Economics

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Is economics value-free?

Published by Anonymous (not verified) on Wed, 28/10/2020 - 5:15pm in

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Economics

I’ve subsequently stayed away from the minimum wage literature for a number of reasons. First, it cost me a lot of friends. People that I had known for many years, for instance, some of the ones I met at my first job at the University of Chicago, became very angry or disappointed. They thought that […]

Book Review: The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century by Rodrigo Aguilera

Published by Anonymous (not verified) on Tue, 27/10/2020 - 10:48pm in

In The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century, Rodrigo Aguilera challenges the arguments of the ‘New Optimists’, showing their progress narrative to be a conservative defence of the status quo that is ill-equipped to deal with pressing socioeconomic problems. In making clear that we do not live in the best of all possible worlds, this deep analysis offers a refreshing perspective on complex political and economic phenomena, writes Elena Cossu

The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century. Rodrigo Aguilera. Repeater Books. 2020.

What do the ‘alt-right’ and Bill Gates have in common? Apparently, according to Rodrigo Aguilera, it is a fondness for authors that use ‘irrefutable statistical evidence that the world is better than ever’ (5). This belief is also the main element of the movement that Aguilera terms ‘New Optimism’ in his book, The Glass Half-Empty. Quoting Oliver Burkeman’s 2017 Guardian article, ‘Is the World Really Better than Ever?’, Aguilera defines the New Optimists as ‘the loose but growing collection of pundits, academics and thinktank operatives who endorse this stubbornly cheerful, handbasket-free account of our situation’ (3).

The question posed in the title of Burkeman’s article is also the puzzle at the centre of The Glass Half-Empty, which is about progress. In the Introduction and Chapter One, Aguilera describes who has faith in the economic progress narrative, and why. He then reviews the concepts underpinning this way of thinking in Chapters One and Two, before exploring if these claims are statistically or philosophically true in Chapters Three, Five and Six. Aguilera also examines the way these ideas are exploited by modern political movements in Chapters Four and Eight. He concludes with some possible economic alternatives to the current status quo.

What does it mean to believe in progress? It means to ‘present statistical facts that demonstrate the material and moral improvement of humanity; imply that those who deny, or question progress have no rational claim for so doing; and attribute this progress to the causes that fit your beliefs’ (4). It consequently implies the defence of the status quo and the belief that science or liberalism can solve all of our human problems.

This culture of venerating progress can be divided into two groups. The first are ‘the libertarians who tend to attribute progress to capitalism, particularly in its more laissez-faire manifestations’ (4), like some centrist mainstream media (for instance, the Economist). The second are those who believe that Enlightenment values like science and reason are not only the sole causes of progress, but think that these are threatened by both the right (obsessed by authoritarianism) and the left (obsessed with feelings and social constructs rather than facts). The best representative of this way of thinking and the risks associated with it is Steven Pinker, who is mentioned more than 74 times throughout the book. A related group is composed of populist leaders, ‘alt-right’ movements as well as academics and media commentators like Jordan Peterson, Joe Rogan and Ben Shapiro, who manipulate Enlightenment values and science in different ways to achieve different political purposes.

The general problem with these groups is connected to the recent tendency in policymaking to reduce ‘complex inter-disciplinary problems to reductionist cost–benefit analyses’ (6). This tendency is in turn motivated by an increase in determinism in the social sciences, fuelled mainly by the mainstream economics discipline and its belief that we know what brings us prosperity. However, the misidentification of the paths to human progress might lead us to rationally commit self-annihilation by ignoring phenomena like climate change.

Another important problem regarding progress concerns its definition. We do not have a shared definition, but even if we define progress as an improvement in development indicators, as often happens, we should consider the following facts. First, progress has been slow for most of human history. Second, the reasons behind progress in the Global South are often misunderstood: ‘although progress has not been even, for enough people in enough countries it has been either visible throughout their lifetimes or just enough to lift them out of utmost squalor. Perhaps if we were to leave it at that, then the progress narrative would be easier to embrace. Unfortunately, it has been conveniently tied to a rather pernicious talking point: that this has been achieved almost entirely thanks to liberal capitalism’ (65).

In fact, Aguilera writes, ‘we cannot ignore that most of the reduction of global extreme poverty in the last half century has been in Asia. And specifically, in a single country: China’ (68). ‘Taking China out of the equation we have it that the global poverty rate barely budged: 56.7% to 50.3%’ (72). China is not exactly a big fan of liberal capitalism. As a consequence, it is incorrect and dangerous to believe that these improvements are caused by an increase in liberalisation, trade or foreign aid, or that we know what caused them at all.

