Re: wynne godley
[EMAIL PROTECTED] 07/19/01 08:18PM neither. It says that Lenin felt and said that Bukharin's book was more complete and accurate than his own little pamphlet on the subject. Bukharin's analysis doesn't fit today's imperialism very well at all, since his emphasis was on the aggressive competition amongst the rich capitalist nation-states (national capitals). These days, it's more a matter of the center vs. the periphery (e.g., NATO vs. Serbia). ((( CB: But I assume Bukharin discusses the other dimensions of imperialism. Aggressive competition amongst the rich capitalist nation-states is only one aspect of the defining characteristics that Lenin points to. In a way, monopoly, state-monopoly, finance capital, financial oligarchy and export of capital are the more economic aspects of the definition, and these aspects are those that persist today and are thereby more pertinent today's discussions. CB: Yes, I agree. I often say way have a sort of Kautskyian superimperialism today. Because the Soviet Union came about after Lenin's analysis of imperialism ( and because in large part because of the Leninists political work) , to make a long story short, the imperialist nations of the 1914 period, have had to unite against the SU and socialist countries, ending the interimperialist rivalry dimension of Lenin's definition of imperialism in the 1914 period. There has also been a world wide revolution against the colonial system of the 1914 period. With the fall of the SU, this interimperialist _unity_ has not dissolved ( yet), so we have , dialectically, especially through the mechanism of the Soviet Union and imperialist reaction to it, Kautskyian ultraimperialism or superimperialism. I'm not sure that there's much basis at this point for the revival of the kind of inter-state rivalry within the capitalist center that Bukharin saw. Maybe if we see a severe depression or if the kind of social collapse that Tom Walkers says might happen... ((( CB: Yes, I was not trying to imply that we are about to go back to world wars, although I wouldn't totally count it out forever. We have Pax (Pox) Americana. ( But the other dimensions of the imperialism of the 1914 period have not gone away. In other words, it is still appropriate to refer to capitalism today as imperialism. this is a big argument, but I agree in the end that what we see nowadays is a kind of imperialism. ((( CB: Surely we have an empire. It is more like the old time empires than was the imperialism of multiple centers from the early 1900's. It is more like the Roman empire which had a single hegmon. ((( Or are you saying that the G-7 countries ( today's imperialist powers ) don't export capital as a main process ? instead of export of capital, I see imperialism as involving the generalization of commodity production (and what Braverman called the Universal Market) and of the proletarianization of labor, i.e., an export of capitalism. Because of the dominance of the center (over the periphery) in this process, there has also been a redistribution of surplus-value toward the center. CB: Well, yes, I interpret export of capital to mean export of capitalist relations of production to the colonies of the empire, export of capitalism to the periphery or colonies or neo-colonies. Agree on the redistribution of surplus-value to the center or the empirial centers. So, the export of capitalism, does not mean making fulfledged capitalists of individuals who are native to the colonies. The American capitalists are the capitalist owning the capital in its colonies. At any rate, this export of capitalism is what Lenin means by export of capital and is a central dimension of imperialism that persists in 2001. In the above, are you saying that export of capital does not accurately characterize the U.S. big corporations today ? How can that be ? What's globalization if not export of capital all over the world by the U.S. and other G-7 countries' corporations ? these days, the US mostly imports capital, as I said before. CB: To say that the U.S. net imports capital does not contradict the fact that the U.S. exports a lot of capital in the sense of establishing capitalist relations of production in many neo-colonies. For example, the maquiladora plants in Mexico are exported U.S. capital , aren't they ? What are U.S. based transnational but companies that export capital ? I don't see how globalization is the U.S. importing capital. The impact of NAFTA is to allow the U.S. to export capital or capitalism as you say. (( Are you saying that today's big capitalist countries are not characterized by the dominance of finance capital and financial oligarchy? The industrial capitalists are important too. There's a shifting coalition of financial and industrial capitalists in power. ((( CB: I'm not sure what Bukharin says,
Re: Re: wynne godley (Attn., Charles Yoshie)
Some secondary sources on Bukharin below, for Charles and y'all.Mark Selden, below, btw, edited a great collection of docs for MR Press on the CCP and PRC back in the 80's or late 70's. His articles in the Bulletin of Concerned Asian Scholars along with counterpoints by Edward Friedman and Maurice Meisner are good. BTW, LNP3, recently said he was not, pro-Trotsky. Said, if anything, he was a Bukharinite. Michael Pugliese P.S. Pass on to Yoshie please, this citation on another thread (Michael Lind) Suicide Of An Elite:American Internationalists Vietnam, P. Hatcher, UC Press. http://history.ucr.edu/seaman/bukharin.html Nikolai Ivanovich Bukharin (1888-1938) IMAGES The above picture of Bukharin, c. 1925 (~32K) Taken from Larina's This I Cannot Forget (see bibliographic information below). Bukharin during his illness in the Crimea, 1930. (~205K) Taken from Larina. Bukharin and Stalin atop the Lenin Mausoleum in October, 1929 (~207K) Taken from Larina. Bukharin's police record upon his arrest in Moscow, 1909. (~30K) Taken from Larina. Left to right : Bukharin, Lazar Kaganovich, Anastas Mikoyan, Aleksei Rykov, Valerian Kuibyshev, Joseph Stalin, Kliment Voroshilov, ... (~81K) Taken from Larina. ... Nikolai Bukharin shortly before his arrest in 1937. (~65K) Taken from Tucker's Stalin in Power (see bibliographic information below). Members of the famous 