... And This is Oz's Next Treasurer!

Overseas readers already met the next Australian Prime Minister.

And this was Joe Hockey, the next Aussie treasurer ("conservative, centre-right, libertarian"), a few years ago, when he wanted to sell the image of a nice guy:

Since then he shed both some kilos and the image of nice guy, replacing them with the persona of Very Serious Person, as befitting the father of Australian austerity.

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Each and every one of these guys is furiously anti-socialist, pro-capitalist and fan of entrepreneurs.

Cloudspotting.

[A]

I don't know about you, but Cloud Atlas seemed to me the kind of DVD to rent only if no better alternative was available. Luckily, the day I rented it, there was nothing else.

Moreover, I had not read anything about it -- which was fortunate, too -- or indeed the 2004 novel by David Mitchell which inspired the film. So I can say I watched the movie without prejudices.

It is an ambitious film. You can tell by details such as its length (165 minutes), cast (including Halle Berry, Tom Hanks, Hugo Weaving, Susan Sarandon and Hugh Grant) and by having three directors (Andy and Lana Wachowski and Tom Tykwer).

Its ambition, however, goes much further: the plot spans over four centuries, starting in an unidentified Pacific island in 1849 to end in another (apparently Hawaii). Indeed, counting a brief prologue and epilogue, the story both starts and ends beyond our planet.

The narrative is divided into six apparently separate episodes, developed in a highly non-linear fashion. In a particular case, for instance, the story of the fast-food restaurant slave-worker Sonmi 451 is told by her, while awaiting execution and presented in flashbacks, interspersed with fragments from the other stories.

[B]

Visual and verbal cues, often subtle, appear, in order to link these episodes, resulting in a larger continuity. Sometimes these cues work flawlessly; sometimes the result is less smooth.

In particular, the more well-known actors, which often play more than one role in the overall story, performed adequately. However, as their roles vary in age, race and gender, many very familiar faces end up wearing make-up, at times to a dubious effect.

In any case, the narrative contains references ranging from the mystical to the materialist and should provide reason for reflection to viewers of a more thoughtful nature.

This brings us to what must be one of the highlights of the film: the performance of South Korean actress Bae Doona, who plays the above-mentioned Sonmi-451, in a dystopian 2144 Seoul.

In spite of the limited screen time allocated to her story, 33-yo Bae's character metamorphosed from a mass-produced worker, indoctrinated to obey, serve and fear her oppressors -- literally a well-behaved child by design -- into a heroic figure of rebellion and serenity in tragedy, displaying at equal parts dignity and courage; the kind of character who deservedly becomes a legend.

This may sound silly, but I could not avoid being misty-eyed with Bae's unforgettable performance, nothing short of exceptional.

While this is a visually impressive film, to me its visual aspect comes only fourth, after the script itself, Bae's outstanding work, and the movie's very inspired soundtrack.

Composed by Tom Tykwer, Johnny Klimek and Reinhold Heil, the soundtrack deserves special reference. Directed by Kristjan Jarvi and performed by the Leipzig Radio Symphony and Choir, the soundtrack, on the basis of a shared motive, incorporates layers corresponding to the different epochs covered by the story, providing a musical link unifying the narrative, without overdoing the basic motive.

It's not surprising Cloud Atlas has attracted polarized reviews. As my description may suggest, this is not an easy film and it shall demand the viewers' attention.

Cloud Atlas is well worth it. 

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While we still can, maybe we should try cloud spotting.


Image Credits:
[A] Source: Cloud Shapes in Blue Sky - Italian Sonnet.
[B] Source: Book review: Cloud Atlas, by Karen Tay.
[C] Source: Cloud Atlas, by Michelle McCue

John Aziz on Subjectivism: Das Mudpie!

John Aziz (associate editor, Pieria: profile) on the subjective theory of value (STV) and why it, in his estimation, is "the greatest idea in the history of economics". (Like... wow!)

