European Tribune - Community, Politics & Progress.

Pinkoes Rewrite History?

by afew
Mon Jul 14th, 2008 at 08:57:34 AM EST

Now here's a confident, definitive historical verdict:

The myth of the self-regulating market
The self-regulating market was the idée fixe of the late twentieth century. Freeing markets promised to unleash the wealth-creating forces of unrestricted competition and risk-taking, as well as to ensure that the resulting prosperity would be inclusive and the outcome stable. A more flexible workforce, greater asset ownership and easier access to financial markets would help households respond to market signals and smooth incomes as well as consumption over time. Greater security would naturally follow.
<...>
Dismantling the checks and balances that emerged with (the post-WWII mixed-economy) consensus has proceeded at an uneven pace among the advanced countries and has often been more enthusiastically embraced in the developing world and in transition economies, where "shock therapies" promised rapid and positive effects. As part of a global trend, many of the stresses and burdens of unregulated markets have been unloaded on to individuals and households, and with diminished or only limited offsetting government responses. This has been described, with reference to the United States of America, as the "great risk shift".
<...>
When the Berlin Wall collapsed in 1989, the talk was of an emerging era---an era of widespread peace, prosperity and stability, thanks to the spread of democratic values and market forces. Bank runs, plummeting house prices, gyrating currencies, food riots, election violence, ethnic carnage---to name just some of the phenomena that have dominated the international news media over the past 12 months---were certainly not to be part of its future.

Cataloguing these violent disruptions in the phony world order of "peace, prosperity and stability", the author, Sha Zukang, looks back to a precedent era of insecurity:

Against the growing backdrop of increasing economic and political insecurity in interwar Europe, John Maynard Keynes called for "new policies and new instruments to adapt and control the workings of economic forces, so that they do no intolerably interfere with contemporary ideas as to what is fit and proper in the interests of social stability and social justice". Those words resonate just as strongly today.

The definitive dismissal of the market fundamentalism of the last two-three decades, the demonstration of its link to instability and thence, war (with the backward glance to interwar Europe), and therefore the vital necessity of looking after "the interests of social stability and social justice": this sweeping overview of our situation is backed by detailed analysis and broad policy proposals. What leftie publication is Sha Zukang writing in?

He heads the Department for Economic and Social Affairs at the UN, and the quotes are from his introduction to the UN's World Economic and Social Survey 2008.

It has a particularly interesting section on agriculture, summarized thus by IPS:

IPS: Decades of Bad Policies Brewed a "Perfect Storm"

As an example of "misconceived policies", it cites the case of agriculture, where pressure on developing economies to open trade and finance markets preceded the means to build productive farms and rural infrastructure.

"This lack of capacity has now become a destabilising factor in a bedrock feature of personal and social security-- the ability of a country to feed its citizens."

From the survey:

...the experiences of China, India, and Viet Nam also show how agricultural growth can lay the basis for subsequent growth of industry and the rest of the economy. Cross-country analyses further show that growth originating in the agricultural sector is oftentimes more effective in reducing poverty and insecurity than growth originating in non-agricultural sectors.

Overall, the survey calls for a global New Deal, including a new Bretton Woods agreement with a revised role for the World Bank and the IMF, and a revisit of the Marshall Plan for a better way of organizing development aid.

Of course, we always knew that, in the tub of GOOD postwar institutions like the World Bank, the IMF, NATO, etc, the UN was the BAD apple, didn't we? :-)

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Pinkoes Rewrite History? | 28 comments (28 topical, 0 editorial, 0 hidden)

Re: Pinkoes Rewrite History? (4.00 / 10)

This is a 230+ pp report, and I haven't had time to look into all of it, but it looks extremely interesting.

When locusts move on, they leave nothing behind

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jul 14th, 2008 at 09:01:26 AM EST

"In praise of bubbles" (4.00 / 5)

Boom and bust cycles have always driven the US economy.

