Endarkenment

[MancMellow]

Nema te deregulacije koja ce u Evropi ili Americi/Kanadi (pa cak i Rusiji) napraviti jeftiniju radnu snagu od Indije i Kine (i ostalih) za jos dugo vremena. Trend je katastrofalan po politicku stabilnost (videti Table 1 iz fotke koju sam okacio). U Evropi tj EU, onom najrazvijenijem delu, nema bas tolike, i sve vece, razlike u primanjima, ali zato nema ni rasta ni zaposlenosti pa ce puci jos i pre. Nijedna opcija koja je sada moguca ne vodi u stabilnost i to je prosto tako. 

[Budja]

Pisao je o tome Chang.

 

Lepo je sto Chang pojma nema ni o dividendama ni o otkupu deonica.

 

Slicno kao sto Harvi kaze da je A zero-growth capitalist economy is a logical and exclusionary contradiction. It simply cannot exist. This is why zero growth defines a condition of crisis for capital. If prolonged, zero growth of the sort that prevailed in much of the world in the 1930s spells the death knell of capitalism.

 

Kakva mudrost!

Tautologija na nivou Grunfa.

[Budja]

Ne mračimo mi nego verujemo autorima tih članaka da ne lupaju bez veze 

 

Stani jbt, pa ovde je u obzir uzet (skoro) ceo svet

 

Problem je sto Harvey i Chang igraju za raju i potpuno ignorisu sta mainstream ekonomisti pisu na iste teme kao da politika dividendi, RD i slicno nije u empirijskoj i teorisjkoj ekonomiji i finansijama iseckana na sitna crevca.

 

Dosadan jesam, ali tu jedino vredi Piketi jer on zapravo vodi dijalog sa neoklasicarima, ova dvojica prosto ignorisu mainstream ili ga karikiraju da bi ispali pametni.

[Budja]

U nekom trenutku vecina ucesnika na trzistu kapitala postali su u sustini spekulanti. Pod time mislim da su odustali od ,,originalne" logike investiranja, a to je da investiras u neku firmu zbog profita koji ce ta firma generisati, tj. da drzis akcije zbog dividendi, i presli na logiku zvanu kupi akcije jeftino prodaj skupo. Ja ne kazem da su spekulanti losi a priori, naprotiv oni su neophodni jer ubrizgavaju likvidnost u trziste, nije biti spekulant ,,ruzna" ili nepozeljna profesija, treba i mora da ih bude. Ali je problem rekao bih kada smo ,,svi" spekulanti a ne neki mali % ucesnika na berzi.

 

Zasto se dogodilo ne znam, jedno objasnjenje je starenje zapadnih drustava, cinjenica da ,,pravo" investiranje jednostavno nije moglo da generise povracaj na ulozen novac koji je bio potreban da se pokriju nadolazece potrebe penzionih fondova i sl., i onda je krenulo jurenje vecih i vecih prinosa kroz raznorazne trange-frange, na kraju, mahinacije.

 

Da, rec je o sve vecoj odvojenosti finansijskog od realnog sektora, tj. finansijski sektor se vrti u krug umesto da bude intermedijator.

Otuda rast razlicitih slozenih hartija od vrednosti i investiranja u real estate i consumer credit, a pad korporativnog finansiranja.

[bigvlada]

Pa 70tih je poceo da ,,stuca" ozbiljno ekonomski model Zapada koji je do tada sljakao, to svi znamo (stagflation itd.), pa je to sve onda zabiberila energetska kriza. Regan i Tacer su produzili zivotni vek tom modelu putem deregulacije - neki potencijal za ekonomski razvoj koji je vec postojao ali je bio ,,obuzdat" obimnom regulacijom na taj nacin je pusten iz boce (narocito u finansijskom segmentu). Do se do kraja 80tih/pocetka 90tih u sustini izduvalo ali je onda dosao informaticki/tehnoloski bum 90tih, pa su mnogi mislili da je sve OK i nastavili po utabanom od strane Regana/Tacerke. Kada su Amerika (i dobrim delom Britanija) u pitanju, stvar je u tome sto do 2000ih vise nije imalo sta da se deregulise maltene, nije postojao neki "pent-up" potencijal za ekonomski rast koji je mogao tek tako da se ,,oslobodi". 2000tih je posle pucanja tehnoloskog mehura Fed onda bukvalno naduvao balon kredita i nekretnina i time produzio zivotni vek celoj konstrukciji do velike finansijske krize. EU bez Britanije je malo drugaciji slucaj, oni nisu nikada deregulisali trziste rada, i tu postoji "pent up" rast koji bi mogao da se oslobodi i da kupi jos neko vreme (recimo 10 godina).

 

No to je sve manje vise poznato, meni ostaje nepoznanica sustinska onda zasto je sistem poceo da trokira 70tih? Sta je tu fundamentalni problem? Ocigledno da nije preterana regulacija sama po sebi problem, jer je ona ,,samo" kupila jos koju deceniju.

 

Da li je stvar u tome da je do 70tih, Zapad, a Amerika narocito, jednotavno izgubio tu veliku prednost koju je imao nad ostatkom sveta zbog pocetnog skoka u industrijalizaciju, kolonijalizma, imperijalizma i svega ostalog? A kod Amerike narocito, zbog cinjenice da je americka industrija iz drugog svetskog rata izasla jaca dok je evropska bila skoro sva sravnjena sa zemljom?