Aziz:

"This [i.e. individually differentiated needs] leads to variations in price - different people are prepared to pay different prices for the same good or service based on their own need or want for it. While open markets and free exchange give a level of order to this process - quote prices, and moving averages - ultimately markets are moved by individuals' subjective valuation process, and the negotiation process." (See here)

So, in Aziz's estimation, two main things determine prices: individuals' subjective valuations, mediated by markets.

Having established his initial position, Aziz proceeds then to compare the STV to its theoretical rival: "The subjective theory of value's chief rival - the labour theory of value [i.e. LTV] advocated by David Ricardo, Adam Smith and Karl Marx - is deeply problematic".

And what are those deep problems? "The great trouble with this is the notion of a real (or fundamental, or intrinsic) price. Prices are just functions of market participants' decisions."

That is, for Azziz, the LTV is "deeply problematic" because in it prices are not determined by individuals' subjective valuation, mediated by markets, as in the STV.

In other words the LTV is deeply problematic because it is not the STV. Case closed. Aziz advances no other reason. For instance, doesn't claim the STV to be more empirically accurate.

So, one could be tempted to ask why the rather obvious fact that the LTV is not the STV is such a troublesome thing?

The only reason Aziz hints at is this: in Aziz's estimation "the subjective theory of value is the greatest idea in the history of economics"! Starting with the premise, the conclusion is the premise itself: the cycle is complete! No more reason is required.

Aziz's personal estimation is the rule to decide whether something is problematic or not. Take that, Ricardo, Smith and Marx!

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While I myself find the invention of sliced bread a greater thing than the subjective theory of value, even among rabid anti-LTV people, particularly among some PKers, the notion that "individuals' subjective valuation, mediated by markets" determine prices is considered bogus.

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I'll be honest: I have nothing personal against John (somehow, at this moment, to address him by his first name sounds friendlier, and I am trying to be nice: you hear me, Chris?); and I have no wish to antagonize yet another young, up-and-coming, philosophically-minded writer, interested-in-economics, UK blogger, so, I'll leave things at that.

In particular I will not comment on his (to me, already strangely familiar) rather vague reference to Nietzsche and Kierkegaard. Moreover, I will not comment on the "counter examples" he proposed (particularly the extremely unfortunate Mudpie one), even at the risk of disappointing the good folks of Kapitalism101!

Meet the Next Aussie PM.

I haven't written much about Australia, lately.

So, dear overseas readers, meet the incoming "conservative, centre-right, libertarian" Australian prime minister, Tony Abbott:

See also.

The best possible example of meritocracy in action!

Update:
16-08-2013. It didn't take long for an update! Australia will give the flick to 32 thousand asylum seekers already here.

As we are in a budget deficit crisis (OMG, OMG), to solve it, Abbott will cut corporate taxes, for the common good. Yes, dear reader, believe it or not, Abbott re-discovered that wonder of economics: the "trickle down".

Although Abbott said the Goods and Services Tax will remain unchanged, he also announced a tax reform commission whose job is to recommend what taxes should be changed. Among the taxes to be evaluated is the GST.

And however dead, cremated and buried, a WorkChoices by any other name would smell like shit. And something definitely smells bad.

Keynes and Hayek: Yin and Yang.

Commenter 1: "It is simply misleading to lump in social democrats and socialists together. There are no similarities between them."
Commenter 2: "This appears to me correct. I think Hayek et al were more concerned with worker control over anything else. It followed from their understanding of economics -- and their lauding of the entrepreneur.
"Social democrats - especially Fabians - had and have a tendency to be elitist (Keynes is a classic example of this). They have a distinct - and I feel, correct - distrust of the masses running their own economic system democratically (through collective, Soviets, syndicates etc)." (see comment thread here)

The quote above is real.

I'm sure readers will find huge inaccuracies in that comment. For starters: the statement that there are no similarities between social democrats and socialists. Historically, it's hard to imagine a greater nonsense. Further, currently the terms "socialism" and "social democracy" have become practically interchangeable. Which is quite unfortunate, for what little is left of the socialists.

