one high school where there were so many "horses on the payroll" they had to be phased out over a four year period). I understand there's also an extensive financial structure of feedback loops -- such as stock options for exec compensation and buy-backs -- that could become negative feedback loops during a period of decline. I won't predict a 1998 recession because I don't have an economic forecasting model. But looking at the social policy fundamentals tells me the next recession will be steep, deep and tenacious. Why? For one, because governments in Canada and the U.S. have been systematically dismantling economic stabilizers on the rather thin premise that they are no longer necessary. For another, so many people are on the edge that it'll take little to push them over the edge. Regards, Tom Walker ^^^ Know Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
re: anarcho-marxists
..My >understanding is that the difference between "antiauthoritarian Marxists" (a >redundant phrase, at least in my book) and pure anarchists is that while the >latter want to abolish the state as soon as possible, the former want to >first subordinate the state to the democratic will of the people (especially >the working class), moving toward the "withering away of the state" as >appropriate, i.e., more slowly. As one of these "anarcho-marxists" -- though I'd probably self-define as an autonomist marxist, if anything -- I'd suggest a different distinction here. In my opinion, the state/non-state issue is better understood as a debate between socialists and anarchists, rather than marxists and anarchists. As far as I'm concerned, identifying as 'marxist' has nothing whatsoever to do with one's position on working class use of the state. Marxism is the study of the movement of the working class, a set of analytical tools and concepts to make sense of concrete social struggles; as such, my own sense is that marxism is a method of enquiry and a mode of analysis, not a conclusion or set of laws. Hence a marxist analysis could consider a temporary use of the state by workers to achieve a specific aim; this in no way suggests a more positive view of the state in general, or any illusions of the state as a nuetral form. So I can then recognize myself in the terms anarchist and marxist -- and communist too for that matter. It is the term 'socialist' that makes me uncomfortable, having (for me) many more state-centred connotations than any of the other terms. Brian - Brian Green| [EMAIL PROTECTED]
Re: your mail
Dear PEN-Lers: I would like to apologize for my inadvertently applying to a personal message via PEN-L. I would greatly appreciate it if you would delete the previous message that I sent from your inbox. Thanks, Steven Zahniser [EMAIL PROTECTED]
No Subject
Dear Conrad: Rose Ann and I enjoyed seeing you in Chicago, and we hope that you will find meaningful and lucrative employment to follow your stint at Simon Fraser. Be sure to check the job postings on the web site of THE CHRONICLE OF HIGHER EDUCATION every Friday, and most of all, don't give up!!! Best wishes, Steven Zahniser POB 9936 Oakland, CA 94613-0936 tel. 510-567-8727 [EMAIL PROTECTED]
BLS Website Paralyzed by Electronic Barrage
U.S. agency's Web site barraged, delaying access to key labor data 1/10/98 By Rajiv Chandrasekaran WASHINGTON POST WASHINGTON -- The Bureau of Labor Statistics, which usually tallies such things as consumer prices, unemployment levels and worker salaries, has been counting something entirely different this week. During business hours Thursday and Wednesday, the bureau's World Wide Web site was barraged with hundreds of thousands of fake information requests a minute, a tactic known in the computer world as flooding, officials said. The tide of requests shut down the Web site, frustrating scores of economists and investors who have started to depend on the Internet to receive the latest economic data. The site was back in operation yesterday afternoon. The site's inoperability drew attention Thursday morning when the bureau released one of the most-watched monthly economic indicators, the producer price index. Most people who tried to reach the site, at http://stats.bls.gov, received error messages saying their computer could not make the connection. The home page was "brought to its knees," said William G. Barron, the bureau's deputy commissioner. Barron said he didn't know why someone would want to attack the site. "Maybe it's just mischievousness," he said. He also acknowledged it could have been an attempt to manipulate financial markets by delaying the release of economic information to some investors. The bureau has not identified who was responsible for the attack, Barron said. He said agency computer technicians had traced the fake messages back to "a handful" of Internet addresses, although those addresses could be forgeries. He said the bureau planned to notify the FBI. The disruption began Wednesday morning, but ended about 4:30 p.m. that day, Barron said. It resumed Thursday morning and ended at the same time, he said. During the attack, the bureau received about 200,000 false requests each minute to establish a connection to the site. Although the bureau's computers were able to reject each fake message after a few seconds, the sheer tide of requests crippled the site. There is little a Web site operator can do to prevent such attacks, because the attacker doesn't immediately look different from a legitimate user to the Web site's computers, said Peter S. Tippett, president of the International Computer Security Association in Carlisle, Pa. "These are particularly difficult to trace and defend against," Tippett said. "With almost all other types of attacks, you can do something to tighten up your [ site ] to make it tougher to attack. But this is different." Tippett said Internet service providers, which carry the messages from attacker to Web site, are starting to prevent messages that don't have legitimate return addresses. Despite those efforts, Tippett said, such flooding "is becoming increasingly common." ©1997 Philadelphia Newspapers Inc.
