Sunday, 24 April 2016 - 4:27pm

Published by Matthew Davidson on Sun, 24/04/2016 - 4:27pm in

This week, I have been mostly writing, but in the last couple of days, I've been reading:

  • Why Are Universities Fighting Open Education? — Elliot Harmon, Common Dreams: Why were some universities opposing a rule that would directly benefit their students and faculty? When you dig a bit deeper, it looks like universities’ opposition to open licensing has nothing to do with students’ access to educational resources. What’s really playing out is a longstanding fight over how universities use patents—more specifically, software patents. Open education just happens to be caught in the crossfire.
  • Paul Krugman, Bernie Sanders, and the Experts — Dean Baker at CEPR: The experts insisted that we would have a Second Great Depression if we didn’t bail out the Wall Street banks. Really? Was there some magical curse that would overcome the country if Goldman Sachs and Citigroup went out of business? Would Keynesian stimulus no longer work? We got out of the first Great Depression in 1941 by spending a ton of money fighting World War II. It is hard to see any reason why we couldn’t have ended the depression a decade sooner by spending a ton of money in 1931 on infrastructure, health care, and education. The same story would have applied in 2009.
  • Q: When is a dollar pegged to gold not on a gold standard? A: From 1934-1971 — Eric Rauchway at Crooked Timber: […]as the economist Edward Bernstein (who was in the Roosevelt Treasury, at Bretton Woods, and later served in the IMF) succinctly explained, years later. 'In spite of the Gold Reserve Act, the United States was not really on a gold standard after 1933. The essence of the gold standard is that the money supply must be limited by the gold reserve. The last time that the Federal Reserve tightened its policy because the gold reserve ratio had fallen close to the legal minimum was on March 3, 1933, when the Federal Reserve Bank of New York raised the discount rate to 3-1/2 per cent. Thereafter, whenever the gold reserve neared the legal minimum, the required reserve ratio was reduced and finally eliminated. A country that loses more than half of its gold reserve, as the United States did in 1958-71, without reducing its money supply is not on the gold standard.'
  • Economists Prove That Capitalism is Unnecessary: The nonsensical logic of mainstream economics — Steve Keen, paywalled in Forbes, published in Evonomics: It’s an assumption that individuals in a market economy are so all-knowing that, in effect, they don’t need markets at all: they can just work it all out in their heads. Yet if anything defines a capitalist economy, it’s the dominance of markets. So effectively the mainstream reaction to anything which disturbs their preferred way of modeling a market economy is to make assumptions that, if they were true, would make a market economy itself unnecessary in the first place.
  • The West Is Traveling The Road To Economic Ruin — Paul Craig Roberts (warning: a bit of a fruitcake at times) reviews the career of "best economist in the world" Michael Hudson: Hudson learned that monetary theory concerns itself only with wages and consumer prices, not with the inflation of asset prices such as real estate and stocks. He saw that economic theory serves as a cover for the polarization of the world economy between rich and poor. The promises of globalism are a myth. Even left-wing and Marxist economists think of exploitation in terms of wages and are unaware that the main instrument of exploitation is the financial system’s extraction of value into interest payments. Economic theory’s neglect of debt as an instrument of exploitation caused Hudson to look into the history of how earlier civilizations handled the build up of debt.
  • How Boots went rogue — Aditya Chakrabortty, The Guardian, in what they call "The Long Read", presumably because "You're Not Going to Enjoy This, But it's Good For You" didn't test so well with key demographics: This is the tale of how one of Britain’s oldest and biggest businesses went rogue – to the point where its own pharmacists claim their working conditions threaten the safety of patients, and experts warn that the management’s pursuit of demanding financial targets poses a risk to public health. (Boots denies this, saying that “offering care for our colleagues, customers and the communities which we serve…is an integral part of our strategy.”) At the heart of this story is one of the most urgent debates in post-crash Britain: what large companies owe the rest of us – in taxes, in wages, and in standards of behaviour.
  • Explaining Why Federal Deficits Are Needed — Thornton (Tip) Parker at New Economic Perspectives [I'm definitely using this one]: The economy is like a car. Government spending is the accelerator. Taxes are the brakes. To keep going or speed up, press the accelerator. To slow down, ease off the accelerator or press the brakes. Driving too fast could lead to hyper-inflation, but that never happened here because the country always slowed down in time.

Sunday, 17 April 2016 - 10:13pm

Published by Matthew Davidson on Sun, 17/04/2016 - 10:13pm in

This week, I have been mostly reading:

  • Sanders, Corbyn and the financial crisis — Simon Wren-Lewis refuses to follow his neoclassical colleague Krugman into Very Serious Person-hood:The right has succeeded in morphing the financial crisis into an imagined crisis in financing government debt (or, in the Eurozone with the ECB’s help, into an actual crisis) which required a reduction in the size of the state that neoliberals dream about. The financial crisis, far from exposing neoliberal flaws, has led to its triumph. Confronted with this extraordinary turn of events, many of those on the centre left want to concede defeat and accept austerity! That is all scandalous, and if the left’s established leaders will not recognise this, it is not surprising that party members and supporters will look elsewhere to those who do.
  • The Problem With Hillary Clinton Isn’t Just Her Corporate Cash. It’s Her Corporate Worldview. — Naomi Klein in The Nation: The real issue, in other words, isn’t Clinton’s corporate cash, it’s her deeply pro-corporate ideology: one that makes taking money from lobbyists and accepting exorbitant speech fees from banks seem so natural that the candidate is openly struggling to see why any of this has blown up at all.
  • How a Cashless Society Could Embolden Big Brother — Sarah Jeong at The Atlantic: Transactions route through several tangled layers of vendors, processors, and banks. At various points in the chain, all transactions squeeze through bottlenecks created by big players like Visa, Mastercard, and Paypal: These are the choke points for which Operation Choke Point is named. The choke points are private corporations that are not only subject to government regulation on the books, but have shown a disturbing willingness to bend to extralegal requests—whether it is enforcing financial blockades against the controversial whistleblowing organization WikiLeaks or the website Backpage, which hosts classified ads by sex workers, and allegedly ads from sex traffickers as well. A little bit of pressure, and the whole financial system closes off to the government’s latest pariah.
  • Paul Krugman Unironically Anoints Himself Arbiter of “Seriousness”: Only Clinton Supporters Eligible — Glenn Greenwald at The Intercept: To any of you Sanders supporters who previously believed that you possessed serious policy expertise, such as Dean Baker; or former Clinton Labor Secretary and Professor of Economic Policy Robert Reich (who yesterday wrote that “Bernie Sanders is the most qualified candidate to create the political system we should have”); or the 170 policy experts who signed a letter endorsing Sanders’ financial reform plan over Clinton’s: sorry, but you must now know that you are not Serious at all. The Very Serious Columnist has spoken. He has a Seriousness Club, and you’re not in it. If you want to be eligible, you need to support the presidential candidate of the Serious establishment, led by Paul Krugman. [Krugman seems determined to follow the sad example of Christopher Hitchens: If you're determined to pose as a contrarian, it's far more comfortable to be a contrarian for the establishment.]

