Wednesday 27 February 2013

Spain: Sabre Rattling.

Ever since the Catalonian regional government called for a referendum on the issue of secession, there have been talks in Madrid about the need for military intervention.

Yesterday, what were mainly vague, private comments, may have become more concrete and public, after an active service officer, general Juan Antonio Chicharro, speaking in a public colloquium, sketched what an observer qualifies as a juridical rationale "for a military intervention to avoid the secession". (See here, in Spanish, my translation)

General de División (equivalent to a US Army Major General) Chicharro, former commander of the Spanish Marines, made the pronouncement at the Gran Peña, a traditional club frequented by reserve officers, during a colloquium to which figures linked to academic and judicial circles were also attending.

According to the El País report, Chicharro's intervention, which fell short of calling for a coup d'etat against civilian authorities refusing to take military measures against separatists, gained relevance as he is an active member of the Army Reserve. In Spain the military jurisdiction outlaws the public expression of opinions suggesting the dereliction of the neutrality duty in relation to political matters.

Coming when the Catalonian regional government seems decided to proceed with the separation and when the federal government, headed by conservative Mariano Rajoy, has shown itself incapable of solving the economic crisis affecting Spain and is besieged with generalized accusations of corruption, Chicharro's opinions were received with approval by the public present at the colloquium, according to the El País.

The last attempt at a military putsch in Spain took place in February 1983, 32 years ago.

02-03-2013. The commotion created by general Chicharro's intervention in the Gran Peña moved the Spanish Defence Ministry, predictably, to open an investigation. PSOE and other parties manifested their condemnation to any form of extraconstitutional exit to the secession movements. General Chicharro sent a letter to El País denying his intervention in the colloquium aimed to justify a military intervention.

Tuesday 26 February 2013

Mamma Mia, l'Ironia.

Or Those "Dumb", "Operetta Loving", "Conservative" Italians.

I can imagine the Italian social democratic intelligentsia trying to make sense of the results of the latest Italian elections.


A little more than a year ago, media gazillionaire and conservative Italian politician Silvio Berlusconi was a pariah.

The Italian population, disgusted by an endless stream of scandals involving Berlusconi, and by the Brussels-inspired austerity German chancellor Merkel and French president Sarkozy forced him to apply, took to the streets to celebrate Berlusconi's resignation in November, 2011.

Fast forward a year and two months, during which the Italian population kept taking to the streets to protest against the austerity, enforced now by the Troika candidate, "Super" Mario Monti.

General elections were called.

On this corner, the so-called centre-left candidate to Prime Minister, the social democrat Pier Luigi Bersani, promised to continue Monti's austerity. You know, it's the responsible thing to do, that's why Brussels had to force it down the Italians' throats.

Bersani, like Monti before him, desperately wants to be seen as a "good, tough, realist economic manager, a fiscal conservative" (social democrats, like Bersani and his Democratic Party, love that label, don't they?).

On the opposite corner, "Il Cavaliere" Berlusconi, as entangled as ever in his own operetta peccadilloes, promised to reverse Monti's austerity.

Dark horse candidate Beppe Grillo, head of the Five Star Movement (5SM), also severely criticized Monti's austerity.

And, guess what, "Il Cavaliere" and his People of Freedom conservative coalition not only recovered from Berlusconi's downfall, but gained control of the Senate. Together with the anti-austerity Beppe Grillo and his virtually unknown 5SM, they could in theory form an anti-austerity coalition:

Party             Vote (%)
Democratic Party    29.5
People of Freedom   29.1
5 Star Movement     25.5
With Monti          10.5
Others               5.4

If I had to guess, I'd say that the Italians really aren't too happy with the "good economic management"; so much so that faced with it, they find Berlusconi's well-known failings a price worth paying.

Although this seems obvious to me, I imagine that's just because I'm dumb.

Really smart pundits, like the BBC News' Alan Johnson, know better: it's not that Monti's "good economic management" sucks and blows, it's just Bersani who wasn't able to sell its virtues:
"Is it possible that the poor showing of the centre-left Democratic Party might lead to ructions within it?
"Its leader, Pier Luigi Bersani, ran a deeply uninspiring campaign.
"He felt he had a healthy lead in the polls and he sat on it, playing safe."
And the best thing is that I bet Bersani may actually believe that.