 

U to vreme se zahuktavala upotreba poreskih rajeva. 

[MancMellow]

Problem je sto Harvey i Chang igraju za raju i potpuno ignorisu sta mainstream ekonomisti pisu na iste teme kao da politika dividendi, RD i slicno nije u empirijskoj i teorisjkoj ekonomiji i finansijama iseckana na sitna crevca.

 

Dosadan jesam, ali tu jedino vredi Piketi jer on zapravo vodi dijalog sa neoklasicarima, ova dvojica prosto ignorisu mainstream ili ga karikiraju da bi ispali pametni.

 

Ma to nije problem, nisam ni mislio na njih dvojicu prevashodno. Piketi - naravno, ali rasprava je pocela o intervjuu sa Fredrikom Eriksonom i Bjernom Vajgelom, a ja sam dodao prikaz knjige Roberta Gordona od Vilijema Nordhausa odakle i ona dva grafikona koja sam postavio. 

[hazard]

http://www.economist.com/news/economics-brief/21702740-second-article-our-series-seminal-economic-ideas-looks-hyman-minskys

 

 

Financial stability

Minsky’s moment

 

The second article in our series on seminal economic ideas looks at Hyman Minsky’s hypothesis that booms sow the seeds of busts

Jul 30th 2016 | From the print edition

 

FROM the start of his academic career in the 1950s until 1996, when he died, Hyman Minsky laboured in relative obscurity. His research about financial crises and their causes attracted a few devoted admirers but little mainstream attention: this newspaper cited him only once while he was alive, and it was but a brief mention. So it remained until 2007, when the subprime-mortgage crisis erupted in America. Suddenly, it seemed that everyone was turning to his writings as they tried to make sense of the mayhem. Brokers wrote notes to clients about the “Minsky moment” engulfing financial markets. Central bankers referred to his theories in their speeches. And he became a posthumous media star, with just about every major outlet giving column space and airtime to his ideas. The Economist has mentioned him in at least 30 articles since 2007.

 

If Minsky remained far from the limelight throughout his life, it is at least in part because his approach shunned academic conventions. He started his university education in mathematics but made little use of calculations when he shifted to economics, despite the discipline’s growing emphasis on quantitative methods. Instead, he pieced his views together in his essays, lectures and books, including one about John Maynard Keynes, the economist who most influenced his thinking. He also gained hands-on experience, serving on the board of Mark Twain Bank in St Louis, Missouri, where he taught.

 

Having grown up during the Depression, Minsky was minded to dwell on disaster. Over the years he came back to the same fundamental problem again and again. He wanted to understand why financial crises occurred. It was an unpopular focus. The dominant belief in the latter half of the 20th century was that markets were efficient. The prospect of a full-blown calamity in developed economies sounded far-fetched. There might be the occasional stockmarket bust or currency crash, but modern economies had, it seemed, vanquished their worst demons.

 

Against those certitudes, Minsky, an owlish man with a shock of grey hair, developed his “financial-instability hypothesis”. It is an examination of how long stretches of prosperity sow the seeds of the next crisis, an important lens for understanding the tumult of the past decade. But the history of the hypothesis itself is just as important. Its trajectory from the margins of academia to a subject of mainstream debate shows how the study of economics is adapting to a much-changed reality since the global financial crisis.

 

Minsky started with an explanation of investment. It is, in essence, an exchange of money today for money tomorrow. A firm pays now for the construction of a factory; profits from running the facility will, all going well, translate into money for it in coming years. Put crudely, money today can come from one of two sources: the firm’s own cash or that of others (for example, if the firm borrows from a bank). The balance between the two is the key question for the financial system.

 

Minsky distinguished between three kinds of financing. The first, which he called “hedge financing”, is the safest: firms rely on their future cashflow to repay all their borrowings. For this to work, they need to have very limited borrowings and healthy profits. The second, speculative financing, is a bit riskier: firms rely on their cashflow to repay the interest on their borrowings but must roll over their debt to repay the principal. This should be manageable as long as the economy functions smoothly, but a downturn could cause distress. The third, Ponzi financing, is the most dangerous. Cashflow covers neither principal nor interest; firms are betting only that the underlying asset will appreciate by enough to cover their liabilities. If that fails to happen, they will be left exposed.

 

Economies dominated by hedge financing—that is, those with strong cashflows and low debt levels—are the most stable. When speculative and, especially, Ponzi financing come to the fore, financial systems are more vulnerable. If asset values start to fall, either because of monetary tightening or some external shock, the most overstretched firms will be forced to sell their positions. This further undermines asset values, causing pain for even more firms. They could avoid this trouble by restricting themselves to hedge financing. But over time, particularly when the economy is in fine fettle, the temptation to take on debt is irresistible. When growth looks assured, why not borrow more? Banks add to the dynamic, lowering their credit standards the longer booms last. If defaults are minimal, why not lend more? Minsky’s conclusion was unsettling. Economic stability breeds instability. Periods of prosperity give way to financial fragility.