Financial bubbles get a bum rap. People focus on the sob stories (think of the grandmothers who invested in Pets.com) and the tales of financial chicanery (think WorldCom). But bubbles - those sudden, excessive, and seemingly irrational investment stampedes - aren't all bad. Sure, they tend to follow a painful cycle of boom, bust, hand-wringing, and abject humiliation. But there's often another step at the end: innovation. Over the past 150 years, many bursting bubbles have paved the way for economic and cultural progress.

There are lots of interesting historical titbits in the 2006 article that follows this ingress.

The point that I take out of it, is that the bursting of a financial bubble is an opportunity as well as a threat. If we want to change things, now is the time to do it. Kick it while it's down.

You can't be me, I'm taken

by Sven Triloqvist on Mon Jul 14th, 2008 at 09:14:05 AM EST

That is not the point they are trying to take ... (none / 0)

... since the defenders of a status quo purported to be "flexibility promoting innovation" may have difficulty seeing that the biggest innovations always upend the status quo, no matter how they may congratulate themselves on how innovative they are.

However, it is, I think, a good point to take from the historical record they are pointing to. Inventions (both social and technical) accumulate over time, but it is when a given channel of technological change runs out of gas that conditions are ripe for fundamentally new innovations to become established on the back of rules newly rewritten in their favour.

Utsukushikereba sore de ii

by BruceMcF (agila61 at netscape dot net) on Mon Jul 14th, 2008 at 01:20:12 PM EST
[ Parent ]

Re: That is not the point (4.00 / 2)

Yes, I was making my own point. ;-)

You can't be me, I'm taken

by Sven Triloqvist on Mon Jul 14th, 2008 at 01:36:19 PM EST
[ Parent ]

Re: Pinkoes Rewrite History? (none / 1)

Sounds to me like justification to the usual suspects for why "We need to get the US out of the UN and the UN out of the US." It will be interesting to see if his work gets any coverage in the MSM.

If sanity be culturally normative, then by the norms of this culture I claim insanity.

by ARGeezer (argeezer a in a circle yahoo dot com) on Mon Jul 14th, 2008 at 11:52:01 AM EST

Re: Pinkoes Rewrite History? (4.00 / 2)

Well, it is a major report filed annually by the UN's Department for Economic and Social Affairs. Which of course probably means that you're right, the MSM will take no notice of it.

When locusts move on, they leave nothing behind

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jul 14th, 2008 at 12:04:42 PM EST
[ Parent ]

Re: Pinkoes Rewrite History? (none / 1)

It is, however, something that can be used as leverage in professional work in the field.

A high income nation that aligned its development promotion along these lines would be laying the foundation for getting an inside track to the growth markets of the middle of the coming century.

Utsukushikereba sore de ii

by BruceMcF (agila61 at netscape dot net) on Mon Jul 14th, 2008 at 01:22:20 PM EST
[ Parent ]

Re: Pinkoes Rewrite History? (none / 1)

Well, Reuters, Yahoo, Salon, and the Onion showed up on the first three pages of an author,title search by Google. Perhaps by the end of today's news cycle?

If sanity be culturally normative, then by the norms of this culture I claim insanity.

by ARGeezer (argeezer a in a circle yahoo dot com) on Mon Jul 14th, 2008 at 12:00:00 PM EST

For future referece viz. positive ET portrayal of (4.00 / 2)

good PRC apparatchicks:

Sha Zukang (1947-) (Simplified Chinese: 沙祖康) is a Chinese diplomat who is currently head of the United Nations Department of Economic and Social Affairs. He was previously the Chinese ambassador to the United Nations Office at Geneva.
A graduate of Nanjing University, Sha started his diplomatic career as a staff member at the Chinese Embassy in the United Kingdom. In a BBC interview in August 17, 2006, he told the US to "shut up" regarding criticism on arms spending of China, noting that U.S. arms expenditure is half of the total arms expenditure of the whole world.

Maybe there's more than a little progressive left in that country, and its leadership, which has on these pages been occasionally written off as fascist or, at the very least, neo-liberal.