Berlusconi's People of Freedom party includes former Fascist elements. Berlusconi himself not only has been linked to the mafia and corruption, but is also well-known for his anti-democratic, racist and anti-Semitic remarks.

Abandoned in their hour of need by the "responsible" and "realist" social democrats, the people will follow anyone promising them relief. And I don't put it past Berlusconi that he will still change his mind on austerity.


Social democrats must have some deeply ingrained self-loathing issues that they need to resolve. The Italian elections, last weekend, show that.

Saturday 23 February 2013

Chronicle of a Death Foretold (III).

While the barbarians gather at the gates of Canberra, the small parties and independents are positioning themselves for the all too predictable changes in the political landscape, including a Coalition-controlled Senate, informs us Lenore Taylor, SMH's chief political correspondent.

(Just for fun, you might want to read the previous installment in this series)

Independent Senator Nick Xenophon [A]
One of those getting ready to survive Labor's upcoming shellacking appears to be independent senator Nick Xenophon, "who lost his balance of power position in mid-2011, is clearly preparing for the prospect that he will be re-elected and get it back again".

As it happens, the intrepid senator for South Australia, who has been generously featured in the media recently for his unexpected adventures in Malaysia (of all places!), "is also leading the way on changes many Coalition members want to make to industrial relations laws, introducing another private member's bill to exempt small businesses in the restaurant, catering and retail sectors with fewer than 20 full-time employees from paying penalty rates at weekends".

Don't believe Taylor? Neither did I, at first, until I found this, straight from the horse's mouth (August 14, 2012):
"Under Senator Xenophon's Fair Work Amendment (Small Business - Penalty Rates Exemption) Bill 2012, penalty rates would still be payable, but only where an employee has worked more than 38 hours in a seven day period or worked more than 10 hours each day. This exemption would only apply to businesses which employ fewer than 20 full time equivalent employees". Update: Senate Hansard transcript for August 16, 2012.
According to ACTU the changes Xenophon proposes mean "over 500,000 workers risk losing their penalty rates". As most workers employed by food outlets and in retail are already part-timers, based on a 6 hour shift:
  • A fast food worker could lose over $26 on Saturdays and $53 on Sundays.
  • A retail worker could lose over $26 on Saturdays. On Sundays, a permanent retail worker (full-time or part-time) could lose $105, and a casual $79.
  • A hospitality worker who is permanent (full time or part-time) could lose over $25 on Saturdays and $74 on Sundays. A casual hospitality worker could lose $50 on Sundays.


With or without reason, restaurant owners and retailers have long been complaining that operating costs are putting them out of business. Xenophon's bill could address reducing commercial leases, red tape, utilities, suppliers, financing and interests payments, the exchange rate, online shopping, all subjects small businesses complain endlessly.

This from a Council of Small Business of Australia press release:
"COSBOA notes that the high penalty rates are also affecting the health of business owners in large shopping centres who are working six and seven days a week due to the landlord forcing them to open and the high penalty rates and low sales making employing other people prohibitive". (Emphasis added)
So, there you have it, the solution to a problem created by landlords is to squeeze their workers.

Xenophon does not address any of this. Why not? Don't ask me, ask him.

The idea is to externalize these "small business" people's costs, so that workers bear them. And this is already the situation with restaurant workers, according to a recent Fairfax Media investigation on restaurants and diners:

Underclass of restaurant employees in Sydney grossly underpaid - Sarah Whyte and Clay Lucas - January 18, 2013
Restaurants' dirty secret revealed - Sarah Whyte, Clay Lucas - January 26, 2013
Wages of sin - January 26, 2013
Hard to swallow: restaurant staff tips taken by owners, says union - Sarah Whyte, Clay Lucas - January 29, 2013
Wages rot begins at the top - Sarah Whyte, Clay Lucas - January 27, 2013


Make no mistake, after these "long-suffering" heroes get their free lunch at their workers' expense, every other "long suffering" hero will cry for their own, and Xenophon, being so understanding, will be happy to indulge. Don't miss it: coming soon to a paycheck near you.

