Saturday, 31 October 2015

Eugenics: Plato’s Farm.

“I see that you have in your house hunting-dogs and a number of pedigree cocks. Have you ever considered something about their unions and procreations?”
“What?” he said.
“In the first place,” I said, “among these themselves, although they are a select breed, do not some prove better than the rest?”
“They do,” [he said.]
“Do you then breed from all indiscriminately, or are you careful to breed from the best?”
“From the best,” [he replied.]
“And, again, do you breed from the youngest or the oldest, or, so far as may be, from those in their prime?”
“From those in their prime,” [he replied.]
“And if they are not thus bred, you expect, do you not, that your birds and hounds will greatly degenerate?”
“I do,” he said.
“And what of horses and other animals?” I said; “is it otherwise with them?”
“It would be strange if it were,” said he.
“Gracious,” said I, “dear friend, how imperative, then, is our need of the highest skill in our rulers, if the principle holds also for mankind.”

Sunday, 25 October 2015

Eugenics: Scientific Reproduction.

Wir stehen nicht allein: we do not stand alone. 1936. [A]

Guess who wrote this:
"If we were right in supposing that the scientific society will have different social grades according to the kind of work to be performed, we may assume also that it will have uses for human beings who are not of the highest grade of intelligence. It is probable that there will be certain kinds of labour mainly performed by negroes, and that manual workers in general will be bred for patience and muscle rather than for brains. The governors and experts, on the contrary, will be bred chiefly for their intellectual powers and their strength of character. Assuming that both kinds of breeding are scientifically carried out, there will come to be an increasing divergence between the two types, making them in the end almost different species.
"Scientific breeding, in any truly scientific form, would at present encounter insuperable obstacles both from religion and from sentiment. To carry it out scientifically it would be necessary, as among domestic animals, to employ only a small percentage of males for purposes of breeding. It may be thought that religion and sentiment will always succeed in opposing an immovable veto to such a system. I wish I could think so. But I believe that sentiment is quite extraordinarily plastic, and that the individualistic religion to which we have been accustomed is likely to be increasingly replaced by a religion of devotion to the State. Among Russian Communists this has already happened."

Thursday, 22 October 2015

Union Power and Inequality: Australia.

Florence Jaumotte and Carolina Osorio Buitron (both from the Research Department, IMF) consider the influence of declining union density (union membership) on income inequality in the 20 top economies (here).

For Jaumotte and Osorio Buitron (J/OB, in what follows), research on the increase in economic inequality has traditionally neglected the relationship between labour market institutions and inequality.

In contrast, in a recent research paper, the authors find that:
"The most novel aspect of our paper is the discovery of a strong negative relationship between unionisation and top earners’ income shares (Figure 2). Although causality is always difficult to establish, the influence of union density on top income shares appears to be largely causal, as evidenced by our instrumental variable estimates."

From their Vox summary:

(right-click for a larger version in a separate tab)


What is the causal relationship between a declining union membership and an increasing incomes share for the top 10%?

For one, J/OB find that "the decline in union density has been strongly associated with less income redistribution, likely through unions’ reduced influence on public policy."

But there's another link, one for which J/OB lack a specific technical term, but which Marxists call exploitation:
"Our finding of a strong negative relationship between union density and top earners’ income share challenges preconceptions about the channels through which union density affects the distribution of incomes. Indeed, the widely held view is that changes in labour market institutions affect low- and middle-wage workers but are unlikely to have a direct impact on top income earners. Our finding highlights the interconnectedness between what happens to the middle class and top income shares. If de-unionisation weakens earnings of middle- and low-income workers, the income share of corporate managers and shareholders necessarily increases.
"There are several channels through which weaker unions could lead to higher top income shares. In the workplace, the weakening of unions reduces the bargaining power of average wage earners relative to capital owners and top executives. Channels include the positive effect of weaker unions on the share of capital income – which tends to be more concentrated than labour income – and the fact that lower union density may reduce workers’ influence on corporate decisions, including those related to top executive compensation".
In other words, weaker unions are less able to reclaim a higher proportion of the surplus workers produced, which high executives and capitalists expropriate, exactly as Marx (and others) explained.


This research comes barely a month after the 7-Eleven Australia wages scam was exposed (here) and at a time when Australians are witnessing an unprecedented effort to lower wages and destroy unions, and union organisers are bullied and persecuted by the Australian police for the crime of bargaining wages for union affiliates: see here.

Sunday, 18 October 2015

Forstater on MMT and Labour Theory of Value.

Peter Cooper found a 2012 radio interview on the relationship between Marx's labour theory of value (or law of value, as some prefer) and MMT: here.

