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...employment guarantees as a way to redress poverty in less developed countries. My favourite topic but unfortunately the alleged fiscal constraints keep coming up. While these policy makers clearly see the need for higher employment rates in the LDCs most are still operating under the spell of neo-liberal macroeconomics.

The difficulty here is that the truth is not an easy sell. Telling those 'under the spell of neo-liberal macroeconomics' that the whole structure stands not on empirical or intellectual robustness but rather on the class preferences of those who financed and still support leading universities is too often (rightly) taken as an insult. That the application of neo-liberal economics is crushing all but the rentier class is, apparently, much easier to rationalize. It takes more tact than I can manage to make this point without displaying contempt for the contemptible.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun May 5th, 2013 at 02:13:12 PM EST
[ Parent ]
No, the difficulty is that for the colonies it isn't really true.

They are missing so many links in the value chain between raw material extraction and consumption that attempting to increase their domestic consumption without an active import substitution program will unacceptably impair their foreign balance. And attempting an active import substitution program will unacceptably impair their relationship with the colonial powers. It's a double-bind, and the colonies are the ones being tied up in it and raped. Often literally.

Mitchell, like a whole lot of the MMT'ers, really hasn't taken any coherent notion of geopolitics on board in his theory. Which is a major weakness for a theory which (correctly) identifies money as principally an expression of political power.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 5th, 2013 at 02:51:21 PM EST
[ Parent ]
IOW a small country can have its own currency but if it does not exercise strict control over capital flow and abnegates its supervision over banking and the business sector in general it can still be raped by much larger players via unfavorable terms of trade imposed on it  through the intellectual hegemony of neo-liberal macroeconomics in the 'global' economy. And if they successfully isolate themselves from those consequences they become 'pariah states' vulnerable to covert intervention and destabilization. Three sector national accounting can show how countries can be sucked dry by balance of trade problems.

MMT is coherent but it does not insure good outcomes regardless of geopolitics. And neo-liberal macroeconomics is bullshit but economic incumbency and institutional capture insure its continued dominance. But the problems are only magnified when most continue to labor under the illusion that present policies work for any but a tiny few. Best to grow powerful by feeding on the helpless in foreign countries before turning your system relentlessly on the citizens of the countries out of which you operate.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun May 5th, 2013 at 03:24:36 PM EST
[ Parent ]
A small country full of brown people who speak funny can have its own currency all it wants. But as long as it's a small country full of brown people who speak funny, the Empire is still going to anchor a couple of carrier groups offshore of it and bomb it back to the stone age if it starts getting uppity.

The accounting details of how precisely the plunder takes place are trivial and pointless for policy purposes, however interesting they are in the abstract.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 5th, 2013 at 03:29:54 PM EST
[ Parent ]
Carrier groups are more the exception. The IMF is more the rule. In between the two but usually intermingled are covert operations conducted by a mix of players. "The Drug War" is a convenient cover for the presence of a large number of paramilitaries among whom economic and political hit men can easily operate.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun May 5th, 2013 at 05:51:32 PM EST
[ Parent ]
As I see it, the escalation goes like this:
  • Bribes and/or threats to political elite
  • Supporting the opposition with money and western media
  • Arming the opposition and supporting coup attempts
  • Bombing
  • Send in the marines

Malaysia appears to just have reached level 2 - recent election was reported as flawed, with "independent" polls showing the opposition in the lead. Syria just reached level 4 with the Israeli bombings. If Libya was escalated to level 4 or 5 is debatable.

The US empire, like the Aztec, appears to be driven to constant war, even against already defeated foes. So not all states that are attacked actually did something to step out of line.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon May 6th, 2013 at 04:32:47 AM EST
[ Parent ]
All empires are driven to constant war to maintain their empire. If the colonies decide to step out of line at the same time, the imperial center can't stop them all, or even any solid plurality of them.

Therefore, the imperial center has to throw a current, former or prospective vassal up against the wall every once in a while, pour encourager les autres.