'Bukharin School' of the 1920's, in 1926. Left to right, bottom row , Ivan Kravel and Vasily Slepkov; middle row , Dmitry Maretsky, Aleksandr Zaitsev, Bukharin, Yan Sten, and Aleksandr Slepkov; top row , Grigory Maretsky, David Rosit, Aleksie Stetsky, ... (~64K) Taken from Larina. Bukharin, Sergei Kirov, center , and Vyacheslav Molotov at a Leningrad Part meeting, 1926. (~108K) Taken from Larina. Photo credits: Larina, Anna. This I Cannot Forget: The Memoirs of Nikolai Bukharin's Widow. Translated by Gary Kern. New York: Norton, 1994. Tucker, Robert C. Stalin in Power: The Revolution from Above, 1928-1941. New York: Norton, 1992. BIBLIOGRAPHY Russian: Akademiya Nauk SSSR Institut Nauchoi Informatsii po Obshchestvennym Naukam. Filosofsko-Sotsiologicheskie i Politicheskie Vzglyady N. I. Bukharina. Moskva: INION AN SSR, 1991. Kun, Miklosh. Bukharin: ego druz'ya i vragi. Moskva: Respublika, 1992. English: Bergman, Theodor, Gert Schaefer, and Mark Selden, eds. Bukharin in Retrospect. Armonk, NY: M.E. Sharpe, 1994. Bukharin, Nikolai. Historical Imperialism: A System of Sociology. New York: International Publishers, 1925 . Imperialism and World Economy. New York: Howard Fertig, 1966. Bukharin, N., and E. Preobrazhensky. The ABC of Communism: A Popular Explanation of the Communist Party of Russia. Translated by Eden and Cedar Paul. Ann Arbor: University of Michigan Press: 1967. Cohen, Stephen F. Bukharin and the Bolshevik Revolution: A Political Biography, 1888-1938. New York: Vintage Books, 1975 Gluckstein, Donny. The Tragedy of Bukharin. London: Pluto Press, 1994. Haynes, Michael. Nikolai Bukharin and the Transition from Capitalism to Socialism. New York: Holmes and Meier, 1985. Heitman, Sidney, ed. and compiler. Nikolai I. Bukharin: A Bibliography. Stanford: The Hoover Institution on War, Revolution, and Peace, 1969. Katkov, George. The Trial of Bukharin. New York: Stein Day, 1969. Larina, Anna. This I Cannot Forget: The Memoirs of Nikolai Bukharin's Widow. Translated by Gary Kern. New York: Norton, 1994. Larina, Anna. Nikolai Bukharin: The Last Years. Translated by A.D.P. Briggs. New York: Norton, 1980. Tarbuck, Kenneth J. Bukharin's Theory of Equilibrium: A Defence of Historical Materialism. Winchester, Mass: Pluto Press, 1989.
Re: wynne godley
ellipsis I wrote: (On net these days, the US is _importing_ tremendous amounts of capital.) Charles writes: CB: What is the comparison between US export of capital and export of goods ? US net exports of goods and services + net US income earned on foreign operations = a negative number these days (so the US is spending more than it's selling and paying income to the rest of the world for their investments and workers in the US). The magnitude of this negative number is approximately equal to the amount of capital inflow into the US: the US is borrowing from the rest of the world and selling US assets in order to raise the dough that allows the US to over-spend and pay income. The classic Leninist distinction of imperialism is the transition from predominance of export of goods to predominance of export of capital. It does not foreclose import of capital at the same time, from other imperialist nations. Even more import of _capital_ than export of capital, as you say is the fact today. The ongoing current account deficit ( import of goods greater than export of goods) is consistent with less export of goods as characterizing U.S. and thus U.S.retaining a classical imperialist profile. Especially since, as just mentioned , much of the import of goods to the U.S. is from U.S. company controlled capital that has been exported producing those imported' goods. I don't think the current day fits Lenin's sketch very well at all. Lenin himself once wrote that Bukharin's book on imperialism was superior. If anything, the current day approaches fitting Kautsky's story of ultra-imperialism (the rich capitalist powers unified against the world), but without the positive connotations that Kautsky saw (the ending of the anarchy of production). The US/NATO against the world is quite different from the Lenin/Bukharin story of big capitalist powers fighting each other, encouraging war (of either the military or trade sort). However, the L/B story applied pretty well until 1945 or so. CB: The fact that there is net import of capital doesn't mean that there isn't enormous absolute ( though not relative) export of capital , does it ? Isn't there still enormous amount of export of U.S. based capital today, even if Japanese and European export of capital to the U.S. is more than U.S. export ? you're right that the US _is_ exporting capital, but most people who read Lenin, etc. interpret it in terms of _net_ exports of capital. Not a period of monopoly ? How so ? Monopoly, like competition, is a normal part of capitalist markets. However, during the period since 1975 or so, the US has seen an increase in the degree of competition. The old system that had prevailed in the US, where stable oligopolies (shared monopolies) dominated a world that couldn't compete very well with US industry, started disappearing in the late 1950s and especially the 1970s. The rise of competition from Japan and Germany (and later South Korea, etc.) undermined the privileged situation of companies like GM and US Steel (now called USX). Technological change undermined monopolies like Western Union (which went from having a _total_ monopoly in the telegraph services to being one company of several allowing the wiring of money out of town). Deregulation undermined monopoly power in trucking and airlines, etc. Anti-trust broke up ATT. The neoliberal movement aimed at not only promoting globalization but also domestic competition (often in order to undermine labor's power which, if restricted to narrow trade union, is dependent on the employer's ability to pass wage increases onto consumers in the form of price increases). Part of the problem was that the old system was thrown into crisis during the 1970s and policy-makers were looking for a way to restore the system. A serious series of shocks to the system (such as the 1980-83 recessions) shook up the _status quo_ again. So by the 1990s, most US businesses lacked the ability to raise prices significantly. As Marx wrote in the POVERTY OF PHILOSOPHY, monopoly generates competition (as described above) -- and competition generates monopoly. Now we're in a new era in which the concentration and centralization of capital is occurring on a world scale, tending toward the creation of world-wide oligopolies. We also see a shift toward using intellectual property rights as the basis for monopoly. ellipsis Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: wynne godley