 

With overleveraged banks and no-money-down mortgages still fresh in the mind after the global financial crisis, Minsky’s insight might sound obvious. Of course, debt and finance matter. But for decades the study of economics paid little heed to the former and relegated the latter to a sub-discipline, not an essential element in broader theories. Minsky was a maverick. He challenged both the Keynesian backbone of macroeconomics and a prevailing belief in efficient markets.

 

It is perhaps odd to describe his ideas as a critique of Keynesian doctrine when Minsky himself idolised Keynes. But he believed that the doctrine had strayed too far from Keynes’s own ideas. Economists had created models to put Keynes’s words to work in explaining the economy. None is better known than the IS-LM model, largely developed by John Hicks and Alvin Hansen, which shows the relationship between investment and money. It remains a potent tool for teaching and for policy analysis. But Messrs Hicks and Hansen largely left the financial sector out of the picture, even though Keynes was keenly aware of the importance of markets. To Minsky, this was an “unfair and naive representation of Keynes’s subtle and sophisticated views”. Minsky’s financial-instability hypothesis helped fill in the holes.

 

His challenge to the prophets of efficient markets was even more acute. Eugene Fama and Robert Lucas, among others, persuaded most of academia and policymaking circles that markets tended towards equilibrium as people digested all available information. The structure of the financial system was treated as almost irrelevant. In recent years, behavioural economists have attacked one plank of efficient-market theory: people, far from being rational actors who maximise their gains, are often clueless about what they want and make the wrong decisions. But years earlier Minsky had attacked another: deep-seated forces in financial systems propel them towards trouble, he argued, with stability only ever a fleeting illusion.

 

Outside-in

Yet as an outsider in the sometimes cloistered world of economics, Minsky’s influence was, until recently, limited. Investors were faster than professors to latch onto his views. More than anyone else it was Paul McCulley of PIMCO, a fund-management group, who popularised his ideas. He coined the term “Minsky moment” to describe a situation when debt levels reach breaking-point and asset prices across the board start plunging. Mr McCulley initially used the term in explaining the Russian financial crisis of 1998. Since the global turmoil of 2008, it has become ubiquitous. For investment analysts and fund managers, a “Minsky moment” is now virtually synonymous with a financial crisis.

 

Minsky’s writing about debt and the dangers in financial innovation had the great virtue of according with experience. But this virtue also points to what some might see as a shortcoming. In trying to paint a more nuanced picture of the economy, he relinquished some of the potency of elegant models. That was fine as far as he was concerned; he argued that generalisable theories were bunkum. He wanted to explain specific situations, not economics in general. He saw the financial-instability hypothesis as relevant to the case of advanced capitalist economies with deep, sophisticated markets. It was not meant to be relevant in all scenarios. These days, for example, it is fashionable to ask whether China is on the brink of a Minsky moment after its alarming debt growth of the past decade. Yet a country in transition from socialism to a market economy and with an immature financial system is not what Minsky had in mind.

 

Shunning the power of equations and models had its costs. It contributed to Minsky’s isolation from mainstream theories. Economists did not entirely ignore debt, even if they studied it only sparingly. Some, such as Nobuhiro Kiyotaki and Ben Bernanke, who would later become chairman of the Federal Reserve, looked at how credit could amplify business cycles. Minsky’s work might have complemented theirs, but they did not refer to it. It was as if it barely existed.

 

Since Minsky’s death, others have started to correct the oversight, grafting his theories onto general models. The Levy Economics Institute of Bard College in New York, where he finished his career (it still holds an annual conference in his honour), has published work that incorporates his ideas in calculations. One Levy paper, published in 2000, developed a Minsky-inspired model linking investment and cashflow. A 2005 paper for the Bank for International Settlements, a forum for central banks, drew on Minsky in building a model of how people assess their assets after making losses. In 2010 Paul Krugman, a Nobel prize-winning economist who is best known these days as a New York Times columnist, co-authored a paper that included the concept of a “Minsky moment” to model the impact of deleveraging on the economy. Some researchers are also starting to test just how accurate Minsky’s insights really were: a 2014 discussion paper for the Bank of Finland looked at debt-to-cashflow ratios, finding them to be a useful indicator of systemic risk.

 

Debtor’s prism

Still, it would be a stretch to expect the financial-instability hypothesis to become a new foundation for economic theory. Minsky’s legacy has more to do with focusing on the right things than correctly structuring quantifiable models. It is enough to observe that debt and financial instability, his main preoccupations, have become some of the principal topics of inquiry for economists today. A new version of the “Handbook of Macroeconomics”, an influential survey that was first published in 1999, is in the works. This time, it will make linkages between finance and economic activity a major component, with at least two articles citing Minsky. As Mr Krugman has quipped: “We are all Minskyites now.”

 

Central bankers seem to agree. In a speech in 2009, before she became head of the Federal Reserve, Janet Yellen said Minsky’s work had “become required reading”. In a 2013 speech, made while he was governor of the Bank of England, Mervyn King agreed with Minsky’s view that stability in credit markets leads to exuberance and eventually to instability. Mark Carney, Lord King’s successor, has referred to Minsky moments on at least two occasions.