Sunday, 10 April 2016 - 6:20pm

Published by Matthew Davidson on Sun, 10/04/2016 - 6:20pm in

This week, I have been mostly researching for an essay, but when feeling naughty I've been reading:

  • Why Some Students Are Ditching America for Medical School in Cuba — Sarah Zhang in WIRED: Consider Cuba’s medical system, which punches far above its weight. The country’s GDP per is just one-tenth of the US’s, and it lacks access to drugs and equipment thanks to the US trade embargo. But life expectancy in Cuba is actually just above that of its northern neighbor. How? By focusing on preventive medicine for everyone under a national healthcare system.
  • How Gates' Billions Silences Criticism of His Development Agenda — Nick Dearden, Common Dreams: Initiatives that Gates funds push intensive farming methods involving plenty of chemicals and privatisation of seed distribution. Time and again, these ‘solutions’ have proved disastrous for small farmers, allowing big players to effectively control the whole food system. They also ramp up global carbon emissions and fuel global warming. But they are exactly what big business wants. In fact, Gates aid sometimes looks designed to help agribusiness develop new markets – like a project with agro-giant Cargill which helped it develop soya ‘value chains’ in Africa. It’s not a conspiracy, it’s simply how Gates, like so many of his fellow plutocrats, believe the world works. Big business invents useful stuff and drive growth. Let’s help them and everyone will be better off.
  • The Mythology of Selfishness — Mary Midgley in The Philosophers Magazine: Our own thoughts and feelings – the constant flow of inner activity by which we respond to the life around us – also affect the world as well as our outward actions. This thought is so frightening that scholars will often go to any lengths to avoid it, which is why that ludicrous doctrine epiphenomenalism still has supporters, and why people spend so much more of their time on sociological statistics, neurological details and speculation about evolutionary function than on studying motive.
  • The Death of Capitalism — Ian Welsh: If you were 30 in 1980, you are 66 today. If you were 40, you are 76. If you were in the decision making class, overwhelmingly allocated to those who were 50+ in 1980, you are 86 today. People who were in their prime and during their decision-making days, when we needed to act on climate change, were making a DEATH BET. They bet they would be dead before the worst results of climate change happened. They will win this bet. This was a RATIONAL thing for them to do. I want to repeat that, because too many people think “rational=good.” It does not. It was rational for them to discount a future they would not see. Also, What Is Capitalism?: The responses to my article The Death of Capitalism made something clear: Most people don’t know what Capitalism is. [The argument is a thoughtful one, but I have a simpler definition: Capitalism is a doctrine which frames all human activity in terms of investment and return.]
  • The Volcanic Core Fueling the 2016 Election — Robert Reich: I’ve known Hillary Clinton since she was 19 years old, and have nothing but respect for her. In my view, she’s the most qualified candidate for president of the political system we now have. But Bernie Sanders is the most qualified candidate to create the political system we should have, because he’s leading a political movement for change.
  • Consumer credit and mortgage finance in the 1920s — Matias Vernengo at Naked Keynesianism: The Great Depression put an end to the roaring 20s. The unsustainable expansion of consumer credit and mortgages seems to have played, as much as in the last crisis, a significant role.
  • How Long Will Your Class Remain Yours? Academic Freedom and Control of the Classroom — Jonathan Rees in Hybrid Pedagogy: An LMS not only mediates and records all interactions between teachers and students in both the online classes and face-to-face classes that utilize it, but it also represents a teaching worldview all by itself. As Jim Groom and Brian Lamb explain, “[B]efore we even begin to encounter the software itself, we privilege a mindset that views learning not as a life-affirming adventure but instead as a technological problem, one that requires a ‘system’ to ‘manage’ it. This mindset and its resulting values result in online architectures that prioritize user management, rigidly defined and restricted user roles, automated assessments, and hierarchical, topdown administration.” Trying to control your own virtual classroom in this environment is like bringing a knife to a gunfight. You know you’re going to lose before the fighting starts, so why bother? And from the linkage therein:
  • Critical Pedagogy in the Age of Learning Management (#moocmooc) — by Sean Michael Morris, who ordinarily would have lost me at the word "critical": The advent of online learning has introduced a new level of data and measurement (also, fucking absurdity) into education. With the learning management system (LMS) comes the ability to track all kinds of information about student performance, participation, and more. At the LMS company where I worked until recently, educational research often focused on the activity of learners on pages, watching videos, taking and passing quizzes, participating in or starting discussions in the forum, and other minutiae. It’s possible to track time on page, time in the course, and the “bounce rate” for learners in their courses. In effect, the research being done isn’t about learning, it’s about surveillance, about observing the learner in the way we might a rat in a maze.

