Re: Enter the Euro-dragon
Doug Henwood wrote: > The Euro central bank makes the Fed look like a model of accountability. > Maastricht specifies that the president of the ECB and its governing board > must be restricted to "persons of recognized standing and professional > experience in monetary or banking matters," language even more restrictive > than the U.S. law regulating appointments to the Fed's board of governors, > where the president is required to pay "due regard to a fair representation > of the financial, agricultural, industrial, and commercial interests" of > the country and its regions. You're totally right, this ECB is unbelievable. There is even in the Maastricht treaty a rule which says that it is forbidden to try to influence the members of the board of the ECB. Also, directors of the bank are in for only one period, to avoid that in the last years they start worrying about their re-election and therefore may feel tempted to take popular measures or listen (they should not) to governments or parliaments. > And they're so busy being deflationists, I > don't think they have the lender of last resort thing worked out at all, > even though the IMF predicts massive financial turmoil as capacity is > shaken out. Right again, this is an unsolved problem they're working on if I understand the press overhere well. Maintaining price stability is the only task formulated for the ECB, employment and things like that are not even in the task description. Robert Went = Drs. Robert Went Faculty of Economics and Econometrics University of Amsterdam Roeterstraat 11, k 9.03 1018 WB Amsterdam The Netherlands Tel: 31-20-525.4189 E-mail: [EMAIL PROTECTED] =
Re: EMU
Some quick remarks for the discussion about the EMU on the list. 1) You can find - a bit schematically - two very different types of criticisms of the euro-project in the many European countries, varying in strength: i) a left critique of the social consequences, the undemocratic character (see for instance the Open Letter of 331 European economists reproduced below for those who missed it at the time); ii) A right-wing critique in various brands, i.e. for nationalist reasons or criticizing the Maastricht criteria as not tough enough (not neo-liberal enough), fearing that the euro will not be as strong as the German mark or Dutch guilder or... (note: the reverse is to be feared, as the mighty European Central Bank will want to proof its anti-inflationary credentials to the financial markets). In Holland, for example, leading members of the right-wing liberals (in government with social-democratics and 'left-wing' liberals) state that we should not throw our strong guilder away, that we can not trust the Italians will keep their deficits down and don't want to pay for their pensions, etc. 2) I agree that the euro-project (not a project for a common currency in itself, but this one with these criteria, set-up, etc.) is a major tool to neo-liberalize the EU. Countries give up instruments for economic policy (exchange rate, interest rate, fiscal policy restricted by Maastricht and the Stability pact) so in case of asymmetric shocks and with few fiscal transfers on a European scale adjustments will have to go through the labour market. That's why in the EU you have a drive to deregulate and flexibilize the 'rigid' labour markets: international organizations like the IMF and OECD (and journals like the Economist) emphasize again and again that the euro can not function if European labour markets are not flexible. Another aspect, which at least in Holland is only in discussion since a year or so, is that with greater transparency of prices and the loss of instruments for economic policy there will be an increase in policy competition, i.e. European countries competing more with each other who has the cheapest welfare state, on taxes (some economists predict that taxes on profits in the EU will go down even further), on not too expensive ecological demands on companies, etc. 3) Don't forget the stability pact, because that prescribes that all countries joining the euro have to cut their budget deficits to 'close to balance'. This implies first of all that the austerity policies since the signing of Maastricht will continue in many countries, and secondly that the whole project is pro-cyclical in at least the coming years: when entering a recession, euro-countries will have to make sure that their deficits don't exceed 3% of GDP (apart from exceptional cases there are penalties). Because many just reached the 3%, they will have no room to manoeuver or even have to cut expenses even more to pay for social security when unemployment rises. The pink newspaper was therefore once again right when it wrote recently in an editorial that the difficult part of the euro- project is not behind us but starting. Robert Went Open letter from European economists to the heads of government of the 15 member states of the European Union Europe, 12 June 1997 On 16 and 17 June you will be in Amsterdam in order to discuss European integration. You will consult with one another about the progress made towards the Economic and Monetary Union. Many questions are still unanswered. Will the EMU begin as planned at the end of this century? Which countries will take part in the euro from the beginning? Will all the Maastricht Treaty criteria be met? These are important questions, but they do not address Europe's essential problems. You know that Europe is contending at the moment with high unemployment, poverty, social marginalisation and ecological deterioration. The current design of Europe's economy does not provide adequate prospects of reining in these problems. The member states' national policies are clearly insufficient. The key question is whether the current plans for further European integration, and in particular for the EMU, will bring us closer to solutions. Your economic advisers have told you that the EMU, as laid out in the Maastricht Treaty (December 1991) and further regulated in the Dublin Stability Pact (December 1996), will bring Europe more jobs and prosperity. We, economists in the EU's member states, are afraid that the opposite is true. This project for economic and monetary integration not only falls short from a social, ecological, and democratic perspective, but also from an economic one. This is a missed opportunity. A single European currency could be very advantageous and help to find the way to full-employment with good quality jobs and social security. This and other relevant
Greenspan literature?