Once you've been reduced to the most abject misery, you know who you owe that to.


The Unions Australia website is designed to facilitate the process of joining a union.

Image Credits:
[A] "Independent Senator Nick Xenophon suggests if the facts change, it is fine to change your mind". File licensed under the Creative Commons Attribution 2.0 Generic licence. Wikipedia. Author: Di Bell. My use of the file does not in any way suggests its author endorses me or my use of the work.

Friday 22 February 2013

No More Mr. No-Guy.

Or The Strange Case of Dr. Abbott and Mr. Tony.

We all make New Year resolutions: to eliminate negative habits (like smoking) or to acquire positive ones (to exercise more); that kind of things.

Federal opposition leader Tony Abbott (National/Liberal Coalition, conservative), like most of us, apparently also made his own. Being a high-profile man, famous for his physical fitness, however, Abbott's resolution couldn't be as trivial as adopting a healthier lifestyle. Nope, Abbott decided to change how voters perceive him.

Understandably, Abbott's resolution has the political commentariat and voters scratching their heads. Peter Hartcher, SMH's political and international editor, among them.

You see, overseas readers, after making a political career as a "brawler" (as political journalist Glenn Milne described him in 2010), a "Neanderthal" (in Labor MP Rob Mitchell's words, quoted by Hartcher), or as "a polarising right-winger" with a "propensity for insensitivity and controversy" (in the diplomatic views of former US Ambassador Robert McCallum, also quoted by Hartcher) Abbott decided to follow the advice people like columnist Terry Barnes have been giving him since at least 2010: "If two-toned Tony can keep his wild side in check, he would make a good PM".

So, farewell to Tony of the Tea Party; no more Dr. No. Meet Dr. Yes, the thoughtful, reasonable, civil, Tony.

And, lo and behold, lots of personal accounts of this more positive Abbott come to the surface, too. Hartcher's op-ed tells:
"A senior official of the federal Employment Department, who has since retired, recalls (...) 'I've worked closely with a lot of ministers and senior politicians. There are very few as humble and ordinary outside their working lives'.
"Not only that, he found Abbott to be an impressive minister who carried a real concern for the human consequences of policy. As employment minister, Abbott dismantled the old Commonwealth Employment Service, put its functions out to tender and created the Jobs Network. 'Once the decision was taken, Abbott turned his attention to the 10,000 people who [no longer] worked in the CES. He said, 'We can't just junk them and move on.' So the tenderers for the slices of the business were encouraged to recruit these people. He looked closely at their redundancy terms'."
Although perhaps Hartcher missed the irony in the previous story (ominous, too, if you are a commonwealth public servant), he asks: "Who is the real Tony?"

Hartcher risks an answer, too: "He's both. Abbott transmuted from responsible, caring minister to angry, barnstorming demolition man as opposition leader, and now he's moving to change back again".


Perhaps. I've never met Abbott, so I couldn't tell. He seemed quite spontaneous when he admitted to Kerry O'Brien, back in 2010, that not everything he said was "gospel truth":

But, if I had to guess, I'd say that Abbott's true personality, whatever it might be, is largely irrelevant. The fact that can be ascertained is that Abbott's former ministerial colleagues have not ceased campaigning for a return to Work Choices (as readers can verify by checking Peter Reith's public op-eds at The Drum), Joe Hockey's commitment to end the already near inexistent "social net" (aka entitlements society) and Abbott's own intention to further benefit the long-suffering miners.

I hate surprises, particularly the unpleasant and predictable ones. How about you?

Wednesday 20 February 2013

Her and Her Shadow.

A quick note today.