"C'est un scandale !"

by redstar on Mon Jul 14th, 2008 at 12:33:04 PM EST

Re: For future referece viz. positive ET portrayal (4.00 / 3)

I was sitting here drumming my fingers on the desk and thinking: "When is redstar going to clue us in to who Sha Zukang is?" ;-)

BTW, I don't think the PRC leadership is either fascist or neolib. But neither do I think, by and large, that what this career diplomat, now with the UN, writes here in the overview to the survey, is typical of what the PRC leadership thinks or expresses.

Anyway, more power to him. And to the department he heads.

When locusts move on, they leave nothing behind

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jul 14th, 2008 at 12:41:57 PM EST
[ Parent ]

Re: For future referece viz. positive ET portrayal (4.00 / 2)

Well, that's understood.

Though I rather doubt that anyone becomes PRC ambassador to the UN without first being a party member in good standing, and second being in quite good standing with the politburo.

I would further suggest that whatever is written by such a PRC diplomat serving in such a capacity for the UN could be taken as reasonable proxy for official policy, or at least, the policy aims of a (likely most powerful) portion of the party.

"C'est un scandale !"

by redstar on Mon Jul 14th, 2008 at 12:45:51 PM EST
[ Parent ]

Re: For future referece viz. positive ET portrayal (4.00 / 2)

I would further suggest that whatever is written by such a PRC diplomat serving in such a capacity for the UN could be taken as reasonable proxy for official policy, or at least, the policy aims of a (likely most powerful) portion of the party.

Such as, perhaps, a recognition that while it may be glorious to get rich, not all of the consequences are quite so glorious? Even that would be well ahead of what passes for consensus in the US.

Sorry to learn of his background. That will immediately delegitimize anything he says to much of the population.

If sanity be culturally normative, then by the norms of this culture I claim insanity.

by ARGeezer (argeezer a in a circle yahoo dot com) on Mon Jul 14th, 2008 at 01:38:19 PM EST
[ Parent ]

Re: For future referece viz. positive ET portrayal (4.00 / 3)

Well, if I understand that quote correctly, "rich" is the way the typical english translation of the chinese is usually given, and remember that in english we can count on the usual ideological bagage that anything in the english language tends to carry given who holds power in the english-language world and the use of language as an instrument of that power.

All this being said, the proper translation of Deng Xiaoping's famous quote probably isn't exactly that. Given the actual full quote:

"Poverty is not socialism. To be rich is glorious."

I think it is clear that the general giving of the meaning in the anglo-saxon capitalist press isn't exactly what Deng intended, that "prosperous" is probably a better word to use than "rich," and that it is quite understood, given the context of the quote, that that prosperity be generally collective in orientation, rather than individual as anglo-saxons normally understand it.

"C'est un scandale !"

by redstar on Mon Jul 14th, 2008 at 01:53:12 PM EST
[ Parent ]

Re: For future referece viz. positive ET portrayal (none / 1)

Thanks for the education, Redstar.

If sanity be culturally normative, then by the norms of this culture I claim insanity.

by ARGeezer (argeezer a in a circle yahoo dot com) on Mon Jul 14th, 2008 at 02:15:41 PM EST
[ Parent ]

Re: For future referece viz. positive ET portrayal (none / 1)

Maybe there's more than a little progressive left in that country, and its leadership, which has on these pages been occasionally written off as fascist or, at the very least, neo-liberal.

I'd say the proper analogy is that of the old elites in nineteenth century northwestern Europe - either encouraging or going along with the capitalist revolution, but nervous about it as well. The landed aristocracy and their followers expressed their unease in the language of nostalgia for the lost hierarchical Gemeinschaft and noblesse oblige; the Chinese apparatchiks do so in the left wing discourse of their youth. In both cases it is a mixture of genuine concern and cynical attempt at retaining power. And in both cases, in practice their primary concern is trying to co-opt and intimidate the new emerging bourgeois elites into obedience, thus meaning that whatever worries they might have about the working class, when push comes to shove they'll crush independent working class activism whenever it genuinely threatens the interests of the bourgeoisie and their policies will be tilted towards helping the capitalist revolution with all its impact on the average population, good and bad.

by MarekNYC on Mon Jul 14th, 2008 at 01:58:14 PM EST
[ Parent ]

Re: For future referece viz. positive ET portrayal (none / 1)

Hard to disagree with most of this, and though I don't share the cynicism expressed in the conclusion, it's easy to see where it comes from and why one might logically see that cynicism as valid.

