Turkish/French tensions: Turkey's honor disgraced
By the way, as a citizen of Turkey, I don't see any reason for feeling so bad about this. A loose translation of a Turkish saying goes like this: What can you argue against the truth? Best, Sabri +++ Turkey considers embargo on France Ankara - Turkish Daily News May 9, 2002 RSF insolence Journalist association causes crisis between Turkey and France by placing Chief of Staff Gen. Kivrikoglu's photograph on the floor of a railway entrance in Paris and accusing him of oppressing press freedom in Turkey Act immediately, or... Turkey officially demands from France removal of Kivrikoglu's picture be removed from railway station floor or 'military agreements between Turkey and France could be reviewed and could be frozen' France adamant French Ambassador Garcia points out during a meeting with Foreign Ministry Undersecretary Ugur Ziyal that the RSF is an nongovernmental organization, however he will inform the French authorities about Turkey's reaction -- The journalists' association, Reporters Sans Frontieres (Reporters without Borders), caused a crisis between Turkey and France by laying a picture of Turkish Chief of General Staff Maj. Gen. Huseyin Kivrikoglu on the floor of a railway station in Paris. The association exhibited a map of countries and pictures of state leaders they say are enemies to the freedom of the press. The Prime Ministry, on the other hand, declared in a written statement that Turkey has clearly stated in talks with French authorities that Ankara has expected France to urgently remove the photo of Gen. Kivrikoglu from the floor of the Paris train station. The Defence Ministry said that the French military attache had been called to General Staff Headquarters on Tuesday and was told that the map, displayed at the Saint Lazare station, should be removed immediately. He was told...this insulting attitude towards Gen. Kivrikoglu must end, an official said. The attache was also informed that should this attitude continue, military agreements between Turkey and France could be reviewed and could be frozen. Foreign ministry takes action Turkish Foreign Ministry Undersecretary Ugur Ziyal has invited French Ambassador Bernard Garcia to the ministry to inform him that the journalist association's attitude is strongly protested. Ziyal demanded that the picture be removed and that necessary measures be taken to protect Turkey's image. According to diplomatic sources, Turkey will closely follow every action being taken. A high-level diplomatic source said that if they want the picture to be removed then they can do it. The other remaining problems with France have not yet been solved. During the half-hour meeting, Garcia pointed out that the association is an nongovernmental organization (NGO), however he will inform the French authorities about Turkey's reaction. Military relations have already been frozen once Due to a decision made by the French Assembly on the so-called Armenian genocide, the Turkish Military General Staff placed an embargo on French military goods. The embargo, which lasted almost a year, ended late February during a visit to Ankara by the French defence minister. Turkey's opponents appointed to French Cabinet Renaud Donnedieu has been appointed to the ministry responsible for France's European relations. Donnedieu is known as a strong opponent of Turkey's membership to the EU, severely criticizing Turkey many times in the past, claiming that Turkey's membership to the EU is against EU nature and also mentioned the so-called armenian genocide. It was also announced that the Armenian terrorist organizations' former advocate, Armenian Patrick Deveciyan, has been appointed to the Interior Ministry as a deputy minister. The Association is silent The association made a press statement after the Turkish reaction to explain their reasons for laying Kivrikoglu's picture on the floor. The statement emphasized that the actions taken against two journalists, Erol Ozkoray and Fikret Baskaya, are behind the protest. It is also mentioned that the Supreme Board of Radio and Television's (RTUK) actions were being protested. Since the association's office was closed due to a French holiday, it was not possible to obtain more information on their reactions to Turkey's requests. One event two reactions Deputy Prime minister Mesut Yilmaz declared during his visit to the Turkish Union of Chambers and Commodities Exchanges (TOBB) that he does not take the association's action seriously. Yilmaz, stating that Europe was a region that strongly upheld the freedom of expression said there are so many institutions which conduct nonsensical activities. I do not take this event as seriously as Kivrikoglu does. On the other hand, the Nationalist Movement Party (MHP) issued a press statement declaring that Turkey should take action against the event. Sefkat Cetin, in the name of the party, announced that not only Kivrikoglu's
Re: Problems of the Left in North America
Lou called me a Tawat on pen-l, yesterday. Whatta loon. Michael Pugliese, Twatskyist 5/10/02 7:03:00 AM, Louis Proyect [EMAIL PROTECTED] wrote: At 03:37 AM 5/10/2002 -0500, Dr. Paul Stevenson wrote: Louis Proyect has taken a potshot at Ellen Meiksins Wood, Leo Panitch and Cloin Leys and has provided absolutely no evidence as to why such a potshot is justified. He has accused Wood of being intellectually lazy and has basically stated that the Socialist Register (edited by Panitch and Leys) as not being on the left, or on the socialist left, or, much less, on the Marxist left. Again, absolutely no evidence in support of such a position is offered. Whether or not, any or all of these individuals is an enemy of Marxism and stalling the class struggle might be a debatable point (all in my view are strong Marxists and strong supporters of a radical leftwing socialism regardless of the comradely disagreements we each might have with what their respective positions on this or that might be [frankly, much of what each and all have written and said I find myself in agreement with]). Frankly, we on the left (especially in North America) need to find all the common ground we can and we certainly do not need to throw out insulting epithets at people and not provide some really good documentation for doing so. -- Reply: I am not sure what you mean by potshot. I described Socialist Register as a general interest social democratic journal. Since Leon Panitch, one of the co-editors, has argued forcefully against what he calls Leninism, I am not sure what the problem is. Oh, I think I know. It is rather fashionable on the left academy to make fire and brimstone speeches about the evils of capitalism, but it is not so fashionable to actually roll up your sleeves and construct Marxist organizations. I find it vastly amusing that such figures as the SR editors, Immanuel Wallerstein, Barbara Epstein, Slavoj Zizek and Michael Hardt end up giving speeches on how to make a revolution. I don't think any of them ever made a leaflet in their illustrious lives. As far as Wood is concerned, I have replied to both her and Brenner on my own email list: 1. The Brenner Thesis 2. The Brenner Thesis, Ireland and Spain 3. The Brenner Thesis as Iberiantalism 4. Testing the Brenner Thesis Against Colonial Spain and Modern South Africa All of these are located at: http://www.columbia.edu/~lnp3/mydocs/economics.htm along with a review of the late Jim Blaut's 8 Eurocentric Historians that appeared in Socialism and Democracy originally. I began to take an interest in the Brenner Thesis after running into Jim on Marxmail, where we became very close politically. As far as Colin Leys is concerned, I had a running exchange with him that can be found at: http://www.mail-archive.com/marxism%40lists.panix.com/msg29637.html John Enyang, a Kenyan graduate student, also replied to him as follows: Colin Leys wrote: 2) The reaction against the then prevailing dependency interpretation of African development was more linked to Lenin's critique of the narodniks than to Marx's Preface to Volume 1 of Capital. In particular the dependentistas tended, as Lenin said the narodniks did, to picture capitalism as something existing in a few 'corners' of the economy, i.e. foreign-owned plants and estates and their penumbra of financial and other services, plus the ports and the railway system, and to see the rest of the economy as consisting of precapitalist social relations, capable of supporting some sort of non-capitalist alternative development path. By the mid-1950's the large majority of the Kenyan population had been either (i) expropriated of their land by the settlers who turned them into wage labourers on their plantations or (ii) been forced into the cash economy and through devices like hut-taxes and head-taxes imposed by the Britishers to stimulate the interest of the otherwise reluctant natives in export cash crops -- coffee, tea. [Exceptions to this would be pastoral peoples in the rather sparsely populated regions like Turkana, who retained relative autonomy from the colonial economy]. In the words of a character of Ngugi, 'the foreigner from Europe was cunning: he took their land and their sweat and their wealth [livestock], and told them that the coins he had brought, which could not be eaten, were the true wealth'. Of course a lot of Kenyan capitalists are dependent on foreign capital, as - nowadays - are a lot of British, Canadian, and even American capitalists, though much less so of course. A most peculiar statement. The relations which exist between say German and Japanese capital are in no way comparable with the relation between British capital and the Kenyan elites. Nor would anybody in their right mind would argue that the German capitalist class has no independent existence beyond acting as the local business agent of Japanese capital. But this is a good approximation to the