Kate McClymont, SMH's senior reporter covering "the [NSW] state's largest ever corruption inquiry", wrote yesterday:
"A barrister appearing for an allegedly corrupt player in the current ICAC inquiry asked me this week if I had seen House of Cards, an English political thriller in which conservative politician Francis Urquhart deploys blackmail and other nefarious methods to achieve his political ambitions.
"There were two things I recalled about the program, and one of them was that the journalist met with a sticky end, still clutching her tape recorder as she fell to her death.
"It was therefore with some disquiet that I learnt one of the central figures who has appeared at the recent Independent Commission Against Corruption inquiry approached a private detective to have me followed." (See here)
The inquiry, involving the Obeid family and Ian Macdonald, former NSW Labor powerbrokers, today resulted in:
"A proposed open cut coal mine central to the state's largest ever corruption inquiry is set to be blocked by the NSW government after the Premier, Barry O'Farrell, announced that evidence heard during public hearings would be considered in deciding whether it should go ahead.
"Cascade Coal lodged a development application for the mine, at Mount Penny in the state's north west, in December 2010.
"The exploration licence for the Mount Penny area, approved by the former Labor minister Ian Macdonald, has become the subject of sensational allegations at the Independent Commission Against Corruption." (See here)


McClymont shows that there still may be some courage and decency around.

Monday 18 February 2013

Those Dumb, Whingeing, Conservative Aussies.

One of those deep questions keeping Australian pundits and politicians awake at night is why the populace seems unhappy and is particularly critical of the incumbent federal government, led by Labor's Julia Gillard. After all, all the data says that Australia is a world example of good economic management.

Ross Gittins, SMH's Economics Editor, has been consistently perplexed by this. Just a couple of weeks ago, Gittins summarized the Government's predicament thus:
"It's long been clear from polling that the electorate doesn't regard the government as good at managing the economy.
"Why this should be so is a puzzle. As Gillard rightly claimed last week: 'As the global economy still splutters, unlike the rest of the world we have managed our economy so we have low inflation, low interest rates, low unemployment, solid growth, strong public finances and a triple-A rating with a stable outlook from all three of the major ratings agencies'."
(See here)
An opinion often heard in the streets is that, well, Aussies are whingers.

Gittins himself offers a subtler, wordier and more sophisticated version:
"I've said elsewhere that part of the reason (...) is that many people's perception (...) proceeds not from independent observation but from their political alignment. Once I know who I'm voting for I then know whether or not the economy's travelling well.
"But there's another part of the explanation: the public's inability to distinguish between cyclical and structural factors.
(...) But such analysis is too subtle for most punters. To them, all news is cyclical: good news means the economy's on the up and up; bad news means it's going down and downer". (See here)
Let's not mince words, what Gittins is saying can be said in fewer and more direct words: critics of the Labor government are both Coalition voters and dumb. For them, according to Gittins, the economy sucks because Labor is in charge.


Maybe Gittins doesn't need to ask them their reasons; I mean, a learned man like him can probably read ordinary people's minds.

And I sure can't speak for all those dissatisfied with the Labor government. Besides, I wasn't asked,

Still, I will explain why I, myself, am personally dissatisfied with the Labor government.

And, for the record, I might be dumb as a door knob, but God knows I am no Coalition voter. Never been one and never will be one.

I am dissatisfied because there is very little difference between a Labor government and a Coalition government. In no particular order and without claiming to be exhaustive: asylum seekers are still incarcerated having committed no crime; the unemployed, the disabled, the single parents are still systematically humiliated, harassed and impoverished so that the Government can claim they are "tough", exactly like the last Coalition government did; employment is precarious and getting more precarious; inequality keeps growing; Australian citizens, like Julian Assange and now Prisoner X, are abandoned by the Labor government, just like David Hicks and Mamdouh Habib were forsaken by the Coalition government.

The rich still do and undo as they see fit and laugh at everybody's faces; the corrupt go unpunished; Labor politicians stab each other's back, just like Coalition politicians do; the environment is still left to fend for itself.

And, let's remember something: the Coalition government boasted about the same wonderful statistics the Labor government does.

So, again, why should I vote Labor?


With all due respect, you guys can worry about what to do with your wonderful statistics (I have a suggestion, though).

I have to worry about seeing a terrible Labor government replaced by a probably even worse Coalition one.

Thursday 14 February 2013

Domo Arigato, Dr. Roboto.

