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Euros: we'll take them down with us and break them

by Jerome a Paris Sat Apr 12th, 2008 at 12:31:34 PM EST


The Demise of the Euro (Forbes)

Tensions between inflation-obsessed Germany and growth-hungry Latin countries will spell its end.

It is only a matter of time, probably less than three years, until the euro experiment meets its end. The financial crisis in the U.S. is hastening the process, as investors flee the dollar, pushing the euro to a price of $1.59. But it will not stay high for long. Countries like Spain and Italy will withdraw and return to their old currencies. Once that happens, get ready for the return of the deutsche mark and the French franc.

What will undo the euro: the mounting tension between the inflation-obsessed German bloc (including Austria, Luxembourg and the Netherlands) and the Latin bloc of France, Italy and Spain.




ECB hawks defiant as storm gathers (Ambrose Evans-Pritchard, Daily Telegraph)

The European Central Bank has again refused to join Anglo-Saxon peers in cutting interest rates, defying ever-louder calls for action as the economic storm clouds gather over Europe.

(...)

The ECB faces a near impossible task squaring the needs of two camps pulling ever further apart. So far, it has bent to the will of its German governors, perhaps because its own credibility derives from the Bundesbank.

The euro was launched under an implicit contract with the German people that EMU would not lead to inflation, or to an easy-money bail-out for improvident Club Med debtors. Harsh realities of politics are likely to intrude before long.

Europe risks a replay of the ERM crisis in the early 1990s when Germany raised rates to fight inflation, causing mayhem in those parts of the ERM bloc that were already in a downturn - Britain, Italy, Sweden.

There is no escape valve this time.


Danger ahead for the mighty euro (The Economist's Charlemagne column)

Euro-zone economies face external woes and internal tensions

In truth, as the euro approaches its tenth birthday celebrations, it is facing the biggest test of its short life. If Europe follows America into recession, which is quite possible, the pain will be a lot greater in the Mediterranean countries than in Germany and northern Europe. Not surprisingly, the political response from the two regions will also be quite different. Even as it prepares to expand once more to take in Slovakia and later other countries from eastern Europe, the euro is about to show the world that it is not yet an optimal currency area--and the demonstration may not be a pretty one.

Because it is not acceptable that the eurozone not suffer as well from the Anglo Disease, of course:


The ECB must get off its hands (Damian Reece, Daily Telegraph)

We remember the complacency of the ECB during the onset of the dotcom crash, when Wim Duisenberg and his staff in the ivory Eurotower insisted against all evidence that Europe would shrug off US troubles, taking over as the locomotive of the global economy. The illusion lasted about six months. In the end Europe came down harder than the US, just as it did in 1931.


(From the Charlemagne column))

AT THE World Economic Forum in Davos in January 2001, the mood was sombre. The dotcom bubble had burst spectacularly, the Nasdaq stockmarket had crashed, and the American economy was tipping into recession. Yet most continental Europeans were breezily optimistic. The long years of being lectured about their inadequacies by the Anglo-Saxons were over. Europe had wisely skipped the dotcom mania, and its new currency, the euro, was giving the continent a boost. Some Europeans even dreamed of taking over as the motor of the world economy. But it was not to be, as Europe promptly fell into a deeper recession even than America.

Seven years on, the parallels are uncanny.

Uncanny indeed. But where will a new bubble to hide the Anglo Disease yet once more come from?

But nothing is more revealing of Anglo-Saxon attitudes to the EU than that permanent desire to see the Germans and the Club Med torn apart. It's a combination of several things:

  • the historical British policy of "divide-and-rule" in Europe just makes it natural to try to pit one part of the eurozone against the other. It's almost atavistic;
  • similarly, the "we're from Mars" mindset of the Atlanticist crowd cannot imagine that there might be any solidarity between sub-parts of Europe nowadays. Why on earth would the Germans make any effort to prop up the Italians or Spaniards? It's costly to do so and the proper selfish thing would be to let them drop dead. Selfishness is good. See how Mexico is doing so much better than Poland - or Spain - these days...
  • and, of course, add the now traditional tactic of accusing others of what you're doing. Talk up the Spanish housing meltdown. Underline how German banks are suffering from the subprime crisis. Lower the eurozone growth prospects. Existential threats, all, to the eurozone economy, while the US and UK are just going through a cyclical, temporary, shallow and short cleansing ("creative destruction") process which only underlines yet again their dynamism. Crises are inevitable, and this one is already discounted - and it even has allowed the Fed to demonstrate its amazing flexibility and creativity, whereas the ECB and the EU are totally inadapted to the challenge.

It does not matter that this is all irrelevant. It occupies territory, distracts from the real issues and fits within the narrative in place.

Mission Accomplished.

[editor's note, by Migeru] This article is part of the Anglo Disease series.

Display:
The question is whether anybody in the ECB or europe takes this biased drivel seriously anymore. The disconnection between the neocon ideology and the catastrophic evidence is becoming a yawning chasm far as I can tell.

All I see is increasing sentiment that people in the UK are realising that being outside the eurozone is a pain in the arse, especially givne the exchange rate.

course, joining would be resisted fiecely by Murdoch and the Economist cos that would be the ned of the Dream.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Sat Apr 12th, 2008 at 03:19:44 PM EST
It would be wonderful to track this narrative back to its roots. These versions are too similar not to have a common ancestor. The think-tanks creating templates to frame the pundits' communication. Heritage, Hudson?
by afew (afew(a in a circle)eurotrib_dot_com) on Sat Apr 12th, 2008 at 04:03:33 PM EST
A related, interesting, yet non-practical, issue is not wether this narrative came from, but why it is accepted.

My two cents: the english way of doing a presentation sacrifices similarities at the benefit of recognising differences.
but that is most likely to be result from either the characteristics of the english language, or - and this may be an example of where when you only have a hammer every thing looks like a nail - because england is an island, and therefore there is no need to search for a national identify (already given by physical geography).

Emmanuel Todd explanation: the positions occupied by brothers in the english family (and in most netherlands, and danemark, and brittany) are not predefined as equal - namely in terms of heritage rights - and that affects how people define themselves (and identification really means belonging to a group, however small, since is common labelling).

.
.
.
(i had already written what follows. it is not very relevant, but it has some merit. so, instead of erasing it, i put it away from the main message of the post)

A key element is the fact they brain evolved to recognise correlations, or principal components: the independent variables which determine the greatest variation of outcome in the observed phenomenon (and therefore outcome can be defined as a function of those variables).
identifying the orientation - greater X leads to greater f(X), or the opposite - can be  on a second layer of data processing, and is much simple. After all - lets put it in geometrical terms -, there are many possible directions, but only two orientations.
Therefore most of brain activity in this process can still be used to support the opposite conclusion.

by findmeaDoorIntoSummer on Sat Apr 12th, 2008 at 05:02:11 PM EST
[ Parent ]
"the opposite of truth is still very close to the truth" Sacha Guitry.
by findmeaDoorIntoSummer on Sat Apr 12th, 2008 at 05:10:19 PM EST
[ Parent ]
The interesting question is whether, just because of the sources that carry it, the narrative will be accepted by Eurozone decisionmakers (and opinionmakers) even if their experience contradicts it.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Sat Apr 12th, 2008 at 05:18:07 PM EST
[ Parent ]
You mean for whom they actually work for?
by findmeaDoorIntoSummer on Sat Apr 12th, 2008 at 07:00:28 PM EST
[ Parent ]
what we'd find. A Common Wisdom engraved in Anglo-Saxon orientated MBA's, or part of the common gaggle doing the rounds in boardrooms and around espresso machines, and the think tanks just the vehicles delivering the Truth to the flunkies.

I'm afraid that ET's narrative is pitting against a cultural mindset dominant at the top of the economic food-chain. (Which is why I dig Chris Cook's analogy of the modern mammals superseding the dinosaurs.)

by Nomad on Sat Apr 12th, 2008 at 05:04:34 PM EST
[ Parent ]
I'm afraid that ET's narrative is pitting against a cultural mindset dominant at the top of the economic food-chain.

I think we've always been conscious of that. Those are the stakes.

I would dig Chris's image too, except that I am extremely wary of evolutionary analogies applied to social and economic history.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Apr 13th, 2008 at 03:32:29 AM EST
[ Parent ]
They don't have anything.

Normally I'd agree with the thesis that the ECB has too strict a bias to and already too low inflation target, but if ever there weren't a time to bail out the BOE and the Fed, this is it.