Noting further that not all "working class activism" is created equally, with relativly contemporary European examples of such activism being quite regressive in nature, and therefore rightfully opposed.

"C'est un scandale !"

by redstar on Mon Jul 14th, 2008 at 02:12:34 PM EST
[ Parent ]

Conservatives rewrite history (4.00 / 2)

There is a concerted movement going on in the US these days to rewrite the collapse of the conservative dogma. It can be summarized as claiming that the old ideological axioms (free trade, deregulation, low taxes, lack of communal social programs, etc) are still all good ideas and will lead to heaven on earth, but that they were implemented improperly.

For example TV host Bill Moyers had two of these apologists on his show this week (you can view the clips on his web site). One represented the Reagan era punditry and the other is a new wave flack. Both made these same points, however.

The fact is that there can never be the utopia that these conservatives promise. Capitalism doesn't work that way. Businessmen aren't interested in seeing a level playing field, they are interested in having government tilt things to their benefit. The guaranteed result is crony capitalism, corruption, misallocation of public funds, wealth disparity, destruction of public infrastructure, and frequently wars of plunder.

This is the message that needs to get out. There was nothing wrong with the Gingrich/Norquist revolution, it has performed exactly as planned, their cronies are swimming in money and everyone else is drowning. No future attempt to implement the conservative ideas will produce any other result. We have been through this cycle enough times and in enough countries to make this painfully clear.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Mon Jul 14th, 2008 at 12:37:35 PM EST

Re: Conservatives rewrite history (4.00 / 2)

On this topic, today's headline in Le Monde is depressing:

"The right claim that it has won the ideological battle"

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (jeromeguillet@yahoo.fr) on Mon Jul 14th, 2008 at 12:53:28 PM EST
[ Parent ]

Re: Conservatives rewrite history (none / 1)

As usual in political economy, France two decades behind everbody else.

"C'est un scandale !"

by redstar on Mon Jul 14th, 2008 at 01:44:38 PM EST
[ Parent ]

Re: Conservatives rewrite history (4.00 / 2)

It's a fair comment in parallel to the survey, to say that unfortunately Sarkozy is running the Thatcher/Reagan "shock" approach... a quarter of a century late, when it seems less and less "inevitable" and (insofar as it ever did) coherent.

When locusts move on, they leave nothing behind

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jul 14th, 2008 at 02:06:29 PM EST
[ Parent ]

Re: Conservatives rewrite history (4.00 / 2)

It's also fair enough to claim the right has won the ideological battle when a good many leaders of the main opposition party (PS) are themselves convinced that neolib "reforms" are necessary, and are just keeping their heads down while the right does the dirty work.

When locusts move on, they leave nothing behind

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jul 14th, 2008 at 02:09:37 PM EST
[ Parent ]

PS leaders (4.00 / 4)

you know, whenever I read actual texts written by PS leaders or intellectuals, what strikes me is that I mostly agree with these texts.

It's genunely surprising to note, as you point out, that the PS seems to be on the "reform" side, when in its actual texts it really isn't. I wonder where the shift happens. Is it because the intellectuals of the left are much more centrist (the Pisani-Ferrys, Colombanis, Attalis) than the politicians, and get heard more (or get to shape the 'common wisdom' interpretation of things)? Is it because the left's politicians' actions are not in line with their writings (the 97-02 period is the last relevant period to really tell, and the left did run a reasonably left-wing package, which was, in France, quite spectacularly successful even if they did not get credit for it)

I think that the left reads the same media as we do, sees the 35-hour xweek demonised on a permanent basis, and does not care to fight for it other than sporadically, and this is seen as acquiesence, when it is just being a minority presence in the media.