I wrote: I don't think the current day fits Lenin's sketch very well at all. Lenin himself once wrote that Bukharin's book on imperialism was superior. Charles writes: CB: Are you saying 1) that Bukharin's analysis of imperialism of that period contradicted Lenin's main points , or elaborated them,making it better ; 2) that Bukharin's analysis of imperialism then fits today better ? neither. It says that Lenin felt and said that Bukharin's book was more complete and accurate than his own little pamphlet on the subject. Bukharin's analysis doesn't fit today's imperialism very well at all, since his emphasis was on the aggressive competition amongst the rich capitalist nation-states (national capitals). These days, it's more a matter of the center vs. the periphery (e.g., NATO vs. Serbia). CB: Yes, I agree. I often say way have a sort of Kautskyian superimperialism today. Because the Soviet Union came about after Lenin's analysis of imperialism ( and because in large part because of the Leninists political work) , to make a long story short, the imperialist nations of the 1914 period, have had to unite against the SU and socialist countries, ending the interimperialist rivalry dimension of Lenin's definition of imperialism in the 1914 period. There has also been a world wide revolution against the colonial system of the 1914 period. With the fall of the SU, this interimperialist _unity_ has not dissolved ( yet), so we have , dialectically, especially through the mechanism of the Soviet Union and imperialist reaction to it, Kautskyian ultraimperialism or superimperialism. I'm not sure that there's much basis at this point for the revival of the kind of inter-state rivalry within the capitalist center that Bukharin saw. Maybe if we see a severe depression or if the kind of social collapse that Tom Walkers says might happen... But the other dimensions of the imperialism of the 1914 period have not gone away. In other words, it is still appropriate to refer to capitalism today as imperialism. this is a big argument, but I agree in the end that what we see nowadays is a kind of imperialism. Or are you saying that the G-7 countries ( today's imperialist powers ) don't export capital as a main process ? instead of export of capital, I see imperialism as involving the generalization of commodity production (and what Braverman called the Universal Market) and of the proletarianization of labor, i.e., an export of capitalism. Because of the dominance of the center (over the periphery) in this process, there has also been a redistribution of surplus-value toward the center. In the above, are you saying that export of capital does not accurately characterize the U.S. big corporations today ? How can that be ? What's globalization if not export of capital all over the world by the U.S. and other G-7 countries' corporations ? these days, the US mostly imports capital, as I said before. Are you saying that today's big capitalist countries are not characterized by the dominance of finance capital and financial oligarchy? The industrial capitalists are important too. There's a shifting coalition of financial and industrial capitalists in power. ...Are you really saying that monopoly is not an accurate description of the U.S. economy 2001 ? yes. If so, that would seem to defy their surface appearance. Microsoft is in court right now , accused of being a monopoly even by the bourgeois legal system. Microsoft is more of an exception than the rule. BTW, I'd also point to the drug companies as monopolies. Are you saying GM, Ford, Daimler, Toyota etc. are not monopolies ? No they aren't, since they compete with each other. The oil companies, seven sisters. The vast majority of the Fortune 500 ? I don't get it. ( But you say more below on monopoly ) I use the economic definition of monopoly. I have to go now... Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
RE: wynne godley
There is tax competition between states and countries, but the effect in distorting tax structures is much more important, IMO, than the impact on the size of government. There is pressure on the size of Gov, but it stems from ideological and (anti-)redistributive concerns, not very much from actual competitive pressure. There is the conservative notion that devolution will cause the public sector to shrink, but so far this has not happened, in the U.S. at least. mbs CB: What is competitive austerity ? Is it competition between governments to see who can cut social spending and public enterprise the most ? Is the difference between this and the 1930 situation that there weren't welfare state institutions as much in place then as in the period out of which competitive austerity is taking us now ? ( It's important to realize that in my full story of the origins of the Great Depression (http://bellarmine.lmu.edu/Faculty/JDevine/depr/Depr.html.), the H-S tariff plays only a small role. (It's sort of like Jar Jar's role in Star Wars Episode I: bad but ultimately unimportant. When I see the Jar Jar-free version of SW Ep I, I'm sure it will be just as bad as the original.) Further, it was a _product_ of an international political economy centering on aggressive nation-state-to-nation-state competition of a sort we don't see in the rich capitalist world these days. It also hit a world economy that was ready to fall. It should also remembered that the early-1920s US tariff _promoted_ US prosperity, unlike H-S. Back then, BTW, it was Republicans, not Democrats, who liked tariffs. Protection was the main Republican activist economic policy. (( CB: Would Bush be going back to the old Republican trend if he protects the U.S. steel industry ? ((( I'm not big into protectionism: it can create jobs in one country by taking jobs away from workers in another. Or -- in the VERY exceptional case of a H-S tariff -- it can destroy jobs for both. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: wynne godley