But that's neither why I reproduce that quote, nor is online ignorance any news.

[A]

What caught my attention is that, if you look past the unapologetic asininity, you'll actually find two interesting facts in that comment.

Firstly, it reminds us of something many lefties prefer to ignore: whatever else they were, Keynes and the Fabian "social democrats" (as Commenter 2 would have) were indeed elitists. Commenter 2 is right on that. Paul Samuelson, for instance, also said that Keynes (like Bertrand Russell) "was an elitist exponent of the middle classes" (see here)

In that sense, Keynes and the Fabian socialists were no different from "Hayek et al".

Whatever differences Hayek and Keynes had in a number of areas (and I am not implying these differences were unimportant), they both shared something fundamental: a belief that there is a natural order to society, a necessary social hierarchy.

It just so happens that in said hierarchy, they and their peers were at the top; and the rest of us at the bottom. For them, that's how things are and that's how they should be.

Theirs is a hard job, but someone's got to do it...

As Commenter 2 put it:

"I think Hayek et al were more concerned with worker control over anything else. (...) They [i.e. "Hayek et al" plus Keynes and the Fabians] have a distinct - and I feel, correct - distrust of the masses running their own economic system democratically (through collective, Soviets, syndicates etc)."

Note very carefully now: Commenter 2 is speculating about the reasons Hayek and Keynes had for their "concern with worker control". They weren't concerned because they thought worker control was inherently totalitarian and there was no democratic alternative to an elitist society. No. They, like Commenter 2, knew that worker control was a democratic alternative.

The problem, according to Commenter 2, is that they distrusted that democratic alternative. They did not approve of it: "They distrust of the masses running their own economic system democratically". And Commenter 2 feels it, it is correct.

The perceptive reader may oppose that, strictly speaking, the passage above is only Commenter 2's guess about something he cannot possibly know with any certainty (i.e. Hayek and Keynes' intimate reasons to be anti-socialists), and that it says more about Commenter 2's fears and bigotry than about Hayek and Keynes'.

This is where I indignantly reply to the perceptive reader: "How dare you! Commenter 2 is a serious, responsible intellectual!"

Just kidding! I'll say: "My point, precisely".

Commenter 2 was expressing his own class prejudices, and trying to make them look acceptable by hiding behind Hayek and Keynes (and you wouldn't dare arguing with them, would you?). In reality, he detests socialism because it is intrinsically anti-elitist: it is democratic.

Commenter 2 sees himself as a member of the elites: his own approval is relevant to evaluate Hayek and Keynes on this ("and, I feel, correct").

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Whatever the reasons Hayek and Keynes had to be anti-socialists (and I wouldn't rush to dismiss Commenter 2's opinion on that) we are left with two opposing visions of how to manage a hierarchical society on behalf of the elites.

Corey Robin, in a recent essay, which I urge you to read, argued that for Hayek freedom is conditional on property and is proportional, in a way, to it; in Hayek's "liberal government" one class commands, while the other is free only to choose between obeying or starving. That's one end, the Hayek's yin, in the Hayek-Keynes hierarchical society continuum.

Paraphrasing Joseph Weydemeyer: a dictatorship of the bourgeoisie, and a particularly brutal one, at that.

At the other end of the Hayek-Keynes continuum it's Keynes' yang: a "democracy" where the same propertied few are still in command, and the same majority still needs to obey; the big difference is that now, during economic downturns, the enlightened few will not allow the deserving majority to starve, provided that majority accept their betters' God-given right to rule.

Still a dictatorship of the bourgeoisie, but an "enlightened" one: you will be spied upon, to make sure you are deserving. Guantanamo Bay, "enhanced interrogation" and "selective targeting" will only happen if you fail to prove yourself reasonable, trusting, meek, and stupid enough (i.e. "trustworthy") every day.

Blessed are the meek...

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I've gone through one of the two interesting facts in that quote. What about the other?