 

Will the moment last? Minsky’s own theory suggests it will eventually peter out. Economic growth is still shaky and the scars of the global financial crisis visible. In the Minskyan trajectory, this is when firms and banks are at their most cautious, wary of repeating past mistakes and determined to fortify their balance-sheets. But in time, memories of the 2008 turmoil will dim. Firms will again race to expand, banks to fund them and regulators to loosen constraints. The warnings of Minsky will fade away. The further we move on from the last crisis, the less we want to hear from those who see another one coming. 

[eumeswil]

Problem je sto Harvey i Chang igraju za raju i potpuno ignorisu sta mainstream ekonomisti pisu na iste teme kao da politika dividendi, RD i slicno nije u empirijskoj i teorisjkoj ekonomiji i finansijama iseckana na sitna crevca.

 

Dosadan jesam, ali tu jedino vredi Piketi jer on zapravo vodi dijalog sa neoklasicarima, ova dvojica prosto ignorisu mainstream ili ga karikiraju da bi ispali pametni.

 

Jak™ taj dijalog, Piketi polazi od vrlo uske definicije kapitala, a predlog rešenja je naravno samo band-aid, pored toga što je čak i kao takav skoro neostvariv u stvarnosti.

 

 

Capitalism in the 21st century short on capital

Why Piketty isn’t Marx

Thomas Piketty’s thousand-page economics bestseller reduces capital to mere wealth — leaving out its political impact on social and economic relationships throughout history.

http://mondediplo.com/2015/05/12piketty

 

Thomas Piketty’s global renown shouldn’t stop us from asking some hard political questions — or rather questions about his intellectual and political deception. The media have been almost unanimous about his Capital in the Twenty-First Century  (1), proof in itself of the book’s total innocuousness. The world would have to have changed a great deal for Libération, Le Monde, the New York Times, the Washington Post and many more to be so enthusiastic about anything actually controversial. Some English-language media, helped by less than progressive reservations, have managed to keep their heads: theFinancial Times took Piketty to task on an obscure statistical point;Bloomberg ran a front cover last May in the style of a teen magazine, showing Piketty as a heartthrob surrounded with stars.

One thing is for sure: only favourably disposed media could hail Piketty as a “21st-century Marx” simply because he calls his bookCapital. He admits he has “never managed really” to read Das Kapital (2) or any other works of Marx, does not set out any theory of capitalism, and makes no attempt to challenge its basis (3).

We should not ignore the book’s merits. Every commentator must be impressed by the scale and quality of Piketty’s statistical work. But its principal virtue lies in the fact that it is a book. Most economists, driven by the need to publish, have unlearned the skill of writing books. Instead, they produce technical papers (not longer than the 15 pages allowed by academic journals) so standardised that they lose all meaning. Capital in the Twenty-First Century is the thousand-page culmination of 15 years of dedicated toil. The usefulness of social sciences is never so clear as when they contribute to the political debate with solidly established facts.

But all the methodological rigour in the world will not make up for the most basic deception, so obvious that it has passed unnoticed: the title. Piketty tells us he is going to discuss capital. He is aware that a well-known author has written a book about it before him. He seems to think “I can get away with this”. Unfortunately, it does matter: it’s fine to call a new book Critique of Pure Reason provided you are not writing about, say, herbal medicine.

Just what is capital? Piketty, not having really read Das Kapital, is only able to give a very superficial definition: the wealth of the wealthy. To Marx, capital was something else entirely, a mode of production, a complex social relationship which, crucially, addsemployment relationships to the monetary relationships of simple market economies. These are based on private ownership of the means of production and on the legal myth of the “free worker”, who is deprived of any means of making a living independently and therefore forced to hire himself out to survive, and to submit to domination by an employer.

  Ultra-long-term view that isn’t

That is what capital is, not just the Fortune 500. In the narrow sense of wealth, capital affects ordinary people through the obscene spectacle of wealth inequality. But as a mode of production and a social relationship, it affects them far more through the slavery it creates — an eight-hour working day takes up half their waking day. Redundant workers probably suffer less from seeing the rich parade their wealth than from the way their lives have been wrecked by the iron law of financial valuation. The same goes for those in work, who suffer under the tyrannical demands of productivity and profitability, constant threats of mass layoffs, delocalisation, restructuring — the energy-sapping precariousness and brutal nature of employment. None of this is even mentioned in the book.

The form and intensity of this slavery are determined by the historical circumstances under which capitalism is manifested — for in practice, there are many different kinds of capitalism. And it is the inseparably linked, changing economic and political factors that continually steer capitalism in new directions. But Piketty is quite unable to see things in a light that would show up the specifically political factors in the history of capitalism.

The first problem is his insistence on taking an ultra-long-term view — which is welcome, given how little most economists know about history, but creates its own problems. To do this over decades can be highly relevant and informative; to do it ultra-long-term, over millennia, means constructing meaningless statistical models and creating huge anachronisms. Piketty presents a graph of “after-tax rate of return vs growth rate at the world level from antiquity to 2100”, as if the concepts of GDP, capital and return on capital after tax had any relevance in antiquity, or even in the 18th century. Applying such concepts as if they were universal is a typical economist’s solecism. Piketty is unable to see that they are ad hoc (and recent) inventions. Ironically, it is when he turns historian, and suddenly switches to the ultra-long-term view, that he most clearly demonstrates his ignorance of the historical realities.

