Friday, 28 November 2014

Domingo y Gardel: "El Día que me Quieras".

From this Saturday on I'll do my best to post a link to a musical piece, which I find personally meaningful (sorry, youngsters, you'll probably hate me for this).

To start, I couldn't possibly get anything better than Plácido Domingo, singing Carlos Gardel's “El Día que me Quieras”. Domingo, on top, chose three great songstresses!

You may not remember them, but I few years back the Three Tenors (Domingo, José Carreras, and -- What's his name? The Italian fellow … -- just kidding, Luciano Pavarotti was great, too, even if he wasn't Spanish) were all the rage.

I didn't like the musical accompaniment that much, unfortunately: too “American”. Oh, well.

Wednesday, 26 November 2014

McCloskey on Piketty: Caesar on a Pau-de-Arara.

The pictures below show a popular form of transportation in contemporary north-eastern Brazil, known in Portuguese as pau-de-arara (I'll leave details for another opportunity). Generally, impoverished refugees from the drought, those people leave their homes and flee to the cities in search of survival.


Gaius Julius Caesar, in the cusp of his power, never owned one such vehicle; neither did the richest Roman, the quasi-legendary Marcus Licinius Crassus, Caesar's contemporary. For that matter, neither did the Egyptian pharaohs, the Chinese, Inca or Aztec emperors.

Centuries of technological advancement certainly revolutionized land travel. And that most of this progress took place under capitalism is undeniable: even a pau-de-arara available to rural migrants from the poorest regions of Brazil puts to shame the technological advancements the Caesars enjoyed.

But you wouldn't think those migrants rich, let alone richer than Caesar, would you? Could you compare the enjoyment (i.e. utility) experienced by the migrants on a pau-de-arara and Caesar in his very own sella, or sedan chair?

The point is that one cannot identify technological progress with wealth, as Deirdre McCloskey implicitly does:
"(…) In Piketty's tale the rest of us fall only relatively behind the ravenous capitalists. The focus on relative wealth or income or consumption is one serious problem in the book". 
Adam Smith, David Ricardo, and Karl Marx knew that, even if McCloskey chose to ignore it: You are poor(er) or rich(er) in relation to your peers and your contemporaries, not in relation to historical comparisons, which easily lead to absurd.

Augustus hailing a pau-de-arara, on his way to Río. [A]

That is, unless you can conceive a Roman Imperator merrily hanging from one of those infernal contraptions, his hopes centred on finding work as domestic help in São Paulo or Río de Janeiro. "Imagine -- thinks Caesar -- they even have those amazing $50 electrically-powered vacuum cleaners!"

Image Credits:
[A] Augustus of Prima Porta, 1st century. Photographer: Till Niermann. My use of the file does not suggest the author endorses me or my usage of his work in any way. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

Sunday, 23 November 2014

Marx's Reply: Alabama!

Or, "40-Hour Week (for a Livin')"

Commenting on Mark Thoma's latest, Branko Milanovic writes that he didn't like Thoma's treatment of Marx and promptly corrects him, based on the authority of Joan Robinson (the well-known "doyenne of English Marxists"):
"Thus, in Marx we have two steps: (a) labor theory of value, and (b) value of labor power which together show (Marx was very proud of this) that exploitation is not mere stealing but takes place on the back of the action of the law of value. Capitalism allows everything to be bought and sold according to its value, including labor. Surplus value and exploitation are thus 'imbedded' in the 'value-driven' or 'value-based' nature of the capitalist process. They are not a robbery; they are just an intrinsic feature of the system.
Joan Robinson thought that Marx’s distinction between value  of labor and value of labor power was just 'metaphysics.' It is quite likely so. But nevertheless, it was an important methodological innovation which distinguishes Marx from Smith and Ricardo."

It's appropriate, then, that Marx himself, directly from Highgate Cemetery, should reply:
"That the method employed in 'Das Kapital' has been little understood, is shown by the various conceptions, contradictory one to another, that have been formed of it.
"Thus the Paris Revue Positiviste reproaches me in that, on the one hand, I treat economics metaphysically, and on the other hand — imagine! — confine myself to the mere critical analysis of actual facts, instead of writing receipts (Comtist ones?) for the cook-shops of the future."

But, there must be something incredibly convoluted in that, no? What, exactly, is involved in the labour power vs labour thing?

"This is the 'jingle' in a television beer commercial in which sweaty workers are shown enjoying a drink or two after their daily efforts. The advertiser's aim is to present ordinary citizens contributing to the advancement of the nation over and above what they are rewarded in wages (and, hopefully, spending some of those wages on the advertiser's 'liquid gold' as well). Ironically, and no doubt unintentionally, the jingle also summarises the Marxist theory of surplus value-that workers produce over and above what is returned to them as wages." (F. Stilwell [*])
Frank Stilwell (professor emeritus, Department of Political Economy, University of Sydney) is referring to the 1985 song "40-Hour Week (For a Livin')" (lyrics, Wikipedia entry), by American country, southern rock and bluegrass band Alabama. In Australia that song was used in a TV ad by a local beer manufacturer.