Why the hell let them monetaize their bad debts in the Eurozone?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sat Apr 12th, 2008 at 04:54:36 PM EST
That's already happened, hasn't it? At the end of last Summer the British banks were getting around the BoE's tight purse by borrowing Euros.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Sat Apr 12th, 2008 at 05:19:32 PM EST
[ Parent ]
There's only so far as they can go that way.

And like the Argentines borrowing in USD ten years ago, one day those same banks will be needing to pay back in Euros when most of their deposits are in sterling.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sat Apr 12th, 2008 at 06:11:30 PM EST
[ Parent ]
So sooner or later we'll have to join the Euro, so  the banks will be able to pay their debts back?

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sat Apr 12th, 2008 at 06:17:35 PM EST
[ Parent ]
More like fall off the euro peg.

Then maybe rename the currency the peso?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sat Apr 12th, 2008 at 08:16:47 PM EST
[ Parent ]
... hmmm ... how much has the UK changed since the 20's?

I mean, since the foolish effort to get back on a pre-war gold exchange rate in denial of shifting geo-economic realities led to a long spell of slower growth than its rivals?

I'm still hoping to get some spare coin while the US$ is still a useful margin below $2.00/€

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Apr 13th, 2008 at 06:24:47 PM EST
[ Parent ]
BruceMcF:
how much has the UK changed since the 20's?

I mean, since the foolish effort to get back on a pre-war gold exchange rate in denial of shifting geo-economic realities led to a long spell of slower growth than its rivals?

And also led to the 1925-9 credit bubble in the US, with known consequences.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Mon Apr 14th, 2008 at 06:08:29 AM EST
[ Parent ]
So what's really going on here? Are these articles a tacit admission that the only thing that can save the US$ is the disappearance of the euro? They ain't just whistling past the graveyard....this is like praying that your neighbours house burns down so that no one will notice that your roof is caving in from want of new shingles. It's spiteful, childish, desperate, and a warning of viscous attacks to come.

England needs to somehow be lured in the Euro Zone. The next step would be the dissolution of NATO. One can always dream...

by PIGL (stevec@boreal.gmail@com) on Sat Apr 12th, 2008 at 05:16:38 PM EST

this is like praying that your neighbours house burns down so that no one will notice that your roof is caving in from want of new shingles. It's spiteful, childish, desperate, and a warning of viscous attacks to come.

This is exactly what this is about. Distracting attention in any possible way.

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

by Jerome a Paris (etg@eurotrib.com) on Sat Apr 12th, 2008 at 05:24:21 PM EST
[ Parent ]
I wish I had more True Facts to back up my snark. I'll just borrow yours, Jerôme, if that's OK with you....
by PIGL (stevec@boreal.gmail@com) on Sat Apr 12th, 2008 at 06:03:16 PM EST
[ Parent ]

England needs to somehow be lured in the Euro Zone.

Euroskeptics apparently fear that the moment when £1 = €1 (or less) will be a propitious time...

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

by Jerome a Paris (etg@eurotrib.com) on Sat Apr 12th, 2008 at 05:25:25 PM EST
[ Parent ]
And suddenly I got something else to root for...
by Nomad on Sat Apr 12th, 2008 at 05:32:51 PM EST
[ Parent ]
I smell a Chris Cook £50 euroLLP bet here...

(here goes...)

If I have it right, by moving my sterling assets into euros now (if I could and in a sliding manner as necessary or preferred), I would be locking my assets to the euro--but I wouldn't be making any profit, just exchanging sterling for euros at the best available rate--in one go, just switch.

So...an LLP which can hold smaller or larger funds in a two-currency balance: sterling and euros.  Who'd want to buy the sterling?  European banks have to accept it; assuming sterling isn't going away, and that there is real value being generated in the UK (not necessarily secured as sterling-profit in bank accounts); how about a fund that allows an individual to deposit sterling or euros or dollars, the exchange rate is on the day, let's say eleven a.m.; or two am.  The fund is available to all, but it sits within an LLP--to join the fund, you have to join the LLP, and once you're in--

If the idea is to leap ahead of the common wisdom, and if this is with the idea of changing the common wisdom to one more to our liking, then a company built out of ET ideas, a few euros, a few signatures (legal documents!)--

(endless re-runs of goodfellas, the moral at the end--heh----"good times, right?"  Bang bang!  Bang bang bang!  Bang bang!  "yeah, good times.")

--and the politicians making up laws and now taking down laws like demons--more laws, different laws, laws that cancel out other laws, or try to circumvent them in some way--This year we need: more laws!  And enforcement at the discretion of--I dunno, the police via instruction from on high--

...as Chris says, get a starting pot, a pool which can be used to pay an individual if another individual in the pool (or those outside who, by the magic of the LLP, suddenly appear inside--in a legal sense or a tax sense) defaults on payment.

What happens to profits is one conversation, but maybe not by far the most interesting.  How are they getting on with that new solar heater?  What?  Again?!  Gah!  Yes.  Okay.  Bert!  Yeah.  Yeah.  Hey, did it do that smoking thing?  It did that smoking thing.  What's that?  You sure?

EuroLLP -- Funding Success

A last thought--an investment is looking for a safe place to be--so you need a paypal-like structure, where value can be passed easily and securely between members; something concocted from within an LLP (for me, LLP is shorthand for "that magical structure which will do exactly what I want it to"--so I'm always awaiting specific dis-accord where my idea(s) are in disagreement with the actually-existing legal status, requirements, and benefits of the actually-existing LLP/LLC rules and regulations.  I read paul spencers LLC, it makes a lot of sense and seems to be binding in a legal sense but not in the sense that--we're going to need a lot of lawyers to oversee this); where what the partners get up to during their daily routine, whatever crazy things they say to each other or swap with each other, no matter what strange creations they make and then maybe abandon, but the only thing of concern to the state (aka the taxman) is: what profits accrued in that members of the LLP did business with people outside of it?  Chris, does that sound right or all wrong?  Does it make any sense?  How do you set up money payment systems where the bank is, as you say, in the first instance a neutral holder of receipts, to be paid as said by the receipt, in the payment method stated on the recipt--It's the marginalisation of money-profit----.  

Chris--Solveig!  Imagine: a freak electric burst from the planet, a pre-cursor to the shifting of the magnetic poles--something that just shut it all down, just like that.  Hey, Scotland's a long way for me on foot--days of walking, weeks!  Now....hmmm...we need something a bit faster.  How about -- Pigeons-R-Us (LLP), why be precious?  Pigeons are good when all the phone lines are down--forever!  But ya know, there's that corporation producing rats--

I suppose another way of looking at it is: if you can't find any money being given to you when you ask the rich for some, then you're going to go lower down the pecking order, so might as well start where most people end up--cultivate the money of the poor, turn it into a simple resource--to be fed out to govt. as desired and following all legal guidelines; but internally, this is it: this is all the money you're going to see from this source, now--how about we--pool a few of our resources--

Gah--I'm trying to paint from a strange blueprint--which keeps changing shapes internally--



Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Sat Apr 12th, 2008 at 08:38:23 PM EST
[ Parent ]
I think you nailed it.
the reaction of the third neighbor is to wish for the roof to fall and the other house to remain intact...

In any case... the US would be lucky (as we all will be) if the US remains at zero growth for some years without getting in negative terrirtory.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Sun Apr 13th, 2008 at 03:22:17 PM EST
[ Parent ]
Oh, you mean after the recession. Yeah, that would be better than the alternative.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Sun Apr 13th, 2008 at 06:28:51 PM EST
[ Parent ]
Criticising the anglo disease is getting to be so easy these days, its becoming a bit like taking toys from kids.  However the Anglo ideology will remain dominant (despite it's internal contradictions) for so long as there isn't an alternative doctrine which articulates a different policy direction and which can demonstarte a superior grip on reality.

So what is that alternative paradigm?  Is it embodied in Euroland?  Is it exemplified by French/German statism?  Is it good old fashione KLeynesianism or social democracy perhaps with an environmentalist tinge? b Just what is it, positively we are advocating?  An EU like transnational solidarity?  A Euro like commitment to stability and real value in a real economy?  A distain for booms and busts?

I think, Jerome, to have a real impact in MSM you will have to do more than demonstrate the increasing desperation of anglo disease advocates.  You are going to have to demonstrate what an alternative vision of the world looks like.  With Sarkozy seemingly going Anglo you cannot use France as the exemplar.  Just what is the sape of the new world you advocate

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Apr 13th, 2008 at 08:25:07 AM EST
Jérôme hasn't only written about the Anglo Disease (national overreliance on the financial sector) but also on "reform has become a dirty word" and "wealth capture is not wealth creation". The argument would be that "reform" is a codeword for deregulation enabling "looting" (wealth capture) by the global financial capital under the excuse of "wealth creation" which doesn't help the majority of the population since "reform" includes hollowing out any redistributive policies that may be in place.