Russell Means, the RCP and Jean Baudrillard
During the Pine Ridge reservation struggle, most US Marxists responded positively. Their ideology might have preempted such a response, but the demand for justice spoke louder. Sometimes it is just as well if the heart overtakes the brain, especially when the brain is not functioning too well. What if they had worked through the "productivist" logic of Marxism mercilessly? After all, if it was "progressive" to support the liquidation of primitive societies in the 18th and 19th centuries, what would make the 20th century different? These issues finally came to a head at a Black Hills Survival Gathering at Rapid City, South Dakota in 1980 when both Indian and Marxist organizations submitted papers. The Revolutionary Communist Party (RCP) presented a paper titled "Searching for a Second Harvest" that reeked of dogmatism and racism. A word or two about this group might be in order. The RCP was an offshoot of the SDS and at one time had thousands of supporters. The SDS had split into 3 factions in 1969. The Maoist Progressive Labor Party led one faction, the so-called Worker Student Alliance. It specialized in a patronizing, workerist "Serve the People" attitude toward trade union and popular struggles. Since Maoism was such a popular current worldwide back then, the other wing of SDS felt the need to compete on the same terms. Those in the know called it waving the red book against the red book. It was all quite insane as those of us in our autumn years can recall. The anti-PLP wing--the so-called Revolutionary Youth Movement--was itself divided. The left, as we all know, has infinite talents for fragmentation and the late 60s was a classic period for both rock-and-roll and sectarian splits. One wing, the RYM-1, was the infamous Weathermen. The other wing, the RYM-2, was as Maoist as the PLP faction but tended to view the American working class as too conservative to win over to socialism. Of course, implicitly this meant white, male workers. Now the RYM-1 group did have an orientation to the workers, but this consisted mostly of spitting and cursing at them for wearing short hair and having caused the Vietnam war. The RYM-2, believe it or not, also split. One splinter became known as the Revolutionary Union. A vainglorious loudmouth named Robert Avakian, who represented himself as an American Mao Tse-tung, led them. By 1980 at the time of the Black Hills conference, the RU had already evolved into the RCP with its current odious persona. This is a combination of ultraleftism, vulgar Marxism and cult worship of whichever avatar of Mao they recognize at the moment. Most recently this has been Chairman Gonzalo of the Shining Path. Meanwhile Avakian worship never goes out of style. Russell Means, a leader of the Wounded Knee occupation, presented a paper titled "The Same Old Song." It is a challenge to dogmatic Marxism and a powerful one at that. He says: "Now let's suppose that in our resistance to extermination we begin to seek allies (we have). Let's suppose further that were to take revolutionary Marxism at its word: that it intends nothing less than the complete overthrow of the European capitalist order which has presented this threat to our very existence. This would seem to be a natural alliance for American Indian people to make. After all, as the Marxists say, it is the capitalists who set us up to be a national sacrifice. This is true as far as it goes. "But, as I've tried to point out, this 'truth' is very deceptive. Look beneath the surface of revolutionary Marxism and what do you find? A commitment to reversing the industrial system which created the need of white society for uranium? No. A commitment to guaranteeing the Lakota and other American Indian peoples real control over the land and resources they have left? No, not unless the industrial process is to be reversed as part of their doctrine. A commitment to our rights, as peoples, to maintaining our values and traditions? No, as long as they need the uranium within our land to feed the industrial system of the society, the culture of which the Marxists ARE STILL A PART." Now for the purposes of my analysis of the Marxism/American Indian problematic, I will not try to come to grips with what this "industrial process" really means. I will take Means at his word that a certain reading of Marxism would applaud the destruction of Indian culture and society. If there is a clash between the railroads and traditional society, the railroads must triumph. After all, there are those Herald Tribune articles that Marx wrote on India in 1853 that made exactly the same point. How can we disagree with Karl Marx, after all? Onward railroads! Onward telegraphs! Into the dustbin of history Hindu or Lakota villagers. Instead of addressing Means' concerns, the RCP paper flails away at him for being a counter-revolutionary who strikes "noble savage" poses. By lumping together communism with capitalism, Means is leading the youth of America astray. They