Barbara Epstein
Lou, you are such a **!!! Barbara Epstein at UCSC, if you'd read her book from U.C. Press on cultural and political radicalism or her pieces in Socialist Review started her activist carrer in the du Bois Clubs, if my memory serves, in the early 60's, moving on to SDS, like Steve Max. That you have such raging hostility to academic leftists makes me think that you haver deep seated anti-intellectual tendencies, however mant thousands of books you've read on Te Polical Economy opf Andulusian Textile Weavers From 1850- 1925. Michael Pugliese, Twatskyist
Re: Re: Problems of the Left in North America
At 07:51 AM 5/10/2002 -0700, Michael Pugliese wrote: Lou called me a Tawat on pen-l, yesterday. Whatta loon. Michael Pugliese, Twatskyist I don't understand how Michael Pugliese has become so confused. He is responding to an exchange I had on PSN, not PEN-L, number one. Number two, if you check the PEN-L archives (http://csf.colorado.edu/mail/pen-l/2002II/), you will find no such reference to me or anybody for that matter calling him a Tawat. Isn't there some way that PEN-L can be protected from these disruptions? Louis Proyect Marxism mailing list: http://www.marxmail.org
Question about the profit rate
Michael, I still could not attempt to answer your question, because (1) it depends on how you define the general rate of profit. For example, do you include taxes in the mass of surplus-value, if so, which taxes. (2) It is not clear what exactly you mean by endogenous/exogenous. Very few people to my knowledge tried to precisely define what this means in Marx's economic theory, as distinct from neo-classical economics. For example, Ernest Mandel did, but he is not necessarily correct in this, bearing in mind he bases himself closely on Marx's unfinished works. For what it is worth, briefly summarising, I think there has been a regime change cause both by internal factors (for example, change in technology) and so-called extra-economic factors (changes in social arrangements, institutional arrangements). These create an environment in which the rate and mass of surplus-value can rise significantly, and some constant capital costs reduced. But to identify and weigh all the factors involved would be a huge empirical research project that is beyond my capacity. I have trouble enough with one country. The Dutch Marxist scholar Robert Went is publishing a book on the subject in August, called The enigma of globalisation (Routledge) but he does not do the empirical analysis, he just sketches the frameworks for analysis. Very sweepingly, I would say it was discovered it the 1980s that the crisis problems of capitalism had been exaggerated and that if you looked more closely at the actual functioning of the system and social arrangements, there was a lot of slack in it, if you tighten up the slack, capitalism motors on. What was required was for the bourgeois classes to have some balls and focus better on the key thing, getting more productivity. Jurriaan
removal from list
Please remove me from the PEN-L list. Thank you.
Re: Barbara Epstein
Dear Michael Pugliese, My criticisms of Barbara Epstein were made on PSN, which stands for Progressive Sociologists Network. This is PEN-L, which stands for Progressive Economists Network. They are two different listservs. One concentrates on sociology, the other on economics. In order to post to PSN, you need send your email to [EMAIL PROTECTED] I hope this helps. Yours truly, Louis Proyect At 07:58 AM 5/10/2002 -0700, you wrote: Lou, you are such a **!!! Barbara Epstein at UCSC, if you'd read her book from U.C. Press on cultural and political radicalism or her pieces in Socialist Review started her activist carrer in the du Bois Clubs, if my memory serves, in the early 60's, moving on to SDS, like Steve Max. That you have such raging hostility to academic leftists makes me think that you haver deep seated anti-intellectual tendencies, however mant thousands of books you've read on Te Polical Economy opf Andulusian Textile Weavers From 1850- 1925. Michael Pugliese, Twatskyist Louis Proyect Marxism mailing list: http://www.marxmail.org
Colin Leys
http://www.versobooks.com/ http://www.versobooks.com/books/klm/leys_c_market_politics.shtml With the globalisation of the capitalist economy the economic role of national governments is now largely confined to controlling inflation and facilitating home-grown market performance. This represents a fundamental shift in the relationship between politics and economics; it has been particularly marked in Britain, but is relevant to many other contexts. Market-Driven Politics is a multi-level study, moving between an analysis of global economic forces through national politics to the changes occurring week by week in two fields of public life that are both fundamentally important and familiar to everyonetelevision broadcasting and health care. Public services like these play an important role, because they both affect the legitimacy of the government and are targets for global capital. This book provides an original analysis of the key processes of commodification of public services, the conversion of public-service workforces into employees motivated to generate profit, and the role of the state in absorbing risk. Understanding the dynamics of each of these trends becomes critical not just for the analysis of market- driven politics but also for the longer-term defence of democracy and the collective values on which it depends. Makes immediate sense to anybody marginally to the left of Ghengis Khan, Mrs Thatcher or Newt Gingerich. John Lonsdale, Trinity College, Cambridge, on The Rise and Fall of Development Theory Colin Leys is Emeritus Professor of Political Studies at Queens University, Canada. His previous books include Politics in Britain, The Rise and Fall of Development Theory and, with Leo Panitch, The End of Parliamentary Socialism. Publication Dec. 2001 256 pages Cloth 1 85984 627 0 £16 / US$25 / CAN$36
Growing exports and falling incomes
http://www.hinduonnet.com/fline/fl1910/19101210.htm Growing exports, falling incomes Jayati Ghosh The latest Trade and Development Report from UNCTAD discusses why increasing manufacturing exports may not be good enough for developing countries' income growth. DIVERSIFICATION of production structures and exports has traditionally been seen as the key to fast development. Indeed, this has been taken so much for granted that for much of the past half century the debate among economists has been not so much about the desirability of this goal, but of the policies required to achieve it. Marketist neoliberal economists have argued that the best way is through liberalisation, deregulation and greater integration of domestic markets with world markets, while structuralist economists have emphasised the need for domestic structural change assisted by trade restrictions that promote industrialisation. In either case, the need to enter new forms of production, to diversify away from traditional exports, and ideally to enter high-value manufacturing production, has been taken for granted. But some new research (discussed in the latest Trade and Development Report (TDR) produced by the United Nations Conference on Trade and Development (UNCTAD)) suggests that even this may not be as unproblematic as it appears, and that