There is also a clear risk of depoliticisation, in that events taking place over decades become minor fluctuations when seen from the perspective of millennia. The decade is the pertinent timeframe forpolitical action, the timeframe within which nations judge their living standards and assess the scope for doing something about them.

Readers may object that Piketty deals mainly with the 20th century. He does, but he applies to it the same universal “laws” that he believes he can apply to capitalism through the ages. To believe that it is possible to define the course of capitalism according to invariant, transhistorical laws, modulated only by fluctuations whose principles are never clearly explained, is the most distinctive feature of economists’ thinking. They see themselves as physicians to society, and often succumb to the temptation of formulating scientific “laws”, like the law of gravity. Piketty is not as naïve as that. But the fact that he too is tempted shows how prevalent “economist-think” has become, affecting even those who (belatedly) advocate a break with economism.

  ‘Fundamental laws of capitalism’

There are no transhistorical laws applicable to capitalism, and Piketty’s own fundamental laws of capitalism are nothing more than accounting equations. What does exist is the historical course of capitalism, as determined by institutional configurations, their succession controlled mainly by political processes; each of them brings particular forms of the servitude that capital — not wealth — imposes on labour.

Piketty may repeat over his thousand pages that inequality increases when r(rate of return on capital) is greater than g (growth rate), but he has explained nothing because he doesn’t describe the factors that determine rates of return and growth in each era. These depend on the organisation of structures in the particular era, the result of political struggles — of class struggles. In France, there was an impressive institutional conjunction after the second world war, and the balance of power between capital and labour tipped some way in favour of labour, with tight controls on capital, the reduction of the stock exchange to a rump, strict regulation of international competition, economic policies geared towards growth and employment, and repeated currency devaluations, producing 5% growth and forcing capital to behave a little more decently. But this only happened because the Matignon agreements of 1936 had prepared the ground after the liberal elite of the 1920s had been swept away, because employers had been compromised by collaboration with the Nazis, the Communist Party had 25% of the vote in the post-war years, and capitalists were nervous about the Soviet Union.

Though Piketty repeatedly mentions “institutions” and “politics”, he is blind to institutional and political history. He talks about the effects of war, and more remotely of decolonisation. These external shocks are almost impossible to quantify, but their role is to destroy capital (wealth) and turn the clock back. He fails to mention general strikes, social struggles, the power struggle between capital and labour, and their institutional consequences. Capitalism according to Piketty has no history — only an unvarying age-old law, occasionally disturbed by accidental events, but always returning to its implacable long-term trend, which leaves no room for conflict between social groups, the real force behind institutional change.

Yet it is the outcome of such conflicts that determines the course of capitalism. Just as it took one direction after the second world war, it took another at the end of the 1970s. Piketty says nothing of the ideological and political reconquest by the rich who, having been less rich for a time, wanted to be richer again. The rollback agenda of US conservatives in the 1970s explicitly expressed the intention of reversing social advances. These advances are always institutional conquests.

The key question is who controls institutions and structures, who has the power to create them, or reshape them to their own ends. Such political questions never surface; the book never mentions any real conflict. There is no analysis of financial deregulation in the 1980s, which made businesses more subject than ever to shareholder control. There is no account of the key role of the socialist governments of the time, the management revolution or the elimination of political and economic differences between leftwing and rightwing elites. There is no account of the unchecked neoliberal drift of the EU from 1984 towards “free and undistorted competition” — the mechanism par excellence for the destruction of advanced social models. There is no account of the treacherous treaties that have removed all room for manoeuvre in national economic policy. Unless these things happened by chance, they must be human work. Capital, as a social group, has now won back everything it conceded after the second world war. But it is still pressing its advantage — with unprecedented support in France from the Socialist Party, which seems to have decided to hand it everything on a platter.

  Evasion and sleight of hand

Piketty remains in a fog of macroeconomic abstractions, repeating that r > g, and cannot claim to have shed light on anything, still less to have made the “theoretical breakthrough” some journalists claim for him. He is ill equipped to tell this story. Nothing in his career has prepared him for it: he cannot go overnight from a social-democratic, organic economist to being the Marx of the 21st century. He is a historian of the sociopolitical school of Pierre Rosanvallon; he was an adviser to the Socialist Ségolène Royal during her 2007 presidential election campaign; the media call him one of the “substitute intellectuals”. In the late 1990s, tousled casual was no longer fashionable, people wanted seriousness: figures, a scientific approach and no ideology, except for Rosanvallon-style globalisation-is-doing-OK-though-it-could-do-better equivocation, suggesting we should not rebel over a few imperfections (“that’s what we have experts for”). La République des Idées (RI), a thinktank and publisher of “correct” ideas led by Rosanvallon, with a mission to nurture France’s Socialist Party intellectually, has consistently taken great care never to raise any indecorous issues. RI has talked about inequality for many years, weeping over the sufferings of the workers, but has blamed rapid technological innovation and lack of training, and praised the virtues of academic research. What about free trade and the devastation it brings? Or the tyranny of shareholder value? Or the EU, now in the final stages of neoliberalism? Not a word (4). RI thinks all these are our destiny. It has a strategy of evasion — and sleight of hand. Those who claim to be serious and are keen to maintain their influence and their reputation in the media never mention such things.