And if, inconveniently, no current, former or future vassal is both (a) out of line, and (b) inside your sphere of influence when you need to have your regular fix of violence, then you just redraw either The Line or your sphere of influence such that someone is.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 6th, 2013 at 02:27:09 PM EST
[ Parent ]
They all rely on violence, but some empires are more driven to establishing a firm hold on their colonies (which means trouble-makers can be shot before they get to the stage where they manage to revolt). An orderly empire allows for well organised resource extraction, a big colonial civil service and saving precious military resources for wars agaisnt oterh empires.

Others have a strong internal need for new wars. Be it new contracts for a MIC, new medals for the officers or fresh slaves.

This is not an either/or thing, more a scale. But contrast the US empire with the Soviet empire. Post-WWII what has Soviet got in way of throwing colonies against the wall? Hungary, Czechoslovakia and Afghanistan.

The US empires need for wars is not as extreme as the Spartans with their seasonal wars on their own slaves, but still on the same end of the scale.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon May 6th, 2013 at 03:20:03 PM EST
[ Parent ]
You can add Chechnya and Tannu Tuva, and I'm sure they did stuff in the Central Asian provinces that we would know about if they had been doing it to white people who speak English. That's somewhere between one per decade - better than the US' biannual event, but not by that much.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 6th, 2013 at 03:31:08 PM EST
[ Parent ]
Askod talked about post-WWII Soviet Union, which excludes both Chechnya and Tannu Tuva (which AFAIK was annexed without bloodshed) but includes East Germany 1953 and Poland 1956. However, "post-WWII" might be an arbitrary and imprecise cut-off, excluding Stalin's worst imperial aggression and putting the post-WWII ethnic cleansings and guerilla wars on the new Western border of the Soviet Union and the active Soviet and Red Army role in the post-WWII communist takeovers into a grey zone. Another issue is covert participation in proxy wars (above all in Korea), which parallels US practice.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon May 6th, 2013 at 04:25:44 PM EST
[ Parent ]
An orderly empire allows for well organised resource extraction [...]

Others have a strong internal need for new wars [...]

... contrast the US empire with the Soviet empire...

John Michael Greer has an almost thermodynamic view of an empire:

An empire is an arrangement among nations, backed and usually imposed by military force, that extracts wealth from a periphery of subject nations and concentrates it in the imperial core. Put more simply, an empire is a wealth pump, a device to enrich one nation at the expense of others. The mechanism of the pump varies from empire to empire and from age to age; the straightforward exaction of tribute that did the job for ancient Egypt, and had another vogue in the time of imperial Spain, has been replaced in most of the more recent empires by somewhat less blatant though equally effective systems of unbalanced exchange. While the mechanism varies, though, the underlying principle does not.
Or other iteration:
an empire is a wealth pump, an arrangement backed by military force that extracts wealth from a periphery of subject nations and concentrates it in the imperial core
I find this view generally right, with the implied addition that an empire is able to lure subjects by fractions of wealth flows in its growth phase. When the expansion hits diminishing or negative returns, civilization joys for periphery become more of propaganda. The Roman empire was quite a hurricane of wealth circulation that had to abate nevertheless.

The Soviet empire is quite an exeption though, despite Greer talking about "looting of eastern Europe for Russian benefit". Economically and materially, the Soviets were actually supporting the periphery (particularly Central Asia, vassals like Cuba, North Korea) with cheap oil, gas, fertilizers, while "looting" is not the right word for what they were imposing. Looking form this angle, the strange collapse of USSR is less mysterious.

by das monde on Wed May 8th, 2013 at 09:57:19 AM EST
[ Parent ]
"...collapse of USSR... "

I am so tired of this propaganda cliché... "Collapse" imply sudden, spontaneous, and more or less disorderly fall/ slump. In contrast the USSR, and most of the Eastern Block was dismantled voluntarily, peacefully, in a planned orderly fashion from the top down; and this is well documented. In fact, to the best of my knowledge it is the only socio-economic system in history that ceased to exist in such a manner.