Charles wrote: CB: What is competitive austerity ? Is it competition between governments to see who can cut social spending and public enterprise the most ? Is the difference between this and the 1930 situation that there weren't welfare state institutions as much in place then as in the period out of which competitive austerity is taking us now ? Max writes: There is tax competition between states and countries, but the effect in distorting tax structures is much more important, IMO, than the impact on the size of government. There is pressure on the size of Gov, but it stems from ideological and (anti-)redistributive concerns, not very much from actual competitive pressure. There is the conservative notion that devolution will cause the public sector to shrink, but so far this has not happened, in the U.S. at least. this is another reason why Max shouldn't leave the list. He's got it exactly right. Different political units are competing for the favors of the multinationals by cutting taxes wages and the like. They also are competing to push exports. This could lead to deepening world depression. It's encouraged by the World Bank the IMF (and the weakness of labor and other non-capitalist forces). Until 2000, the deflationary effects of this part of the race to the bottom was counteracted by the US being the world's consumer of last resort. (These days, the US is broadcasting recession to the world.) CB: Would Bush be going back to the old Republican trend if he protects the U.S. steel industry ? more likely, he'd be giving in to special-interest pressure. The powers that be -- both Republican and Democratic -- are all in favor of free trade. I doubt that they'll give up on this philosophy until the US stops being the hegemonic power. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: wynne godley
Like the U.S. Business Industrial Council. Marc Cooper on Radio Nation had on one of their ideologues. http://www.opensecrets.org/lobbyists/98profiles/24303.htm 1998 DATA* (1997 DATA ALSO AVAILABLE) US Business Industrial Council Total Lobbying Expenditures: $60,000 Lobbying Firms Hired by US Business Industrial Council: Lobbying Firm Hired Amount Spent Lobbyist Subsidiary (lobbied for) [In-house lobbyists for US Business Industrial Council] [N/A] Kearns, Kevin L Wood, Lloyd III - * This data was compiled using 1998 lobby disclosure reports and amendments filed under the Lobbying Disclosure Act of 1995. Feel free to distribute or cite this material, but please credit the Center for Responsive Politics. http://www.google.com/search?q=U.S.+Business+Industrial+Council Michael Pugliese P.S. These folks be more my type of businessmen... ... American Industrial Hemp Council's Board of Directors has ... mail: - describe your business in 50 words ... Industrial Hemp Brochure ... once again allowing US farmers to ... Description: The comprehensive information source for the North American hemp industry. Learn all about industrial... Category: Society Issues Business Agriculture Industrial Hemp www.naihc.org/ - Original Message - From: Charles Brown [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Wednesday, July 18, 2001 9:06 AM Subject: [PEN-L:15288] wynne godley [EMAIL PROTECTED] 07/17/01 07:11PM Anyway, I think it's a big mistake to generalize from the 1930 Hawley-Smoot tariff to current-day issues. (It's quite common for the free trade vulgaris crowd -- e.g., Krugman -- to fall for this trap.) The GATT (now called the WTO) is aimed specifically at preventing trade wars of the type that H-S spurred. In any event, the world political economy has changed, undermining the political basis for protectionism (as I argue later on in the paper that Mark quotes). When the components of a car are imported for assembly in the U.S., that makes even the direct benefits of protection more ambiguous. Further, the power of the main political forces for protection has faded, at least in the U.S.: these are nationally-oriented manufacturing, narrow-minded labor unions, and domestic agriculture. As I further argue in the paper, these days it's not protection that encourages depression as much as a world-wide process of competitive austerity and export promotion encouraged by the US and its IMF and World Bank and by the competition to attract capital investment by offering low wages, pliable work-forces, etc. CB: What is competitive austerity ? Is it competition between governments to see who can cut social spending and public enterprise the most ? Is the difference between this and the 1930 situation that there weren't welfare state institutions as much in place then as in the period out of which competitive austerity is taking us now ? ( It's important to realize that in my full story of the origins of the Great Depression (http://bellarmine.lmu.edu/Faculty/JDevine/depr/Depr.html.), the H-S tariff plays only a small role. (It's sort of like Jar Jar's role in Star Wars Episode I: bad but ultimately unimportant. When I see the Jar Jar-free version of SW Ep I, I'm sure it will be just as bad as the original.) Further, it was a _product_ of an international political economy centering on aggressive nation-state-to-nation-state competition of a sort we don't see in the rich capitalist world these days. It also hit a world economy that was ready to fall. It should also remembered that the early-1920s US tariff _promoted_ US prosperity, unlike H-S. Back then, BTW, it was Republicans, not Democrats, who liked tariffs. Protection was the main Republican activist economic policy. (( CB: Would Bush be going back to the old Republican trend if he protects the U.S. steel industry ? ((( I'm not big into protectionism: it can create jobs in one country by taking jobs away from workers in another. Or -- in the VERY exceptional case of a H-S tariff -- it can destroy jobs for both. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
Re: wynne godley
CB: Cutting taxes on multinationals, but not on workers ? Cutting wages or
working class incomes , in part, by cutting social spending , this
neo-liberalist austerity ?
yup.