There are similarly dangerous narratives regarding the Global North, which often exclude how the cost of education, healthcare and housing – and inequality overall – is increasing. These also often ignore how the ‘productivity growth in many Western countries has slowed down or even turned negative in the post-crisis years’ (59). In the very relatable words of Aguilera: ‘if you are a young professional in the Western and especially the Anglo-Saxon world without the benefits of a trust fund or a generous grandfather’s loan to kick start your real estate ambitions, you have a right to be angry’ (64).

In general, the main takeaway of the book is that there is no ‘rational’ way to look at facts and statistics. Theories are a constant act of ‘putting facts together’ based on heuristics and available information. Such a process should never be taken for granted. Many believers in progress do the opposite, creating an unbreakable echo chamber. To prove this point, Aguilera also takes time to summarise the different biases that we all have. If you believe you are superior to this discussion about biases, do not worry. You are probably affected by the ‘bias blind spot’, which is a bias that leads people to believe they are less likely to fall for cognitive biases than they actually are.

Alternatively, if you wholeheartedly agree with intellectuals like Pinker, you might be afflicted by the Just World Hypothesis (‘The belief that the world is fundamentally just and that people generally receive just deserts for their actions and behavior’ (48)), as well as other type of biases clearly explained by the author. There are in fact many mechanisms that prevent us from seeing complexity and being rational, and we should be especially careful to acknowledge what we do not know, instead of claiming we have a perfect solution for anything.

Aguilera gives us different answers on what could be done to change this dead-end, focusing particularly on the problems afflicting the West. First, we need to honestly check our biases and admit that liberal capitalism has a particular resistance to acknowledging its disenfranchising aspects, while being very good at overplaying its positive achievements:

capitalism is certainly efficient at producing things; which is why it was the driving force behind the rising material prosperity of the world in the nineteenth and twentieth centuries. But it is also very effective at creating scarcity in markets where rent can be extracted without moving a finger, such as land and housing (137).

Second, we need to start thinking differently about more sustainable alternatives such as social capitalism, changing the set of incentives that motivate firms, creating more employee-owned firms, property-owning democracy and participatory budgeting. Other solutions, relating to the problem of automation as an example, include Universal Basic Income, a negative income tax, Universal Basic Services or the idea of sovereign wealth funds. Aguilera overall believes in a future where a more compassionate form of capitalism is possible, but he warns us of the perverse effects of ‘woke capitalism’ (the belief you can change the world through your purchases) as a possible solution.

In conclusion, The Glass Half-Empty extensively shows us that no, we do not live in the best of all possible worlds, and neither liberal capitalism nor Enlightenment values are the sole reason for the improvements we may have experienced so far. Equally importantly, these are not the only things that will save us. This book is a deep analysis with no definite solution, as this would contradict the book’s own premise. However, what this book does is give us a perspective on complex political and economic phenomena, while engaging in a central debate about economic development. It is a refreshing take on a theoretical level regarding whether economics should focus less on results and more on understanding the links between cause and effect, and on a practical level for thinking about the future of populism and global governance.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics. 

Image Credit: Photo by manu schwendener on Unsplash.


Britain in the vanguard of fascism..

Published by Anonymous (not verified) on Tue, 27/10/2020 - 10:34pm in

A constituent has written an open letter to his MP, Anthony Mangnall (Conservative, Totnes) of which I quote the conclusion below. It is powerfully argued and well worth reading the rest. I’d urge everyone to do so. In leaving the EU, the UK has placed itself in the vanguard of the fascist revival taking place... Read more

The Tories’ deficit deceit

Published by Anonymous (not verified) on Tue, 27/10/2020 - 9:31pm in

I think this from Simon Wren-Lewis, written yesterday, is very good:

[The suggestion is] that Sunak, like Osborne, only pretends to misunderstand the nature of government debt. I used to say this deficit deceit was really a pretext to reduce the size of the state, but I think we need to be more precise in the current climate. Many Conservative MPs today seem quite happy about the state paying too much money out to corporations who have previously or will subsequently give Conservative politicians seats on the board, and/or have given the party financial support. What they fear is government money going to the wrong people, people who are not their friends, donors or the very rich, and who are unlikely to vote for them.

Corruption, in other words, under the guise of deficit concern.

There is not really a lot to add to that.