The financial crisis of 2007-8 and the European crisis of 2010 brought a violent resurgence of what had been suppressed. (This will have to be discussed. But it is difficult to discuss such issues from scratch — when one does not know how to respond properly, not knowing about whole areas and without the words to describe what can be seen.) Finance has been globalised and nobody had taken any notice, but it is now clear that everything is not rosy. The economist Daniel Cohen, like Piketty, after decades of silence on this, has suddenly realised that the design of the EU’s monetary union was “faulty from the start” (5). These experts must be running on diesel: they clearly need time to warm up. Their belated rectifications will have very little effect. Long-term intellectual and political habits are hard to overcome. Capital is riddled with them; Piketty skips over the political and social history that led to Fordism, then to neoliberalism.

Even more spectacular is the ambition expressed in the last part of his book, boldly titled “Regulating Capital in the 21st Century”. The logical consequence of the strategy of evasion is that taxation becomes the only remaining tool available. Giving up on trying to change structures means taking palliative measures. Taxation has never been anything more than a social-democratic palliative — if we can’t tackle the causes, let’s at least try to alleviate the effects. Piketty, torn between the immediate problem and his desire not to disrupt anything fundamental, would like taxation to have greater virtues than it does, even the ability to regulate international finance. It’s hard to see what kind of tax could substitute for the necessary major assault on the structures of liberalised finance. What tax could replace bank separation, closure of some markets, a ban on securitisation? If Piketty saw the problem this way, he would have to approve of the creation of a definancialised enclave with adequate protections — severe restrictions on the freedom of movement of capital. That would be too much for him: he is so anxious to maintain his anti-nationalist credentials that he apologises for using France as an example.

  Globalised solutions

In line with its own unvoiced assumptions, orthodoxy requires a solution in the style of Jacques Attali (first president of the European Bank): globalised capitalism has suffered a few mishaps, but we will find globalised solutions. People must be patient. The globalisation of solutions is coming. “Socialist” France is prepared to abolish a tiny EU tax on financial transactions, but a global tax on capital is on the way. Piketty takes a thousand pages to conclude that the choice is between a global tax and isolationism. Those who have read his book in good faith may feel disappointed that they are not yet out of the woods.

They may also have been a little naïve. The media sold Piketty as the new Marx, but did not mention his background. And readers believed the media. It is surprising how many people, including some who should have known better, were taken in. Piketty claims he is “vaccinated for life against the conventional but lazy rhetoric of anti-capitalism.” A clean-shaven Marx, then, not a hair out of place. But he is still willing to wear a false beard. In a US interview with New Republic, he claimed he had no time for Marx (6). Back in France, he said straight out that he was “trying to contribute to the emergence of the communist idea” (7). And everyone believed him. In December 2014 he reaffirmed his belief in “market forces” and rebuked “the new extreme left movements in Europe”, Podemos and Syriza (8). But by January he had become an informal adviser to Podemos’s leader Pablo Iglesias, since he now saw the rise of anti-austerity parties as “good news for Europe” (9). On a French television show in February, he refused to say whether he was a leftwing or a rightwing economist. He may lack intellectual consistency, but you have to admire the opportunism with which he adapts to public opinion in real time, so as to please the widest possible audience.

Piketty provides a scientific consecration, not only of the public perception that monetary inequality exists, but also of the theme around which the discussion of capitalism will revolve — around which it already revolves: even The Economist has had years of articles on monetary inequality, which will be the weakest link in the diagnosis, the point where the most inoffensive critiques converge. Monetary inequality has a great virtue: it makes it possible to avoid talking about the other inequalities created by capitalism, which are not accidental, but fundamental and constituent — the political inequalities in the true sense of hierarchical subservience in employment; that in business, some give orders and others must follow them. No tax, not even a global tax, will ever be able to address this.

To ask questions about this inequality, which is ultimately about the way lucrative property (capital) (10), controls our lives, and of the pressure to be employed, is to ask the key question that the real Marx asks about capital. Or anyway the key question about capitalism’s current configuration, which a global financial tax (that will never happen) could do nothing about. Only a resumption of the struggle for popular sovereignty, by a single nation, or several nations together, according to political circumstances, would be able to do anything — by changing, through the transformation of structures, the balance of power that allows capital to hold society to ransom (11).

Piketty’s critique of wealth inequality touches on none of this. He has the good taste to offer us a pleasant vision of social harmony, with the top 1% or 0.1%, as the villains — as if the remaining 99.9% were united in deservingness by their employment, when they are in fact divided by all the conflicts of their own situations and the neoliberal violence propagated along the chains of command in business. Those divisions are all the greater because of the particular structures of contemporary capitalism, established by the persistent efforts of a class aware of itself and its interests; but this is something those who claim to be serious will not mention, even when they claim they are discussing the theory of capital.

The worst is that Piketty’s book has an explicit “social philosophy”: labour is deserving, but wealth generated through business enterprise is good — unless the rich merely sit on that wealth. The formula “every fortune is partially justified yet potentially excessive” is not scary. The media, controlled by their shareholders, did not misjudge Piketty. In his desire for generalised peace — between capital and labour, the peace of the 99.9%, the peace of “global governance” — Piketty, who mentions “institutions”, “politics” and “conflicts” only as a matter of form, delivers his vision: “The bipolar confrontations of the period 1917-89 are now clearly behind us.” This does not sound like our moment in time, when a historic crisis of capitalism has returned the idea of ending it to the intellectual agenda.