After mining truck drivers and journalists, it's the family doctors' turn to shout bingo!

Reporting on research conducted by Professor Kris Hauser and Casey C. Bennett, from Indiana University's School of Informatics and Computing, Stephen C. Webster (The Raw Story, h/t Mike Norman Economics) says: "AI system diagnoses illnesses better than doctors".

If my livelihood depended on working as a GP, I'd say that headline is rather ominous.

But you ain't seen nothing yet. This is the real punch line: "Bennett and Hauser said their computer diagnosis would have provided a 58.5 percent cost savings 'per unit of health outcome' versus treatment as usual by a doctor".


But there's no reason to worry. Economists know for sure, because their theories say so, that for every good job gone, another job of some description (but undoubtedly equally good) will be created and will be there, waiting just for you. And you know for sure that you can trust them; I mean, they wouldn't lie to us, would they? Besides, they have such a wonderful predictive record.

Bennett: "Even with the development of new AI techniques that can approximate or even surpass human decision-making performance, we believe that the most effective long-term path could be combining artificial intelligence with human clinicians".


Don't get me wrong: I am no luddite. This may indeed be a boom for patients, if not on prices (let's quit kidding ourselves), at least on quality. What I fail to see is how unemployed doctors will benefit from this.

And, after them, it may well be your turn.


From the IU media release: "The new work addresses three vexing issues related to health care in the US". The last issue is "a lag time of 13 to 17 years between research and practice in clinical care".

Let's close this post with a strangely suitable 1983 video:

By the way, I hope the day is not far removed when researchers announce a robo-economist, a robo-politician and a robo-think tanker. Now, wouldn't that be fun?

Wednesday 13 February 2013

Moving to Oz? (X)

A few weeks ago a study commissioned by the Fair Work Ombudsman over the matter of unpaid work experiences and internships was released.

The study was conducted by professors Andrew Stewart and Rosemary Owens, from the University of Adelaide's Law School.

Unpaid work experience, as I remarked here, is a problem affecting graduate and skilled migrant workers arriving in Australia as part of the independent migrant stream. It has an equivalent on unpaid internships offered to Australian undergraduate students and newly graduated professionals.

The video below contains the announcement made by the Fair Work Ombudsman, Nicholas Wilson:

From the University of Adelaide's media release:
"There is significant evidence of unpaid work experience, internships and trial work that could be seen as undermining the award system and other labour standards," says Professor Stewart. (...)
"However, there are real instances of employers who repeatedly use unpaid internships instead of paying someone a wage to perform that labour. At this point, as we've seen in countries like the United States, 'experience' can move into the more dangerous territory of 'exploitation'," she
[Professor Owens] says. (...)
Professor Stewart says: "Free labour can result in employment being squeezed out, which means someone is missing out on making a livelihood. If someone is not earning a fair day's pay for what is actually productive work, this could also mean a breach of the Fair Work Act".
The Fair Work Ombudsman's YouTube site, which can be found here, contains orientation material useful to workers.

These are the links to the Fair Work Ombudsman's website, Facebook page and Twitter page.

[Updated on 24-02-2013: The Unions Australia website is designed to facilitate the process of joining a union.]

I am including the YouTube video as a free service to prospective migrants, young workers and anyone who might be concerned. If you work for the Fair Work Ombudsman and know for a fact that by including that link I am infringing any rights or in any way acting inappropriately, let me know and I'll remove it.

Sunday 10 February 2013

Marx, Barter and Say's Law.