As such, since the neoliberal ideology and its "reform" agenda are demonstrably destructive to the economies where they are deployed (in the "periphery" this is demonstrated in Stiglitz's insider critique of the IMF and World Bank; and in the "core" this is the Anglo Disease), what needs to happen is that the 30-year long neoliberal assault is rolled back.

It's not what "a post-Anglo world" that's the issue here. It's to beat back the ideology of "reform" which is an excuse for "wealth capture".

Now, considering that the US has been understating its inflation and overstating its growth numbers via "Hedonic pricing" with respect to Europe's inflation and growth statistics, it is unclear that Europe's problems (sluggish growth, etc) are as dire as the advocates of "reform" claim. This means that Europe didn't deal as badly with the 1970's stagflation and its aftermath (ever since) as the conventional wisdom has it. And stagflation is what killed Keynesianism in the US and provided an opening for the Chicago boys.

If one argues that Monetarism, supply-side economics and "reform" never worked, then what's the need for a "new" alternative? Go back to what worked before.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Sun Apr 13th, 2008 at 09:14:24 AM EST
[ Parent ]
but here it in one place: The financial crash has a simple cause and a simple solution


And the solution is simple: stop debt (this is happening on its own anyway). and boost income.

How do you do that when there isn't enough money around?

By creating real activity rather than the money-shuffling kind.

And, as it were, there is a sector that is "real" and has an urgent need for action: infrastructure, and in particular energy-related infrastructure.

A plan that focuses on a few simple things:

  • massive public support for energy efficiency refurbishment of existing homes;
  • a massive, New Deal rural electrifaction scale plan to build renewable energy assets and the corresponding grid infrastructure;
  • a similarly massive plan to develop smart public transportation, both locally and intercity;

Spending the money currently wasted in Iraq on these 3 things alone would provide a real boost to the economy in the sectors that actually need it, would reduce oil&gas consumption and carbon emissions, and be an actual investment in the future, as opposed to the current drain on the future that's been engineered via debt used on mindless consumption of junk.

Add in plans to boost minimum wage, reinforce union rights and tax imports of carbon-rich goods, and you'd have a pretty damn good economic - and geopolitical programme.

Because the problem is the most of America's population is living, by design, above its means. It is kept dependent, fearful and distracted while the happy few gorge. Call it what it is: class war. Time to fight back.




In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Apr 13th, 2008 at 09:58:16 AM EST
[ Parent ]
That's for America. How about Europe?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Sun Apr 13th, 2008 at 10:18:05 AM EST
[ Parent ]
  • home energy efficiency
  • renewable energy and grid investment
  • reinforcement public transportation (maybe with more of a focus on merchandise transportation, but even on the private transporation, the needs are huge)
  • minimum wage protection/reinforcement

There are all needed and would be useful. The only thing not relevant is the fact that money was not wasted in Iraq on the same scale.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Apr 13th, 2008 at 10:29:55 AM EST
[ Parent ]
Let's not forget that approximately one-half of the entire IMF credit meltdown total is spent yearly in the US on military technology, the support structure for the amurkan economy.  Every frickin' year.  Where would US economic (jobs, GDP, share prices...) statistics be without that?

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Sun Apr 13th, 2008 at 10:43:00 AM EST
[ Parent ]
If you redirect the spending to more constructive projects, what's the problem? You'll need to re-train parts of the workforce, sure, but a factory that produces tanks and fighter jets can be re-tooled to produce railway engines at least as easily as a railway factory can be re-tooled to produce tanks or fighter jets.

It's all government spending we're talking about and it doesn't produce anything useful anyway, so the re-training and re-tooling doesn't have to take place in market-competitive ways or timescales. As long as you keep the people involved employed, any and all useful output is a bonus.

Am I missing anything here?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Apr 13th, 2008 at 10:51:56 AM EST
[ Parent ]
You're missing the education of our statesmen in the principles of classical economics.

Keen on Keynes

For a man who has been long unemployed some measure of labour, instead of involving disutility, may have a positive utility. If this is accepted, the above reasoning shows how 'wasteful' loan expenditure may nevertheless enrich the community on balance. Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better.

It is curious how common sense, wriggling for an escape from absurd conclusions, has been apt to reach a preference for wholly 'wasteful' forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict 'business' principles. For example, unemployment relief financed by loans is more readily accepted than the fiinancing of improvements at a charge below the current rate of interest; whilst the form of digging holes in the ground known as gold-mining, which not only adds nothing whatever to the real wealth of  the world but involved the disutility of labour, is the most acceptable of all solutions.



When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Sun Apr 13th, 2008 at 11:02:44 AM EST
[ Parent ]
OK so Migeru advocates a return to Keynesianism; Crazy Horse a move out of military to productive industrial expenditure; and Jerome a move away from "financial services" towards investment in more productive and infrastructural sectors of the economy - with a particular emphasis on renewable energy.  

Nothing wrong with any of that though some would argue that globalisation has changed the whole ball-game and that "financial services" , corporate management and militarism is how the new globalised neo-colonial world is held in thrall - not just the "working classes" in Europe and the USA.  Thus by moving up the food chain to brand marketing, corporate and financial services Europe and the USA is managing to continue to maintain prosperity (for the rich) and some measure of stability for the general population on the back of cheap third world labour in outsourced industries.

However by "hollowing out" particularly the Anglo economies (and increasingly, European ones as well) and outsourcing to cheap labour economies a new dependency is created - not just on oil, but on cheap labour in China, India etc.  This has allowed inflation to be kept low and general living standards to be kept stable, even whilst proportionately less and less productive work has been carries out in Europe and the US.  If for whatever reason, this source of cheap labour becomes unavailable, either through political re-alignments, tariff barriers or wage inflation in China/India - then the impact on "western economies" will be even more devastating than the rise in Oil prices.

In other words I don't think what you guys advocate is all that radical - and any "western economy" can and will adopt those strategies if military adventures fail, financial services crash, energy prices rise and Unions re sufficiently organised and militant about wage rates and social services.  But what I think is lacking is an alternative intellectual paradigm which makes those changes the obvious "common sense" policies visible to all - particularly to the voters.

For instance the obvious alternative to Brown's plunging popularity in the UK now is more of the same in the shape of Cameron and the Tories.  There isn't a new paradigm even on the horizon.  The solution now is still more "reform", more outsourcing to China/India, more deregulation, greater inequality in income, and less social services in the shape of greater charges for education and healthcare.

"There is no alternative" used to be the slogan, now there is - even more "reform", and even France is going down that route.  Advocating a return to Keynesianism - even if partially technically correct isn't going to create a new political paradigm or consensus.  Greater investment in renewable energy can happen if the price is right without any change in "anglo" ideology.  The financial services will go where the money goes - and be increasingly virtualised in any case.  War is simply a cost benefit analysis - where the elite gets the benefits and others bear the costs.  As long as US Companies can get the oil out it doesn't really matter what happens to Iraqis and ordinary soldiers on the ground.

I remain to be convinced that the "anglo disease" analysis is anything more than a fairly obvious rearranging of the deck chairs that any more competent management would do in any case.  It doesn't provide an ideology capable of motivating a mass movement to change the fundamental realities of power - in Europe, the US or the global world order.  It's simply a more rational form of capitalism.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Apr 13th, 2008 at 02:35:30 PM EST
[ Parent ]
Globalisation is nothing more and nothing less than the free movement of capital across national borders.  This used to be heavily regulated up to the 1980's but it no longer is.

In this environment capital can blackmail national governments with taking its toys away (and causing unemployment) unless favourable conditions are set. National governments surrender without a fight. I don't understand why they can't say "if you take your factory away we'll fund the construction of another one". Very often trade unions complain that plants are closed not because they operate at a loss, but because it is simply more profitable to operate them elsewhere. You juts need a factory owner with a lower required return on investment (sometimes te return on capital cannot be lowered below a certain level because of debt, but as long as the facility is cash-flowing the debt can be restructured). All of this is a political problem. Apart from deregulating capital flows we have regulated government out of owning or funding productive assets because it "distorts competition" or something like that.

Meantime, people remain the least mobile of the means of production, not only because people are not inclined to uproot themselves, but also because of all kinds of migration barriers designed to protect (each country's) domestic populations against competition by foreign workers. Within the EU this is no longer the case. So the result of deregulation of capital flows, regulation of governmental industrial policy, and regulation of migratory flows is to royally screw the people who have no other asset than renting out their labour.