Frédéric Lordon

Frédéric Lordon is an economist and author of Et la vertu sauvera le monde... Après la débâcle financière, le salut par l’éthique?(Raisons d’agir, Paris, 2003)

Translated by Charles Goulden

 

Frédéric Lordon is an economist and the author of La Malfaçon: Monnaie européenne et souveraineté démocratique (Production Defects: the European Currency and Democratic Sovereignty), Les Liens qui Libèrent, Paris, 2014

(1) Harvard University Press, 2014.

(2) Interview, New Republic, Washington, DC, 5 May 2014.

(3) See Russell Jacoby, “Something better than this”, Le Monde diplomatique, English edition, August 2014.

(4) Except for Jean Peyrelevade’s Le capitalisme total (Total Capitalism), which begins with a diatribe against shareholder capitalism and ends with an ode to responsibility.

(5) “La crise tient fondamentalement aux vices de la construction de la zone euro”(The Crisis is Fundamentally Due to Design Faults in the Eurozone), Daniel Cohen,L’Express, Paris, 5 June 2013.

(6) 5 May 2014.

(7) Debate with Alain Badiou on “Contre-courant”, Mediapart, 15 October 2014.

(8) Interview with Owen Jones, The Guardian, London, 22 December 2014.

(9) Interview, The Guardian, 12 January 2015.

(10) Bernard Friot, L’Enjeu du salaire (What’s at Stake for Employees), La Dispute, Paris, 2012.

(11) See Frédéric Lordon, “What’s left for the left?”, Le Monde diplomatique, English edition, September 2014.

 

 

 

 

 

 A i on igra za raju malo kad zatreba.

 

The media sold Piketty as the new Marx, but did not mention his background. And readers believed the media. It is surprising how many people, including some who should have known better, were taken in. Piketty claims he is “vaccinated for life against the conventional but lazy rhetoric of anti-capitalism.” A clean-shaven Marx, then, not a hair out of place. But he is still willing to wear a false beard. In a US interview with New Republic, he claimed he had no time for Marx (6). Back in France, he said straight out that he was “trying to contribute to the emergence of the communist idea” (7). And everyone believed him. In December 2014 he reaffirmed his belief in “market forces” and rebuked “the new extreme left movements in Europe”, Podemos and Syriza (8). But by January he had become an informal adviser to Podemos’s leader Pablo Iglesias, since he now saw the rise of anti-austerity parties as “good news for Europe” (9). On a French television show in February, he refused to say whether he was a leftwing or a rightwing economist. He may lack intellectual consistency, but you have to admire the opportunism with which he adapts to public opinion in real time, so as to please the widest possible audience.

[eumeswil]

Naravno, to je to. Ali kako je do toga došlo? Pa recimo da 1955 neko je, naravno, mogao da proda svoje deonice u GM, ali sve što je sa tim param mogao je da, verovatno (nisam se udubljivao u cifre, ali pretpostavljam, možda grešim) kupi neke druge sa marginalno drugačijim povratom od prodatih. Ili ako ne marginalno, onda ne ludački većom razlikom i mnogo manjim rizikom. Globalno tržište postoji, ali samo za kapital. Ne postoji za radnu snagu i ne postoji, što je još važnije, za uslove poslovanja koji u velikoj meri zavise od države. Uopšte nisam optimista.

Koliko ima smisla objašnjenje teorijom monopolske faze kapitala? Ulažu u "fiktivni" kapital jer u realnom sektoru nemaju dovoljno dobre profitabilne prilike.

 

 

 

The first economist to connect the theory of crisis to the theory of monopoly was the Polish economist Michal Kalecki, who drew his inspiration from Marx and Rosa Luxemburg. Kalecki’s work in the early 1930s in Polish had developed, according to Joan Robinson and others in the circle of younger economists around Keynes, the main elements of the “Keynesian” revolution, in anticipation of Keynes himself. Kalecki moved to England in the mid-1930s where he helped further the transformation in economic analysis associated with Keynes. There he developed his concept of the “degree of monopoly,” which stood for the extent to which a firm was able to impose a price mark-up on prime production costs (workers’ wages and raw materials). In this way, Kalecki was able to link monopoly power to the distribution of national income, and to the sources of economic crisis and stagnation. Kalecki also explored the more general historical conditions affecting investment. In the closing paragraphs of his Theory of Economic Dynamics (1965) he concluded: “Long-run development is not inherent in the capitalist economy. Thus specific ‘developmental factors’ are required to sustain a long-run upward movement.”