Prof. David Ruccio (University of Notre Dame) on Marx, Say's Law and barter:
"But anyone who has studied even a bit of the history of economic thought knows that Marx criticized Say’s Law long before Keynes wrote the General Theory. It’s right there, in volume 1 of Capital—and, even before that, in Part 2 of Theories of Surplus-Value. In fact, Marx chides David Ricardo for relying on the 'childish babble of a Say', which he considered not 'worthy of Ricardo'.
"Marx develops his critique of Say’s Law almost at the very beginning, even before introducing capitalist production per se. All he needs is commodity production and the “metamorphosis” of the commodity into money. It’s precisely the introduction of money that, in Marx’s view, both expands and destabilizes exchange, because it is now possible to sell without purchasing (and thus to hold onto the money until the time is right to turn around and make another purchase).
"Therefore, the only world in which Say’s Law might hold is non monetary or barter exchange". (See here. My emphasis)
Prof. Bill Mitchell, on Marx, and Say's Law:
"However, the essential elements underpinning the critique of Say’s Law and the modern understanding of involuntary unemployment in a monetary capitalist economy can be found in the work of Karl Marx, particularly in his – Theories of Surplus Value.
Marx, in particular, provided a strong critique of Classical economist David Ricardo, who in his major work – On the Principles of Political Economy and Taxation – had championed the ideas of J.B Say, which denied the possibility of generalised over-production in a monetary economy.
"In Theories of Surplus Value, Marx launched an attack on Say’s Law, which is the proposition that there could be no general overproduction in a capitalist economy. Marx was intent on showing that a money-using, capitalist economy was prone to economic crises (which we now call recessions) and that unemployment was a inherent tendency of such a system.
"Marx was thus opposed to the Classical denial that persistent unemployment could occur. He noted that in denying the possibility of a general glut, Ricardo assumed that consumers had unlimited needs for commodities and any particular saturation (having too much of one good or service) would be quickly overcome by increased demands for other commodities.
"Marx started from the proposition that capitalists aim to accumulate ever increasing wealth by extracting surplus value, which is production value in excess of what the workers receive in the form of wage payments. The generation of profit thus requires two actions: (a) surplus value creation as the object of production which aims to reduce the payments to labour (limit their consuming power); and (b) Sale of commodities in market which is limited by the consuming power of society."
(See here. My emphasis)

Saturday 9 February 2013

Burn it Down.

"His trust was with th' Eternal to be deemed
Equal in strength, and rather than be less
Cared not to be at all; with that care lost
Went all his fear: of God, or Hell, or worse"

Mike Shinoda and Rick Rubin produced Burn it Down, lead single from Living Things. Shinoda on the meaning of that song:
"You know, to be honest, we get the songs to a certain point, and once we put out our record, it's up to the fans to decide how the song gets finished. In other words, we lead you to a certain point in the road and we say, 'Okay, the rest of it is your call. You bring your own interpretation to the song'."
To me, it tells an epic and tragic tale. But that's me.

Not much more to say, really. In my opinion, by far the single best video of 2012:

Friday 8 February 2013

Marx is no Fred Astaire.

Fred Astaire, 1941. [A]
While I don't agree with everything he writes, I can honestly say I am a fan of Prof. Robert Paul Wolff.

His writings are interesting, accessible and enjoyable and he has an extraordinary sense of humour (often, self-deprecating, too).

Wondering about Marx's unusual literary style, particularly in Das Kapital, full of metaphors and literary allusions, drawing on thousands of years of Western literature, and abounding in religious echoes, Wolff concluded that it has not gained Marx many readers among later economists:
"Needless to say, this [Wolff's own view] was not then, nor is it today, the common view of Marx's ideas and their literary form. The majority opinion, as I observed in Moneybags [Must be so Lucky, one of Wolff's books], has always been what might be thought of as the public health or childhood polio interpretation of Capital. According to this reading, Marx as a young man contracted a nearly fatal case of the particularly virulent strain of Hegelism that raged pandemically throughout Germany during the third and fourth decades of the nineteenth century.  Although he somehow managed to survive the illness, he was intellectually crippled for life. Hence it is simply bad manners to mock him as he drags himself painfully, awkwardly from concept to concept in the realm of Ideas. Rather we ought to marvel that he can traverse the distance from the premises to the conclusion of an argument, and we ought scarcely to expect him to ascend a ratiocinatio polysyllogistica like Fred Astaire tip-tapping his way up a flight of stairs. The British version of this rather curious literary theory, put forward most notably by the doyenne of English Marxists, Joan Robinson, simply has it that Marx was German, and hence was unable to achieve the clarity and simplicity of Locke, Hume, Bentham, Smith, or Ricardo".