Now, I don't know how to articulate that into "an ideology capable of motivating a mass movement to change the fundamental realities of power".

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Sun Apr 13th, 2008 at 02:52:21 PM EST
[ Parent ]
Within the EU language barriers remain for movement of people, and those cannot be legislated away.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Sun Apr 13th, 2008 at 02:59:31 PM EST
[ Parent ]

globalisation has changed the whole ball-game and that "financial services" , corporate management and militarism is how the new globalised neo-colonial world is held in thrall - not just the "working classes" in Europe and the USA.  

I know you write "some would argue that" before that bit, but it still seems to inform your overall argument. Globalisation per se has not changed the whole ball game. Globalization compounded by deregulation and liberalisation has done that. But that's a political choice, not a hard un-changeable reality.


 If for whatever reason, this source of cheap labour becomes unavailable, either through political re-alignments, tariff barriers or wage inflation in China/India - then the impact on "western economies" will be even more devastating than the rise in Oil prices.

It is "cheap" only because externalities are not priced in - and they are not priced in because politicians won't do it, thinking that "cheap" (monetarily) is all that matters, whatever the damage we do to others and to ourselves.

What's required is a conscientious decision to show the very real price of that "cheapness." That's what regulation is about - re-internalisation of externalities, ie making those that cause the externalities bear the consequences, like making polluters pay (or, better, clean at their cost). Suddenly producing in China won't look so "cheap" Because the real cause of their "cheapness" today is not so much low labor costs (that's a marginal factor except in a few industries), but the ability to ignore safety rules, pollution regulation and the like.

And the "impact" of that on the West is likely to be a net plus, in the long term, just like renewable energies will be, because they are cheaper in reality - it's just that the costs of the alternatives we currently use are not directly associated with their use (think oil - military budget, coal - health care for asthma patients, etc...).

Being sustainable is cheaper in the long run - the real kind of "cheaper."


In other words I don't think what you guys advocate is all that radical - and any "western economy" can and will adopt those strategies if military adventures fail, financial services crash, energy prices rise and Unions re sufficiently organised and militant about wage rates and social services.  But what I think is lacking is an alternative intellectual paradigm which makes those changes the obvious "common sense" policies visible to all - particularly to the voters.

It's not that radical - it's been done once already, in the second half of last century, and it created the first real middle class ever on the planet. But as our economies grew fat, the temptation to "harvest" the middle classes rather than to create became overwhelming. It would be nice of we can go back to what worked without a major economic crisis, but it seems unfortunately unlikely - and too late anyway.

But long term, planified government regulation is an alternative paradigm - and it has the advantage of being a proven solution.

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

by Jerome a Paris (etg@eurotrib.com) on Sun Apr 13th, 2008 at 03:11:09 PM EST
[ Parent ]
Jerome a Paris:
But long term, planified government regulation is an alternative paradigm - and it has the advantage of being a proven solution.
And that is not necessarily incompatible with private enterprise, since the latter seems to have a much shorter horizon.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Sun Apr 13th, 2008 at 03:20:28 PM EST
[ Parent ]
Jerome a Paris:
But long term, planified government regulation is an alternative paradigm - and it has the advantage of being a proven solution.

OK so we at least have a name for an alternate paradigm - Government planning/regulation - as opposed to "the magic of the markets" - or whatever metaphysic lies at the heart of monetarism/neoliberalism.  Unfortunately the Soviet Union rather gave "Government planning" a bad name, so we have to be more specific as to what dynamics should drive the planning process.

Jerome a Paris:

What's required is a conscientious decision to show the very real price of that "cheapness." That's what regulation is about - re-internalisation of externalities, ie making those that cause the externalities bear the consequences, like making polluters pay (or, better, clean at their cost).

OK - that could be part of the dynamic driving the planning process - make sure that the producer/buyer pays the full replacement/recycling costs of the products created and consumed.  Presumably we would be charging a levy on Chinese goods to take account of their larger CO2 footprint - but how do you price in human rights violations, safety etc. - and Charging a levy on Brazil for the destruction of the amazonian global carbon sink.   Could get complicated - but at least it raises some of the right issues.

But the biggest problem - even with the Keynesian mixed economy advocated by Migeru - is that:
a. Public sector planning is seen by the dominant paradigm to encroach on individual freedom and productivity/efficiency
b.  There isn't a clear paradigm/ideology which provides a rationale for such planning and gives a clear measure of how effectively it is being carried out  - i.e. to demonstrate how much value is being added by the process

Thus the civil service is seen as largely parasitical /non productive and driven by internal self-interested, empire building priorities rather than making an active and positive contribution to social justice/economic productivity.  

Social democracy is an uneasy compromise between "socialism" - seen as a failed economic system - and unfettered capitalism - seen as an unjust economic system - but their is no clear rationale as to where that "compromise" should ideally be.  We have no effective measures of the value a good planning process can create - where is the cost benefit analysis for any Civil service activity?

In other words its not good enough just to argue we need more regulation/state intervention - we need a socioeconomic political science which defines precisely what those interventions should be - to fulfill what objectives - and to demonstrate how much better those objectives can be fulfilled by state planning than by any other method.  After all the "magic of the market" is a fairly ridiculous concept - but we have to do better than the "magic of Government" if we want to argue how value is added by government processes.  Pointing to some good examples is not a theory.  Precisely why and how will giving increased power to "unaccountable bureaucrats" add more value than deregulating markets - on a grand scale - and precisely what standards and measures should those bureaucrats be held accountable to?

We can, in theory, refuse to buy a capitalist's products (unless they have a monopoly).  We cannot escape the regulation of a bureaucrat - because it usually has the force of law - so a much higher standard of proof is required to demonstrate its efficacy as far as the common good is concerned.  Most civil servants resist such accountability like the plague and thus undermine the legitimacy of their enterprise.  We need a better way and system for measuring their performance and contribution if their legitimacy vis a vis the markets is to be enhanced.

In other words there is good Government planning and bad government planning and at the moment the average citizen has no way of telling the difference and no way of doing anything about it even if he does know the difference.  There are almost no internal systemic mechanisms in place for systematically weeding out poor perforce/contribution and rewarding/enhancing the good.  The whole process is opaque to the average citizen and thus lacks real accountability and legitimacy - and thus has been easy meat for the neo-liberal "reformers" to destroy.

We need an entirely new paradigm by which public services are managed, monitored. measured and enhanced and it is simply not good enough to say we need more of the same - we don't. We need something which is demonstrably much better, more efficient, more accountable, and measurable against democratically set standards and goals.  Without that the free-marketeers will continue to win every ideological argument hands down.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Apr 13th, 2008 at 04:15:38 PM EST
[ Parent ]
Frank Schnittger:
But the biggest problem - even with the Keynesian mixed economy advocated by Migeru - is that:
a. Public sector planning is seen by the dominant paradigm to encroach on individual freedom and productivity/efficiency
b.  There isn't a clear paradigm/ideology which provides a rationale for such planning and gives a clear measure of how effectively it is being carried out  - i.e. to demonstrate how much value is being added by the process
You seem to be conflating economic planning with a command economy. Just because the government sets long-term goals and lays out a regulatory environment conducive to reaching those goals doesn't mean that the government is running a command economy where private initiative is curtailed. It is a myth that freedom is absolute and unconstrained: freedom is exercised within a consensual framework (and the laws of physics). Also, we need to get out of the idea that government action "distorts" the market.

By talking about "regulation by bureaucrats" and just in general you're formulating the whole discussion in the "neoliberal reform" frame, and in that frame our arguments are just awkward. We need to change the frame.

Government planning reduces to the question of should the government set long term goals, or not? And certainly it should. It's just that right now the only government goals set for the long term seem to be to attain a certain high level of market liberalization. What the market does with its free rein (for instance, whether growth is sustainable or based on eating the seed grain) doesn't seem to figure in the governments' long-term goals. And that is a failure of the imagination.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Sun Apr 13th, 2008 at 04:44:51 PM EST
[ Parent ]
Markets are good at solving certain types of  optimisation problem: left to themselves the problem they will solve is how to maximise the amount of money that accumulates to a small number of people. One of the jobs of government is to set the markets more useful problems than that.
by Colman (colman at eurotrib.com) on Sun Apr 13th, 2008 at 04:47:27 PM EST
[ Parent ]
Migeru:
You seem to be conflating economic planning with a command economy

Not at all - but certainly that is the image conjured up by neolib parallels drawn with the Soviet Union.  We are talking here of regulation which comes somewhere between planning and command.