The idea seems clear to me; so clear in fact that a Joe Blow like yours truly can understand it: surplus value is what workers produce "over and above what is returned to them as wages" and which always ends up in their employers' pockets: the employer pays the exact labour power expended (the wages), all right; but whatever the worker's labour produces goes to his employer. When the output exceeds the input, there is a surplus value: expressed in money, a profit.

Being that so clear, it's astonishing that learned, middle-class, liberal, sophisticated, worldly, hard-working, economics professors appear to have difficulty understanding surplus value and Marxism.

Left in my confusion, I cannot but remember Upton Sinclair:
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it."

[*] 2002. Political Economy, the Contest of Economic Ideas. Oxford University Press. Page 114.

Thursday, 20 November 2014

Abbott's Bullshit.

The truth about the Australian fake democracy in one headline and two interviews.

This is the current headline (November 20th, ABC Online):

"Mr Turnbull said the ABC would receive $5.2 billion in funding over that time - a cut of 4.6 per cent.
"He said SBS's operating budget would be reduced by $25.2 million or 1.7 per cent over the same period." (see here)

This was Tony Abbott's promise (September 6th, 2013, SBS):


But, let's face it, this was no surprise. Every single Australian citizen or resident knew Australian politicians in general, and this mob very especially, could not be trusted with the truth.

This was Tony Abbott (7:30 Report, May 18th, 2010):

Yet, against all logic, you voted for them. Indeed, you still want to believe capitalism can be fixed: it's just a matter of putting the "right people" in charge. When the last government fails, you turn to the other party, hoping it will be better or at least less bad.

Now, my fellow countrymen, you earned every little bit of the shit befalling upon you; upon all of us, in fact: unfortunately, we'll all have to pay for your decision.

However, I remain optimistic. This may still prove to be a salutary lesson: you'll eventually learn the truth about capitalist democracy and their politicians, as people like me already learned.

You'll just have to sink deeper in shit. Fear not, these politicians will oblige, be sure of that.

Enjoy the lesson.

Wednesday, 19 November 2014

Thoma on Piketty: a Matter of Context.

Thomas Piketty's Capital in the 21st Century has generated an enormous amount of comments and reviews (see here for a partial list of reviews), some of them quite favourable, others not so much; some very accurate, some others missing the point entirely. In general, the authors of these comments and reviews have focused on, let's say, the technical aspects of Piketty's work.

Without denying the importance of these aspects, these commentators and reviewers have largely neglected Piketty's place in the history of economic thought. Mark Thoma (professor of Economics, Department of Economics, University of Oregon, here) has made an important contribution to fill that void for the general public.

I cannot but recommend his recent article (The Fiscal Times, 18-11-2014), from which I quote:
“What Piketty has done in his book is revive the study of the distribution of wealth without violating the positive and normative distinction that economists hold so dear. It’s fine to leave questions about the distribution (or redistribution) of wealth to the political arena, but how can politicians make good decisions if economists cannot tell them about the laws of motion that determine the evolution of wealth and income distributions? Whether or not Piketty is correct about the fundamental determinants of these distributions remains to be seen, but he deserves much credit for reviving these questions and bringing them to the forefront of economic research.” (emphasis added)
In addition to a brief overview of the history of economic thought, Thoma sums up brilliantly what -- in my opinion -- are both Piketty's greatest contribution and limitation: while distribution is a political decision, is it really fine for the little guy to leave questions of distribution to the political arena?

His mainstream Keynesian colleagues, their Post-Keynesian critics, and many a Marxist would do well to think long and hard on the issues Thoma raised in this piece. Anyone with an interest on Marxism should also read Thoma's account of the history of economic thought.

Kudos to Prof. Thoma (h/t MNE)

Monday, 17 November 2014

The Age of "Capitals".

Plastilina plasticine from VEB Varia-Chemische Fabrik Mügeln from the GDR [A]

Matt Bruenig (h/t MNE) notes the proliferation of "capitals": human, social, and cultural capitals; plus organizational, institutional, intellectual, and even gender capitals.

While focusing on "human capital", Bruenig writes about the effect of this general tendency:
"However, one of the problems with the late 20th century academic fad of calling everything capital is that it can and does generate some serious confusion via category errors."
I couldn't agree more; in fact, I'd go one step further: it renders the category of "capital" meaningless for, if everything is "capital", then there is nothing specific about capital; by implication, there's nothing specific about labour and wages.

That's how you find people who can remain straight-faced and say things like this:
"Profit can be seen as the wages of profiteers for their ability to organise the means of production. In a lot of larger companies that is quite literally the case - salaries for managers with bonuses."
And why reminders like this are necessary.

But other examples of this bad habit are not hard to find. Exactly the same thing happened with the word "value", to the extreme that our fashionable cognoscenti (many of whom, I'm sure, Bruenig have confronted over the net) react to the word "value" with either laughing or hissy fits (often both, in an apparent display of schizophrenia).

Another example: "middle-class". Apparently, its contemporary definition goes something like this: "Conceptual plasticine; used in pseudo-socio-economic discourse". The consequence? Everyone thinks they're "middle-class".