Beyond the hilarity, what Wolff writes goes a long way into explaining this from an eminent economist like Prof. Mark Thoma (with whom I often agree, whose blog I visit frequently and, frankly, enjoy):
"I understand the idea the Marginal Product (MP) theory is an apologetic for the distribution of income within the neoclassical model. But for me, the important question is why laborers have not received the share of income that the MP theory of distribution says they should have received. What went wrong? Why, relative to the MP benchmark, did too much flow to the top, and too little to the working class (and it seems to me you have to go beyond skill-based technical change to answer this question because SBTC seems quite consistent with MP theory)? There may very well be a theory of exploitation here that a Marxist can love, but why not cast it in these terms, i.e. why not explain why income flows have been distorted? Why not base it upon a MP theory of value rather than the incorrect LTV, and then explain how exploitation -- distortions to income flows toward the top -- works within this framework?"
So, we have that MP is an apologetic for unequal income distribution and more importantly fails to explain why the labour share of national incomes flows to the top, but Marx's LTV and exploitation theories, which answer these more important questions, are incorrect, and should, instead, be based on MP.

And, let's be fair, neither is Thoma alone, nor is his case the most extreme; further, to his credit, he doesn't try to spin a clear contradiction into some "deeper" truth. God knows that many, after stumbling like that, don't have the moral fortitude.

And, no, before you ask, I don't find Marx an easy read. To me, it's a challenge that I try hard to face... That's the difference.

Damn you, Karl Marx! Why did you have to write so much and about economics, sociology, philosophy, political science, politics and history, at the same time, and, on top, sprinkle everything with artsy references, literary criticism and other heady stuff?

Image Credits:
[A] "Studio publicity portrait for film 'You'll Never Get Rich'." (And he means you). Public domain. Wikipedia.

Another comment on Prof. Wolff's work: "And Now for Something Completely Different", by Matías Vernengo.

Tuesday 5 February 2013

Merkel, Kohl and Rajoy.

A political funding scandal in Germany started in November, 1999, when the district court of Augsburg ordered the arrest of former CDU (conservative, centre-right) treasurer Walter Leisler Kiep in connection with alleged dealings with lobbyist, fundraiser, arms dealer and businessman Karlheinz Schreiber, fugitive at the time.

Kiep admitted to receiving an illegal donation in 1991 on behalf of the CDU, headed at the time by former chancellor Helmut Kohl.

Helmut Kohl. [A]

Kohl denied any knowledge; while his protégé, Angela Merkel ("mein Mädchen", "my girl", Kohl affectionately called her) demanded a quick and sweeping investigation.

The investigations, conducted with typical Germanic efficiency, were quick indeed. Kiep and other CDU leaders would regularly disclose information detailing Kohl's involvement.

Sometimes, by himself, sometimes with Wolfgang Schäuble (CDU chairman) another of his protégés, Kohl would initially deny the information, just to recant a few days later.

December 22, 1999: Merkel wrote in the Frankfurter Allgemeinen Zeitung: "Kohl has harmed the party". After asking the CDU to distance itself from Kohl, Kohl's former girl writes: "The party must therefore learn to walk by itself, confidently, to continue without its old warhorse, as Helmut Kohl has frequently called himself". (See here in German, my translation)

The ties with the "old warhorse" severed, Schäuble was left holding loose reins, only.

February 16, 2000: Schäuble resigns as CDU chair and parliamentary leader. A few weeks later, as a reward for her moral fortitude and leadership, Merkel went on to replace Schäuble as CDU chair.

Wolfgang Schäuble, left; Angela Merkel, right. [B][C]


February 4, 2013: German bankers' money at stake, chancellor Merkel provides her moral support to Spanish PM Mariano Rajoy, who has been accused of corruption in his own country in a modern day public financing scandal reminiscent of the old German scandal:
"Germany had 'great respect and great admiration' for Madrid's economic reforms, Merkel said. Strict austerity measures and the nationalizations of several of Spain's largest banks had helped put the debt-stricken country back on track. These steps would have a positive effect on Spain's future, she added.
" 'We have a trustworthy relationship', Merkel said, pledging further support to the eurozone partner". (See here)
No calls for quick and sweeping investigations. No severing ties with "old warhorses".