But you ignore my central point - the the ideology of state planning provides no frame of reference for measuring the quality and value added of regulation and for differentiating between good and bad, and for providing citizens with the tools to reinforce the good and reduce the bad.  You are expecting people to buy into the state regulation ideology en block and on trust - and not providing the evidence of what is working well and what is not, and what mechanisms are provided to ensure a move from bad to better.  The state will always be on the defensive without such detailed democratic accountability, because the neolibs can always point out that the markets ensure bad capitalists (sometimes) fail.  You can't give Governments a blank cheque - and that is essentially what the state regulation ideology is looking for - "were disinterested experts, trust us" doesn't cut it any more.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Apr 13th, 2008 at 05:00:50 PM EST
[ Parent ]
We are talking here of regulation which comes somewhere between planning and command.

Suppose the government has a plan. what tools are they allowed to deploy to attain the plan's goals?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Sun Apr 13th, 2008 at 05:08:18 PM EST
[ Parent ]
Whatever works best, subject to the law and civil liberties?  You mentioned command as a problem, not me.  My concern is with accountability/quality/performance in achieving democratically agreed objectives.  Bad governance gives all governance a bad name when there are no tools and procedures for identifying, measuring and correcting it.  My suggestion is that there is a reason why the neo-libs have been so successful in selling their ideology over the past 30 years - despite a very dubious track record in the real world - and a large part of that reason is that they have been able to play on popular resentment of unaccountable bureaucracy and the faux equality of choice of the market place.  

The Government planners otoh have been lousy at marketing their successes and even worse at dealing with their failures.  They have created a new kind of class society where privileged civil servants can lord it over the rest of the populace who don't have the same security of tenure, pensions, unsackability, and unaccountability for their performance.  The democracy of the marketplace is very unequal, but it is better than no democracy at all.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Apr 13th, 2008 at 05:25:14 PM EST
[ Parent ]
I agree that the unaccountability of many (not all) governmental bureacracies is a big problem in building a better society.

I would phrase the question like this: How do we build more accountable governmental service systems, so that we as citizens can make sure they work for us and not lord it over us?

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

by A swedish kind of death on Mon Apr 14th, 2008 at 05:53:56 AM EST
[ Parent ]
I realise that you're playing devil's advocate here, but I cannot help but point out that you are the one writing the bigger blank cheque vis-a-vis transparency. Corporate structures have near-zero transparency and bad capitalists usually do not fail.

To take a simple example, in most parts of Denmark it is literally impossible to buy food without financially supporting the wars in Vietraq and Afghanistan. I can vote against those wars in the ballot box. I cannot vote against them with my euros. Much the same can be said for textiles produced in SE Asian sweatshops. And cell phones containing copper from cyanide heap-leech mining.

Alright, you might argue that I can manage without a phone if heap-leech mining bothers me so much. But you'd be hard pressed to argue that I can do without clothes and food.

So the reality is that lamenting the lack of transparency in government bureaucracies (and thus tacitly implying that there is transparency in the "free market") is simply not an apples-to-apples comparison. And that is the first point we'll want to make, I think.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Apr 14th, 2008 at 02:08:28 PM EST
[ Parent ]

There isn't a clear paradigm/ideology which provides a rationale for such planning and gives a clear measure of how effectively it is being carried out  - i.e. to demonstrate how much value is being added by the process

Erm... do EDF, TGV, Airbus ring a bell? Why do you think that there is such a large side-dish of French-bashing in the promotion of neoliberalism? France is the inconvenient proof that strategic behavior by the State over the long run works.

It's a pity that the French elites have been to a much too large extent brought into the fold by their neoliberal cousins, and have forgotten how to defend their model, but the model is still there, and still works. And people in France know it. And foreign investors know it.

Why do you think I spend so much time debunking the myth of declining France? Because it has direct relevance.

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

by Jerome a Paris (etg@eurotrib.com) on Mon Apr 14th, 2008 at 05:23:56 AM EST
[ Parent ]
So the paradigm/ideology would be The French modelTM?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Mon Apr 14th, 2008 at 05:56:12 AM EST
[ Parent ]
You know this site is a nest of French Technocrats, don't you?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Mon Apr 14th, 2008 at 06:05:52 AM EST
[ Parent ]
As I said earlier, a few good examples is not a theory.  I could just as easily quote Alitalia or any number of inefficient state enterprises.  What IS interesting and important is why some are very good, and many are awful.  Undoubtedly the freedom from very short term, PR and personal careerist/bonus dominated decision making is a major problem with the Anglo disease management style.  However, it's not good enough just to say "the French are good at it" - you have to specify precisely which aspects of the French model are demonstrably superior, and why.

Having worked in a major, rapidly globalising, private sector company for most of my life I am all too aware of the huge structural problems with the management systems that are developing there, and yet they are of a different order and kind to those in large public sector organisations.  

The neo-lib myth of the entrepreneur entirely subject to the vagaries of the market place has about a much relevance to today's gloabalising corporations as the "log cabin to White House" myth of American Politics.  You are mistaking the ideology for the reality if you think that neo-lib economics has any great understanding of how a large corporation is actually managed.

The difficulties of managing a large global business, most of the internal components and services of which have no direct exposure to any marketplace, are not all that different in kind to managing a large state organisation, but the response has been altogether more dynamic in the private sector.  The notion that we can go back to 1940's style state bureaucracy to provide an alternative paradigm to neo-lib economics is reactionary, not progressive, and shows know understanding of the transformation in organisational systems that has taken place in the last 50 years - almost regardless of the economic sectors in which they are embedded.

(As an aside, there are many dimensions to globalisation - far and away more than just the focus on free movement of capital referred to earlier - and organisational development theory is only beginning to address them.)

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 08:12:42 AM EST
[ Parent ]
The difficulties of managing a large global business, most of the internal components and services of which have no direct exposure to any marketplace, are not all that different in kind to managing a large state organisation, but the response has been altogether more dynamic in the private sector.

For example?

by Metatone (metatone [a|t] gmail (dot) com) on Mon Apr 14th, 2008 at 10:29:31 AM EST
[ Parent ]
Example: The degree to which individual managers and organisational sub-units in the private sector are subjected to precisely articulated and measurable targets, often agreed jointly by negotiation, and monitored carefully to ensure that all expenditures are directed towards those ends.  Thus projects are subjected to rigorous cost benefit analysis and post audit to ensure the projected benefits have actually been achieved.

In my experience - even at the top end of the public service - there is huge resistance to any precise targets being set, never mind objective monitoring as to whether they have been achieved.  The notion of accountability has more to do with not rocking the boat rather than with the quality and quantity of services delivered to the general public.  The objective is often to achieve growth in budget allocation rather than improved quality and quantity of service.  

Things are changing, but very very unevenly and slowly, and there is little structural incentive for that change to take place - not least because very few Government Ministers have a clue about running a large organisation, and can be easily sidelines or hoodwinked if they ask awkward questions.  Many civil servants have nothing but contempt for their ministers and have made thwarting them into an art form. It is very easy to sabotage a politicians career if he is expected to take personal responsibility for all Departmental decisions - even those he was never properly informed about.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 11:03:35 AM EST
[ Parent ]
precisely articulated and measurable targets

You've had a better experience of the corporate world than most people!

The problem, of course, with measurable targets is that very often the things that are important to performance, especially when profit isn't the bottom line, are difficult to measure. So you set targets by what can be measured, even if they're at best tangential to fulfilling the actual aims of the organisation.

by Colman (colman at eurotrib.com) on Mon Apr 14th, 2008 at 11:10:17 AM EST
[ Parent ]
Point accepted, and it becomes really difficult in areas like health care.  But it can be done.  The problem is that there are huge vested interests determined to stop it happening.  Funny how it is impossible to measure health care quality and  efficiencies in the public sector - but no difficulty in charging for it in the private!

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 11:41:13 AM EST
[ Parent ]
In areas like health care and education, New Labour's target obsession has been demonstrably damaging.

A couple of examples come to mind. One is the charge that people have been alleged to be kept waiting in ambulances before being admitted to Accidents and Emergencies in order not to violate a government-imposed target that all patients should progress to a certain stage within 4 hours of admission. The other example is that, after focusing on the number of pupuls excluded from schools for 6 school days or longer, policies have been adopted that discourage schools from excluding pupils for that length of time (by making it a monetary cost for the school), as well as having Local Authority officials do their best to avoid long-term exclusions whether or not the underlying issues are addressed. The same thing happens with permanent exclusions: it is possible for the Local Authority to negotiate a voluntary transfer of a student from one school to another as a way to avert a permanent exclusion. The end effect, the pupil moving school, is the same as it would have otherwise been, but it doesn't show up on permanent exclusion statistics.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Mon Apr 14th, 2008 at 11:46:38 AM EST
[ Parent ]
All of this is possible where the "customer" has no effective means of redress for any harm suffered -  a key organisational design principle for any service industry.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 12:14:12 PM EST
[ Parent ]
What it's a key organisational design principle for any service industry that the customer should have no effective means of redress?

that's cynical ;-)

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Mon Apr 14th, 2008 at 12:15:39 PM EST
[ Parent ]
nah - its what the public sector is like now, and what needs to be changed!