Drain the (corporate) swamp

Published by Anonymous (not verified) on Tue, 27/10/2020 - 1:00pm in

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Economics

Today, I celebrate – my home town of Melbourne has recorded zero new infections for the second time since June 9, 2020 and zero deaths. A consecutive day of double zero. My Melbourne band Pressure Drop is planning a live streamed gig soon – our first time playing since March. Details will come when we know more about when we can do it. Something to celebrate in a bleak year. Today I am writing about the underside of neoliberalism though. Nothing to celebrate about this at all. Revolving doors, corporatisation of public service and introducing the excesses and corruption that is endemic in that private sector, more on that, and a federal government that is refusing to introduce a federal corruption body despite the evidence of widespread malpractice at that level. Why this matters is because to build a better world we need to reverse the demolition of the traditional public service by the neoliberals over several decades, which has turned a once wonderful bureaucracy (departmental structure) from a public service delivery capacity into a contract brokerage for outsourced and deregulated service delivery units, chasing profits in the private sector and cutting as many corners as they can get away with. With lax oversight these days, they can get away with a lot. And when public agencies start behaving as if they are corporations then things really come unstuck. And then we see the alarming necrosis that exists at the top levels of Australian corporations. No wonder we have just had Royal Commissions into the banking and finance sector and into the (privatised) aged care sector which have delivered such shocking results. Nothing to celebrate at all.

In recent days, the question of establishing a federal corruption commission, along the lines of the various state commissions has arisen again and once again the federal government is demonstrating its reluctance to do anything.

This is despite news over the last few weeks of:

1. Australia Post bosses and the board handing each other expensive Cartier watches as gifts for doing their jobs, which are hugely remunerated anyway. This lot have at the same time been cutting services (postal deliveries) and cutting employment of the posties who actually slog it out each day.

Update: This was revealed just after I posted this entry – Luxury hotel bill controversy for Australia Post boss – it is hard to make this stuff up. She has to go.

2. The top executives in the Australian Securities and Investments Commission, the public body which operates as the “corporate, markets and financial services regulator” handing themselves out massive payments, allegedly beyond the limits set by the Remuneration Tribunal.

The CEO was given a “more than $118,000” to receive “personal tax advice” (Source). My tax agent costs me $180 a year or thereabouts.

His deputy, who resigned yesterday, was paid more than $A70,000 over the last two years as a “housing cost payment” (Source).

This body (ASIC) was singled out by the Hayne royal commission on finance etc for taking a soft approach to known corporate corruption, preferring to do private (undisclosed) deals with the criminals rather than send them to the cleaners in a public way.

As one commentator, who really studies this sector, wrote (Source):

There has been a cultural problem at ASIC for years but it has worsened recently with disharmony at the top. It has botched a series of appointments over the past few years that reads like a script from Yes Minister.

The latest CEO, who must resign as a result of the revelations in the last week, was just appointed out of the blue by the Government after it botched the appointment process.

The Government also “blindsided the regulator with a decision to trash responsible lending laws and strip ASIC of responsibility for bank credit regulation”.

These are just the most recent cases of deplorable practice.

We also know that it is widespread in a public sector that ‘corporate’ behaviour has crept in and has compromised the quality of service delivery and capacity of the public sector to play a key role in moving us to better places.

Given we are in the midst of a dangerous pandemic, which has really undermined our societies, the study published in – Public Health Research and Practice (September 25, 2019) – The revolving door between government and the alcohol food and gambling industries in Australia – was rather prescient.

The paper was interested in studying:

… the ‘revolving door’ phenomenon, whereby individuals move between positions in government and positions in the Australian alcohol, food and gambling industries.

The motivation was clear – “The harmful impacts of alcohol use, unhealthy food consumption and gambling on public health are well documented”.

Which means that we need “strong, evidence-based public health policy”.

However, it become obvious that that need “runs counter to the interests of companies in the alcohol, food and gambling industries”, and those industries are continually trying to distort policy to advance their own interests, even if that compromises the general well-being of society.

That is the nature of capitalism.

One strategy is the “revolving door” syndrome:

… whereby (typically senior) employees move between positions in government (the regulator) and positions in industry (the regulated), or vice versa.

It is a global problem.

The evidence in Australia is that “Industry’s privileged access to government threatens unbiased policy making and creates an imbalance between the influence of industry and evidence-based public health advocacy.”

Through a series of interviews with key players, the study concluded that 36% of registered lobbyists were “a former government representative”, many of them senior MPs.