product diversification in itself ensures neither more dynamic exports nor even higher incomes from such activities. On the face of it, developing countries as a group have achieved an impressive degree of production diversification over the past two decades, and this has also been reflected in export performance. From the early 1980s, merchandise exports from developing countries have been growing much faster (at 11.3 per cent per annum) than the world average of 8.4 per cent. More significantly, there has been a big shift in developing country exports away from primary commodities (whose share has fallen from 51 per cent in 1980 to 19 per cent in 1998) and towards manufactured goods, which now account for more than 80 per cent of their exports. What seems most promising is that the largest increase has been in the exports of manufactures with high skill and technology intensity, whose share jumped from 12 per cent of total developing country exports in 1980 to 31 per cent in 1998. Despite all these apparently positive signs, however, there is no evidence of improved income shares for developing country exporters. In fact, the Trade and Development Report 2002 argues that while the share of developing countries in world manufacturing exports, including those of rapidly growing high-tech products, has been expanding rapidly, the income earned from such activities does not appear to share in this dynamism. This becomes apparent from a comparison of shares in exports and value-added in world manufacturing. While developing countries as a group more than doubled their share of world manufacturing exports from 10.6 per cent in 1980 to 26.5 per cent in 1998, their share of manufacturing value-added increased by less than half, from 16.6 per cent to 23.8 per cent. By contrast, developed countries experienced a substantial decline in the share of world manufacturing exports, from 82.3 per cent to 70.9 per cent. But at the same time their share of world manufacturing value-added actually increased, from 64.5 per cent to 73.3 per cent. This means that developed countries moved up the value chain much faster, and that developing country exporters have continued to face problems in translating export volume growth into income growth. The problem is compounded by the fact that developing countries remain net importers of manufactured goods, indeed they have become more so. Imports of manufactured goods have continuously outpaced exports of such goods for developing countries, unlike developed countries. Meanwhile, manufacturing exports have consistently exceeded the value of manufacturing value-added, once again the opposite of developed countries. HOW can we square this with the evidence on product diversification and entry into dynamic exporting sectors that was mentioned above? After all, developing countries have been increasingly active traders in what are seen as the most dynamic sectors of the world economy: computers and office equipment; telecommunications, audio and video equipment; and semiconductors. But the point is that international production and trade in these sectors exhibit a relatively new pattern, whereby there is a vertical disintegration of production across locations. That is, different parts of a production process are dispersed across different geographical locations, and goods travel across several such locations over the entire process before reaching final consumers. This is also true of the other major dynamic export sector: textiles and clothing. In such sectors, the total value of recorded trade far exceeds the value-added. But by and large most developing countries
Re: Re: Re: Problems of the Left in North America
You called me a Twat. I mistyped, you !@#$%^*()_+ Michael Pugliese see the final part of the below. You are a twat. Louis Proyect Marxism mailing list: http:/ / www.marxmail.org 5/10/02 8:03:25 AM, Louis Proyect [EMAIL PROTECTED] wrote: Display all headers From: Michael Pugliese [EMAIL PROTECTED] To: [EMAIL PROTECTED] Date: Thu, 09 May 2002 21:58:42 -0700 Subject: Lou Calls Me a Twat The juvenile, bullying windbag is really in need of yrs. of psychoanalysis from Joel Kovel. Michael Date: Thu, 09 May 2002 15:48:36 -0400 From: Louis Proyect [EMAIL PROTECTED] Subject: RE: [PEN-L:25828] Re: Re: on the , axis of EEEevil (Richard Burton in Exorcist II) To: michael pugliese [EMAIL PROTECTED] Apologies for my recent extreme obnoxiousness, first to all. Even, Lou, who I have learned more than a few things over the yrs. But, that said, what is the Howrad stern of the internet Left doing talking about manners? The king of scatology on alt.politics.socialism.trotsky newsgroup. My position on Cuban socialism, briefly. As a left Shactmanite I'd call it bureucrtic collectivism, as an oerthodox trot I'd say it's a deformed workers state in need of political revolutiuon from below which would strengthen the political base of the regime against the presures of the world market and the USG. Opposed to the embargo, in favor of a careful perestroika style opening of the the system without demogogic attacks on the internal opposition as purely the creation of the CIA and CANF. If Lou has ever seen the documentary by Nestor Alemendros on Cuba that interviews many exiled Cuban Communists he would have a more nuanced, less defensive p.o.v. that might generate more respect for his p.o.v. --- Original Message --- You are a twat. Louis Proyect Marxism mailing list: http:/ / www.marxmail.org 5/10/02 8:03:25 AM, Louis Proyect [EMAIL PROTECTED] wrote: At 07:51 AM 5/10/2002 -0700, Michael Pugliese wrote: Lou called me a Tawat on pen-l, yesterday. Whatta loon. Michael Pugliese, Twatskyist I don't understand how Michael Pugliese has become so confused. He is responding to an exchange I had on PSN, not PEN-L, number one. Number two, if you check the PEN-L archives (http://csf.colorado.edu/mail/pen-l/2002II/), you will find no such reference to me or anybody for that matter calling him a Tawat. Isn't there some way that PEN-L can be protected from these disruptions? Louis Proyect Marxism mailing list: http://www.marxmail.org http://groups.google.com/groups?q=Proyect%27s+Morninghl=enie=utf-8oe=utf-8 selm=appar-131019991918198657%40pm3-9-s33.traverse.netrnum=3 Groups Advanced Groups SearchGroups Help Groups search result 3 for Proyect's Morning From: uchural ([EMAIL PROTECTED]) Search Result 3 Subject: f loves Proyect Newsgroups: alt.politics.socialism.trotsky View: Complete Thread (2 articles) | Original Format Date: 1999/10/13 Some people might regard being compared with Proyect as high praise. Jim F. For those of you who have not had a chance to read them, I submit Proyect's Morning and The Resume of Louis N. Proyect: PROYECT'S MORNING Subject: Proyect's Morning From: uchural Newsgroups: alt.politics.socialism.trotsky Date: Wed, Jul 7, 1999 11:36 AM Message-ID: Not even noon, and Columbia University's computers have churned out the following for the world to read: The Morally Filthy Louis N. Proyect Has a Busy Morning _ You miserable dirty little cunt the same fucking rot You miserable little mother-fucker Get cancer, you little prick You have a lot of fucking nerve quoting Rosa Luxemburg People like yourself who champion Ayn Rand, the Cato Institute, and Wall Street Journal editorials are no different than the social democratic scum who murdered Luxemburg and Liebknecht libertarian scum like yourself are good for nothing except defending corporate profits Therefore, you should get your slimy little ass off this newsgroup and someplace where you belong Go there, you little slug, and take your co-religionist Airdale with you No, what would help is if you took a pistol and stuck the barrel in your mouth and opened fire your excesses are driving many people into fantasizing about plunging knitting needles into your eyeballs You are nothing but a scumbag troll like Watson, aren't you Are you masochistically inclined Do you have the same sickness as Watson who probably masturbates after getting flamed THE RESUME OF LOUIS N. PROYECT You should seek out professional help Oh, big fucking deal obvious that Mor Cota/Big Mac/Justin Flude would piss on Hunter do you have a problem with reading comprehension you are so fucking out of it some sort of problem with your mental capacities Are you an alcoholic under the influence of alcohol an uneducated rustic who can must suffer from blackouts dumber than the cat he owns an illiterate clown incapable of understanding do you put on clown makeup
Growing exports and falling incomes
Thanks, Ian. That is the kind of economic information that is pertinent to read.