Sunday, 3 April 2016 - 8:36pm

Published by Matthew Davidson on Sun, 03/04/2016 - 8:36pm in

This week, I have been mostly reading:

  • Why should Bill Gates get to set the agenda for international development? — Polly Jones, Global Justice Now: Our new report Gated Development demonstrates that the trend to involve business in addressing poverty and inequality is central to the priorities and funding of the Bill and Melinda Gates Foundation. This is far from a neutral charitable strategy, but instead an ideological commitment to promote neoliberal economic policies and corporate globalisation. Big business is directly benefitting, in particular in the fields of agriculture and health, as a result of the foundation’s activities, despite evidence to show that business solutions are not the most effective. [A philanthropist gives to charity. A philanthrocapitalist becomes a charity.]
  • The Seven Stages of Establishment Backlash: Corbyn/Sanders Edition — Glenn Greenwald, The Intercept: [T]he nature of “establishments” is that they cling desperately to power, and will attack anyone who defies or challenges that power with unrestrained fervor. That’s what we saw in the U.K. with the emergence of Corbyn, and what we’re seeing now with the threat posed by Sanders. It’s not surprising that the attacks in both cases are similar — the dynamic of establishment prerogative is the same — but it’s nonetheless striking how identical is the script used in both cases.
  • Who Pays Writers? — Maggie Doherty in Dissent Magazine: Artistic experimentation depends on the material security that the welfare state provides. It’s easier to be avant-garde when you’re not wondering about the source of your next paycheck or worrying about prospective book sales. In the words of one grant recipient, responding anonymously to an NEA survey from the 1970s, federal grants offer writers “temporary freedom from a stultifying and paralyzing form of economic bondage.” For writers, economic freedom is tantamount to artistic freedom. The NEA redistributed such freedoms by funding writers who weren’t lucky enough to call financial security a birthright.
  • Good news everyone! We've moved on from retrospectively blaming Greece for the GFC to retrospectively blaming China! Don’t blame China for these global economic jitters — Ha-Joon Chang in The Guardian: [T]he main causes of the current economic turmoil lie firmly in the rich nations – especially in the finance-driven US and UK. Having refused to fundamentally restructure their economies after 2008, the only way they could generate any sort of recovery was with another set of asset bubbles. Their governments and financial sectors talked up anaemic recovery as an impressive comeback, propagating the myth that huge bubbles are a measure of economic health.
  • Who are the spongers now? — Stefan Collini, London Review of Books: It is the application of [the neoliberal] model to universities that produces the curious spectacle of a right-wing government championing students. Traditionally, of course, students have been understood by such governments, at least from the 1960s onwards, as part of the problem. They ‘sponged off’ society when they weren’t ‘disrupting’ it. But now, students have come to be regarded as a disruptive force in a different sense, the shock-troops of market forces, storming those bastions of pre-commercial values, the universities. If students will set aside vague, old-fashioned notions of getting an education, and focus instead on finding the least expensive course that will get them the highest-paying job, then the government wants them to know that it will go to bat for them.

Sunday, 27 March 2016 - 1:59pm

Published by Matthew Davidson on Sun, 27/03/2016 - 1:59pm in

This week, I have been mostly going to pieces, so only reading this much:

  • The Optimism Error — Robert Skidelsky proposes a British Investment Bank to fend off hysteresis: So we now have a situation in which the main tools available to government to bring about a robust recovery are out of action. In addition, sole reliance on monetary policy for stimulus creates a highly unbalanced recovery. The money the government pours into the economy either sits idle or simply pumps up house prices, threatening to re-create the asset bubble that produced the crisis in the first place. We already have the highest rate of post-crash increase in house prices of all OECD countries. This suggests that the next crash may not be far off. [Though I disagree vehemently with the view that "printing money to pay for public spending should only be a remedy of the last resort". Money creation through central-bank-funded fiscal deficits should be the norm for any government that does not want to hand responsibility for money supply to commercial banks, who are responsible for channeling money into the very bubbles Skidelsky is worried about.]
  • Australian copyright reform stuck in an infinite loop — Kathy Bowrey in The Conversation: For example, section 113M allows libraries and archives to make “preservation copies” of original material that is of historical or cultural significance to Australia, but they are not allowed to make these copies available to patrons except through a terminal on site. As a researcher I am not allowed to make an electronic copy of the material so I can use it in writing up my research. As is common practice in libraries I would probably be allowed to transcribe a document by hand. However transcribing by hand is, as a matter by law, no different to a digital reproduction. Why does this law require me to spend public research money to physically attend the institution, perhaps also requiring an airfare and accommodation expenses, so I can take out my quill?
  • Paul Krugman, Bernie Sanders, and Medicare for All — Dean Baker, CEPR via Econospeak: Ordinarily economists treat it as an absolute article of faith that we want all goods and services to sell at their marginal cost without interference from the government, like a trade tariff or quota. However in the case of prescription drugs, economists seem content to ignore the patent monopolies granted to the industry, which allow it to charge prices that are often ten or even a hundred times the free market price. (The hepatitis C drug Sovaldi has a list price in the United States of $84,000. High quality generic versions are available in India for a few hundred dollars per treatment.) In this case, we are effectively looking at a tariff that is not the 10-20 percent that we might see in trade policy, but rather 1,000 percent or even 10,000 percent.
  • SWEET HOLY F---!!!! — exclaims Brad DeLong:
  • Neoliberalism, public and private goods and the digital revolution: Part one — Nicholas Gruen at Club Troppo: […] if knowledge and digital artefacts are always and everywhere a potential public good, you’d expect that expressing the collective interest in that fact would lead to a role for collective institutions (not necessarily government) representing the public interest as a countervailing force against private interests. As Robert Kuttner argues, an identifying idea of progressives since the turn of the 20th century if not before that capital needs a counterweight – in the state and other collective institutions. An obvious agenda is IP, which is becoming progressively more unbalanced towards the interests of private IP holders (Will Mickey ever go free?). Likewise arrangements for the creation of knowledge about drugs is a big mess, incredibly poorly suited to the interests of lower income countries but also to economic efficiency more broadly.
  • The Citadel Is Breached: Congress Taps the Fed for Infrastructure Funding — Ellen Brown: Rep. Peter DeFazio (D-Oregon), ranking member on the House Transportation Committee, retorted [to Ben Bernanke], “For the Federal Reserve to be saying [deficit spending] impinges upon their integrity, etc., etc. — you know, it’s absurd. This is a body that creates money out of nothing. [I]f the Fed can bail out the banks and give them preferred interest rates, they can do something for the greater economy and for average Americans.”
  • The Remarkable Bernie Sanders Journey That Will Overcome the Crowning of Clinton — RoseAnn DeMoro of National Nurses United at Common Dreams:

    Enthusiasm for the Sanders campaign, the transformative program that he presents, which is really the program NNU and grassroots activists have long championed, is off the charts, and continuing to grow.

Sunday, 20 March 2016 - 4:25pm

Published by Matthew Davidson on Sun, 20/03/2016 - 7:25pm in

This week, I have been mostly reading:

  • Tools — xkcd: Tools
  • Impossible possibilities for Keynes’s grandchildren — David F. Ruccio: [W]hat Keynes did not understand is that workers don’t just produce wealth, which they can then enjoy by reducing the amount of work they do. They produce wealth that stands opposed to them, wealth in the form of capital, which is then used to render part of the working population superfluous, thus dragging down the wages of other workers, who are then employed to boost the profits of their employers. The workweek of the employed population doesn’t decrease, even as they are joined to new technologies and are transferred to new sectors of the economy.
  • Shortly after her death, Harper Lee's heirs kill cheap paperback edition of To Kill a Mockingbird — Cory Doctorow, Boing Boing: A court upheld the sealing away of Lee's will from public view, so it's impossible to say for sure what prompted the move, but this much is clear: schools that assign "To Kill a Mockingbird" -- one of the most commonly assigned books in US classrooms -- will have to pay a lot more for their books, and that money will not, and cannot, benefit the author.
  • The Story of Our Economy in 2015: A cocktail of household consumption, household consumption, and more household consumption — Frank Van Lerven at Positive Money: The OBR forecasts that real GDP growth will average 2.3-2.5% a year between 2016 and 2020. This growth is meant to take place despite the reduction in government expenditure. As we have suggested before, considering that the UK is not a net exporter, if the government decides to reduce its level of debt then the domestic private sector has to take on more debt for there to be any growth. Increasing levels of private sector debt, (business and household borrowing), will be called upon to drive growth in the years to come.
  • The co-option of government by transnational organisations — Bill Mitchell: The process of privatisation clearly transferred resources from the public sector to the private sector and reduced the public bureaucratic control of the organisations in question. Those processes are reversible. If we want a demonstration of that reversibility, then we need not look further than what happened to the banking sector in the early days of the GFC when many national governments effectively socialised the losses from the failed corporate strategies, protected depositors and nationalised the organisations. There was no hint then that the nation-state had lost its power or discretion to act to advance the national interest and largely disregard the interests of the private shareholders of these large transnational, financial entities.
  • Despair Fatigue — David Graeber in The Baffler: True, most mainstream economists are capable of seeing through obvious nonsense, like the justifications proposed for fiscal austerity. But the discipline is still trying to solve what is essentially a nineteenth-century problem: how to allocate scarce resources in such a way as to optimize productivity to meet rising consumer demand. Twenty-first century problems are likely to be entirely different: How, in a world of potentially skyrocketing productivity and decreasing demand for labor, will it be possible to maintain equitable distribution without at the same time destroying the earth? Might the United Kingdom become a pioneer for such a new economic dispensation?
  • A thought experiment for Tony Abbott and Malcolm Turnbull — Steve Keen in Business Spectator: Imagine that there is an economy where the money supply consists of a single dollar, which is exchanged 100 times per year among this economy’s inhabitants — thus generating a GDP of $100 per year. Then imagine that the government in this economy sets itself the target of running a surplus equivalent to 1 per cent of GDP. If the government achieves its objective, what will GDP be the following year? Zero. And, if the government debt ratio was more than 1 per cent beforehand, it will be infinite afterwards. Why? Because the economy had only one dollar of money in existence, and the government’s surplus took that $1 out of circulation, leaving the economy with precisely zero dollars for commerce the following year. The government budget affects GDP by changing the amount of money in circulation in the economy, and a government surplus effectively destroys money.
  • Are luxury condo purchases hiding dirty money? — Husna Haq at the Christian Science Monitor: In fact, using shell companies, or limited liability companies, to hide a buyer's identity is actually relatively common, and legal. But the practice could drive up real estate prices in some markets, and contribute to real estate booms. Federal authorities are also concerned that the practice enables foreign buyers to easily find a safe haven for illicit money in American real estate.
  • How does the 1 percent capture the surplus? — David Ruccio: The basic idea is that “pass-throughs”—businesses whose annual income is taxed at the owner-level (such as partnerships and S-corporations)—now account for more than half of all U.S. business income, thus passing traditional (so-called C) corporations. […] 54.2 percent of U.S. business income in 2011 was earned in the pass-through sectors, compared to only 20.7 percent in 1980.
  • "Neoliberalism" is it? — Jeremy Fox takes on Will Davies' challenge of a week earlier in openDemocracy: Compared with some other candidates, ‘neoliberalism’ does not seem to be an especially elusive abstraction. I take it to mean marketisation of the public realm as a political project. Its current popularity among political leaders of a certain hue is that it has the appearance of offering value-free decision-making because it allows market competition rather than ideological bias to determine value. They are thereby absolved, at least in theory, from responsibility for the provision of important public services.
  • Why you shouldn’t let your smartphone be the boss of you — Peter Fleming in the Guardian: According to an influential group of neoliberal economists working in the 1970s, people ought to see themselves as “human capital” rather than human beings. This sort of capital is a never-ending investment, continuously enhanced in relation to skills, attitude and even physical appearance. Work is crucial for building this capital, perhaps its defining source. This is where employment and life more generally slowly merge and become indistinguishable from each other. A job is no longer something we do to achieve socially productive goals in society. An activity among other pursuits. No, a job today is something we are … preferably 24/7. Working unpaid overtime therefore seems natural. Self-exploitation looks like personal freedom.
  • The return of public investment — Dani Rodrik: If one looks at the countries that, despite strengthening global economic headwinds, are still growing very rapidly, one will find public investment is doing a lot of the work.
  • Diane Coyle finds Minsky, but misses Keynes — Geoff Tily, Prime Economics: Now Keynes was no trivial figure. How can it not be “interesting” that one of the greatest economists of the twentieth century was misrepresented by the academic economics profession, and this misrepresentation has been denied ever since? How can what he actually said not be interesting, once we recognise that what we thought he said was wrong? How can his work not be interesting if it treats finance and the shortcoming of conventional macroeconomics is that it doesn’t treat finance?
  • Ultra-Rich 'Philanthrocapitalist' Class Undermining Global Democracy: Report — Sarah Lazare at Common Dreams: A study just out from the Global Policy Forum, an international watchdog group, makes the case that powerful philanthropic foundations—under the control of wealthy individuals—are actively undermining governments and inappropriately setting the agenda for international bodies like the United Nations. The top 27 largest foundations together possess assets of over $360 billion, notes the study, authored by Jens Martens and Karolin Seitz. Nineteen of those foundations are based in the United States and, across the board, they are expanding their influence over the global south. And in so doing, they are undermining democracy and local sovereignty.
  • 5 outrageous things educators can’t do because of copyright — Lisette Kalshoven in Medium: The current patchwork of copyright exceptions for education at the member state level can lead to absurd situations for teachers that want to utilize creative works. We asked friends from across Europe to submit examples showing where copyright and education do not mix. You can cry (or laugh) with us.