Their overall conclusion was that:

This study suggests that the revolving door that sees people move between roles in the Australian Government and alcohol, food and gambling industries is commonplace, creating a range of ethical and moral problems, and posing a risk to public health.

While this study was specifically focusing on a few sectors, the problem generalises and has been increasing over the last several decades.

And governments have rarely enforced sunset clauses (“cooling off periods”) between government service and corporate service.

A previous study – ‘In the family’: majority of Australia’s lobbyists are former political insiders (September 17, 2018) – found that “More than half of all Australian lobbyists previously worked inside government or for the major political parties, with one in four staffing the offices of ministers, parliamentary secretaries or backbenchers.”

I have been accumulating evidence on this phenomenon and was interested in a report that was released earlier this week (October 25, 2020) – Many are called, few are chosen – which was published by the organisation – Ownership Matters, a “governance advisory service for institutional investors based on local insight and years of corporate memory”, located in Melbourne, Victoria.

Effectively they seek to promote the interests of corporate owners rather than the management or the board.

Their report exposes the ‘corporate club’ that exists in Australia where corporate boards are made up of a group of ill-suited individuals who lack the talent and capacity to do the job properly.

This club is male dominated but not exclusively. The lack of talent is not gender-biased.

Ownership Matters:

… analysed the pool of 1777 executives and 4143 non-executives who have served on ASX 300 company boards from 2005 to the present day.

They wanted to:

1. Explore the rate of inclusion of women in management – that is, gender diversity.

2. The “association between board turnover rates and company performance”.

3. The “propensity of Australian companies to appoint from within the existing pool of ASX 300 directors” – that is, the ‘club’.

Their overall findings were that while the proportion of women in director positions rose marginally over the period:

1. “Boards of the worst performing companies refresh themselves only marginally faster than companies that perform the best.”

2. “There is a strong bias toward appointing existing ASX 300 directors to vacancies”.

3. The tenure of directors lengthens “with each position attained” – so once your in, your in.

Apart from the relevance to shareholders who confront the boards at annual meetings, this report bears on the sort of interests that I have – making government policy work better and benefit a wider group rather than be captured by segments of the corporate sector.

For years, we have been assailed by spivs (politicians, corporate lobbyists, etc) telling us that privatisation, outsourcing, public-private partnerships and deregulation (the self-regulation myth) would transfer decision-making to market-disciplined corporations who would deliver the best service at the lowest cost.

So a range of public services were sold off and are now being delivered by profit-seeking corporations.

The evidence is fairly clear that this era has not improved things. Rather the contrary across a range of sectors – telecommunications, transport, energy, water, etc.

And this report from Ownership Matters provides some insights into why the outcomes have been so poor in many sectors.

The report makes it clear that the corporate decision-makers are not up to it and come from a restricted ‘gene’ pool (the ‘club’) where their own self-aggrandisement and wealth capture comes before anything else.

And it also bears on the ‘market discipline’ argument.

The boards of companies that performed the worst barely changed relative to those who performed better.

It shows that shareholders are often not able or are reluctant to throw out boards of poorly performing corporations. It is clear that once a person gets through the door of the ‘club’, they can expect a long period of excessive bonuses, director remuneration and the rest of it, regardless of how they perform.

And getting through the door is a function of which school one goes too and daddy’s mates.

And once in the ‘club’, the evidence clearly shows that multiple directorships await the successful entrant. So the lack of talent is spread broadly across the corporate sector.

Lawyers and accountants dominate rather than industry specialists. There is very little cultural diversity or skill diversity.

There has been a long debate on whether workers should have compulsory positions on boards of companies.

Last year, a growing scandal emerged where large corporations were paying huge amounts to their corporate executives but underpaying workers according to their legal obligations.

Several cases are working their way through the courts now to secure the billions of dollars of backpay that is owing to workers.

The evidence has emerged that (Source):

… boards of too many ASX-listed companies have failed to govern adequately for employees outside the executive team.

The banking and aged care royal commissions have exposed rotten cultures in organisations and cases of companies squeezing employees too far in order to boost profits.

The Ownership Matters report reinforces this view.

If boards were required to have significant worker involvement – that is people who have detailed knowledge of what the firm actually does, rather than seeing the firm as just a gravy train to advance the personal wealth of the directors – then things might change.

I would see that as a first step towards improving the situation.