Rebel without a clue
RENO, Nev. - The 21-year-old college art student accused of putting pipe bombs in mailboxes in five states told authorities he was trying to make a smiley face pattern on the map, a sheriff said Thursday. The first 16 bombs were arranged in two circles, one in Illinois and Iowa and the other in Nebraska. On a map, the circles could resemble the eyes of the popular 1970s happiness symbol. The final two bombs, found in Colorado and Texas, form an arc that could be the beginning of a smile. There was a comment made to one of my officers about his hope to make a smiley face when he was all finished, Pershing County Sheriff Ron Skinner said. Tom Walker 604 255 4812
RE: Rebel without a clue
is anyone able to summarize this character's alleged motive for his alleged bombings? (BTW, his roommate in college is named Jim Devine -- just like the bent dermatologist here in L.A.) Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine -Original Message- From: Tom Walker [mailto:[EMAIL PROTECTED]] Sent: Friday, May 10, 2002 9:35 AM To: [EMAIL PROTECTED] Subject: [PEN-L:25849] Rebel without a clue RENO, Nev. - The 21-year-old college art student accused of putting pipe bombs in mailboxes in five states told authorities he was trying to make a smiley face pattern on the map, a sheriff said Thursday. The first 16 bombs were arranged in two circles, one in Illinois and Iowa and the other in Nebraska. On a map, the circles could resemble the eyes of the popular 1970s happiness symbol. The final two bombs, found in Colorado and Texas, form an arc that could be the beginning of a smile. There was a comment made to one of my officers about his hope to make a smiley face when he was all finished, Pershing County Sheriff Ron Skinner said. Tom Walker 604 255 4812
ECONOMIST on U.S. GDP growth
Economist.com/America's economy May 4, 2002 FINANCE ECONOMICS A hard act to follow ON THE face of it, America's economy is roaring back. In real terms, its GDP grew at an annual rate of 5.8% in the first quarter. It leaves the rest of the world far behind: Britain's economy grew by just 0.3% in the same quarter, while the pace for Japan and the euro area is reckoned to have been no more than 1-2%. America's numbers look almost too good to be true--which may be why they were followed by falls in share prices and the dollar. Dig beneath the headline figure for growth and America's performance looks less miraculous. Almost four-fifths of the bounce in GDP came from firms reducing their inventories at a slower pace than in the previous quarter, and from a big jump in government spending. Defence spending grew at an annual rate of 20%. At the same time, residential construction, up an annualised 16%, was given a temporary boost by one of the mildest winters on record. Total final sales (which does not count changes in inventories) rose at an annual rate of only 2.6%, If one also strips out the jump in defence spending and, to take a rough guess, half of an unsustainable boom in construction, then growth falls to a mere 1.5%. Consumer spending rose by a reasonable 3.5%, but fixed investment by firms fell, for the fifth consecutive quarter. Alan Greenspan, the chairman of the Federal Reserve, has said repeatedly that a pick-up in investment is critical for a sustained economic recovery. But that, in turn, requires stronger profits. The new GDP numbers not only showed that growth is less robust than it seems, but that inflation is unusually weak. The GDP deflator--the amount by which nominal GDP is adjusted to take inflation into account--rose at an annual rate of only 0.8% in the first quarter, to give a year-on-year rise of 1.3%. It will probably fall further: in the past, the GDP deflator has fallen on average by more than one percentage point in the first year of a recovery, as productivity has rebounded faster than costs. An unusually low rate of inflation, combined with uncertainties about the strength of the recovery, has two big implications. First, the Federal Reserve is unlikely to raise interest rates in the near future. It will not want to run the risk of allowing inflation to get too close to zero, where options for conducting monetary policy rapidly dwindle. Second, the lack of pricing power is likely to result in a weaker rebound in profits than in previous recoveries, dampening stockmarket hopes. The SP 500 index remains one-third below its 2000 peak. Uncertainty about profits is not the only factor that weighs on share prices. Lombard Street Research points to something else that may hold down equities: tighter liquidity. America's broad-money supply, measured by M3, has slowed sharply in the past three months. Usually, when the money supply grows faster than GDP, excess liquidity spills into financial markets--as happened late last year. When money-growth falls below GDP growth, liquidity tends to be drained out of markets, pushing down share prices. Were the stockmarket to slide further, strong consumer spending, the main driver of GDP growth in the first quarter, might come into question. Copyright © 2002 The Economist Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
The ECONOMIST on U.S. productivity growth.
[Interestingly, the ECONOMIST doesn't mention the role of the over 4% average annual increase in the nominal major-currencies trade-weighted value of the dollar -- or over 5% in real terms -- during the period 1996 to 2001. This is a key factor that would hurt profits despite rising productivity.] May 11, 2002 FINANCE ECONOMICS To these, the spoils NOT only has America's productivity wonder survived its first recession; it has positively thrived. Output per man-hour in the non-farm business sector rose at an annual rate of 8.6% in the first quarter of this year, its fastest growth in 19 years. Quarterly figures are volatile, yet the year-on-year growth in productivity was also impressive, at 4.2%. This bodes well for America's future economic growth--but not necessarily for company profits, or for share prices. Commentators cheered the latest evidence of rapid productivity gains, hoping that it might promise fatter profits ahead. That America's productivity continued to rise last year, in contrast to previous recessions, seems to confirm that an increase has taken place in trend productivity growth. Still, the latest numbers overstate the underlying trend. First, the growth in output, and hence productivity, was inflated in the first quarter by a big swing in inventories. Productivity often surges in the first year of a recovery after recession, as firms produce more without needing to hire extra workers. Productivity rose by 4-5% in the first year following both the 1981-82 and the 1990-91 recessions. Firms have actually continued to cut jobs this year, lifting the unemployment rate in April to an eight-year high of 6%. Today's best guess is that trend productivity growth is around 2-2.5%. That is less than the 3-4% claimed at the height of the new-economy bubble; but still well above the 1.4% average over the two decades to 1995. A second, more fundamental quibble is that, although profits will certainly rebound this year, as firms continue to trim their costs and revenues rise, in the longer term faster productivity growth does not automatically mean faster profits growth. A new study by Stephen King, chief economist at the HSBC bank, concludes that workers and consumers have received the lion's share of the productivity gains of therevolution in information technology (IT). Companies have received relatively little reward for their risk-taking. In the late 1990s it was widely assumed that faster productivity growth would mean higher profits (so justifying higher share prices). Over the previous half-century a strong positive relationship had indeed held between productivity and profits. In the 1990s that relationship broke down. Despite a surge in productivity, national-accounts profits (as opposed to profits reported by companies, a less accurate measure) fell between 1997 and 2000, even before the economy dipped into recession (see chart). At the end of 2000 the profits of America's non-financial firms were no higher in real terms than in 1994, implying a big fall in their share of GDP. Mr King argues that workers (who are, naturally, also consumers) were virtually the sole beneficiaries of the new economy, in the shape of faster real wage growth. This was partly thanks to a fall in the prices of IT goods that they bought. More important, the same IT that spurred productivity also increased competition more widely across industries, from airlines and banking to insurance and cars, squeezing prices and profits. Information technologyreduces barriers to entry, and makes it easier for consumers to compare prices. What is more, globalisation, itself spurred by information technology, has further trimmed the pricing power of firms. HSBC finds that, in most economies, the correlation between domestic inflation and domestic unit-labour costs has declined over the past 40 years; the correlation between domestic inflation and average OECD inflation has risen. In most countries in the 1990s domestic inflation was more closely correlated with OECD inflation than it was with domestic costs. The dismal performance of profits should not surprise. As the IMF's World Economic Outlook last October pointed out, productivity gains from previous technological revolutions, from railways and textiles to electricity and the car, have gone largely to consumers. Each time, a decline in the prices of goods and services has given a big boost to real incomes. Consumers gained from cheaper travel or clothes, but profits disappointed. The difference this time is that new technology has increased competition and squeezed profit margins across the whole economy. None of this lessens the overall benefit of faster productivity growth. But it does lead to some interesting conclusions: * The profit expectations built into share prices are unrealistic. Even if productivity growth remains robust, long-term profits growth is likely to be weaker than expected, making shares overvalued. * A lower return on equities means