You'll have to take my word for it, for I am not interested in controversy with Commenter 2 and his kind (and if this sounds contemptuous, that's intentional), but the fact is, that quote comes from a blog popular with MMTers, Post-Keynesians (or PKers) and sundry lefties (plus their customary sparring buddies from the Austrian blogosphere).

Commenter 2, as it happens, is a well-known "online" PKer, one sharing an almost medieval, Austrian outlook on class and society. It takes all sorts, I guess.

Let me be crystal clear: with this I don't mean to put all Post-Keynesians, particularly respected professors, in the same bag with Commenter 2. I am convinced many PKers (not only scholars, but also their more serious online following), would sincerely disown those views. I suspect many rank-and-file PKers will be surprised with the connection.

Further (and readers must understand this), those comments do not devalue Post-Keynesian theoretical insights.

So, having explained what I don't mean to do with this post, I must explain what I do mean. I am warning my readers to a risk: the risk of assuming that the label "Post-Keynesian" is synonymous with progressive or liberal, or - worse error - with socialist or democrat.

It is not. It will never be. To use a statistical metaphor: there may be a positive PK/progressive correlation, but correlation does not imply causation.

By extension, the application of some otherwise interesting PK insights, like MMT (insights that exceed Keynes' in scope, btw), could improve our current situation, but could also be used to further the class domination of our masters. This and no other is Commenter 2's goal and in this I believe he faithfully follows Keynes. So, with all due respect, I'll remain skeptical on PK ideas as long-term solutions.

Nor should socialists/Marxists harbor undue illusions about progressives and liberals, however genuinely wise and well-intentioned (and I'll repeat this: there are many who are indeed wise and well-intentioned).

Here I'll urge you to read a very important essay by Bhaskar Sunkara (editor, Jacobin magazine), from where this passage was extracted:

"Liberalism's original sin lies in its lack of a dynamic theory of power. Much of its discourse is still fixated on an eighteenth-century Enlightenment fantasy of the 'Republic of Letters,' which paints politics as a salon discussion between polite people with competing ideas. The best program, when well argued by the wise and well-intentioned, is assumed to prevail in the end. Political action is disconnected, in this worldview, from the bloody entanglement of interests and passions that mark our lived existence".

[B]

In that quote, again you see the yin and yang of elites discussing our future, while the rest of us watch humbly from the sidelines, always mindful of being polite, reasonable and moderate, never radical, socialist, or what's the same, "fanatical" (God forbid!). Children should be seen but never heard.

Sunkara's views are not the Bible; but he does make some good points.

Update: I've changed my mind (29-07-2014) and added a link to the post where those comments appear.

Image Credits:
[A] Duty Calls. Source: xkcd.com or here
[B] Yin and Yang. Author: Klem. Public domain. Wikimedia.

Mark Harrison and Whig History.

Or, Picking and Choosing the Past to Shape a Better Future.

"Whig history (or Whig Historiography) is the approach to historiography which presents the past as an inevitable progression towards ever greater liberty and enlightenment, culminating in modern forms of liberal democracy and constitutional monarchy." (See here)

I hate this kind of polemic, I really do and I try to avoid it like the plague. Regrettably, I'll have to make an exception this time.

Mark Harrison (Professor of Economics, University of Warwick, contributor to Pieria, profile) wrote two typical TINA articles (i.e. "Liberal capitalism isn't perfect", but the alternative is necessarily a "nightmare": so, shut up, quit complaining, and stick to Liberal capitalism, link, link):

"At one point I thought of calling this blog 'Alternatives to Capitalism: the Search for a Red Herring' (a 'red herring' is something that doesn't exist but people look for it anyway.). But I realized that would have been wrong, because alternatives to capitalism have actually existed. The problem with the alternatives is not that we cannot find them. It is that the people who went searching for them fell into a dream and woke up to a nightmare."

Normally, I'd leave that be. Frankly, while I am a communist, I am not in the business of whitewashing the crimes of Stalin, Ceausescu, Mao, Pol Pot, Honecker and their likes. I'm just not their defense attorney. If the idea is to judge them in the court of history, my role shall be as a witness, not as a lawyer.