Of course one might argue that the USSR lost the Cold War and the armaments race, and that was what tore the system down, but this will be digging more into the reasons of why the lights were turned off. By the end of the 1980s the USSR still had enough retaliatory military power to continue to dwindle for decades ahead.

by Ivo on Thu May 9th, 2013 at 05:20:16 AM EST
[ Parent ]
Indeed, the USSR is not an example of a system that tried to stay alive and kicking for as long a possible.
by das monde on Thu May 9th, 2013 at 05:24:34 AM EST
[ Parent ]
dismantled voluntarily, peacefully, in a planned orderly fashion from the top down

Hm, in the case of the Soviet Union, a failed coup followed by independence declarations of the republics, ending with a semi-coup of the leaders of three republics against Gorbachev (the Belavezha Accords) is not exactly planned or orderly, even if the final act was another accord that also regulated legal inheritance.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu May 9th, 2013 at 07:37:35 AM EST
[ Parent ]
The gradual dismantling process was set in motion in the mid 1980s; doubtless there must had been some preceding work behind the scenes at the very top; and the whole colossal transformation relied entirely on the state's administrative apparatus for the execution. If that is not "planned" and "orderly" I don't know what is it.
by Ivo on Thu May 9th, 2013 at 09:09:21 AM EST
[ Parent ]
The gradual dismantling process was not set in motion with a plan of dismantlement. That was an unplanned outcome. I'm not sure what you mean by "relied entirely on the state's administrative apparatus for the execution". Inaction or insufficient action in the face of separatism is mostly down to the top, rather than the apparatus (although, again, there was a coup attempt); and at least a significant part of the apparatus going along with the formation of new separate state administrations is nothing strange, either (what else would they have done?). At this point, my question is: what is your minimum standard for the collapse of an empire, then? (As in, example of the least dramatic dissolution you still count as a collapse.)

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu May 9th, 2013 at 09:16:18 AM EST
[ Parent ]
My impression was that Gorbachev, Shevardnadze and others had come to the conclusion that the command control centralized state had become massively sub-optimal and undertook a process of restructuring and openness in an attempt to transform the nature of the Soviet Union into one that would provide a better version of socialism. But the process got out of their control. Given the centralized nature of the state it was an orderly process until they had dismantled enough of the state that opponents could challenge them. Gorbachev and Shevardnadze underestimated the malignancy of the worms in the cans they opened and over estimated their ability to continue to control events. But had they not started glasnost and perestroika and tried to create a less oppressive state the dissolution of the Soviet Union might not have even happened yet.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri May 10th, 2013 at 10:31:24 PM EST
[ Parent ]
until they had dismantled enough of the state that opponents could challenge them
Which opponents and challenges do you have in mind? When were they visible?
by das monde on Sat May 11th, 2013 at 03:14:24 AM EST
[ Parent ]
Operating from memory based largely on LA Times coverage at the time - up to a quarter century ago - there was no shortage of hard line elites who liked things the way they were and they had the support of lots of Soviet citizens who became increasingly nostalgic for Stalin, the old Russian preference for order above all else. The ones who were problematic for Gorbachev were those in authority - mayors of large cities and leaders of states and regions, Latvia, Lithuania and Estonia, Belorussia, Ukraine, Armenia, Kazakhstan, Turkmenistan, Tadzhikistan, etc. along with some military leaders and internal security officials. Wiki reminds me of the collapse of world oil prices which left the Soviets short of foreign currency and led to shortages. Then there was the ongoing problem in Poland which led to the election in August of '89, almost coincident with the putsch in Moscow.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat May 11th, 2013 at 11:53:35 AM EST
[ Parent ]
No shortage of hard line elites?! Their attention was highly dysfunctional then. Nostalgia for Stalin and order? Without Gorbachev bringing that up, who would have bothered highly?

Gorbachev was very active in replacing top functionaries, also in the republics. Funny, but his policies exactly provoked national tensions that were dormant for decades. No one else but himself installed those few "problematic" city majors, region leaders - and then gave all initiative to them in the last year, while showing no adequate concern for the fate of the USSR. In the East Europe, stubbornness of DDR and Romania leaders bothered him more than Poland.

The August putsch was in 1991. The Soviets needed quick foreign currency only for Chernobyl.

by das monde on Sat May 11th, 2013 at 12:57:41 PM EST
[ Parent ]
No one else but himself installed those few "problematic" city majors, region leaders - and then gave all initiative to them in the last year, while showing no adequate concern for the fate of the USSR.