Conflict in Nepal
[comments?] Nepal needs reform, not more guns The Maoist rebellion is a product of gross inequality and misrule Isabel Hilton Friday May 10, 2002 The Guardian [U.K.] When President George Bush promised more military aid to Nepal's visiting prime minister this week, a White House spokesman justified the extra funds: Nepal is fighting a Maoist rebellion, and Nepal is an example, again, of a democracy, and the United States is committed to helping Nepal. As though to underline the Nepalese security forces' need for more weaponry, the Maoists launched an overnight attack on a security post in the west of the country - an area in which the government has been claiming impressive casualties recently. There is no doubt that the Maoist insurgency is serious. It began in 1996 when Dr Baburam Bhattrai, a leftwing academic and political activist, went underground to begin the armed struggle, only six years after a largely peaceful mass movement had forced the late King Birendra to return democracy to Nepal. The restoration of democracy had been a moment of hope for one of the world's poorest countries - a country in which education had been deliberately withheld by the oligarchy on the grounds that it gave people dangerous political ideas. It would be good to report that the advent of democracy substantially improved the lot of the average voter, but it did not. After a decade of looting and corruption by the elected politicians, even the unpopular royal family was almost forgiven. When most of them were murdered by the crown prince last June in an evening of unexplained carnage, the popular grief was real. The massacre had two consequences that bear on the present crisis: the murdered king, Birendra, had refused to deploy the army against the Maoists. He seems to have shared a widespread apprehension that the army was likely to indulge in indiscriminate killings that would make the situation worse. The king preferred to rely on the less well-equipped police and to keep the door open for negotiations. Birendra's brother, Gyanendra, who succeeded him on the throne, had no such reservations. Shortly after the mourning period ended and the Maoists launched an offensive, Gyanendra sent in the troops. The result has been a staggering escalation in violence. Half of the 4,000 casualties in the six-year insurgency have occurred in the last six months and the war is now close enough to the capital for gunfire to be audible in the evenings. Meanwhile, tourism has collapsed and Nepal's poverty is worse than ever. As far as its democracy goes, such civil rights as there were have been suspended, the newspapers are censored, hundreds of people have been arrested and held without trial. The Maoists hold about a quarter of the country, and in these areas things are little better: teachers have been targeted, children pressganged as soldiers, suspected government informers summarily executed. Last month, the Maoists offered to resume negotiations with the prime minister, Sher Bahadur Deuba. Mr Deuba was among those who used to favour negotiations: in 1999, he chaired the so-called Consensus Seeking Committee, a government-sanctioned group that tried to reach a negotiated agreement with the Maoists. That committee, which was disbanded after a few months, concluded that the insurgency was a political problem that had its roots in Nepal's profoundly unequal society. Their final report urged the government to negotiate. Mr Deuba has changed his mind. He turned down last month's offer, preferring, apparently, to rely on the promised $20m in US military aid. But unless Nepal addresses the profound defects of its democracy, a military solution is unlikely to bring any lasting peace. The rebels are stronger than the government acknowledges, funded by a compulsory tax that they collect from businesses and NGOs, not only in the rural areas but also in Kathmandu, under the noses of the security forces. Nepalis are shocked by the violence of the uprising and appalled by the idea of a Maoist government that has no external support beyond the equally desperate Naxalite rebels in north-eastern India. ButNepal's staggering economic inequalities, the caste-based discrimination, the political corruption and the arbitrary abuse of human rights by the security services undermine the government's claim to the loyalty of the people. Even before the recent escalation of the conflict, Amnesty International challenged the security services' version of events, pointing out that the Maoists that they claimed to have killed were often innocent civilians and the alleged subversives whom they arrested frequently disappeared with no semblance of due process. It's easier, in the short term, to label Nepal's insurgents as terrorists and to send more guns than to address political reform in a country that has been paralysed for a decade by the shortsighted squabbling of its political class. Whether it will work is another question. [EMAIL PROTECTED]
Important Public Health Issue
The Onion | 4/17/2002 U.S. Children Getting Majority Of Antibiotics From McDonald's Meat WASHINGTON, DC-According to a Department of Health and Human Services report released Monday, McDonald's meat from antibiotics-injected livestock is now the primary source of antibiotics for U.S. children, particularly for uninsured youths from low-income households. Unfortunately, some children still fall through the cracks in our health-care system, but luckily, McDonald's is there to lend a helping hand, Secretary of Health and Human Services Tommy Thompson said at a press conference announcing the findings. So even if a child's family has no health insurance and can't afford medicine, virtually anyone can afford a delicious 99-cent Big Mac with pickles, cheese, and a heapin' helpin' of [the antibiotic] quinupristin-dalfopristin. In HHS tests, 82 percent of children who had not been properly inoculated were still found to have significant levels of antibiotics in their bloodstreams. The antibiotics, the tests concluded, were the result of sustained intake of McDonald's meat. Disadvantaged children tend to eat at McDonald's a lot, which is a good thing, Thompson said. If you think about it, where else are these kids going to get their fluoroquinolone? Large-scale meat producers, Thompson noted, routinely add antibiotics to the feed of healthy animals to prevent cross-infection in the crowded, cramped quarters where livestock are typically raised. In the U.S., the average beef steer receives eight times more antibiotics than its human counterpart. When your daughter gets strep throat, head straight over to McDonald's and prescribe her a delicious Quarter Pounder or nine-piece Chicken McNuggets, Thompson said. She'll not only receive the amoxycillin she needs to get better, but also a whole array of growth hormones proven to speed a child's physical development. And if your child prefers Burger King or Wendy's, he continued, that's fine, too. Any of the big fast-food chains can get them healthy. While all Americans benefit from the 25 million pounds of antibiotics fed to chickens, pigs, and cows each year, children stand to gain the most, U.S. Sen. Richard Lugar (R-IN) said. Children weigh less than adults, so when they eat a hamburger, they get a proportionally more potent dose of antibiotics, said Lugar, who is among the Senate's strongest proponents of fast-food-based health care. These antibiotics are vital in the treatment of such common childhood ailments as sore throat, ear infection, and hoof rot. According to Lugar, waiting in a crowded doctor's office may soon be a thing of the past. Every day, food scientists are discovering new antibiotics, growth hormones, and other chemically engineered substances to inject into the nation's beef supply, Lugar said. And with Americans working longer and longer hours just to make ends meet, people can't afford to waste time sitting around some waiting room until their name is called. Unlike a doctor, our fast-food providers can deliver a full spectrum of antibiotics in minutes-hot, fresh, and with a smile. In conjunction with the Department of Health and Human Services, Burger King will soon release a brochure, Happy And Healthy The Burger King Way, which outlines a 14-day plan for the treatment of bacterial infections. In the leaflet, a cartoon cow in a medical coat reminds parents to give their infected children two daily doses of antibiotic-treated meat for 14 days. If the condition does not improve after 10 days, the parent or guardian of the ailing child is instructed to contact a store manager. If your child has a sinus infection, he or she can drop by before and after school for a Double Cheeseburger 50cc Meal or a delicious Chicken Tetracycline, Burger King spokeswoman Linda Jacobs said. As we're fond of saying here at Burger King, 'This won't hurt a bite!' Though representatives say they're pleased with the praise it has received, the fast-food industry does not intend to rest on its laurels. Repeated use of antibiotics will result in increased resistance to antibiotics in new strains of bacteria, said Carl Pickney, lab researcher for TriCon Global, the fast-food conglomerate that owns KFC, Taco Bell, and Pizza Hut. That's why we need to encourage our meat suppliers to continually raise the levels of antibiotics in their meat, developing newer, stronger antibiotics to replace those that no longer work. We're making good progress, but we've still got a whole lot of meat to modify. © Copyright 2002 by Onion, Inc. All rights reserved. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: Growing exports and falling incomes
Jurriaan, Happy to help out; it's part of what the list should be for Ian - Original Message - From: Jurriaan Bendien [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Friday, May 10, 2002 9:20 AM Subject: [PEN-L:25848] Growing exports and falling incomes Thanks, Ian. That is the kind of economic information that is pertinent to read.