Sunday, 13 March 2016 - 5:11pm

Published by Matthew Davidson on Sun, 13/03/2016 - 5:11pm in

This week, (actually posted a day late, but back-dated) I have been mostly reading:

  • Older Students Learn for the Sake of Learning — Harriet Edleson at the "Well, d'uh!" desk of the New York Times: For lifelong learners the focus is outward. At Osher, classes are not specifically skill-based, like learning a language or weaving. Instead, students generally delve into subjects they may have been interested in for years but simply didn’t have time to study.
  • Report From the Student Privacy Frontlines: 2015 in Review — Annelyse Gelman, Electronic Frontier Foundation: This year the fight to protect student privacy hit a boiling point with our Spying on Students campaign, an effort to help students, parents, teachers, and school administrators learn more about the privacy issues surrounding school-issued devices and cloud services. We're also working to push vendors like Google to put students and their parents back in control of students’ private information.
  • Japanification Revisited — Ian Welsh: In choosing the method we chose to do the bailouts, we also made the choice to have a shitty economy. Employment has never recovered, in terms of the percentage of the population, and will not (we’re about to hit a recession), wages are down for much of the population, and all the gains of the last economic cycle have gone to the top three to five percent. Mind you, there was an historic stock bubble. The rich are even richer than they were in 2007. Obama and Bernanke’s policy has done what it was intended to: It has preserved, and then increased, the wealth of the rich.
  • The corporate university and its threat to academic freedom — Sean Phelan in openDemocracy: It would be simplistic to suggest that the corporate university represents an ideological vision spontaneously brought into being by a managerial class. As recent changes to the governance of New Zealand university councils – rescinding the guaranteed representation of both students and staff – suggests, the desire for a corporate university is often a state-led political project, pushed by governments who want to reduce public funding to universities, and reconfigure the university as little more than an engine of economic growth.
  • Neoliberalism and its forgotten alternative — David Ridley, openDemocracy: Sociologists and social scientists need to be a part of an active process of giving back social inquiry to the public, emancipating this deeply human and social activity first and foremost from the elitism, specialisation and instrumentalism of academia. We may need to reduce the working week even further to enable people to have time for community activities and public research. We certainly need to prevent education from being turned towards a class-based, narrowly vocational process of training people to be profit-making machines.
  • Because you can never have too many charts on the economics of credit cards — Harold Pollack in The Reality-Based Community: [P]rofit margins are really high for the small group of borrowers with low FICO scores in the range of about 550. Amazingly, the industry made about $0 in cumulative profits on the top 80% of accounts that have FICO scores exceeding 630. The bottom 10% of accounts account for the majority of total industry profits. It’s also striking that the industry actually seems to lose money on consumers near the median of the distribution with FICO scores around 700, and then makes profit again on the best credit risks.
  • Why Minsky Matters: An Introduction to the Work of a Maverick Economist — Victoria Bateman reviews Randy Wray's new book about the work of his mentor: As 2008 so clearly showed, we simply cannot have our cake and eat it. Financial crises are not just events that happened a long time ago in history – or far, far away in distant and much poorer lands. They are hard-wired into the capitalist system. Minsky was one of the valiant few who tried to draw attention to this fact, and one of the few to predict the global financial crisis decades before it actually hit. Unfortunately, his warnings fell on deaf ears. Like many a great artist, his popularity soared only after his death and only once the crisis hit – in what came to be known as a “Minsky moment”.
  • #ResistCapitalism — Cameron K. Murray: [S]ome kind of welfare state is essential for maintaining the dynamism of the capitalist part of the economy. Without this cushion against failure, who would risk their life savings on inventing and investing in new products and innovations? Essentially we all want a mixed economy, a level of safety net that reflects the wealth of the country, and basic services provided in an equitable manner. […] But when the political power of a select few capitalists overwhelms the system to the extent that the other non-capitalist parts of the mixed economic suffer, there are obvious and genuinely satisfying moral grounds for protest.
  • Facebook is no charity, and the ‘free’ in Free Basics comes at a price — Mark Graham in The Conversation isn't keen on Zuckerberg's reboot of Compuserve: In much the same way that Nestlé offered free baby formula in the 1970s as development assistance to low-income countries – leaving nursing mothers unable to produce sufficient milk themselves – Free Basics is likely to impede commercial alternatives.
  • The Procrustean Economy — Neil Wilson: The data collected from [neoliberal] economies will resemble the data you would expect from the [neoliberal] model. It really can't do much else - since the policies are there to prevent deviation from the norm. Therefore when you do empirical studies what you are actually using as data is the output from a system rammed into an inappropriate model. The data is tainted and what the taint means has to be understood.
  • The Fed Doesn’t Work For You — J. W. Mason in Jacobin: A rising wage share supposedly indicates an overheating economy — a macroeconomic problem that requires a central bank response. But a falling wage share is the result of deep structural forces — unrelated to aggregate demand and certainly not something with which the central bank should be concerned. An increasing wage share is viewed by elites as a sign that policy is too loose, but no one ever blames a declining wage share on policy that is too tight. Instead we’re told it’s the result of technological change, Chinese competition, etc. Logically, central bankers shouldn’t be able to have it both ways. In practice they can and do.