A pretty good description of a top down reform that got out of hand due to serious miscalculations by Gorbachev. You seem to have lived through it first hand. What is your take on what Gorbachev intended and why his choice of new 'reformers' was so disastrous for the USSR? And, what different path might have made the transition and left the bulk of the USSR intact?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat May 11th, 2013 at 05:14:23 PM EST
[ Parent ]
By now my view is very simple. No one saw it coming, yet plausible explanations were settled very quickly. The suspected crushing forces are not convincing though, while failure of the support systems is obvious. Like in Chile, the whole plan was well prepared (including Chicago Brick economic receipes), and executed to expectations.
by das monde on Sun May 12th, 2013 at 02:40:45 AM EST
[ Parent ]
i don't believe IMF involvement came until Yeltsin gained power, though under Gorbachev privately owned cooperatives were legalized for what we would call medium and small businesses and state enterprises, such as Aeroflot were encouraged to spin off subsidiaries who were encouraged to seek foreign investors.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon May 13th, 2013 at 11:41:57 AM EST
[ Parent ]
That's incorrect. The IMF had been active for decades as a creditor to various Warsaw Pact countries.

When energy prices crashed in the 1980s, as a consequence of the development of the North Sea oil and gas deposits, they became unable to finance the imports of higher quality Western consumer goods to which the population had become accustomed during the period of high energy prices in the '70s. It went predictably downhill from there.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 13th, 2013 at 02:28:22 PM EST
[ Parent ]
'The IMF had been active for decades' on account of western banks lending into the Warsaw Pact countries, a substantial part of which was vendor finance. But it was not until October 5, 1991, when President Mikhail Gorbachev and Managing Director Michel Camdessus entered into an agreement: Special Association Between the U.S.S.R. and the Fund - Terms and Conditions. But this agreement became null and void upon Gorbachev's resignation and the dissolution of the USSR. Seeing his plans for a federation of socialist states fail Gorbachev resigned on December 25, 1991. Yeltsin had already announced in October that Russia would proceed along the lines recommended by the IMF.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon May 13th, 2013 at 04:56:38 PM EST
[ Parent ]
The USSR putsch in Moscow was in August of 1991, two years after the Central Europe events in 1989:

by Bernard (bernard) on Sat May 11th, 2013 at 01:58:58 PM EST
[ Parent ]
Before all these events in 1989 the USSR elite had given clear signals not only that they will not interfere, but in fact they actively encouraged satellites' independent policy. I remember some of the reported friction between Gorbatchev on the one hand, and the most rigid leaders on the other, specifically with Honeker and Zhivkov. All the work Gorbatchev and his circle had done made the subsequent changes in 1989 possible.

Btw, as a matter of fact Chaushescu was not exactly "overthrown", but after a mock court murdered by his own security services live on TV; not as savage as the execution of Ghadaffi, but still pretty shocking back then to happen in an European country.

by Ivo on Sat May 11th, 2013 at 05:49:51 PM EST
[ Parent ]
No, the Ceauşescu execution wasn't live (in fact, the shooting itself wasn't filmed, leading to some conspiracy theories), and it was done by soldiers not Securitate members, but sure it was a show trial. What do you mean not overthrown? Whoever does the execution, he lost power by force.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat May 11th, 2013 at 07:03:45 PM EST
[ Parent ]
Frankly, I do not take that coup attempt seriously. It fits quite well into staged collapse suspicions. KGB just did a few "desperate" motions, and then embraced the new wild Russian capitalism.
by das monde on Thu May 9th, 2013 at 09:37:22 AM EST
[ Parent ]
But without a collapse scenario, The Blessed St. Ronnie and US brinksmanship policies don't get enough credit for making it all happen.
by rifek on Fri May 10th, 2013 at 11:14:51 AM EST
[ Parent ]
an empire is a wealth pump

This strikes me as very consistent with Varoufakis' Global Minotaur thesis, with only a change of emphasis. John Michael Greer emphasizes the wealth accumulation by individuals and corporations in the core of the empire while Varoufakis emphasizes the recycling mechanism. The recycling of money keeps the system going while the wealth accumulation by a tiny elite puts increasing strains on the system.