clones
from Reuters, via Yahoo!: "Alarmed Clinton Wants Human Cloning Ban By Steve Holland "WASHINGTON (Reuters) - President Clinton on Saturday said he was troubled by a scientist's desire to clone a human and urged Congress to pass a ban on human cloning experiments for at least five years..." (Saturday January 10 3:33 PM EST) COMMENT: when cloning is outlawed, only outlaws will be cloned! in pen-l solidarity, Jim & Jim2 Devine
Re: The ghost in the mirror
Tom Walker wrote: >The lesson of the Asian crisis is that the limit of fictional accounting has >been reached. Humpty-dumpty has fallen off the wall. How do you know? Why can't the big boys restructure Asia into a nicely subordinate region just like they did Latin America after its import substitution strategies fell apart in the debt crisis of the early 1980s? You may be right - I'm just wondering how you know the eggshell is irreparably cracked. "Korea is now owned & operated by our Treasury - that's the positive side [of this crisis]." - Rudi Dornbusch on CNBC, January 8. Doug
Re: Final Comment
In message <[EMAIL PROTECTED]>, James Michael Craven <[EMAIL PROTECTED]> writes >Capitalism produces a whole host of slick facades to "show" that >choices are indeed free choices or if they are even "constrained >choices", we are all constrained and they are choices nontheless. >But the reality is that what appears to be "consensual" is the >"consent" given when the alternative is not simply less money but >rather no money; the "consent" given when the alternative is not >simply less comfortable shelter but rather no shelter; the "consent" >given when the alternative is a slow and horrible death. This is all very well, but you seem to be arguing that there is no difference between wage slavery and slavery, or between adulthood and childhood. To argue that the power of capital is coercive surely does not mean that we might as wll be slaves, does it? -- James Heartfield
Greenspan on Deflation
The Wall Street Journal Interactive Edition -- January 3, 1998 Speech by Alan Greenspan Remarks by Federal Reserve Chairman Alan Greenspan at the Annual Meeting of the American Economic Association and the American Finance Association, Chicago, January 3, 1998 'Problems of Price Measurement' For most of the past twenty years, the challenges confronting monetary policy makers centered on addressing the question of how inflation could be brought down with as little economic disruption as possible. Given the progress that has been made in reducing inflation, and the very solid economic performance that this low-inflation environment has helped to promote, a new set of issues is now emerging on the policy agenda. Of mounting importance is a deeper understanding of the economic characteristics of sustained price stability. We central bankers need also to better judge how to assess our performance in achieving and maintaining that objective in light of the uncertainties surrounding the accuracy of our measured price indexes. In today's advanced economies, allocative decisions are primarily made by markets. Prices of goods and services set in those markets are central guides to the efficient allocation of resources in a market economy, along with interest rates and equity values. Prices are the signals through which tastes and technology affect the decisions of consumers and producers, directing resources toward their highest valued use. Of course, this signaling process, which involves individual prices, would work with or without government statistical agencies that measure aggregate price levels, and in this sense, price measurement probably is not fundamental for the overall efficiency of the market economy. Indeed, vibrant market economies existed long before government agencies were established to measure prices. Nonetheless, in a modern monetary economy, accurate measurement of aggregate price levels is of considerable importance, increasingly so for central banks whose mandate is to maintain financial stability. Accurate price measures are necessary for understanding economic developments, not only involving inflation, but also involving real output and productivity. If the general price level is estimated to be rising more rapidly than is in fact the case, then we are simultaneously understating growth in real GDP and productivity, and real incomes and living standards are rising faster than our published data suggest. Under these circumstances, policy