Re: Re: Re: on the , axisofEEEEEEEeeeeeeeeevil.... (Richard Burton in Exorcist II)
Michael Pugliese wrote: methinks you meant El Jefe Maximo Caudillo Fidel's instead of just listing a bunch of books that you swear by, Louis Proyect lists are near-perfect e-list semaphore speak... all lists are necessarily incomplete, however, those critical of fidel are woefully so if they fail to include roy terrell's great piece 'but for a hanging curve ball' in 26 july 1960 issue of sports illustrated...ny yankee manager casey stengel states that yankees would have signed fidel following 1954 tryout in ft. lauderdale despite fact that he threw hanging curve ball and then let him languish in minor leagues forever if they could have known that he'd become revolutionary leader...yogi berra, who caught fidel at his tryout, suggests that he could have helped fidel overcome problem of hanging curve ball in time...imagine, early 60s yanks could have had whitey ford (one of mickey mantle's drinking buddies), jim bouton (bit of revolutionary in his own right, see book entitled 'ball four') and al downing (great african-american pitcher for several years until he developed arm trouble), and fidel (what better team for him to have played for than yankees)...maybe if fidel ha! d been on mound in ninth inning of seventh game of 1960 world (gotta love imperial bombast of u.s. major league championship name) series, he'd have struck bill mazeroski out rather than giving up home run to win title... in sum, blame ny yankees for u.s. cuba 'problem'...michael hoover
RE: Re: Re: Re: on the , axis ofEEEEEEEeeeeeeeeevil.... (Richard Burton in Exorcist II)
in sum, blame ny yankees for u.s. cuba 'problem'...michael hoover who do we blame the Yankees on? go Cubs! Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
RE: Rebel without a clue
Jim Devine asked: is anyone able to summarize this character's alleged motive for his alleged bombings? Drive ya nuts trying to make sense of it. It did the kid. It would seem to be a given that the fellow is unbalanced. The question is _how_ unbalanced compared to the norm. I read his published note and it reminded me all too much of run of the mill sophmoric essays. The note referred centrally to conformity, which made me think of Paul Goodman's Growing Up Absurd and, by extension of Robert Lindner's psychoanalytical narratives. BTW, a copy of Goodman's book was found in Ted Kuczynski's cabin in Montana, or where ever it was. (BTW, his roommate in college is named Jim Devine -- just like the bent dermatologist here in L.A.) There's also an official with Unison in Glasgow named Jim Devine. Tom Walker 604 255 4812
hanging curve ball
in sum, blame ny yankees for u.s. cuba 'problem'...michael hoover That should be ny yanquis, no? Tom Walker 604 255 4812
Re: RE: Rebel without a clue
Jim Devine asked: is anyone able to summarize this character's alleged motive for his alleged bombings? Drive ya nuts trying to make sense of it. It did the kid. Tom Walker 604 255 4812 I have tried to stick to the agenda of political economy, broadly speaking, since my return to PEN-L. This question, however, does prompt me to suggest a look at my article Movies and Madness which showed up on Marxmail recently, plus the addendum on the movie Snake Pit. http://www.columbia.edu/~lnp3/mydocs/culture/madness.htm http://www.columbia.edu/~lnp3/mydocs/culture/snakepit.htm It was inspired by discussion around A Beautiful Mind which received the Best Movie award right around the time I was reading Madness on the Couch by Edward Dolnick. This is a disturbing account of how Freudian psychoanalysis was used to treat schizophrenia, autism and obsessive-compulsive disorder prior to the discovery that such mental illnesses were organic in nature and reacted best to medication rather than the talking cure. I think we have to put to rest the notion that severe mental illness is caused by stress, family dysfunction, etc. Autism, schizophrenia and OCD are all as much an expression of a systemic organic failure as are Parkinsons, epilepsy or Alzheimers. You might as well use talk therapy on somebody with Alzheimers as with schizophrenia. Louis Proyect Marxism mailing list: http://www.marxmail.org
Re: Re: Re: Re: on the , axis ofEEEEEEEeeeeeeeeevil.... (Richard Burton in Exorcist II)
The Yankees were always the team of big money, big capital. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
on the , axis ofEEEEEEEeeeeeeeeevil.... (
This just in: Whire House Spokeperson Ari Fleischer has announced that the Bush administration has issued an amended version of its Axis of Evil, which now includes not only the original list (Iraq, North Korea, Iran), and the more recent additions of Cuba and Libya, but also Berkeley, Calif., Madison, Wisc., Ann Arbor, Mich., and Cambridge, Mass. They're not really part of America anyway, Fliescher explained, and they're filled with communists, terrorists, and students from Arab countries. Asked why the White House ommitted New Haven, Conn., from the list, Fleischer explained that adding the location of Yale University to the target list would harm annual giving. jks _ Send and receive Hotmail on your mobile device: http://mobile.msn.com
pop quiz time
[who said it?] ...confusion forces practical economists to explain the determination of interest by opportunity cost reasoning - a particular rate of interest being set by the 'pure' rate yielded by the riskless government bonds, with inflation, risk, and administrative cost premia added. But there is no watertight justification for the perpetual existence of this 'pure' rate. Interest exists because it is there; it is still held up by its own theoretical bootstraps. The failure of mainstream economics to explain adequately the existence of interest betrays the fact that it is merely a theoretical concept with no true basis in reality. It is a figment of our collective imaginations.
Re: pop quiz time
It sounds like Keynes, except he would have criticized (neo)classical economics rather than mainstream economists; the latter phrasing sounds more recent. For what it's worth, mainstream theory suggests another possible explanation for positive interest rates besides time (and possibly risk) preference, although it is not one that is typically emphasized: interest represents a scarcity rent for capital. This latter explanation is both plausible and consistent with the now much-reinforced empirical finding of interest-inelastic savings. Gil [who said it?] ...confusion forces practical economists to explain the determination of interest by opportunity cost reasoning - a particular rate of interest being set by the 'pure' rate yielded by the riskless government bonds, with inflation, risk, and administrative cost premia added. But there is no watertight justification for the perpetual existence of this 'pure' rate. Interest exists because it is there; it is still held up by its own theoretical bootstraps. The failure of mainstream economics to explain adequately the existence of interest betrays the fact that it is merely a theoretical concept with no true basis in reality. It is a figment of our collective imaginations.
Re: pop quiz time
I think I said that one day after drinking eight cups of tea. Gene Ian Murray wrote: [who said it?] ...confusion forces practical economists to explain the determination of interest by opportunity cost reasoning - a particular rate of interest being set by the 'pure' rate yielded by the riskless government bonds, with inflation, risk, and administrative cost premia added. But there is no watertight justification for the perpetual existence of this 'pure' rate. Interest exists because it is there; it is still held up by its own theoretical bootstraps. The failure of mainstream economics to explain adequately the existence of interest betrays the fact that it is merely a theoretical concept with no true basis in reality. It is a figment of our collective imaginations.
Re: Re: Re: Re: Re: on the , axis ofEEEEEEEeeeeeeeeevil.... (Richard Burton in Exorcist II)
When Joe Dimaggio died a couple of years ago I wrote down an appreciation of him which talked of the Yankees the way Michael sees it. I was a Brooklyn Dodger fan. Here are a few sentences: there was an element of class in the choice of the Dodgers vs. the Yankees. The Bums were working class, the Yankees the ruling class. New York was the Empire State, and as an Irish kid, a very aware Irish kid, I hated empires, coming from a colonized people. I grew up hating Churchill, (and with lots of good reasons, as it turns out. I hope Pinochet gets extradicted.) .. I hated DiMaggio. He embodied the class hatred, my Irish hatred of empires, and, just simple fierce childhood loyalty to your team. But he was the best ballplayer of all. Gene Michael Perelman wrote: The Yankees were always the team of big money, big capital. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
MaxSpeak, You Listen
Open for business. * Max B. Sawicky http://www.MaxSpeak.Org BLOG: http://www.MaxSpeak.Org/gm/index.htm
RE: pop quiz time
sounds like Joan Robinson. [who said it?] ...confusion forces practical economists to explain the determination of interest by opportunity cost reasoning - a particular rate of interest being set by the 'pure' rate yielded by the riskless government bonds, with inflation, risk, and administrative cost premia added. But there is no watertight justification for the perpetual existence of this 'pure' rate. Interest exists because it is there; it is still held up by its own theoretical bootstraps. The failure of mainstream economics to explain adequately the existence of interest betrays the fact that it is merely a theoretical concept with no true basis in reality. It is a figment of our collective imaginations.