Image Credits:
[A] Helmut Kohl. Public domain image. Wikipedia.
[B] Wolfgang Schäuble. Public domain image. Wikipedia.
[C] Angela Merkel. File licensed under the Creative Commons Attribution-Share Alike 3.0 Germany licence. Wikipedia. Author: Armin Linnartz. My use of the file does not in any way suggests its author endorses me or my use of the work.

Sunday 3 February 2013

Primeval Manufacturing.

Ever since a kid I've been interested in science. It's a long story and someday I might even tell a bit of it (believe it or not, is has to do with my Dad, Neil Armstrong, Isaac Asimov and Gerard K. O'Neill).

Yet, I almost never post about science. Maybe that should change.

The following is a fascinating video, part of the evidence provided in support of the claims contained in an also fascinating 2009 paper by Sanz, Call and Morgan[1]:

I don't suppose I need to comment how powerfully evocative the video is, in a general sense.

But beyond that general effect, to me it is suggestive for at least two additional reasons; one of which can be gleaned here (perhaps to the surprise of most):
"Equal quantities of labour, at all times and places, may be said to be of equal value to the labourer. In his ordinary state of health, strength, and spirits; in the ordinary degree of his skill and dexterity, he must always lay down the same portion of his ease, his liberty, and his happiness. The price which he pays must always be the same, whatever may be the quantity of goods which he receives in return for it. Of these, indeed, it may sometimes purchase a greater and sometimes a smaller quantity; but it is their value which varies, not that of the labour which purchases them. At all times and places, that is dear which it is difficult to come at, or which it costs much labour to acquire; and that cheap which is to be had easily, or with very little labour. Labour alone, therefore, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price; money is their nominal price only." (A. Smith. The Wealth of Nations, Book I, Chapter V. My emphasis)
Any comments?

[1] Crickette Sanz, Josep Call and David Morgan. 2009. Design complexity in termite-fishing tools of chimpanzees (Pan troglodytes). Biol. Lett. published online 4 March 2009. here

Stigler, Ricardo and LTV

George J. Stigler (1911-1991, 1982 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel winner), together with his lifelong friend, Milton Friedman, is considered one of the founders of the Chicago School of Economics.

As such, Stigler has probably been endlessly accused by non-mainstream economists and critics of mainstream economics as a dogmatic, closed-minded fellow.

And, you know, he may well deserve that. As it happens, however, it seems Stigler was also interested in the history of economic thought.

In what for me was a rather pleasant surprise, in a paper, with the slightly ironic title "Ricardo and the 93% Labor Theory of Value" [1], Stigler had these generous words to say about Ricardo:
"The basic reason Ricardo's theory is often misinterpreted is that it was often misinterpreted in the past. If a theory once acquires an established meaning, each generation of economists bequeaths this meaning to the next, and it is almost impossible for a famous theory to get a fresh hearing. Perhaps one hearing is all that a theory is entitled to, but one may plead that Ricardo deserves at least a rehearsing--his theory is relatively more widely misunderstood today than it was in his lifetime. One can build a strong case that the modern economist need not be acquainted with Ricardo's work, but there is no case for his being acquainted with an imposter".
Mind you, exactly the same could be said about Marx (as I bear witness) and Stigler did not mention him. Stigler's generosity, I guess, had its limits.

Ironically, too, many critics of mainstream don't seem that much better, either.


And, it seems Stigler had a rather mischievous side, for he closes his paper with the following footnote:
"Very occasionally a theory, unlike a dog, has its second day, as when Keynes persuaded many economists of the error of the century-long tradition that Malthus' criticisms of the full employment assumption of Ricardo were invalid. The example is the more remarkable because the tradition was correct".
Unfair? Perhaps, but I actually liked that parting shot. For a change, it's nice to hear that applied to others beyond the usual suspects.

[1] George J. Stigler, "Ricardo and the 93% Labor Theory of Value". The American Economic Review, Vol. 48. No. 3 (Jun, 1958), 357-367.