CB: Is it the pushing exports and the cutting taxes and wages that could
lead to deepening world depresssion , or mainly the competing to push
exports ? How does competing to push exports tend toward deepening world
depression ? Is it that the competition cuts prices ( deflationary
effects ?) and thereby incomes and profits of the competing neo-colonial
, non- G-7 countries and their companies ?
both the cut in domestic consumption and the increase in exports encourage
world recession: they are complementary parts of the story.
The problem with pushing exports is that net exports (exports - imports)
adds up to zero on the world scale, while one country's exports are
another's imports. This means that you can't see _all_ countries increasing
exports at the same time.
it's both a matter of falling real production and falling prices. It's for
the whole world, except that the US has until recently acted as the
consumer of last resort.
CB: So, any move in the direction of protectionism, as in godley model,
due to aggravating current accounts deficit could aggravate a move of US
to being less of a world consumer of last resort, combining with any
recession in the U.S. in this tendency to be less of a world consumer of
last resort, and stiffening the competition of neo-colonial companies and
countries to sell imports ?
I can't talk about Godley, since I haven't read what Alex Izurieta wrote
about his views yet.
But raising tariffs is a bad idea in a recession. Instead of pushing
exports, it's a matter of cutting imports. It has the same world-wide effect.
CB: Isn't this in part because a lot of the imports into the U.S. are
from U.S controlled transnationals from their capital and production
outside of the geographical U.S. ( the U.S. still exporting capital
muchly ) ?
I don't think that the identity of the company selling the products is
important economically. The products -- and the economic effects -- are the
same, no matter who produces them.
Politically, however, the fact that US imports are so often products of
US-based multinationals undermines the protectionist political coalition.
(On net these days, the US is _importing_ tremendous amounts of capital.)
But as was just said elsewhere, there is no escape in this capital chasing
its tail for, ultimately capital is its own chief barrier, i.e. Marx's
critical insight that the chief barrier to capital is capital itself
('Capital' vol 3 and the 'Grundrisse') and therfore, at a certain point,
capital has to *attempt to escape its own laws of motion*. and in fact,
capital moved from its 'progressive' phase of free
competition, free market, free trade etc to the imperilaist epoch, where
it has to try to escape the law of value through interfering with all
these things. It attempts to escape its own barriers through export of
capital, monopoly, foreign trade, the division of the world into oppressed
and oppressor nations, state intervention etc etc etc. This was an
*objective* trend. One which is clearly still with us
this is very abstract. I was talking on a much lower level of abstraction.
Currently, the US economy is not in a period of export of capital or
monopoly (though the latter is slowly reviving). Foreign trade is
increasingly with us, as is the division of the world into oppressed and
oppressor nations (though the nature of that division has changed). State
intervention is also a constant. It's always been part of capitalism's laws
of motion.
And so at some point, might the U.S. hegmonic powers that be contradict
their main tendency to adhere to and promote free trade and oppose
tariffs in the U.S. ? Won't depression in the rest of the world ( the
could be deepening world depression you mention above ) eventually cause
political instability there, forcing the U.S. world hegmonic corporations
to circle the wagons around the U.S. ? Or can the current balancing act be
maintained for decades ?
I see the possible shift to US protectionism as more of a _result_ of a
crisis than a cause at this point. That is, it seems quite unlikely given
the current balance of political power, so that only if when the
competitive austerity causes a world depression should we see a rise of
protectionism.
Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
RE: wynne godley
I don't think it's quite right as an analogy. There's a city/suburb problem that you can appreciate wherein better-off people reside in suburbs and use the cities for job locations, services, and certain amenities not available in suburbs (museums, sports teams, etc.). This way they avoid, with the connivance of state legislatures, sharing their local taxes with the less fortunate. The urban rich can afford to opt out of city services, so they don't care if the urban tax base goes to shit. Within cities, the use of enterprise zones, business improvement districts, and tax increment financing further balkanizes and shrinks the tax base. Tax competition is usually understood, and I would say properly understood, as units of more or less similar nature (states, localities, nations) competing against each other for taxpayers by reducing their taxes. mbs The Wall Street Journal today has a front page story on how this tax competition as gutted the tax base of Toledo, gutting its educational system. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: RE: wynne godley
Max, I don't understand your point. Toledo gave away tax breaks to lure companies, such as Chrysler, which gutted its tax base. On Wed, Jul 18, 2001 at 04:49:04PM -0400, Max Sawicky wrote: I don't think it's quite right as an analogy. There's a city/suburb problem that you can appreciate wherein better-off people reside in suburbs and use the cities for job locations, services, and certain amenities not available in suburbs (museums, sports teams, etc.). This way they avoid, with the connivance of state legislatures, sharing their local taxes with the less fortunate. The urban rich can afford to opt out of city services, so they don't care if the urban tax base goes to shit. Within cities, the use of enterprise zones, business improvement districts, and tax increment financing further balkanizes and shrinks the tax base. Tax competition is usually understood, and I would say properly understood, as units of more or less similar nature (states, localities, nations) competing against each other for taxpayers by reducing their taxes. mbs The Wall Street Journal today has a front page story on how this tax competition as gutted the tax base of Toledo, gutting its educational system. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED] -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
RE: Re: RE: wynne godley
To that extent tax competition is on point. In the main, urban fiscal problems are due to the city-suburb (city-state legislature) relationship, IMO. mbs Max, I don't understand your point. Toledo gave away tax breaks to lure companies, such as Chrysler, which gutted its tax base.