The interview is conducted by Tom O'Brien from Alpha to Omega, and the interviewee is Prof. Mathew Forstater, from the University of Missouri-Kansas City.

Cooper has written about this subject before (relevant links in his post, above) and I've mentioned in this blog the views of two leading MMT proponents -- L. Randall Wray (here) and Bill Mitchell (here) -- on the subject of the LTV.

Friday, 9 October 2015

We Get Knocked Down … but We Get up Again!

"The only kinds of fights worth fighting are those you are going to lose, because somebody has to fight them and lose and lose and lose until someday, somebody who believes as you do wins. In order for somebody to win an important, major fight 100 years hence, a lot of other people have got to be willing -- for the sheer fun and joy of it -- to go right ahead and fight, knowing they’re going to lose.
"You mustn’t feel like a martyr. You’ve got to enjoy it." (I.F. Stone)

It's not easy being a socialist. You won't make money in the process, or win powerful friends and influence people (it would be great, wouldn't it?). In fact, many will hate and despise you gratuitously. You will be slandered. Every little success will cost you dearly.

But you already know that, don't you?


There is something, however, you may not already know: There are two ways to look at that.

This is one way:

This -- ask Chumbawamba -- is the other way:

No way is better than the other, in general. But one way might be better for you, in particular.

Whatever way life -- and you -- choose, I wish you good luck. May (the) God(s) -- if He/She/It/They actually exist(s) -- give  you strength comrade.

Always remember this:

"I was. I am. I shall be!" (here)

Thursday, 8 October 2015

Replicability in Economics?

The latest scandal in economics? After considering 67 recent empirical papers published in 13 prestigious journals, Andrew C. Chang and Phillip Li found that "[b]ecause we are able to replicate less than half of the papers in our sample even with help from the authors [more precisely: 1/3 totally independently, less than 1/2 with the author's help], we assert that economics research is usually not replicable." (PDF)

Sounds bad, doesn't it? Don't worry about it, because it gets worse. Like, a lot worse.

Wednesday, 7 October 2015

Keynes on Trotsky.

1919 Russian Civil War White propaganda poster. Source: MIA.
Appearing originally on March 27, 1926 in The Nation and Athenaeum, John Maynard Keynes' "Trotsky on England" found its way -- rather strangely, as it's anything but a biography -- into "Essays in Biography", Keynes' anthology of biographical essays published six years later.

Trying to read that intensely exasperating essay (apparently conceived as a review of Leon Trotsky's 1925 book "Where is Britain Going?"), I found "Keynes on Trotsky", an old post by Larry Hamelin (who goes by the colourful moniker of "The Barefoot Bum", here).

Saturday, 3 October 2015

Keynes or Marx? Ask Hardcastle.

"[I]t was Keynes, not Marx, who cracked the code of crisis economics and explained how recessions and depressions can happen." (Paul Krugman)
Edgar Hardcastle. Source: MIA

Although Whack-a-Krugman (with or without reason) has become a popular past-time among the Internet experts, I'm not reproducing the quote above (from "Why Aren't We All Keynesians Yet"; Fortune, August 17, 1998: link) to pick on Paul Krugman, or any other notable in particular.

Instead, my intention is to give a clear example of an unjustified triumphalism common not only among the multitude of commentators of unknown and/or questionable credentials (to say nothing of intellectual honesty and ability to read) populating comment threads and the Twittersphere, but even among mainstream bona fide Keynesian scholars (like Krugman). [*]

In both cases, I suspect, the comment is nothing more than an uncritical/confused endorsement of some previous authority's pronouncements (btw, I could give at least one good example, as good as the quote above, including a high-profile academic's candid admission, but I rather avoid hurting feelings).


Edgar Hardcastle (1900-1995) -- and many others after him -- have abundantly written about the largely unacknowledged debt Keynesian economics owes Marx. From his June 1971 article "Marx and Keynes on Unemployment" for the Socialist Standard:
"Keynes was given the credit of having demolished the theories of 19th century economists who had taught that, if left to its own devices, capitalism would always and of its own accord tend towards full employment. What was little noticed was that most of the ground covered by him had been treated in detail by Marx three-quarters of a century earlier. Keynes was quite contemptuous of Marx, describing Capital as "an obsolete textbook which I know to be not only scientifically erroneous but without interest or application to the modern world" (A Short View of Russia, 1925) and he never seems to have appreciated that his own criticisms of earlier economists were much like those of Marx."
Read the rest here.


That's not to say that Marxism and Keynesianism are fully compatible. For my own critique of a particular aspect of Keynesianism, start here.

[*] Incidentally, at the drop of a hat, many of the feral commentators do not hesitate in turning their tantrum from Marx to -- ironically enough -- people like Krugman.