  • Globalisation and currency arrangements — Bill Mitchell: The thesis advanced by many analysts is that globalisation has reduced the capacity of the nation-state and forced governments to adopt free market policies at the microeconomic level and austerity at the macroeconomic level, for fear that capital flight will destroy their economies. It is a neatly packaged thesis that the political Left has imbibed, and, in doing so, has undermined the progressive basis of these institutions and left voters with little choice between right-wing parties and the social democratic parties who formally represented the interests of workers and acted as mediators in the class conflict between labour and capital. The major distinguishing feature these days between these two types of parties, who were previously poles apart in approach and mandate sought, is that the so-called progressive side of politics now claims it will implement austerity in a fairer way. These austerity-lite parties, buying into the myth that globalisation has undermined the capacity of the state to pursue full employment policies with equitable income distribution, do not challenge the basis of austerity, but just quibble over who should pay for it.
  • In 2016, let's hope for better trade agreements - and the death of TPP — Joe Stiglitz via the Guardian: In place of global trade talks, the US and Europe have mounted a divide-and-conquer strategy, based on overlapping trade blocs and agreements. As a result, what was intended to be a global free trade regime has given way to a discordant managed trade regime. Trade for much of the Pacific and Atlantic regions will be governed by agreements, thousands of pages in length and replete with complex rules of origin that contradict basic principles of efficiency and the free flow of goods. […] Obama has sought to perpetuate business as usual, whereby the rules governing global trade and investment are written by US corporations for US corporations. This should be unacceptable to anyone committed to democratic principles.
  • ObamaCare’s Neoliberal Intellectual Foundations Continue to Crumble — Lambert Strether via Naked Capitalism: Obama gives an operational definition of a functioning [health insurance] market that assumes two things: (1) That health insurance, as a product, is like flat-screen TVs, and (2) as when buying flat-screen TVs, people will comparison shop for health insurance, and that will drive health insurers to compete to satisfy them. As it turns out, scholars have been studying both assumptions, and both assumptions are false. […] the population studied reduces costs, not by comparison shopping, but by self-denial of care. […] it looks like ObamaCare has replaced a system where insurance companies deny people needed care with a system where people deny themselves needed care; which is genius, in a way.
  • Mainstream macro and Minsky the maverick — Diane Coyle reviews, perhaps too briefly, Randy Wray's new book: The second chapter was to me the most interesting. It’s called ‘The Road Not taken’ and sets out the broad mainstream approach against which Minsky developed his arguments. This is the neoclassical synthesis, whose foundations were laid by John Hicks and Alvin ‘Secular Stagnation’ Hansen in the early years after Keynes’s death, then by both ‘Keynesians’ like Patinkin and Tobin and ‘Monetarists’ such as Friedman. Wray argues that these camps disagreed largely over parameter values, and that they essentially bowdlerised Keynes by ignoring his emphasis on investment, finance and uncertainty. [I admit to some satisfaction, bordering on relief, at finding somebody confirming that new Keynesians and neoliberals "disagreed largely over parameter values", having just this morning confidently asserted on a uni discussion board that there has long been "broad agreement within mainstream economics over what the appropriate policy levers are, but disagreement about where these levers should be set".]

Sunday, 6 March 2016 - 5:38pm

Published by Matthew Davidson on Sun, 06/03/2016 - 5:38pm in

This week, I have been mostly driving between home and the hospital as my dear lady wife waited (and waited, and waited…) for surgery, so the few most interesting things I've read are:

  • Intellectual property and the decline of the U.S. labor share — Nick Bunker, Wahington Center for Equitable Growth: According to the paper, the decline [in the US labor share] starts in 1947, which would mean the labor share was declining throughout the period it was famously stated to be constant. But not only does the decline start earlier than previously thought—it’s also much larger. It’s actually twice as large. And the increase in intellectual property products explains the entirety of the decline.
  • George Obsorne says its austerity, whether it busts us or not — Richard Murphy: At the precise moment when the economy needs investment more than anything else, in flood defences and onwards, and at a time when we do as a nation not only have the capacity to deliver that investment because there is a shortfall in demand for other goods and services, but also have the means to fund that investment because borrowing costs are, for the government, little above zero per cent in real terms right now, George Osborne is saying he will not make any effort to help the UK economy by undertaking that essential investment programme. He is instead saying that when demand is weak he will make it weaker. And that when investment is needed he will not undertake it.
  • The mass consumption era and the rise of neo-liberalism — Bill Mitchell: The research I have been doing in the last few days continues the theme that globalisation has not rendered the nation state impotent. The thesis, as outlined in the introduction, is that the nation state has just changed its role and now uses its power to advance more narrow interests than previously.
  • The Best Paid People in Our Societies Are the Worst People — Ian Welsh: Private bankers and financial execs make almost all of the investment decisions in our society. They decide what will be built, what jobs will be created, etc. They are the people who decide if something will happen and they make terrible decisions–even based on their own valuation system. […] Do not speak of “salary” and “merit” in the same sentence except with scorn. When the CEO doesn’t show up, so what? When the janitor doesn’t show up, though, hey! We find out who really matters.
  • Who Are The Prominent Academics Who Advocate A Different Type of QE? — Frank Van Lerven, Positive Money: In a recent post Positive Money showed that there is a strong intellectual body of history behind the various alternative proposals for QE. Both John Maynard Keynes and Milton Friedman proposed a style of Quantitative Easing (QE) that was aimed at the real economy. Today, these types of proposals are commonly referred to as “QE for People”, “Sovereign Money Creation”, “Strategic QE” and “Helicopter Money” amongst others.