Re: Re: Re: RE: wynne godley
This also creates a bind regarding the dollar. If the dollar threatens to depreciate, the damn foreigners will refuse to continue financing our binge, dump their securities, drop the market and spoil our fun. Rob Schaap wrote: Ah, we're talking economics again, are we? Well, Prudent Bear Marshall Auerback http://www.prudentbear.com/Comm%20Archive/markcomm/i082900.htm talked about Wynn Godley's thoughts on private sector debt last August (when, to my mind, things looked bad, but not as bad as now - Kenichi Ohmae's warnings about Japan's new boy's idea of effectively sucking back Wall St Yen to wash away red ink, and mebbe destroy some excess capital, come to mind): -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
Re: Re: Re: RE: wynne godley
At 04:08 PM 7/17/01 +, you wrote: Ah, we're talking economics again, are we? is that allowed? Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~JDevine Is it peace or is it Prozac? -- Cheryl Wheeler.
Re: Re: Re: RE: wynne godley
Although Godley is not signing on for a while, his co-author and ex-penner, Alex Izurieta, is coming on board. You can direct some of these questions for him, although you might wait a couple of hours. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: Re: Re: RE: wynne godley
At 09:37 AM 7/17/01 -0700, you wrote: Although Godley is not signing on for a while, his co-author and ex-penner, Alex Izurieta, is coming on board. You can direct some of these questions for him, although you might wait a couple of hours. folks, be polite! Jim Devine [EMAIL PROTECTED] http:/bellarmine.lmu.edu/~JDevine It takes a busload of faith to get by. -- Lou Reed.
RE: RE: Re: Re: Re: RE: wynne godley
. . . The effects of any form of undisguised wall-to-wall US protectionism on world trade today would be presumably, completely catastrophic, the debacle even worse than 1929-31. Is the Godley view that this debacle is inevitable anyway, so it's a case of sauve qui peut? Mark Jones I presume a plausible U.S. protectionism would not be an all-or-nothing thing, but a modulated policy negotiated in some kind of concert with other countries (naturally with a U.S. edge in bargaining power). Whether/how it would work I have no idea. mbs
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Mark Jones wrote: Incidentally, the Godley paper lays policy emphasis on import controls. This looks like impish humour, since it is hard to imagine how such a policy could be implemented without doing even more damage. As Jim Devine says, the cure is worse than the disease: To summarize, U.S. prosperity was fragile even before late 1929, due to the process of over-investment relative to demand and the international environment. Then the Crash, restrictive fiscal and monetary policy, and protectionism interacted to break the unstable prosperity and to accelerate the downward movement. This movement involved the famous multiplier/accelerator interaction, reinforced by wage-cut induced underconsumption, debt deflation, and international interactions. [(The Causes of the 1929-33 Great Collapse: A Marxian Interpretation, by James Devine) ] The effects of any form of undisguised wall-to-wall US protectionism on world trade today would be presumably, completely catastrophic, the debacle even worse than 1929-31. Is the Godley view that this debacle is inevitable anyway, so it's a case of sauve qui peut? As my old friend Steve Zeluck used to say, the devil can quote scripture. Anyway, I think it's a big mistake to generalize from the 1930 Hawley-Smoot tariff to current-day issues. (It's quite common for the free trade vulgaris crowd -- e.g., Krugman -- to fall for this trap.) The GATT (now called the WTO) is aimed specifically at preventing trade wars of the type that H-S spurred. In any event, the world political economy has changed, undermining the political basis for protectionism (as I argue later on in the paper that Mark quotes). When the components of a car are imported for assembly in the U.S., that makes even the direct benefits of protection more ambiguous. Further, the power of the main political forces for protection has faded, at least in the U.S.: these are nationally-oriented manufacturing, narrow-minded labor unions, and domestic agriculture. As I further argue in the paper, these days it's not protection that encourages depression as much as a world-wide process of competitive austerity and export promotion encouraged by the US and its IMF and World Bank and by the competition to attract capital investment by offering low wages, pliable work-forces, etc. It's important to realize that in my full story of the origins of the Great Depression (http://bellarmine.lmu.edu/Faculty/JDevine/depr/Depr.html.), the H-S tariff plays only a small role. (It's sort of like Jar Jar's role in Star Wars Episode I: bad but ultimately unimportant. When I see the Jar Jar-free version of SW Ep I, I'm sure it will be just as bad as the original.) Further, it was a _product_ of an international political economy centering on aggressive nation-state-to-nation-state competition of a sort we don't see in the rich capitalist world these days. It also hit a world economy that was ready to fall. It should also remembered that the early-1920s US tariff _promoted_ US prosperity, unlike H-S. Back then, BTW, it was Republicans, not Democrats, who liked tariffs. Protection was the main Republican activist economic policy. I'm not big into protectionism: it can create jobs in one country by taking jobs away from workers in another. Or -- in the VERY exceptional case of a H-S tariff -- it can destroy jobs for both. Jim Devine [EMAIL PROTECTED] http://bellarmine.lmu.edu/~jdevine