makers must be cognizant of the shortcomings of our published price indexes to avoid actions based on inaccurate premises that will provoke undesired consequences. Clearly, central bankers need to be conscious of the problems of price measurement as we gauge policies designed to promote price stability and maximum sustainable economic growth. Moreover, many economic transactions, both private and public, are explicitly tied to movements in some published price index, most commonly a consumer price index; and some transactions that are not explicitly tied to a published price index may, nevertheless, take such an index into account less formally. If the price index is not accurately measuring what the participants in such transactions believe it is measuring, then economic transactions will lead to suboptimal outcomes. The remarkable progress that has been made by virtually all of the major industrial countries in achieving low rates of inflation in recent years has brought the issue of price measurement into especially sharp focus. For most purposes, biases of a few tenths in annual inflation rates do not matter when inflation is high. They do matter when, as now, inflation has become so low that policy makers need to consider at what point effective price stability has been reached. Indeed, some observers have begun to question whether deflation is now a possibility, and to assess the potential difficulties such a development might pose for the economy. Even if deflation is not considered a significant near-term risk for the economy, the increasing discussion of it could be clearer in defining the circumstance. Regrettably, the term deflation is being used to describe several different states that are not necessarily depicting similar economic conditions. One use of the term refers to an ongoing fall in the prices of existing assets. Asset prices are inherently volatile, in part because expected returns from real assets can vary for a wide variety of reasons, some of which may be only tangentially related to the state of the economy and monetary policy. Nonetheless, a drop in the prices of existing assets can feed back onto real economic activity, not only by changing incentives to consume and invest, but also by impairing the health of financial intermediaries--as we experienced in the early 1990s and many Asian countries are learning now. But historically, it has been ve
The ghost in the mirror
Someone, long ago misplaced a decimal point when reporting the iron content of spinach. This careless mutation led to the birth of Popeye. From spinach to myth on the placement of a small dot. We will hear many times over the next weeks and months from the likes of Bill Clinton and Alan Greenspan the phrase, "the economic fundamentals are sound." We will also hear the media repeatedly use the metaphor, "financial meltdown." Paper is not plutonium. Are the fundamentals sound? What are the fundamentals? The so-called fundamentals are price and production statistics reported in isolation from other information. The presumed soundness of these fundamentals relies on the convenient fiction that the same statistics could as readily be produced in isolation from the other information. Of course they can't. Prices and production aren't independent of changes in credit availability and financial analysis any more than body temperature is "independent" of respiration. A few days ago Alan Greenspan addressed the American Economics Association, taking about the dangers of deflation. It's important to understand what Greenspan is saying (and not saying) -- not just get mad at it. In his address, Greenspan imagines a world of prices, markets, measurement, allocation, assets, products, institutions, investments, risk, information, money and policy in which labour almost doesn't exist. There is one point in Greenspan's address where labour makes a brief cameo appearance: his concern that resistance to nominal wage cuts will lead to rises in real wages and, as a consequence higher unemployment in equilibrium: > But deflation can be detrimental for reasons that go beyond those that > are also associated with inflation. Nominal interest rates are bounded at > zero, hence deflation raises the possibility of potentially significant > increases in real interest rates. Some also argue that resistance to > nominal wage cuts will impart an upward bias to real wages as price > stability approaches or outright deflation occurs, leaving the economy > with a potentially higher level of unemployment in equilibrium. The consignment of labour to the outer fringe of the economy is not a personal peculiarity of Greenspan's. It is the fundamental premise of the financial accounting system. Treating