But Prof. Harrison is not acting as a prosecutor only: he is advancing his own view of what's best for the future. Prof. Harrison is also acting as a salesman for "Liberal capitalism". And that's his prerogative; but I, for one, won't buy it.

So, I'll allow myself a few comments to explain why. Basically, because I have a very good memory and I do read newspapers.

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The first thing about the Harrison pieces is that, in reality, they do not compare capitalism with socialism: they compare a very selected bit of 20th century capitalism with all of 20th century socialism. But capitalism is way older than that: Prof. Harrison, an economist, should know that.

Further, Prof. Harrison disowns Nazi/Fascism as non-liberal. What exactly is the difference between the liberal and the non-liberal flavours? Aren't "entrepreneurs" motivated by profit in the liberal version? Don't they own wealth? Can't they fund election campaigns and bribe bureaucrats with that wealth? Can Prof. Harrison show one example of historical liberal capitalism?

At any rate, Nazi/Fascism was no alternative to capitalism, as Prof. Harrison claims: Nazi/Fascism was really-existing capitalism. IG Farben, Siemens, Volkswagen, Deutsche Bank, Krupp, Lufthansa and even Hugo Boss (to name just a few big German corporate names, leaving American, Swiss, French, Swedish and Italian firms out of the story) have many reasons to be grateful to those guys. Search for Monowitz (aka Auschwitz III).

But even if we arbitrarily and conservatively limited capitalism to what came after the Industrial Revolution (leaving, therefore, the mercantilist period out, with the extremely bloody colonization of the Americas), excluding the unsavory Nazi/Fascism bit, he should account for part of the 18th century and all of the 19th: but he didn't mention the Irish Potato Famine of 1845-47 (largely under Sir Robert Peel's Whig government!), nothing said about continental Europe, or the Indian Famines (under British capitalist rule!); he didn't mention the neo-colonialism in Africa or Asia. Why not?

What about the depressions during the 19th century? The Great Depression, the 1970s stagflation, the Latin American debt crisis, the Asian crisis, and the Russian default? I know that people have short memories, but Prof. Harrison didn't even mention the current global recession, for Christ's sake!

And what about the bloody repression during the 1848 European Revolutions, weren't they carried out by non-communist governments? And 1871, during the Paris Commune?

I can understand Prof. Harrison not knowing about South America. That's an "arcane" subject, so I suppose only specialists know about it, and although he delves in history, he's no historian. Fine. So he never heard about the Paraguayan War, when British and European interests pushed Argentina, Brazil and Uruguay to crush Paraguay, which was industrializing.

I'd say the American Civil War should be a less arcane topic. But he doesn't mention, either, the behavior of the Union and Confederacy. Does he mean it was up to scratch or that those weren't really capitalist governments? Not a word on the Indian Wars, the Boer Wars or the Boxer Rebellions.

Prof. Harrison says he doesn't know how many people the Imperial Japanese Army killed in China. Fair enough; let me give him a hand. The Chinese government claims something like 20-25 million people, in China alone. Is that figure good enough, or will he suggest some revisionism?

Maybe Prof. Harrison should try a Google search on the names Vietnam, Laos, Cambodia, Algeria, Mozambique, Angola, Namibia, Indonesia, Zimbabwe/Rhodesia, Congo (both Brazzaville and Zaire), Sierra Leone, Kenya, and actually, pretty much all Latin America. In each and every single one of these countries we had either anti-colonial wars against a capitalist metropolis, a war against a capitalist racist government or a capitalist government waging war against workers and peasants.

Okay, that was long ago. But Prof. Harrison doesn't even mention Afghanistan and Iraq! He is an economist, so geography is not his forte, either; okay. I could point these places in a map for him, so that he can be sure those places actually exist.

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The second thing I noticed is that Prof. Harrison does not include the whole of really existing capitalism: he considers capitalist governments, only.

But, what about the private sector? No mention whatsoever, which is kind of strange for a liberal. I mean, to forget the private sector????