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 01:32:44 PM EST
[ Parent ]
Actually, the tendency to consider people using public services as customers is just as much a problem as anything else.
by Colman (colman at eurotrib.com) on Mon Apr 14th, 2008 at 01:37:42 PM EST
[ Parent ]
Call me naïve but - the ballot ?

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Wed Apr 16th, 2008 at 05:57:31 PM EST
[ Parent ]
Charging for stuff is not necessarily measuring it.

Read any analysis of private sector charging by health economists (some of Enthoven's early work will do) and you'll see that private health care does not do half of the measurement that you are ascribing to them.

by Metatone (metatone [a|t] gmail (dot) com) on Mon Apr 14th, 2008 at 12:14:10 PM EST
[ Parent ]
Funny how it is impossible to measure health care quality and  efficiencies in the public sector - but no difficulty in charging for it in the private!

It's easy to set price. Cost-plus works fine for the purpose of the health care provider. Determining value, on the other hand, is a much stickier issue.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Apr 14th, 2008 at 02:26:44 PM EST
[ Parent ]
Even a cost plus model requires measurement of service volumes, and an analysis of costs - and usually an analysis of costs elsewhere to determine the reasonableness of the proposed price.  I have known all of these basis metrics and comparisons to be resisted at senior levels in the public sector.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 02:42:05 PM EST
[ Parent ]
And they are resisted for good reason.

From a value perspective, cost-plus is nonsense. A simple antibiotic treatment for a lung infection saves your life. It costs - at worst - € 100 and a couple of doctor's visits.

I don't know the price tag for a major cosmetic operation, but I would be very surprised if it is less than two orders of magnitude greater.

Without going too far into the value of purely cosmetic operations, I hope that we can at least agree that curing a patient of TB is more valuable than a facelift?

Further, the comparison of costs across suppliers assume a roughly comparable product and that customers are able to shop between suppliers. In many cases this is simply an invalid frame of reference. Not only is major surgery (nevermind emergency care!) a sufficiently rare event for most people that the marketplace won't work [1], there is also the issue that many aspects of pre- and post-treatment care are not (easily) comparable across facilities.

Applying the kind of metrics that you suggest to medical care is like trying to figure out the mass of the Earth by counting the number of pebbles on a beach. It's not the right way to do it. In fact, it's not even a wrong way to do it.

And don't get me started on the moral hazard of reducing citizens to "consumers" and medical professionals to "suppliers."

Don't get me wrong; I'm all for transparency and accountability. But making up insane measurements just to measure something isn't accountability. It's accountabilityness, to Colbertize a bit.

- Jake

[1] Recall that the marketplace is only self-correcting if the burnt hand can teach - if each person breaks his leg at most once or twice during a lifetime, there is no way he can amass the level of experience with the different providers of health care to make an informed choice on his own.

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Apr 14th, 2008 at 03:25:57 PM EST
[ Parent ]
It's the infrastructure of the country, and its presence in vital industrial sectors. it's no accident, and it's a lot more than anectodal.

And a lot of that relied on simple things: a willingness to entrust the State with strategic planning, the attendent prestige of working for the State you're not just a bureaucrat, you're part of the elite of the country), and the ability of the government to hire the top brains in the country, via the selective Grandes Ecoles, which are specifically created to train competent administrators and engineers, and instill in them a very real sense of duty.

And it's not something from the 40s. EDF's nuclear programme was decided in the mid-70s and implemented throughout the 80s and 90s. Ditto with the TGV.

Now the people that could renew that spirit work for banks - because they're the places with money, prestige and power. Is that a good thing? Is it an irreversible one?

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

by Jerome a Paris (etg@eurotrib.com) on Mon Apr 14th, 2008 at 10:36:46 AM EST
[ Parent ]
Jerome a Paris:
Now the people that could renew that spirit work for banks - because they're the places with money, prestige and power. Is that a good thing? Is it an irreversible one?

It will happen if the pay, prospects, and prestige are better because we have lost the idealism associated with the post war project of rebuilding Europe as not just a similar collection of states to that we had before the war, but as something qualitatively different - with a strong supranational dimension, a strong social and welfare state dimension, and a strong commitment to providing an integrated economic infrastructure which can enable the private sector to flourish.

Now that idealism and endeavour, that ambition and infrastructure, must become EU and worldwide and much bolder and more ambition to transcend the "greed is good" philosophies of the Chicago school.  

We're on the same side of this debate -I'm just trying to goad you into being much more positive and offensive in your approach - instead of always playing defense against the idiocies of the neo-libs. THAT'S TOO EASY FOR YOU NOW. Populations and movements are inspired not by withering critiques of what is, but by dynamic visions of what can be.  The EU is one such exemplar, the UN, International court of Justice are others.

We need to be much bolder in confronting our leaders with the idiocies of the current conventional wisdom.  Bush/Chaney/Blair should be indicted before the courts.  Rendition flights stopped.  Sanctions applied for human rights violations whether in Gitmo or Tibet.  Mugabe ousted by UN intervention if necessary.  MBeki challenged for his complicity.  The UK told it can't join the Euro until it gets its financial services sector in order.  

In short we have to make the EU/Euro such a success that the Anglo disease will be obvious for all to see.  But we also have to tackle the idiocies of the public sector in many countries which will prevent popular acceptance of that model ever becoming more universal.    This requires that we articulate a new model of management efficiency and accountability for that sector - yes, built on the successes to date - but also learning from the failures.  Otherwise Berlusconi will keep on coming back.....

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 11:37:32 AM EST
[ Parent ]
The notion that we can go back to 1940's style state bureaucracy

Isn't that a strawman?

to provide an alternative paradigm to neo-lib economics

Didn't you just argue that we would be mistaken in thinking that neo-lib economics had anything to do with the running of a globalising corporation? So why would we need an alternative?

the transformation in organisational systems

Is there any reason why this should be exclusive to the private sector?

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Apr 14th, 2008 at 10:56:03 AM EST
[ Parent ]
Migeru was arguing that Keynesianism didn't fail, the neolibs didn't succeed, and the obviously solution was to go back to Keynesianism.  My answer is a Yes, but...  the world has changed, globalism isn't just about deregulation and free movement of capital, and that technology and scale has enabled and forced a complete transformation in how large scale economic activity is organised.  To be effective, the regulatory environment also needs to become more globalised, and infrastructural initiatives such as those instanced by Jerome need to become more global in scope - as Airbus already is.

Neo - liberalism appeals to the values of the small entrepreneur - who is often subject to fierce market disciplines and bitterly resents regulatory costs and perceived unfairness and inefficiencies.  Large global corporations give lip services to competition, but in reality are dedicated to destroying it, by fair means or foul.  They need some regulation to be able to operate and often have the power to ensure it reinforces their position and makes life difficult for new entrants or weaker rivals.  

However they have also been much more effective at playing of nation states against each other and maximising their advantage.  International regulation is a bit like  trade unionism, which offsets the weakness of an individual vis a vis a large business through collective bargaining.  It is only through a large number of states controlling access to key markets acting collectively that they have any chance of regulating global firms effectively.

There is absolutely no reason why the transformation of organisational systems should be exclusive to the private sector, and every reason why it shouldn't be.  But vested interests aren't the exclusive preserve of the private sector, and we lack an informed political culture capable of ensuring the necessary, and in this case real, reforms take place so that public sector organisations can rival the private in inefficiency and effectiveness, but with respect to a much more socially and environmentally responsible set of goals.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 12:10:22 PM EST
[ Parent ]
Migeru was arguing that Keynesianism didn't fail, the neolibs didn't succeed, and the obviously solution was to go back to Keynesianism.  My answer is a Yes, but...  the world has changed,

And Mig and Jerome point out that Keynesianism still hasn't failed. If Keynesianism weren't viable, the economic systems that France, Denmark, Germany, Sweden and several other countries currently have could simply not exist. Thus, we can conclude that Keynes still works. Q.e.d.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Apr 14th, 2008 at 02:20:36 PM EST
[ Parent ]
All countries have a mix of public and private - the question is what is the optimum proportion, and how do you optimise the contribution of both to the public good.  As I understand it Keynes didn't factor in the cost of non-renewable externalities, neither where individual polities played off against each other by mobile capital to the degree to which that happens today.  I'm no economist, but I'm also not sure what contribution Keynes had to make to the optimisation of public sector efficiencies in meeting agreed objectives.  However the universal reference point of "the market" provides some somewhat spurious measure of that for the private sector as far as the neo-libs are concerned, and that is part of their effectiveness in public discourse.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 02:51:40 PM EST
[ Parent ]
Another problem that this "new philosophy" is going to have to deal with is the question of what's wrong with giving jobs to third world workers? My idealistic view of socialism is that the international movement would strike in Europe, say, in reaction to labor problems in South America, for example. Or in the U.S. to support workers in China.