I have not given up on the PS, yet. I do wonder how to get its decent enough message across, though.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (jeromeguillet@yahoo.fr) on Mon Jul 14th, 2008 at 02:26:16 PM EST
[ Parent ]

Re: PS leaders (4.00 / 2)

I agree with you. I think the problem is that the only doctrine they have is social-democracy, but a social democracy that was very well adapted to the industrial capitalism of 30 years ago.

However, the left has been caught off-guard by the Reagan-Thatcher counter-revolution and hasn't been able to update its thinking and take into account the new developments of financial capitalism and globalisation.

It is not because they lack thinkers: as we can see from the quotes in our diaries, there have been many thinkers, including top-level economists, who were able to help the Socialist Party in developing new models.

But the problem is that theoretical work has been neglected for too long in favour of tactical manoeuvre. Theory is not sexy anymore and today's Socialist Party leaders are spending their time on internal shenanigans and are focused on gaining power without reflecting about what they are going to do once there. That leaves them no time to really reflect about new economic models...

"Ne te courbe que pour aimer..." René Char

by Melanchthon on Mon Jul 14th, 2008 at 03:15:49 PM EST
[ Parent ]

Re: PS leaders (none / 1)

Internal rivalries are certainly a huge drain on the PS' performance. They have cost and will cost it dear.

When locusts move on, they leave nothing behind

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jul 14th, 2008 at 04:07:53 PM EST
[ Parent ]

Re: PS leaders (none / 1)

I didn't say I was giving up on the PS. I am frustrated by their apparent lack of critical focus. But isn't the difference between written policy statements and analysis, and "public-facing" communication, typical of a party that still produces a theoretical synthesis that is supposed to represent its official policy, while it is far from what the party leaders really think?

And I can't help seeing a lack of conviction in their statements of opposition to Sarkozy's banzai politics.

When locusts move on, they leave nothing behind

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jul 14th, 2008 at 04:06:07 PM EST
[ Parent ]

Re: Conservatives rewrite history (4.00 / 2)

Maybe it's a good sign. When the right claims it has won, it is usually the beginning of its decline. "Mission accomplished", anyone?

"Ne te courbe que pour aimer..." René Char

by Melanchthon on Mon Jul 14th, 2008 at 03:30:21 PM EST
[ Parent ]

Re: Pinkoes Rewrite History? (4.00 / 4)

Well the market does self-regulate. That's what we're seeing now.

The problem with theft is, after a while, there's nothing left to steal. The problem with having huge amounts of money owing is you have to return the principal and interest. The problem with lending money to people who can't pay it back is the money won't be paid back. The problem with devaluing the currency is the currency doesn't buy as much, anymore. The problem with shipping all the jobs overseas is there aren't any local jobs. If all the capital is shipped overseas it ain't here no more. If you demand an ROI of 8% and making stuff only gives you 4% then you don't make stuff no more.

In short, if you gut the economy the economy is, indeed, gutted.

gah-zowie

Och nu den svenska kocken bakar en Alaskan älg jägare. Bonk! Bonk! Bonk!

by ATinNM on Mon Jul 14th, 2008 at 01:24:12 PM EST

Re: Pinkoes Rewrite History? (4.00 / 2)

The ONLY free market that I'm aware of that seems to work somewhat is the Sacramento Farmer's Market every Sunday, although I suspect that the various tomato vendors collude to agree on one price (five different booths at $1.50 per pound?).

Worth the price, but still, FREE market? I guess I'm free to keep my money in my pocket,

McCain/Palin ... total sacks of SHIT!

by THE Twank (paszeski__aaaaaaatttttt__yahoo.com) on Mon Jul 14th, 2008 at 02:19:08 PM EST

Pinkoes Rewrite History? | 28 comments (28 topical, 0 editorial, 0 hidden)

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