P.S.
Sorry, that previous answer to Ian's pop quiz was too truncated. I should have said that mainstream theory suggests another possible explanation for positive interest rates that, like explanations based on time or risk preferences, is consistent with the operation of competitive and complete markets. Of course nothing ensures that the relevant markets in which interest rates arise have these nice properties. Leaving that restriction aside, mainstream theory could adduce explanations based on market power (e.g., collusive rate-setting) or contractual imperfections (e.g., efficiency interest rates, as in the Stiglitz/Weiss model of credit rationing). Gil It sounds like Keynes, except he would have criticized (neo)classical economics rather than mainstream economists; the latter phrasing sounds more recent. For what it's worth, mainstream theory suggests another possible explanation for positive interest rates besides time (and possibly risk) preference, although it is not one that is typically emphasized: interest represents a scarcity rent for capital. This latter explanation is both plausible and consistent with the now much-reinforced empirical finding of interest-inelastic savings. Gil [who said it?] ...confusion forces practical economists to explain the determination of interest by opportunity cost reasoning - a particular rate of interest being set by the 'pure' rate yielded by the riskless government bonds, with inflation, risk, and administrative cost premia added. But there is no watertight justification for the perpetual existence of this 'pure' rate. Interest exists because it is there; it is still held up by its own theoretical bootstraps. The failure of mainstream economics to explain adequately the existence of interest betrays the fact that it is merely a theoretical concept with no true basis in reality. It is a figment of our collective imaginations.
Re: MaxSpeak, You Listen
Looks good Max. Congratulations. Best, Sabri
RE: pop quiz time
Hicks? -Original Message- From: Ian Murray [mailto:[EMAIL PROTECTED]] Sent: Friday, May 10, 2002 4:00 PM To: [EMAIL PROTECTED] Subject: [PEN-L:25863] pop quiz time [who said it?] ...confusion forces practical economists to explain the determination of interest by opportunity cost reasoning - a particular rate of interest being set by the 'pure' rate yielded by the riskless government bonds, with inflation, risk, and administrative cost premia added. But there is no watertight justification for the perpetual existence of this 'pure' rate. Interest exists because it is there; it is still held up by its own theoretical bootstraps. The failure of mainstream economics to explain adequately the existence of interest betrays the fact that it is merely a theoretical concept with no true basis in reality. It is a figment of our collective imaginations.
Re: RE: pop quiz time
Envelope says it's Paul Mills and John R Presley from Islamic Finance: Theory and Practice; St Martins Press, 1999, p. 14. Mills is/was at HM Treasury UK Presley is/was Econ. Prof. Univ. of Loughborough and Chief Economic Adviser The Saudi British Bank. As I noted after 9-11 the issue of usury deeply divides the elites and the 'middle' and working classes in the ME, esp. in SA since the inroads made by capitalist financial practices post WWII. The critique seems readily appropriable and capable of deepening in the service of an elaboration of insitutional alternatives to usury Ian
Re: The ECONOMIST on U.S. productivity growth.
On 2002.05.11 02:08 AM, "Devine, James" [EMAIL PROTECTED] wrote: [Interestingly, the ECONOMIST doesn't mention the role of the over 4% average annual increase in the nominal major-currencies trade-weighted value of the dollar -- or over 5% in real terms -- during the period 1996 to 2001. This is a key factor that would hurt profits despite rising productivity.] May 11, 2002 FINANCE ECONOMICS To these, the spoils NOT only has America's productivity wonder survived its first recession; it has positively thrived. Output per man-hour in the non-farm business sector rose at an annual rate of 8.6% in the first quarter of this year, its fastest growth in 19 years. Quarterly figures are volatile, yet the year-on-year growth in productivity was also impressive, at 4.2%. This bodes well for America's future economic growth--but not necessarily for company profits, or for share prices. Commentators cheered the latest evidence of rapid productivity gains, hoping that it might promise fatter profits ahead. That America's productivity continued to rise last year, in contrast to previous recessions, seems to confirm that an increase has taken place in trend productivity growth. Still, the latest numbers overstate the underlying trend. First, the growth in output, and hence productivity, was inflated in the first quarter by a big swing in inventories. Productivity often surges in the first year of a recovery after recession, as firms produce more without needing to hire extra workers. Productivity rose by 4-5% in the first year following both the 1981-82 and the 1990-91 recessions. Firms have actually continued to cut jobs this year, lifting the unemployment rate in April to an eight-year high of 6%. Today's best guess is that trend productivity growth is around 2-2.5%. That is less than the 3-4% claimed at the height of the new-economy bubble; but still well above the 1.4% average over the two decades to 1995. A second, more fundamental quibble is that, although profits will certainly rebound this year, as firms continue to trim their costs and revenues rise, in the longer term faster productivity growth does not automatically mean faster profits growth. A new study by Stephen King, chief economist at the HSBC bank, concludes that workers and consumers have received the lion's share of the productivity gains of therevolution in information technology (IT). Companies have received relatively little reward for their risk-taking. In the late 1990s it was widely assumed that faster productivity growth would mean higher profits (so justifying higher share prices). Over the previous half-century a strong positive relationship had indeed held between productivity and profits. In the 1990s that relationship broke down. Despite a surge in productivity, national-accounts profits (as opposed to profits reported by companies, a less accurate measure) fell between 1997 and 2000, even before the economy dipped into recession (see chart). At the end of 2000 the profits of America's non-financial firms were no higher in real terms than in 1994, implying a big fall in their share of GDP. Mr King argues that workers (who are, naturally, also consumers) were virtually the sole beneficiaries of the new economy, in the shape of faster real wage growth. This was partly thanks to a fall in the prices of IT goods that they bought. More important, the same IT that spurred productivity also increased competition more widely across industries, from airlines and banking to insurance and cars, squeezing prices and profits. Information technologyreduces barriers to entry, and makes it easier for consumers to compare prices. What is more, globalisation, itself spurred by information technology, has further trimmed the pricing power of firms. HSBC finds that, in most economies, the correlation between domestic inflation and domestic unit-labour costs has declined over the past 40 years; the correlation between domestic inflation and average OECD inflation has risen. In most countries in the 1990s domestic inflation was more closely correlated with OECD inflation than it was with domestic costs. The dismal performance of profits should not surprise. As the IMF's World Economic Outlook last October pointed out, productivity gains from previous technological revolutions, from railways and textiles to electricity and the car, have gone largely to consumers. Each time, a decline in the prices of goods and services has given a big boost to real incomes. Consumers gained from cheaper travel or clothes, but profits disappointed. The difference this time is that new technology has increased competition and squeezed profit margins across the whole economy. None of this lessens the overall benefit of faster productivity growth. But it does lead to some interesting conclusions: * The profit expectations built into share prices are unrealistic. Even if productivity
Re: RE: pop quiz time
Ian writes: Envelope says it's Paul Mills and John R Presley from Islamic Finance:Theory and Practice; St Martins Press, 1999, p. 14. Damn. I am wrong again. I thought it was Gene who said that and was planning to ask him whether that tea he drank was Long Island Ice Tea. Best, Sabri
Re: Re: RE: pop quiz time
Presley is also the world's expert on the economics of Dennis Robertson. Ian Murray wrote: Envelope says it's Paul Mills and John R Presley from Islamic Finance: Theory and Practice; St Martins Press, 1999, p. 14. Mills is/was at HM Treasury UK Presley is/was Econ. Prof. Univ. of Loughborough and Chief Economic Adviser The Saudi British Bank. As I noted after 9-11 the issue of usury deeply divides the elites and the 'middle' and working classes in the ME, esp. in SA since the inroads made by capitalist financial practices post WWII. The critique seems readily appropriable and capable of deepening in the service of an elaboration of insitutional alternatives to usury Ian -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
RE: P.S.