Sunday, 28 February 2016 - 8:35am

Published by Matthew Davidson on Sun, 28/02/2016 - 8:35am in

This week, I have been mostly reading:

  • The Helicopters already exist. If you know where to look — Neil Wilson braves the slippery slope from advocating for central bank independence to…: And then you move onto the question of war. If parliament can't be trusted with money, or social security, why should it be trusted in sending people to their deaths. […] Of course if the generals are in charge and are able to deploy troops independently of parliament, then we would rightly call that a military dictatorship. Therefore the notion of an independent central bank should be called out for what it is - an economic dictatorship ruled over by a class of individuals who look after the interests of the bankers and creditors and want to prevent government having first access to the resources of the country. Those supporting the idea are excuse makers for that destructive regime.
  • The difficulty of ‘neoliberalism’ — Will Davies, Political Economy Research Centre: The reason ‘neoliberalism’ appears to defy easy definition (especially to those with an orthodox training in economics or policy science) is that it refers to a necessarily interdisciplinary, colonising process. It is not about the use of markets or competition to solve narrowly economic problems, but about extending them to address fundamental problems of modernity – a sociological concept if ever there was one. For the same reasons, it remains endlessly incomplete, pushing the boundaries of economic rationality into more and more new territories. […] The dramatic rise of student indebtedness in the UK makes little economic sense for anyone (even the government) but it succeeds in placing higher education in a quantitative framework, linking past, present and future.
  • Keywords for the Age of Austerity 24: Sullen — John Patrick Leary: The problem is not just that education is vocational here, because there’s nothing wrong with vocational education per se, nor is “critical thinking” or moral education or whatever you want to call it necessarily un-vocational anyway. Rather, it is the way “academic entrepreneurship” encourages students and others to see education, a public service subsidized to great extent by the people, as a publicly-funded adjunct of private business, useful for research, development, and employee training. Lesson number 1 of entrepreneurship class: Why take a financial risk when you can just outsource it to someone else?
  • The Great Malaise Continues — Joseph Stiglitz: The obstacles the global economy faces are not rooted in economics, but in politics and ideology. The private sector created the inequality and environmental degradation with which we must now reckon. Markets won’t be able to solve these and other critical problems that they have created, or restore prosperity, on their own. Active government policies are needed. That means overcoming deficit fetishism.
  • New Research. Inequality of Wealth Makes Us Short and Dead — Peter Turchin in Evonomics: So, the life expectancy of white middle-aged males has declined, and the average height of black women has also declined. Is this the beginning of a more broadly based trend, in which the biological well-being of the “other half”—the 50 percent of the poorer Americans—will decline?
  • ‘Helicopter tax credits’ to accelerate economic recovery in Italy (and other Eurozone countries) — Biagio Bossone and Marco Cattaneo at Tax Credit Certificates (TCCs) […] are assigned to households in inverse proportion to their income, both for social equity purposes and to incentivise consumption. TCC allocations to enterprises are proportional to their labour costs, and act as labour-cost cutting devices, immediately improving their competitiveness, as any internal or external devaluation would do. Greater export and import substitution following price reductions not only create more output and employment, they also offset the impact of increased demand on the external trade balance. Smaller amounts of TCCs can also be issued and used by the government to pay for public infrastructure initiatives and social welfare programs.
  • The DWP is trying to psychologically 'reprogramme' the unemployed, study finds — Jon Stone, The Independent: A study backed by the Wellcome Trust found that people without jobs were subject to humiliating “reprogramming” by authorities designed to change their mental states. The researchers said the new approach, which forced upon the unemployed a “requirement to demonstrate certain attitudes or attributes in order to receive benefits or other support, notably food” raised major ethical issues.
  • Economists Don't Know Much About the Economy, #46,523: The Story of the Robots — Dean Baker in HuffPostBiz: Patent and copyright protection are not laws of nature, they come from the government. And in recent years we have been making them stronger and longer. […] In the absence of these protections, we might all look forward to paying a few dollars for the robots that will clean our houses, cook our food, and drive us wherever we want to go. Low cost robots would make almost all of us richer. Only if the government imposes patent monopolies that keep robots expensive do we have to worry about a redistribution from the rest of us to those who "own" the technology.
  • Huge currency zones don’t work – we need one per city — Mark Griffith in Aeon: In the 1970s, the American/Canadian economist Jane Jacobs reached a radically simple insight. Her lifelong interest in urban history convinced her that cities, not countries, drive economics. Cities are messy, unplanned places where people who otherwise would never meet devise joint projects. Hence, Jacobs argued, all innovation happens in cities. It made sense, then, that each city’s currency should follow its business cycle. Forcing two or more cities to share one currency slowly pumps up one city and sickens the others.
  • Designer nights out: good urban planning can reduce drunken violence — Kees Dorst in The Conversation: It is easier said than done, but we need to think away from knee-jerk reactions - where branding an incident as “alcohol-related violence” naturally puts the focus on policies around alcohol service restriction. There is so much more that can be done to keep young people safe at night.
  • Why bullshit is no laughing matter — Gordon Pennycook in Aeon: It is now very common for proponents of alternative medicine to emphasise ‘open-mindedness’. Unfortunately, this can entail disregarding empirical evidence. For example, many anti-vaxxers do not appear to care that Andrew Wakefield’s infamous article in the Lancet in 1998 drawing a link between the MMR vaccine and autism has long been discredited and retracted. Indeed, straight-up explanations of this fact do little to dissuade those who have fallen prey to anti-vaxxer bullshit. Diseases such as measles and mumps are making a comeback in the US and, according to at least one website, there have been more than 9,000 preventable deaths due to failures to vaccinate in the US since 2007. Bullshit is indeed no laughing matter.
  • Saturday Morning Breakfast Cereal by Zach Weinersmith [Yes, education really works like this]:

Sunday, 21 February 2016 - 11:51am

Published by Matthew Davidson on Sun, 21/02/2016 - 11:51am in

This week, I have entirely caught up on 2015! Next week will be January and February 2016, before uni starts the week after.

  • ‘On the first day of Christmas, my true love gave to me’ … a bunch of econ charts! — Jared Bernstein and Ben Spielberg in the Washington Post. My pick of these:
  • The Melting Away of North Atlantic Social Democracy — Brad DeLong in Talking Points Memo: Supply-and-demand tells us that when the economy's wealth-to-annual income ratio varies, the rate of profit should vary in the opposite direction. But history tells us that the rate of profit sticks at 5% per year, across eras with very different wealth-to-annual-income ratios. Piketty, however, does not tell us why. Perhaps this is because at a technological level capital does not empower and complement but rather competes with and thus substitutes for labor. Perhaps this is because of successful rent-seeking by the rich who control the government and get it to award them monopoly rents. Perhaps it is because of a social structure that leaves wealth holders believing that a 5% per year is the "fair" rate of profit and are unwilling to underbid each other.
  • The road to the workhouse — Frances Coppola is rightly outraged by punitive sanctions imposed on UK benefit claimants: The workhouse ethic was that work is a moral imperative: people who have no work are morally defective and must be forced to work as a "correction". If they refuse to work, they must be severely punished. The DWP's sanctions regime looks uncomfortably similar. The sick, disabled, mentally ill and unemployed are treated like criminals even though they have committed no crime. A strict penal regime is imposed on them, with extremely harsh punishments for minor transgressions of unfair and arbitrary rules. These punishments affect not only their own health but the health of those dependent on them. Not unlike workhouses, really.
  • AIPE: 8000 students in limbo as Sydney college has its registration cancelled — Eryk Bagshaw, Sydney Morning Herald: A former student of the college, Helen Fielding, told Fairfax Media she was coached over the phone by agents to sign up for a $19,600 diploma of Human Resources Management. The 21-year-old grew up in foster care and has an obvious intellectual disability. "I'm not good at reading," she said at her housing commission flat outside Newcastle.
  • Home is where the cartel is — Steve Randy Waldman: If you buy a home in San Francisco today, the last thing you want to happen is for the housing affordability problem to be solved next year. If apartment prices become reasonable, you’d find yourself with a huge financial loss and an underwater mortgage. […] High rents are like poverty at the Brookings Institution, a problem we claim we desperately want to solve but don’t really want to solve because the things we would have to do to solve it would be costly and disruptive to the people whose interests get termed “we” in a sentence like this one.
  • The Sneaky Way Austerity Got Sold to the Public Like Snake Oil — Lynn Parramore of the Institute for New Economic Thinking interviews Orsola Costantini of same: How do we stop powerful players from co-opting economics and budgets for their own purposes? Our education system is increasingly unequal and deprived of public resources. This is true in the U.S. but also in Europe, where the crisis accelerated a process that was already underway. When children don’t get good educations, the production of knowledge falls into private control. Power gets consolidated. The official theoretical frameworks that benefit the most powerful get locked in.
  • Why Philanthropy Actually Hurts Rather Than Helps Some of the World’s Worst Problems — George Joseph, In These Times: Zuckerberg can legally offer the bulk of his "philanthropy" to any for-profit recipients he wants and still receive public acclaim for "gifting" his fortune. We're seeing the rise of a new, horizontal philanthropy - the rich giving directly to the rich - at a level that's completely unprecedented.
  • It's official — benefits and high taxes make us all richer, while inequality takes a hammer to a country's growth — Lee Williams, the Independent: Thanks to the OECD report, we find that the very thing that the sacrifices of austerity were made to preserve – the growth of the economy – is the very thing they are destroying. Neo-liberal, laissez-faire capitalism extends inequality, we already knew that. But now we have the evidence that inequality harms, rather than encourages growth.
  • 'Free Basics' Will Take Away More Than Our Right to the Internet — Vandana Shiva, Common Dreams: The Monsanto-Facebook connection is a deep one. The top 12 investors in Monsanto are the same as the top 12 investors in Facebook, including the Vanguard Group. The Vanguard Group is also a top investor in John Deere, Monsanto’s new partner for ‘smart tractors’, bringing all food production and consumption, from seed to data, under the control of a handful of investors. […] Smart Tractors from John Deere, used on farms growing patented Monsanto seed, sprayed and damaged using Bayer chemicals, with soil and climate data owned and sold by Monsanto, beamed to the farmer’s cellphone from Reliance, logged in as your Facebook profile, on land owned by The Vanguard Group. Every step of every process right up until the point you pick something up off a supermarket shelf will be determined by the interests of the same shareholders. More here.
  • Why Are Universities Fighting Open Education? — Elliot Harmon at Common Dreams: Though universities tout [patented] technology transfer as a way to fund further education and research, the reality is that the majority of tech transfer offices lose money for their schools. At most universities, the tech transfer office locks up knowledge and innovation, further expands the administration (in a sector that has seen massive growth in administrative jobs while academic hiring remains flat), and then loses money.