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In any event, the world political economy has changed, undermining the political basis for protectionism Jim, I check the archives often, and have learned a great deal from your posts. Not sure I agree here. Wouldn't the US state like to run a trade deficit to its own mnc's and thus accept imports from where its mncs are deeply integrated at the expense of other countries? There seems to be some basis for such a neo mercantalist trade policy. In the case of China--seemingly a platform first and foremost for Japanese mncs-- the US accepts imports probably not only because their own mncs are involved directly or as subcontractors but as a quid pro quo for access to the massive internal Chinese market. But it seems to me that neo mercantalist state may be alive and well. Don't know how far the state has retreated. Best, Rakesh
RE: wynne godley
Max Sawicky wrote, If the discussion is not fruitful, I'm sure it will be nutful. Beans are a fruit, aren't they? Tom Walker Bowen Island, BC 604 947 2213
RE: wynne godley
If the discussion is not fruitful, I'm sure it will be nutful. mbs Jim Devine has brought up Wynne Godley's work several times. He has a new paper writter with a former penner, who had promised to return. I think that Godley may sign up to pen-l after he returns from England. I hope that we can discuss his paper fruitfully. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: RE: wynne godley
I was hoping for more fruit and less nuts. On Mon, Jul 16, 2001 at 03:48:15PM -0400, Max Sawicky wrote: If the discussion is not fruitful, I'm sure it will be nutful. mbs Jim Devine has brought up Wynne Godley's work several times. He has a new paper writter with a former penner, who had promised to return. I think that Godley may sign up to pen-l after he returns from England. I hope that we can discuss his paper fruitfully. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED] -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
RE: Re: RE: wynne godley
his work is very important i think. he sets up scenarios with simple models, like Y = C + I + G + X -M or S + T + M = I + G + X and then can show, e.g., what would have to happen for expansion to continue or to avoid a significant downturn, given things like trade deficit and/or tight fiscal stance. or if credit would dry up in the consumer sector. it is also interesting to look at his stuff in relation to David Levy's forecasting, based on the Levy/Kalecki/Minsky profits equation. It would be intersting to see him on pen-l. -Original Message- From: Michael Perelman [mailto:[EMAIL PROTECTED]] Sent: Monday, July 16, 2001 2:59 PM To: [EMAIL PROTECTED] Subject: [PEN-L:15206] Re: RE: wynne godley I was hoping for more fruit and less nuts. On Mon, Jul 16, 2001 at 03:48:15PM -0400, Max Sawicky wrote: If the discussion is not fruitful, I'm sure it will be nutful. mbs Jim Devine has brought up Wynne Godley's work several times. He has a new paper writter with a former penner, who had promised to return. I think that Godley may sign up to pen-l after he returns from England. I hope that we can discuss his paper fruitfully. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED] -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
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Worse than that, it makes sense -- a violation of basic academic principles. On Mon, Jul 16, 2001 at 04:29:07PM -0500, Forstater, Mathew wrote: his work is very important i think. he sets up scenarios with simple models, like Y = C + I + G + X -M or -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: RE: wynne godley
In the most recent article he comments that the United States should not forget that nondiscriminatory measures to control imports (not to be confused with 'protectionism') are permitted under Article 12 of the successor to the GATT. What kinds of measures are these? - Original Message - From: Mark Jones [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Monday, July 16, 2001 6:00 PM Subject: [PEN-L:15210] RE: wynne godley Michael Perelman: I think that Godley may sign up to pen-l after he returns from England. I hope that we can discuss his paper fruitfully. I'd be specially interested to discuss his views about import controls. Mark
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Ah, we're talking economics again, are we? Well, Prudent Bear Marshall Auerback http://www.prudentbear.com/Comm%20Archive/markcomm/i082900.htm talked about Wynn Godley's thoughts on private sector debt last August (when, to my mind, things looked bad, but not as bad as now - Kenichi Ohmae's warnings about Japan's new boy's idea of effectively sucking back Wall St Yen to wash away red ink, and mebbe destroy some excess capital, come to mind): ... A further complicating factor when examining this credit binge and its consequences is the degree of dependence on foreigners to sustain the boom and thereby facilitate the service of this growing private sector debt burden. For the moment such foreign munificence seems to have a very positive effect for all concerned. Foreigners are deriving great returns investing in a booming US economy, which in turn reinforces the tendency to invest more. But consider the effects of this virtuous cycle: foreign ownership of US assets now measure over $6.4 trillion (equivalent to 66 per cent of US GDP), according to Bridgewater Associates, compared to US holdings of foreign assets which measure a mere $4.7 trillion (or 48 per cent of GDP). On a net basis, the US now is a net debtor to the tune of almost 20% of GDP, and this continues to mount with every monthly increase on the nations current account deficit. The foregoing study by Bridgewater Associates breaks down the extent of this foreign ownership in the following manner: - Foreigners own a record 38% of the US treasury market, and if you take out the treasuries held by the Fed, foreigners own 44% of the liquid treasury market. - Foreigners own a record 20% of the US corporate bond market. - Foreigners own 8% of the US equity market. Including direct investment foreigners own l4% of US corporations Foreign ownership of US assets per se is not the problem. The threat comes from the fact that this foreign ownership overlays an economy