Image Credits:
[A] "Plastilina plasticine from VEB Varia-Chemische Fabrik Mügeln from the GDR (East Germany)". Author: Richard Seefeld (23-11-2004). My usage of the image does not suggests the author's endorsement of me or my work. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license. Wikipedia.

Wednesday, 12 November 2014

Did Abbott and Putin Meeting Live up to 'Shirtfront' Hype?

(see also the full version: here)

In the latest news: A Russian Navy 4-ship squadron in the Coral Sea, south of Bougainville, moving towards Australian waters. The Australian Navy is unconcerned with those events, and that's why they sent a P-3 Orion surveillance plane and a frigate, to monitor the Russian ships.

Apparently, the vessels' mission is to deliver the apologies PM Abbott forcefully demanded. President Putin, it seems, learned to apologize in the John Howard Apologies School.

Without showing any signs of Schadenfreude, the Minister for Communications, Malcolm Turnbull said he is not amused with the 7.30 Report video. For once, senator Cory Bernardi agrees with him.

Incidentally, Australia, it seems, has evidence of the Russian involvement in the downing of the Malaysia Airlines MH17 flight. Challenged by their Russian counterparts to present the evidence, Australian authorities declined: the evidence is a secret, after all.

Tuesday, 11 November 2014

EXTRA: Abbott-Putin Showdown.

So, you thought that the APEC meeting would end without the epic Abbott-Putin fight, eh?

You were mistaken. Here is exclusive footage for Magpie News of the moment when Australian PM Tony Abbott shows Russian President Vladimir Putin who's the boss:

That's a lifetime lesson.

Monday, 10 November 2014

MH17 Affair: Good on Russia - Abbott.

Or, The Mouse that Roared …  Briefly.


After blaming Russia (July 18-19) - without proof - for the downing of the MH17 Malaysian Airlines flight, where nearly 40 Australians lost their lives, the rhetoric of the Australian PM, Tony Abbott, has gone through the whole spectrum, from demanding peremptorily that Russia not stand in the way of a full inquiry into the tragedy and warning that
"There can be no excuses, no buck-passing, no blame-shifting."
To the extreme of threatening last month to "shirtfront" Russian President Vladimir Putin, during his visit to Brisbane, for the G20 meeting.

The latest of our intrepid leader, Tony Abbott:
"Prime Minister Tony Abbott says he will seek an 'assurance' from Vladimir Putin that his country will co-operate with investigations into the downing of MH17, in a further softening of his tone towards the Russian President.
"Speaking to reporters at the APEC summit in Beijng on Monday, Mr Abbott dramatically toned down his rhetoric and noted Russia's pledge to do what it could to bring the perpetrators to justice.
" 'Good on Russia for saying that and I'll just be looking for an assurance from the President that what they said then - they meant and what they said then is still what they say now,' he said."
It seems this is something we Aussies must learn to live with: the permanent feeling of vicarious embarrassment. Do you see now why I'd rather see an old-fashioned dust-up?

We Australians deserve better than this Coalition/Labor farce.

Image Credits:
[A] Author: U.S. National Institute of Health. Image in the public domain. Wikipedia.

Tuesday, 4 November 2014

Thuringia: Seeing Red.

Tom Gill (h/t MNE), for Counterpunch, writes that:
"25 Years After the Fall of the Berlin Wall
"Return of the German Reds?
"The radical Die Linke looks set to take charge of a regional government in Germany for the first time, in alliance with the social democrats (SPD) and Greens."
That's good, I guess. Apparently the SPD finally got tired of having its already devalued brand name entirely soiled by its association to Merkel's CDU, and decided to join Bodo Ramelow, Die Linke's leader in Thuringia in a coalition government.

Let's just hope for once a pact with the devil does not end like all pacts with the devil: Die Linke being betrayed by Labor, Fabians, Democratsprogressives, social-democrats. You know, the Left -- or Die Linke, as they say in German -- betrayed by the pseudo-Left -- or liberals, as we say in Oztralian.

But there's more. Philip Oltermann, writing from Berlin for The Guardian, also chronicles the event. According to Oltermann,
"Twenty-five years after the fall of the Berlin Wall, the Left party's ascendancy in Thuringia is the clearest sign yet that German views on the GDR legacy are becoming more pragmatic and less ideological."
Oltermann reckons that the reunified Germany has slowly incorporated the good things (yes, there were those, even if you never heard of them from our free press) from the former East Germany. This has been a difficult process, though, as Oltermann explains with seemingly trivial examples:
"When Germany introduced a bottle deposit system to encourage recycling in 2002, it pointed towards Scandinavia, even though East Germany had a sophisticated recycling infrastructure since the 1960s."
Oltermann calls that denial "ideological"; perhaps he is right. Maybe you could say German mainstream opinion-makers are "doctrinaire". You, too, could be right; after all, that's what mainstream opinion-makers, all over the world, do for a living: being doctrinaire.

I call it a bit differently: it's the pettiness and mediocrity that characterizes the defenders of capitalism, liberal and conservative, alike (pretty much the same crap, really, but from different piles). See also.