Gil writes: For what it's worth, mainstream theory suggests another possible explanation for positive interest rates besides time (and possibly risk) preference, although it is not one that is typically emphasized: interest represents a scarcity rent for capital. This latter explanation is both plausible and consistent with the now much-reinforced empirical finding of interest-inelastic savings. Gil This may be a much-reinforced empirical finding, it is not treated as such by the intermediate macro textbooks, at least not all of them. There's one I read -- was it Abel Bernanke? -- that (1) said that saving is interest-inelastic and then (2) consistently drew the supply of saving as upward-sloping, matching the downward slope of the demand for saving curve (i.e., investment demand). They did the same for the supply of labor[power] curve. BTW, the inelastic saving supply curve fits with Keynes' idea that interest and profits represent quasi-rents, i.e., temporary scarcity rents. Of course, that doesn't quite explain why savings never lose their scarcity value, so that the interest rate zooms to zero. He adds: I should have said that mainstream theory suggests another possible explanation for positive interest rates that, like explanations based on time or risk preferences, is consistent with the operation of competitive and complete markets. Of course nothing ensures that the relevant markets in which interest rates arise have these nice properties. Leaving that restriction aside, mainstream theory could adduce explanations based on market power (e.g., collusive rate-setting) or contractual imperfections (e.g., efficiency interest rates, as in the Stiglitz/Weiss model of credit rationing). I don't think that these latter explanations that orthodox theory could adduce help us with the question at hand. They are microeconomic explanations, that don't explain the general (macro) rate of interest, perhaps as measured by the yield on a minimum-risk corporate bond (or by an average of empirically-existing interest rates). Rather, they explain differences of interest rates between different lenders or markets. If I understand Marx's theory correctly, it explains the general interest rate within the framework of the supply of and demand for loanable funds, though of course it adds some twists by putting this market into a societal context (while not assuming full employment as the original theories of loanable funds did). Interest is one piece of the surplus-value, so that if workers aren't dominated in society and thus exploited, there is no production available with which to pay interest. The concept of interest arises because of the division of labor that has developed historically between industrial capital and money-lending (banking) capital. The industrial capitalists are willing to share some of the surplus-value that they've pumped from their workers with the banking capitalists because the latter provide the service of financial intermediation. (Marx saw that service as unproductive, but that's another issue, one I won't touch.) In this view, the long-run equilibrium interest rate -- a.k.a. the natural rate of interest of Wicksell _et al_ -- would depend on the relative institutional power of industrial capital and banking capital and would thus change between historical eras. Supply and demand would lead to fluctuations about this equilibrium, as in the business cycle (see vol. III of CAPITAL). BTW, I don't see any significant contradiction between Marx's theory and that of Keynes. The latter can be used to enrich the details of the former, while the former provides a more sophisticated understanding of the societal context. JD
USTR Warns India On Trips Compliance Issues
The Financial Express Wednesday, May 08, 2002 USTR Warns India On Trips Compliance Issues Sanjay Sardana New Delhi, May 7: The US Trade Representative (USTR) has flayed India for being less protective on intellectual property rights (IPR) and for having overly broad compulsory license provision. USTR report has also warned India of strict action if it fails to resolve various issues relating to Trade-related Intellectual Property Rights (Trips). India has already been put on the priority watch list in USTR '2002 special 301 report.' USTR will continue to consult with the Indian government to resolve the outstanding Trips compliance concerns. But, if these consultations do not prove constructive, we will consider all other options available, including WTO dispute settlement, to resolve them, the report says. Interestingly, USTR is under attack within the US itself. Its agenda is not easily distinguishable from the agenda of the brand pharmaceutical industry, according to Tom Allen, member of the US House of Representatives. In his address to the International Generic Pharmaceutical Association last month, he said, USTR has sided with the brand-drug manufacturers, and against the generic industry associations, European Union, developing countries and consumer activists. Mr Allen said the companies of the Pharmaceutical Research and Manufacturers Association (PhRMA) had tilted the system in two way - first by spending more than $200 million in the last four years on lobbying, campaign contributions and political ads. The report released last week says that India's patent system and protection of exclusive test data appear far from compliant with its obligations under the Trips agreement. The term of protection for pharmaceutical process patents is only seven years. India fails to provide patent protection for pharmaceutical and agricultural chemical products and the compulsory licensing system seems overly broad. On China front, though the country has been put under the 'priority foreign country' status the US has raised concerns with regard to high-level of piracy and counterfeiting, and has asked for a more effective and coordinated action. Apart from India, Argentina, Brazil, Colombia, Egypt, European Union, Hungary, Indonesia, Philippines, Russia, Taiwan and Uruguay have also been put under the 'priority watch list' by USTR. As far as China is concerned, the US has also complained that certain US companies have experienced difficulties in obtaining administrative protection for their products. The US will continue to closely monitor China 's implementation of its WTO commitments. The reports says, India's over-generous opposition procedures often allow competitors to delay patent issuance until the patent has expired, resulting in de-facto removal of patent protection. It has expressed fears that pending legislation meant to rectify India's Trips deficiencies may fall short. The inadequate patent protection currently available is difficult for innovators to obtain. India's patent office has a huge backlog of 30,000 patent applications and severe shortage of patent examiners. In addition, India's copyright law, which is generally consistent with international standards, was weakened by amendments, enacted in 2000, that undermine protection for computer programmes. Enforcement against piracy remains a growing concern for the US copyright industries, especially given the fact that pirated imports are entering the market from Southeast Asia and that there is growing Internet piracy. While announcing the results of the 2002 Special 301 review, Ambassador Robert B Zoellick has reiterated that USTR would not change the present approach to health-related intellectual property issues. MNCs Local Pharma Firms Slug It Out On Patents Bill Our Corporate Bureau The deep divide between multinational and domestic pharma companies over certain provisions relating to the amendments in the Second Patents Bill came to the fore at a brainstorming session on Impact of Patents Bill on Healthcare. Parliament is expected to debate the Second Patents Bill on Wednesday. Indian Drug Manufacturers Association (IDMA), membership of which is dominated by domestic small and medium companies, is rooting for broadening the scope of compulsory licensing provisions to include widespread diseases as the current provisions are not adequate. On the other hand, the MNCs-backed Organisation of Pharmaceutical Manufacturers of India says that the introduction of broad-based compulsory licensing would only help the copier and not the patient. At the session, organised by Associated Chambers of Commerce and Industry of India (Assocham), it was basically IDMA and Indian Pharmaceutical Alliance (IPA) lined up against the Organisation of Pharmaceutical Manufacturers and officials of MNCs like Pfizer and Eli Lilly. The MNCs have been trying to allay fears that in the post-patent regime, there was likely to be a sharp rise in the prices of
Re: P.S.
Gill writes: I should have said that mainstream theory suggests another possible explanation for positive interest rates that, like explanations based on time or risk preferences, is consistent with the operation of competitive and complete markets. Here is a question: What is the theoretical justification of negative (real) interest rates we recently have observed in Japan? Sabri
Re: Re: P.S.
it is safer holding a government bond than putting money in the bank, so people pay a premium for the bonds. I don't know why they don't keep the cash instead. On Fri, May 10, 2002 at 08:32:53PM -0700, Sabri Oncu wrote: Gill writes: I should have said that mainstream theory suggests another possible explanation for positive interest rates that, like explanations based on time or risk preferences, is consistent with the operation of competitive and complete markets. Here is a question: What is the theoretical justification of negative (real) interest rates we recently have observed in Japan? Sabri -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