To the elites it is the personal wealth accumulation that matters, not the fates of nation states. To that end they have systematically undermined the economic sovereignty of individual nations, starting at the core. No restrictions on our capital movement gentlemen, that will not be tolerated. That makes it easier for them to extract profits from shifting the manufacturing to China and other low wage locations while US citizens go into debt to finance consumption. The fact that the recycling mechanism has broken down indicates that either a new system will have to emerge and/or we will witness the collapse of the current system. But doing anything that interferes with the accumulation to prevent collapse, economic and/or environmental, is just not a serious proposal.  

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun May 12th, 2013 at 01:52:01 AM EST
[ Parent ]
They are missing so many links in the value chain between raw material extraction and consumption that attempting to increase their domestic consumption without an active import substitution program will unacceptably impair their foreign balance. And attempting an active import substitution program will unacceptably impair their relationship with the colonial powers. It's a double-bind, and the colonies are the ones being tied up in it and raped. Often literally.
Brazil managed it, somehow. Must be the size.

The Euro will outlivebury us all --- Jean-Claude Juncker
by Migeru (migeru at eurotrib dot com) on Sun May 5th, 2013 at 03:44:28 PM EST
[ Parent ]
Sort of. I mean, it's not as though Brazil's post-hyperinflation history is precisely a model of rising social equality and political emancipation.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun May 5th, 2013 at 03:46:45 PM EST
[ Parent ]
Brazil did not provide a job guarantee, but it did embark on an ambitious import substitution program regarding oil. The environmental impact of the drive to develop ethanol as fuel (deforestation of the Amazon basin for sugar cane cultivation) is another story...

The Euro will outlivebury us all --- Jean-Claude Juncker
by Migeru (migeru at eurotrib dot com) on Sun May 5th, 2013 at 04:32:50 PM EST
[ Parent ]
Actually, the Basin is the story.  Its ruthless exploitation is what got Brazil off the ground, and as Brazil has not really put anything in place to replace, the limits of that resource put Brazil on a collision course with itself.
by rifek on Fri May 10th, 2013 at 11:19:39 AM EST
[ Parent ]
Who are those that rule effectively Brazil? What are their ties with the ruling classes abroad?

res humą m'és alič
by Antoni Jaume on Sun May 5th, 2013 at 04:08:31 PM EST
[ Parent ]
Is Brazil ruled by a comprador class?

The Euro will outlivebury us all --- Jean-Claude Juncker
by Migeru (migeru at eurotrib dot com) on Sun May 5th, 2013 at 04:42:16 PM EST
[ Parent ]
I do not have adequate data to say anything about a comprador class, but high bourgeoisie tends to be more global than the common people, so it may end in the same results.

res humą m'és alič
by Antoni Jaume on Sun May 5th, 2013 at 06:07:37 PM EST
[ Parent ]
And just now has a President who has roots in 'Marxist urban guerrilla groups'. Sounds like a tough lady. From Wiki:
She became a socialist during her youth, and following the 1964 coup d'état joined various left-wing and Marxist urban guerrilla groups that fought against the military dictatorship. Rousseff was eventually captured and jailed between 1970 and 1972, where she was reportedly tortured.


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun May 5th, 2013 at 06:09:27 PM EST
[ Parent ]
Yes, which may lead to progress for the majority of the people, but inequality is still very high, the Gini coefficient seems to be over 50, higher than Mexico or the USA.

res humą m'és alič
by Antoni Jaume on Sun May 5th, 2013 at 06:17:35 PM EST
[ Parent ]
Sounds like the President of Uruguay, too...

In the long run, we're all misquoted — not Keynes
by Migeru (migeru at eurotrib dot com) on Sun May 5th, 2013 at 06:21:07 PM EST
[ Parent ]
But of course we know that violence never accomplishes anything, except when it does.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon May 6th, 2013 at 02:45:10 AM EST
[ Parent ]

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