labour as a variable cost is rational from the short-term perspective of the firm. One can only imagine that it is still rational from a social perspective if one insists that the economy is nothing more than an aggregation of firms. Greenspan follows all the "right" steps and makes a big boo-boo. There is no place on financial accounting's balance sheet for the depreciation of labour. Since there's no place to report it, it doesn't exist. The fundamentals are not sound. They can only be made to look good by wishing away "labour as an overhead cost" [to use J.M. Clark's terminology]. This recalls the criticism leveled at socialism by von Mises and echoed by the post-mortems of East Bloc economies -- managers of state enterprises could mask economic inefficiencies by valuing inventories and capital equipment at current prices regardless of any prospects of realizing those prices. The financial accounting myopia has produced the mirror image of that incomplete socialist accounting. Instead of discounting capital depreciation and assigning fictional values to inventory, it discounts the social costs of labour and thereby enormously inflates the value of financial assets. The "way forward" according to such a distorted view is to further depreciate labour. The lesson of the Asian crisis is that the limit of fictional accounting has been reached. Humpty-dumpty has fallen off the wall. Regards, Tom Walker ^^^ Know Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
David Card's Response
Thanks to all the pen-l-ers who responded to my request, particularly to Bill Lear who posted me Card's response. Paul Paul Phillips, Economics, University of Manitoba
Re: David Card's Response
I spoke to David Card yesterday. He like Doug Henwood will be following the well travelled path to Chico. He says that he has a new paper that answers the critique of his work. He feels very confident that his work was correct all along. I mentioned the EPI study Schmitt, John. 1996. "The Minimum Wage and Job Loss: Opponents of Wage Hike Find No Effect." Economic Policy Institute Briefing Paper (January). He said that his results were similar. I will give a reference to the Card paper when I get it. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
re: anarcho-marxists
Jerry Levy's discussion of anarcho-Marxists is very welcome. My understanding is that the difference between "antiauthoritarian Marxists" (a redundant phrase, at least in my book) and pure anarchists is that while the latter want to abolish the state as soon as possible, the former want to first subordinate the state to the democratic will of the people (especially the working class), moving toward the "withering away of the state" as appropriate, i.e., more slowly. Of course, there are a lot of specific differences and shades of gray between these two (council communism, etc.) Hal Draper points out that the (pure) anarchist advocacy of the abolition of the state is, in effect, anti-democracy on the level of society as a whole (and anarchists have a tendency to deny the existence of "society as a whole"). We have the problem of the decentralized democratic workers' council on the other side of the river stubbornly deciding to install a nuclear power plant while our co-op has no way to stop it. Another point: I guess I get the point that prostitution can be "okay" if it's highly regulated. But can an anarcho-Marxist advocate the involvement of the state in this regulation? is the informal regulation by grass-roots democracy enough to deal with the abuses (child prostitution, etc.)? that is, can decentralized democratic norms prevail against market forces without support from the unrepresentative and authoritarian state? in pen-l solidarity, Jim Devine
anarcho-marxists
Jim Craven wrote: > Anarcho-Marxists? What's next? Communist Nazis or Nazi Communists? The above sounds, whether intended or not, like an [ill-informed] insult to anarchists. To begin with, anarchists are part of the Left and the workers' movement (and should in no way be confused with Nazis ... or right-wing libertarians]. To refresh your memory, both anarchists and communists were part of the First International (and the Paris Commune of 1871) rather than the Third Reich. Secondly, there have been currents within both anarchism and Marxism which suggest that this alleged dichotomy between anarchism and Marxism is misplaced. For instance, the council communists and, more recently, autonomist Marxists. Thirdly, what makes this alleged dichotomy between Marxism and anarchism a fallacy is that there are many "class struggle anarchists" and (happily) more anti-authoritarian Marxists. Thus what has separated anarchists and Marxists historically is narrowing. Jerry