If the proposed planned economy is set up to protect the jobs of western workers, which is the current approach of American trade unions, then it is part and parcel of the current problem of defining an "other" that must be held down in order to keep oneself up.

Workers in a globally distributed economy can only fend off the system by working together, which is not now a popular approach. If anyhing, the working classes in the west are on completely the other side of the argument...

by asdf on Sun Apr 13th, 2008 at 07:14:16 PM EST
[ Parent ]
I couldn't agree more - and would go further - Globalisation has been better than neo-colonialism for many third world countries.  We can complain of the sweat shops in India, but they are preferable to the mass starvation that reigned before.  Globalisation also involves transfers of technology, skills, infrastructure and educational/political literacy which can result in autonomous development as many of the Asian Tiger economies have demonstrated.  At least some of the anti-globalisation sentiment in the first world is driven by the very real fear that some"third world" countries are catching up and may become dominant in the future.

But the biggest problems is that, whereas economic corporations have globalised extremely rapidly, the political, trade union, public service and legislative/regulative frameworks have remained largely national (and chauvinist) in character - and have thus had almost no ability or success to balance the ecnomic growth and success of the capitalist cl;asses.  #

It is no accident that the real venom of the neo-cons is not directed at France (as Jerome fondly imagines) but at anything that smacks of international or global regulation - thus the UN, EU, Kyoto, ICHR, Internal National courts of Justice etc. must be dismantled or destroyed for the neocon project to succeed.  

Individual nation states - even France -are child's play for the big international players - it is the growth of international law and institutions which are the real threat to the neocon project.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 08:28:21 AM EST
[ Parent ]
We can complain of the sweat shops in India, but they are preferable to the mass starvation that reigned before.

Well, uh, but what about Africa? No sweatshops involved, but market ideology forced upon governments and preventing action.

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

by DoDo on Mon Apr 14th, 2008 at 10:12:57 AM EST
[ Parent ]
Sweatshops before and after, a lot of aid, a lot of aid organisations with "empowerment" philosophies, and yet very little positive development.  I'm not sure that it is market ideologies forced on Governments which is the primary cause of Government inaction - although there are obviously instances of that.  Often the "indigenous" Governments seem worse that the colonial regimes they have replaced - and I know a fair amount of the depredations practiced by the colonisers.  

There is something about deep poverty which is deeply debasing, and which is reflected also in political cultures.  It is very hard not to see Africa through western ideas, and not to impose implicitly western models of development.  Many societies have recovered from colonial domination, but not many African ones.  I could offer some hypotheses, but it would take a diary, and I am not well qualified enough  to take the flak that would probably ensue.

Either way Globalisation is a reality, not an option, and it is the quality of the international and local political response which is at issue.  Both are sadly deficient in the case of Africa.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 10:48:04 AM EST
[ Parent ]
Frank Schnittger:
Either way Globalisation is a reality, not an option
The technological revolution in communications leading to the global village may be a fact of life, but the deregulation of the global economy through floating exchange rates, liberalised international capital flows and the WTO (and the EU's single market, and ASEAN, and NAFTA, and Mercosur...) are political choices.

As is well known even Bretton Woods was designed to allow sustained global trade imbalances, against the proposals of Keynes who argued for global regulation of currencies and trade balances in order to introduce negative (i.e., stabilizing) feedbacks into the global economy.

We would live in a very different world if, via policy choices, people were more internationally mobile than capital.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Mon Apr 14th, 2008 at 11:00:51 AM EST
[ Parent ]
IMF and EU Are Blamed for Starvation in Niger
Johanne Sekkenes, the mission head of MSF which is mounting the biggest emergency exercise in its history in Niger, says the current emergency could have been avoided. "This is not a famine, in the Somalian way," she said. "The harvest was bad in 2004 and the millet granaries are empty. Yet there is food on the markets. The trouble is that the price of the food is beyond anyone's reach. "Given this situation, it was criminal of the UN this year to tackle the emergency in a gingerly way, putting 'moderately priced' cereals on the market. The UN should have immediately organised free food distribution."

Ms Sekkenes said the International Monetary Fund and the European Union had pressed Niger too hard to implement a structural adjustment programme. "No sooner had the government been re-elected [this year] than it was obliged to introduce 19 per cent VAT on basic foodstuffs. At the same time, as part of the policy, emergency grain reserves were abolished."

From another article on the same famine:

MSF: Plenty of food - yet the poor are starving

The starvation in Niger is not the inevitable consequence of poverty, or simply the fault of locusts or drought. It is also the result of a belief that the free market can solve the problems of one of the world's poorest countries.

...The last harvest was only 11% below the five-yearly average. Prices have been rising also because traders in Niger have been exporting grain to wealthier neighbouring countries, including Nigeria and Ghana.

Niger, the second-poorest country in the world, relies heavily on donors such as the EU and France, which favour free-market solutions to African poverty. So the Niger government declined to hand out free food to the starving. Instead, it offered millet at subsidised prices. But the poorest could still not afford to buy.

...Last month around 2,000 protesters marched through the streets of the capital, Niamey, demanding free food. The government refused. The same month, G8 finance ministers agreed to write off the country's $2bn (?1.3bn) debt.

The human side:

In Tahoua market, there is no sign that times are hard. Instead, there are piles of red onions, bundles of glistening spinach, and pumpkins sliced into orange shards. There are plastic bags of rice, pasta and manioc flour, and the sound of butchers' knives whistling as they are sharpened before hacking apart joints of goat and beef.

A few minutes' drive from the market, along muddy streets filled with puddles of rainwater, there is the more familiar face of Niger. Under canvas tents, aid workers coax babies with spidery limbs to take sips of milk, or the smallest dabs of high-protein paste.

Wasted infants are wrapped in gold foil to keep them warm. There is the sound of children wailing, or coughing in machine-gun bursts.

"I cannot afford to buy millet in the market, so I have no food, and there is no milk to give my baby," says Fatou, a mother cradling her son Alhassan. Though he is 12 months old he weighs just 3.3kg (around 7lbs).



*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Apr 14th, 2008 at 01:41:39 PM EST
[ Parent ]
What's that Jerome says? "Famine is a market solution"?
by Colman (colman at eurotrib.com) on Mon Apr 14th, 2008 at 01:43:34 PM EST
[ Parent ]
...and the sad thing is that even most European leftists would think that that line is a bad joke, and that Naomi Klein is hyperventilating with Disaster Capitalism.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Apr 14th, 2008 at 01:49:50 PM EST
[ Parent ]
When people are starving there is only one humanitarian solution, and that is to give them food as quickly as possible.  However that can also have the effect of rendering local agricultural activity uneconomic, and thus depressing local production still further.  Thus the solution may be to provide an income that can enable starving people to buy food locally at sustainable prices.  

Meanwhile, in many instances the President has a string of Mercedes, a private plane, and a Swiss Bank account, and his officials are creaming off the aid budget...  As I said earlier, often there are failures of political leadership at both local and international levels and the development of good representative, educational, infrastructural, and economic structures at local level is a better long term solution than ever greater dependency on external aid budgets.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 02:04:39 PM EST
[ Parent ]
I don't see how what you say applies to what the quoted articles describe.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Apr 14th, 2008 at 02:13:18 PM EST
[ Parent ]
I can't comment on the specifics of the article as I know little about Niger.  I have studied development economics in other countries and what I have said above would not be particularly controversial in the context.  

In the Irish Famine c. 1845-52 c. 1 Million died and one 1 million emigrated at a time when grain and cattle were being exported to England.  500,000 were evicted from their lands for not paying the rent.  The colonial and landlord class structure was as much responsible for the toll as the potato blight, if not more so.  Famine was indeed the market and colonial solution to Irish rebelliousness and population growth.

Ultimately. political independence was only partly the solution.  Economic independence (or at least an interdependence of near equals) did not come until much later - arguably mid 1990's.  Before that emigration was still the historic norm, and the population continued to decline until the 1960's despite high birth rates.  