No reference to organized crime, for instance. But if someone could claim to embody the ideal of the Randian entrepreneur, as I said elsewhere, is the organized crime capo: they actually fight the government, like, with weapons and bombs! What about the Opium Wars and the Colombian and Mexican drug wars? The American mob? If their motive is profit and they sell stuff, aren't these, by definition, entrepreneurs?

No reference to Bhopal, or Deep Horizon, or Dhaka or to fracking; nothing about financial fraud (from John Law, to Charles Ponzi, to the S&L scandal, to Banco Ambrosiano, to Enron, to Bernie Madoff, to Goldman Sachs' "shitty deals", to LIBOR fixing).

What about the narco-right wing Latin American dictatorships, a la Manuel Noriega? The very definition of private/public sector partnerships: the police/army kill trade unionists, the bosses lower wages and, with the savings, pay the cops kick backs.

In Guatemala alone, 200 to 300 thousand people were murdered, largely under the government of general José Efraín Ríos Montt, who was convicted of genocide but let go free. Of Ríos Montt, U.S. President Ronald Reagan said: he is a "man of great personal integrity". Incidentally, the notoriously violent Mexican drug cartel Los Zetas was founded, among others, by veteran Kaibiles, former counter-insurgency troops under Ríos Montt.

What about the United Fruit Co. (creators of banana republics), or the mercenary armies; the Dearborn (MI) massacre, or the Battle of Mount Blair (WV); Standard Oil. Did Prof. Harrison ever hear about Major General Smedley D. Butler (U.S. Marine Corp.):

"I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers".

What about the right-wing 1970 narco-cup in Bolivia, when Klaus Barbie was an advisor to the putsch, as he once was to the CIA in the hunt for Ché Guevara?

Has Prof. forgotten about Augusto Pinochet's Nazi links? I mean, wasn't Pinochet the good dictator, the Liberal one? Surely, he remembers Friedrich August von Hayek and Milton Friedman?

Okay, Prof. Harrison forgot all that. We are all human and memory is fickle.

What about more recent cases: the murder of African and Latin American activists ordered by Royal Dutch Shell and Coca Cola? Did Prof. Harrison ever hear about sweatshops and Foxconn? What about the blood diamonds and arms dealing, and people smuggling, trafficking and slavery (currently some 20 million worldwide, they say). Isn't that the private sector at its most authentic?

And the latest: organ trafficking!

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Either Prof. Harrison has a penchant for understatements ("Liberal capitalism isn't perfect"), some serious memory problems, or he has never read a newspaper.

In any case, he should really try a better sales pitch: there's no way that I'd buy into "capitalism", in either of its varieties (really-existing or fairy-tale). And that's my prerogative.

How about you?

Carlyle on Heroes.

Or, an Exercise in Literary S&M

Quarter-plate daguerreotype
of Thomas Carlyle (1848). [A]

Today I finally decided to have a look at Thomas Carlyle's "Lectures on Heroes, Hero-Worship and the Heroic in History".

I'll admit it: I haven't read the whole thing, yet. So, my first impressions, which follow, may be unfair. If so, I guess I'll have to apologize and I'll be glad to.

With the caveat in place, and for what it is worth, here is my opinion. It's hard to say what is more appalling in "On Heroes": Carlyle's shameless sycophancy, his literary style or the sheer length of the writing (137 pages in Word, single space, Times New Roman 12).

Carlyle finishes with:  

"Our last [Hero, with capital H: i.e. Napoleon], in a double sense. For here finally these wide roamings of ours through so many times and places, in search and study of Heroes, are to terminate. I am sorry for it: there was pleasure for me in this business, if also much pain. (...)"

At this early stage of my reading, I suspect Carlyle is right on that: this will be a painful exercise (although so far I haven't found any hint of pleasure); and, a long way before finishing the "Lectures", I am already feeling sorry.

Image Credits
[A] Quarter-plate daguerreotype of Thomas Carlyle (1848). Harvard University Library. Author unattributed. Public Domain. Wikipedia.