Dear Pen-l-lers A Dutch weekly asks me to write a portrait (profile) of Greenspan. Suggestions for books/articles about the man (I don't suppose there exists a biography), his background, policies, influence, etc. are therefore very much appreciated. I don't suppose other subscribers to the list are interested in this, so it is probably the best to send messages directly to me. Thanks a lot, Robert Went = Drs. Robert Went Faculty of Economics and Econometrics University of Amsterdam Roeterstraat 11, k 9.03 1018 WB Amsterdam The Netherlands Tel: 31-20-525.4189 E-mail: [EMAIL PROTECTED] =
[PEN-L:12201] Re: jobs, jobs, jobs
Jim Divine wrote: > Third, it suggests that globalization has played a big role, even if we > don't see globalization as either natural or the whole story. To Dornbusch > I would add that intranational competition has increased along with > international competition, due to anti-trust, deregulation, etc. > > What it suggests to me is that the reason why the US sees little or no > inflationary acceleration despite sub-5% unemployment rates is that the > economy-wide institutional power of labor has been sapped. I'm all in favor > of unions and increasing labor's institutional power (including the welfare > state). But the fact is that the capitalists still have the whip-hand and > can punish us with inflationary acceleration or unemployment if we use that > power in a way that goes against profits. With globalization, they have > additional options. The same type of argument is developed by Dani Rodrik in "Has globalization gone too far?" In itself the book contains nothing shocking, but I still found it useful because he is (and calls himself) a neo-classical economist, and shows from within how even in the orthodox models about trade globalization can/does lead to increasing social inequality and unemployment. And although he writes again and again that we have to abandon ideas about protectionism, he critizes main-stream economist who don't take seriously or dismiss worries about the conseqences of globalization (like the strike movement in France in December 1995, supported by the overwhelming majority of the population) and has to relativize himself the holy free trade gospel. Robert Went = Drs. Robert Went Faculty of Economics and Econometrics University of Amsterdam Roeterstraat 11, k 9.03 1018 WB Amsterdam The Netherlands Tel: 31-20-525.4189 E-mail: [EMAIL PROTECTED] =
[PEN-L:9537] Re: query: uneven development
I remember a good book by Michael Lowy, The politics of combined and uneven development, published in 1981 by Verso. Robert Went > Does anybody on pen-l know of any good references on (or special insight > into) the subject of the Marxian theory of "uneven and combined > development." I am specifically thinking of the theory that the Bolsheviks > invoked in the early 20th century, rather than the dependency school's > "uneven development" (to use Samir Amin's phrase), even though I know that > the two theories are related, to some extent overlapping, and to some > extent conflicting with, each other. > > thanks ahead of time. > > in pen-l solidarity, > > Jim Devine [EMAIL PROTECTED] > [EMAIL PROTECTED] > Econ. Dept., Loyola Marymount Univ. > 7900 Loyola Blvd., Los Angeles, CA 90045-8410 USA > 310/338-2948 (daytime, during workweek); FAX: 310/338-1950 > "It takes a busload of faith to get by." -- Lou Reed. > > = Drs. Robert Went Faculty of Economics and Econometrics University of Amsterdam Roeterstraat 11, k 9.03 1018 WB Amsterdam The Netherlands Tel: 31-20-525.4189 E-mail: [EMAIL PROTECTED] =