It's a long hard road, and there is no easy solution.  Debt forgiveness and economic aid is part of that solution, but ultimately the political and economic development can only be done by the people themselves.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 14th, 2008 at 02:33:42 PM EST
[ Parent ]
I can't comment on the specifics of the article

You don't have to comment on the specifics, you just have to relate them to the big picture you draw. I say there is lack of coherence.

Debt forgiveness and economic aid is part of that solution, but ultimately the political and economic development can only be done by the people themselves.

The articles I quoted give an example when debt forgiveness is made conditional on the local government abolishing what has been in place before: grain stocks, price controls, free distribution; and set free processess that made the situation worse: trading of agricultural products to the highest bidder (exporting it to neighbouring countries); and all that at a time when the overall production shortage was not in any way catastrophic: a mere 11% below average. None of this you can blame on the locals and lack of development -- this is the 'development' we prescribe to them.

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

by DoDo on Tue Apr 15th, 2008 at 04:51:09 AM EST
[ Parent ]
Having just forgiven previous debt, presumably the G8 weren't prepared to lend more without some prospect of being repaid.  Most aid (other than emergency) is predicated on the assumption that it is about assisting countries to become more self-sufficient and less dependent on future aid - by assisting in skills development, infrastructural investment etc.  

If Niger is still exporting food - what is the income derived being used for?  Is there an internal tribal/class/elite structure whereby some starve and some are relatively well off?  Are their huge internal inefficiencies, waste, corruption, and lack of planning? Are there projects in train which can improve the overall productive capacity and income distribution of the economy?  

I'm afraid the specifics ARE very important, and blanket assertions that "its all the West's fault" don't really help to resolve the problem because "the West" is never going to take 100% responsibility for resolving the problems, and the whole point of development is to devolve responsibility, power and capability to the the local polity.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Apr 15th, 2008 at 06:49:55 AM EST
[ Parent ]
it is about assisting countries to become more self-sufficient

That's nice words. In effect, it turned out to be about giving Western companies better access to local markets, capitalising on legacy dependency. But whatever the reasoning, the lethal effect on local population is the same.

If Niger is still exporting food

Not Niger, traders. (If the specifics are important, let's read with precision.) You understand, private enterprise.

- what is the income derived being used for?

That's irrelevant. Whether that income is turned back into the economy or spent on luxury (which means that ultimately the money goes back to us in the West) or gets lost in corruption, people will starve. (Unless you use money from selling food to buy food for food distribution, which doesn't make any sense.)

Is there an internal tribal/class/elite structure whereby some starve and some are relatively well off?

I refer you back to the article. The problem is that the poorest can't afford food at market prices, even subsidized prices.

Are their huge internal inefficiencies, waste, corruption, and lack of planning?

That's again irrelevant. As I said, upon Western demands, planning already in place was abolished.

Are there projects in train which can improve the overall productive capacity and income distribution of the economy?  

That's again irrelevant. Wait, no: if such projects would not be in place, Western demands of neoliberal reform are knowingly putting locals at risk.

blanket assertions that "its all the West's fault"

You saw no such blanket assertion above, neither from me nor in the quoted articles. You saw quite specific points based on a real-world example. Meanwhile, what I saw from you were blanket assertions (or at least the insinuation of blanket assertions in the form of questions) without any use of evidence.

help to resolve the problem

I'm talking about a problem caused by the West, a minor shortage that wouldn't have turned into a famine without Western intervention, all this while ostensibly working on resolving earlier problems - at their own terms.

the whole point of development is to devolve responsibility, power and capability to the the local polity.

Prescribing economic policy is no devolution of responsibility, power and capability. It's the seizure of them.

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

by DoDo on Tue Apr 15th, 2008 at 07:30:25 AM EST
[ Parent ]
Ok DoDo - I'll leave you to solve the Niger problem, seeing as my comments are deemed either irrelevant or ill-informed. I've heard your arguments being used extensively for the past 35 years - and mostly by people with little or no actual experience of working in sub Saharan Africa, whereas those who have actually worked there extensively tend to see things as a lot more complex.  I am aware of the history of gross colonial and neo-colonial exploitation, but I don't have first hand experience of Niger, neither have I ever studied it in detail, so hopefully you will follow through on your commitment and achieve better results than those who have gone before you.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Apr 15th, 2008 at 08:18:58 AM EST
[ Parent ]
When people are starving there is only one humanitarian solution, and that is to give them food as quickly as possible.  However that can also have the effect of rendering local agricultural activity uneconomic, and thus depressing local production still further.

Purely because Western(TM) "development aid" is and has always been industrial subsidies in drag. If "we" were serious about the aid in question, we'd distribute free food, and buy whatever food the local farmers could produce. Shorter transportation times, money into the local economy rather than big agribiz, and you don't destroy the local agricultural sector, thus not setting the stage for a replay next year.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Apr 14th, 2008 at 02:15:52 PM EST
[ Parent ]
It is no accident that the real venom of the neo-cons is not directed at France (as Jerome fondly imagines) but at anything that smacks of international or global regulation

Hmmm, I think similar amounts of venom are spent on those, but also on Germany and other places whenever economic news seemingly favourable to the ideology come up. You may find Jérôme's fervour amusing nationalist self-overestimation from Ireland, but I'm familiar with the steadfast drippling of venom via the media and international fora he's angry about, and think he may only over-emphasize how much of it France gets.

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

by DoDo on Mon Apr 14th, 2008 at 10:17:47 AM EST
[ Parent ]
its 'rhenan capitalism', with strong (long term) relationships between banks and industrial companies, has been under similarly ceaseless attacks by the neolibs.

Probably because the banks had the junior role in the partnership.

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

by Jerome a Paris (etg@eurotrib.com) on Mon Apr 14th, 2008 at 10:39:07 AM EST
[ Parent ]
(not to mention, of course, the institutional role given to unions in companies. That grates, too)

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Apr 14th, 2008 at 10:39:56 AM EST
[ Parent ]
Ahem, sweatshops have had no observable effect on starvation and malnutrition in India. If anything, they seem to have amounted to a slight negative impact.

That's not to say there's nothing positive about industrialisation, but we shouldn't get carried away with stereotypes.

by Metatone (metatone [a|t] gmail (dot) com) on Mon Apr 14th, 2008 at 10:25:45 AM EST
[ Parent ]
Jake, i meant only what would current ecostats be without the military budget.  i've advocated useful (sustainable economy) work replacing the military for several decades.  the jobs creation portion of the renewable energy platform alone has been argued since the mid-seventies.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin
by Crazy Horse on Sun Apr 13th, 2008 at 11:36:47 AM EST
[ Parent ]
One wonders just how bad things have to get before alternate ideas are permitted in the US media?  

The elites here are nervous about losing money right now - but not about losing either respect or control.  And why should they be?  The stenographers and cheerleaders in the media have shown neither the desire nor the capacity to engage in critical thinking.

by cambridgemac on Sun Apr 13th, 2008 at 02:30:51 PM EST
<BLOCKQUOTE>The elites here are nervous about losing money right now - but not about losing either respect or control.  And why should they be?  The stenographers and cheerleaders in the media have shown neither the desire nor the capacity to engage in critical thinking. </BLOCKQUOTE>

The only real threat to the American elite today is losing their money.  Losing their money promptly removes them from the ranks of the elite.

The government, media and the people are all potential threats to the elite in a functioning democracy.

However government is today more responsible to the money of the elite rather than the people.  So government has not been a threat.

The media is no longer the media but just another business chasing dollars and profits.  Hounding the elite is not as profitable as providing entertainment targeting the easily manipulated. The media has forgotten its purpose.

In a functioning democracy, the people can challenge the elite through their government or as a physical threat.  However through the power of their money, the elite have purchased the government as their shield and sword against the people.  The government, in every nook and cranny of society and expanding, has immense police powers which makes challenging the status quo purely a voting matter.  The government does not fear the people.  Thus the people have been neutralized from challenging the elite.  

IMO, it will take another severe economic collapse to mobilize the necessary mass of angry people required to generate enough fear in government to challenge the elite.  I believe too many politicians of both parties are owned by the elite for change to take place regardless of the president or his intent.  I believe change will only come from the people and only in conjunction with a shock and awe situation.

The process of elite control of government has gone on too long.  They are now entrenched. At the national level, we no longer have a functioning democracy.  Only immense pain might produce real change, IMO.  Unfortunately those sort of times are just as likely to produce a Hitler as a Roosevelt.

by Jagger on Sun Apr 13th, 2008 at 05:42:37 PM EST
[ Parent ]


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