rife with debt and, hence, highly vulnerable to financial dislocation should this foreign capital withdraw precipitously. We have already seen the effects of the sudden withdrawal of short-term capital in economies prone to financial fragility during 1997/98: Thailand and Korea immediately spring to mind. But in one respect the US is far more vulnerable than these Asian economies, which at least had the virtue of high levels of private household savings to fall back on. In the US, by contrast, household savings are virtually non-existent (indeed, they are negative, as of the most recent figures for July). Indeed, the ratio of debt relative to income for both the household and corporate sectors is at an all-time high. By way of comparison, these ratios are well above the levels that led to the widespread banking and savings and loan crises a mere decade ago. The net debt issuance of US private households and corporations taken in aggregate is now nearly 6 per cent of national income, according to a recent study by Andrew Smithers---a historically unprecedented level. Wynn Godley of the Jerome Levy Institute has pointed out that when a private sector deficit of this magnitude has been attained elsewhere in the G-10, it has invariably led to financial crisis, recession, or both. The parallels with the Asian nations circa 1997 are both ominous and instructive. As Bridgewater notes, If foreign sentiment does ever turn they have a boatload of US assets that could be sold. These holdings are so big, and so much larger than US assets abroad that they are a long-term risk to US financial markets. A precipitous withdrawal of foreign capital risks setting in motion a deflationary dynamic in which debt defaults intensify, thereby accelerating an even greater contraction in economic activity. And I remember Jim and Matt telling us Godley and Wray argued in a March 2001 *Business Week* that Bush's incremental tax cut won't have the clout in the medium term to finance the private sector's debt load. Now, if I may risk sounding my usual ignorant self in matters economical, ain't it the truth that America's problem ain't quite the same as Japan's? Well, not at the same stage, anyway. Sure, America has excess capacity - lots of it - and sure, Japan has a bad debt problem - lots of it - but ain't private debt the big cloud on the American horizon? It occurs to me that if you give rich Yanks a big tax cut, or a 'prosperity dividend', they're gonna do more of what they have been doing: buy foreign made luxury consumer goods and encourage Veblenian emulation by people emboldened to leverage their tax cuts. More money in the hand is more creditworthiness as far as American consumers have been concerned of late. What America actually needs is to start working on private debt, and mebbe get somebody somewhere to buy more of the stuff its own cappos make. What I'm trying to say is that tax cuts, in the
Re: RE: wynne godley
At 17/07/01 02:00 +0100, you wrote: Michael Perelman: I think that Godley may sign up to pen-l after he returns from England. I hope that we can discuss his paper fruitfully. I'd be specially interested to discuss his views about import controls. Mark Wynne Godley is a thoughtful and courageous person, but are import controls really a viable option for developed capitalist economies at present? It is hard to see the Bush administration going through the fine print of the GATT conventions to justify this. Besides isn't a continued unequal flow of value into the USA essential to it continuing generously to play the role of consumer of last resort? I see that one model Wynne Godly explored originally developed at Cambridge University, is a closed world model in which 11 trading blocs--of which the United States, China, Japan, and Western Europe are four--are represented. This model is based on a matrix in which each bloc's imports are described in terms of exports from the other 10 blocs. From this information and using alternative assumptions (for example, about growth rates, trade shares, and energy demands and supplies), past trends can be identified and the patterns of trade and production analyzed to reveal any structural imbalances. It would be interesting to discuss whether there is any connection with why US consumer spending has not fallen yet as Wynne Godley predicted it would - to be fair sometime in the medium term. This relates to the marxian question of whether there is too much capital in the world relative to purchasing power of the masses, which is certainly my assumption. I may have missed if anyone has spelt out the arguments for the alternative hypothesis, that there is too little capital. It would be interesting if the delayed contraction of spending by the consumers of last resort, in the USA, could be linked to a model in which they continue to benefit from an uneven flow of value from outside economies which are forced into relative devaluation. It may be that the relative flow of capital into the USA could be compared with the relative flow of imports. Mark's question about import controls implies a view that international trade affects some countries particularly adversely, and this is a defensive manoeuvre which should be compared to devaluation as a way of getting some progressive control over the situation. But shouldn't we be looking at the whole world system? I would be more interested in theories Wynne Godley may have about how the global imbalances are working out, and what interventions should be discussed at the global level to ward off the prospect of global recession, and get some leverage on the global capitalist system. Chris Burford
Re: Wynne Godley
I read it a while ago, and thought it was pretty persuasive, but I'd be interested in any critiques. Joel Blau Michael Perelman wrote: Jim Devine has referred to Wynne Godley's 7 unsustainable processes before. Does anybody else have any opinions about the article? -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
