Dale Carnegie, please...

Barely one day after Gerard Henderson tried to spin the apparently politically-motivated violence in Arizona into an Australian leftist issue (with the ABC -now sans Kerry O'Brien- as usual suspect), The Sydney Morning Herald publishes a link to the website "People OK with murdering Assange".

And, boy! oh, boy! isn't that website a veritable treasure trove of right-wing bigotry, imbecility and ignorance. How can Mr. Henderson possibly ignore this?

Just two examples:

"A dead man can't leak stuff... This guy's a traitor, he's treasonous, and he has broken every law of the United States. And I'm not for the death penalty, so... there's only one way to do it: illegally shoot the son of a bitch." Bob Beckel (Fox News commentator).

Find the video here and here.

Two little questions: Isn't to call for an illegal act defined as incitement to crime, murder in this case? Don't you need to be an American citizen to be a traitor to the United States?

And, to be fair to American right-wingers and to Mr. Henderson, the other fat man, right-end of the screen, appears to be... a "liberal"!

"Julian Assange is not an American citizen and he has no constitutional rights. So, there's no reason that the CIA can't kill him." John Hawkins (far-right blogger)

Unlike Mr. Beckel, at least Mr. Hawkins is right on this: Julian Assange is not an US citizen. This, however, does not mean he has no constitutional rights, or human rights, for that matter. Find Mr. Hawkins' text here.

For Christ's sake, please will someone give Julian Assange a copy of Dale Carnegie's "How to Win Friends and Influence People"?

Land, Rent and Wages (II)

Imagine you live in a rather backward place, where artisans and craftsmen co-exist with modern manufacturing.

And you are poor, although otherwise you are a modern gogetter: enterprising, hardworking, smart, realist and disciplined. As importantly, you are qualified as a tailor and own your sewing machine, inherited from your grandfather.

So, you decide to start a small business requiring little capital: you want to make shirts for sale.

You could be living nowadays in Bangladesh, for all we know, but people in the European Middle-Ages used to operate in similar ways.

You figure it takes you, as it does everybody else, one day to make a shirt, and it costs you to produce it:

Material unit cost (i.e. per shirt)

Should you ask Re 75 for your shirts? Obviously, not!

You are spending one day working on that shirt, but this cost is not reflected in the price. So, you put on your "worker" hat and charge the standard wage paid in the industry (say, Re 65 a day). With that, the shirt price raises to Re 140.

Is this the "right" price? Putting on your "capitalist" cap, you realize it isn't quite good, yet. True, it includes the standard shirtmaker daily wage, but you could get the same amount working for a shirt factory, without going through any other troubles (risking your capital, ordering materials, book keeping, etc.)

So, you must include an amount as compensation for your role as capitalist and for the use of your capital, but how much?

Other things being equal, you'd prefer to sell each shirt at the highest possible price: the excess of the unit price over unit cost being your compensation as capitalist (i.e. your profit per shirt).

However, this is not possible in general: the more you charge, the more customers you turn to your competitors.

In practice, you do the simplest thing: charge the same as everybody else. This is smart thinking, because shirts like the ones you make sell for, say, some Re 145 (give or take a little). This leaves an average margin of Re 5 as unit profit.

Is that good enough? Strictly speaking, it depends: if you had other more profitable -but roughly equivalent- investment options, it wouldn't be. But let's assume Re 145 is a good price.

Let's pause here, to consider something: as an independent artisan, you share characteristics with workers and businesspeople; however, there are differences, if subtle.

You share with workers the need to make a living. And the money you get to make a living (your labour compensation) comes from your labour, just as it does for any other worker.

With businesspeople (or capitalists) you share the need to make profits, and, being an independent artisan, your profits are a mark-up you add on top of your costs.

And like other businesspeople (but unlike other workers), you control all aspects of production. In particular, you control how fast and how long you work (and you get the full benefits/costs of any changes you decide!).

And you are motivated and hardworking, so a little time into your shirt-making, and you find yourself able to produce 2 shirts every day, while everybody else still manages only one!

How much is your daily profit now:

A. Twice as much as before (i.e. Re 10).

B. No change.

C. None of the above?

Think about the answer and we'll check it later, in the next blog.

Baker Street

I can't say I was a loyal follower of Gerry Rafferty: I was quite young at the time.

But I grew up with Baker Street: paraphrasing a radio station, it's part of the soundtrack to my life.

Somehow, Rafferty's death feels as the death of my youth.

And somehow, it's like we are all neighbors in Baker Street:

This city desert makes you feel so cold
It's got many people, but it's got no soul
And it's taken you so long
To find out you were wrong
When you thought it held everything

You used to think that it was so easy
You used to say that it was so easy
But you're trying, you're trying now

Another year and then you'd be happy
Just one more year and then you'd be happy
But you're crying, you're crying now

Gerry Rafferty (16/04/1947 – 04/01/2011) R.I.P.

You call that a leak? This is a leak!

Have you ever heard the word "plutonomy"?

Neither had I, until I found the "Citigroup Attempts to Disappear its Plutonomy Report" blog.

This is what the fine folks at Real-World Economics Review Blog had to say about it:

    "Both reports were leaked and made available on the WEB. Michael Moore referred to them in 'Capitalism: a Love Story', and the now retired US newscaster Bill Moyers has called attention to them. But they seem to have been largely ignored by scholars. They should be required reading."

And this is what a poster (clearly, not a "loony lefty"), had to say:

    "Remarkable: except for its conclusions it reads like a 'loony left' analysis..."

As a "loony lefty" I've got to say: I couldn't agree more.


PS: You can find the links to the reports in the link above, or in the one below:
"New links for secret Citigroup Plutonomy Reports"