 

This analysis was carried forward by Josef Steindl, a young Austrian economist who had worked closely with Kalecki in England. According to Steindl’s Maturity and Stagnation in American Capitalism (1952), giant corporations tended to promote widening profit margins, but were constantly threatened by a shortage of effective demand, due to the uneven distribution of income and resulting weakness of wage-based consumption.* New investment could conceivably pick up the slack. Yet such investment resulted in new productive capacity, that is, an enlargement of the potential supply of goods. “The tragedy of investment,” Kalecki wrote, “is that it is useful.”* Giant firms, able to control to a considerable extent their levels of price, output, and investment, would not invest if large portions of their existing productive capacity were already standing idle. Confronted with a downward shift in final demand, monopolistic or oligopolistic firms would not lower prices (as in the perfectly competitive system assumed in most economic analysis) but would instead rely almost exclusively on cutbacks in output, capacity utilization and new investment. In this way they would maintain, to whatever extent possible, existing prices and prevailing profit margins. The giant firm under monopoly capitalism was thus prone to wider profit margins (or higher rates of exploitation) and larger amounts of excess capacity than was the case for a freely competitive system, thereby generating a strong tendency toward economic stagnation.*

 

http://monthlyreview.org/2002/01/01/monopoly-capital-and-the-new-globalization

Edited September 14, 2016 by miki.bg

[Peter Fan]

Nekako mi ovo ne pije vodu. Ima li kakvih skorasnjih primjera takvih monopolnih firmi?

[bigvlada]

Nekako mi ovo ne pije vodu. Ima li kakvih skorasnjih primjera takvih monopolnih firmi?

 

Nešto najpribližnije što mi pada na pamet je IBM, PC divizija (1981-1987), ali analogija nije najbolja; bila bi da su se ponašali kao Apple u pogledu kloniranja (kupili a ne licencirali dos, imali ekskluzivno pravo na bios i cpu itd...). 

[eumeswil]

Nekako mi ovo ne pije vodu. Ima li kakvih skorasnjih primjera takvih monopolnih firmi?

Pa ne moraju da budu baš monopolne koliko ja razumem. Stvar je u tome što još imaju opciju da prave fiktivne pare. Microsoft ima/imao je de facto monopol jer je privatizovao deo onoga što Marks nazvao general intellect i nametnuo se kao standard u PC svetu zajedno sa Intelovim monopolom plus gomila antikompetitivnih praksi - http://www.ecis.eu/documents/Finalversion_Consumerchoicepaper.pdf

Edited September 16, 2016 by miki.bg

[Indy]

Stvarno ne znam gde drugde da ovo stavim, a po tome koliko je distopično, može i ovde.

 

Quote

 

https://newsie.social/@rvawonk/111191013141745027

Caroline Orr Bueno @rvawonk@newsie.social

Genetic testing company 23AndMe confirmed that it suffered a data breach in what appears to be a targeted attack on Jews & Chinese people. Hackers have put up for sale 1 million data points about Ashkenazi Jews, plus hundreds of thousands of Chinese users.

The breach allegedly includes celebrities like Mark Zuckerberg, Elon Musk, and Sergey Brin. #cybersecurity #databreach #23andme

https://www.wired.com/story/23andme-credential-stuffing-data-stolen/

 

 

Quote

The genetic testing company 23andMe confirmed on Friday that data from a subset of its users has been compromised. The company said its systems were not breached and that attackers gathered the data by guessing the login credentials of a group of users and then scraping more people’s information from a feature known as DNA Relatives. Users opt into sharing their information through DNA Relatives for others to see. 

Hackers posted an initial data sample on the platform BreachForums earlier this week, claiming that it contained 1 million data points exclusively about Ashkenazi Jews. There also seem to be hundreds of thousands of users of Chinese descent impacted by the leak. On Wednesday, the actor began selling what it claims are 23andMe profiles for between $1 and $10 per account, depending on the scale of the purchase. The data includes things like a display name, sex, birth year, and some details about genetic ancestry results, like that someone is, say, of “broadly European” or “broadly Arabian” descent. It may also include some more specific geographic ancestry information. The information does not appear to include actual, raw genetic data.

 

 

[peralozac]

Baš distopično. Btw, ja sam kod njih radio analizu i možda sam na toj listi koju prodaju. Totalno uvrnuto. Ništa, od večeras bezbolku i pištolj pod jastuk. Oh wait, ali ja nemam ni bezbolku ni pištolj. 

 

Spoiler

On 1. 4. 2018. at 16:42, peralozac said:

Upravo stigli rezultati prebrojavanja krvnih zrnaca! Prvo sam hteo da okačim na Fašistički Perspic topić, ali ovde je ipak primerenije jer:

 

1. Perina čukun-čukun-čukun-baba je očijukala sa konviktskim dedom (ili deda sa konviktskom babom)! Da sam bar znao i prijavio ovaj bitan professional skill kad smo podnosili za vizu, ne bi čekali skoro dve godine već završili posao za par meseci kao svi pošteni konvikti.

 

2. Perina čukun-čukun-čukun-čukun-baba je očijukala sa jevrejskim dedom (ili deda sa jevrejskom babom)! Ovo objašnjava moju ješinsku ljubav prema novcu, plutokratiji i naravno maksimizaciji potrošnje i komfora^{TM Noskič}.

 

P.S. Moderaciji naglašavam da kao dokazani konvikt i Ješa odsadpanadaljeiubuduće imam puno pravo na korišćenje ovih pogrdnih izraza, zbijanje neumesnih šala i sve ostalo što sleduje jednom čisto0.1%krvnom pripadniku naroda.

 

 

[Indy]

Sama ideja da je neko, bilo ko, spreman da kupi (makar i za 1 cent) listu onih koji su eto Aškenazi Jevreji je... Mada, u današnje vreme je to skoro za očekivati.