Conclusion

A progressive agenda not only has to end the corporate capture of the state legislative and regulative machinery but also require corporations serve broader interests, which includes their own shareholders.

And this corporate cabal of lack-lustre, self-serving revolving door individuals have been carping for the last few months about the Victorian government’s tight lockdown that has been the most successful defense against a second wave anywhere in the world. All the corporate voices wanted was to ‘open up and let us get on with business’.

Which we know translates to – who cares how many vulnerable people die as long as we can engorge ourselves with corporate excesses. I am glad the Victorian government had the steel to ignore them.

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.

Common law looks as tho’ it is no longer sufficient for domocracy

Published by Anonymous (not verified) on Tue, 27/10/2020 - 10:18am in

The principle of subsidiarity is a European idea – and not just in Catholic Europe, but also in the local parish council. It is basically the idea that decisions should be made as locally as possible. Now, for Catholocism, I think the idea has long been honoured more in the breach than the observance, (though... Read more

7 March 1979: Foucault on the Radicalness of Liberal Governmentality (XXV)

Published by Anonymous (not verified) on Tue, 27/10/2020 - 5:40am in

First of all, we should not forget that the diffusion of the German neo-liberal model has taken place in France on the basis of a strongly state-centered, interventionist, and administrative governmentality, with precisely all the problems this entails. Second, the attempt to introduce and implement the German neo-liberal model in France takes place in a context of an initially relatively limited, and now acute economic crisis which is the motive, pretext, and reason for the introduction and implementation of the model and, at the same time, what checks it. Finally, for the reasons I have just mentioned, the third characteristic is that the agents of the spread and implementation of this model are precisely those who administer and direct the state in this context of crisis. Because of all this, the implementation of the German model in France involves a whole range of difficulties and a sort of awkwardness mixed with hypocrisy, examples of which we will see. Michel Foucault, 7 March, 1979,  translated by Graham Burchell, Lecture 8, The Birth of Biopolitics, 192

According to Foucault, the twentieth century is characterized by two kinds of "reduction of state governmentality." (191) One is through  the "growth of party governmentality," as occurred most dramatically in fascist and communist states.* Lecturing in 1979 the Marxist kind was not yet something of the past.

As an aside Foucault is also having a bit of fun here because for Max Weber the mediating function of parties (and party bosses) is characteristic of nineteenth century developing liberal democracies.  (Of course, that is compatible with the rule of law, which, by contrast, true party governmentality erodes.) This is a core commitment of twentieth political science (see, e.g., Schattschneider). As I have noted before, this feature of liberal democracy has been eroded by the development of the open primary (this started to happen in Foucault's life-time).

Liberal democracies, by contrast, "regimes like our own" experiment with the second "form of reduction" and "attempt to find a liberal governmentality." (191) And it is very important for Foucault's argument that liberal governmentality has two different templates: one that he calls the "German model," which is the ORDO liberal version he has articulated in the first seven lectures.  This ORDO model is ""being diffused, debated, and forms part of our actuality, structuring it and carving out its real shape, is the model of a possible neoliberal governmentality." (192) The other approach is the Chicago school.*

Now, what's crucial -- and what has taken me a long time to discern -- is that Foucault makes a rather sharp distinction between the way the German model functions in its origin and what happens to it when (ahh) its copy is diffused and 'implemented' elsewhere; the implementation is, simultaneously, a "radicalization," (207). But Foucault does not make the distinction (between original and copy) fully explicit because he does not repeat the analysis of the previous weeks to draw out all of the contrast.

For, in a seeming paradox, while the ORDOs confronted a much more distinctive circumstance, the collapse of Nazi Germany and occupation, Foucault treats original ORDO-neoliberalism as a kind of organic political solution to circumstances. (Here he implicitly kind of tracks Röpke conception of what ought to happen as factual.) Whereas the application of the copy of neoliberalism in France during the apparently more ordinary political crisis of the 70s is treated as disruptive. And so lurking in Foucault there is a surprisingly nineteenth century assumption in which ideas and society form a kind of organic whole.**

One way to track the most fundamental difference is that in Germany, post Stunde Null, the ORDOs had to invent (recall lecture 4) a new kind of sovereign power, which simultaneously made the NAZIs illegitimate, and that would constitute the legitimacy of the Bonn Republic by the maintenance of certain basic rights by way of the rule of law and economic growth with social characteristics. Whereas in France, liberal governmentality is imported by leading technocrats of a legitimate state in economic crisis. And for Foucault this starts to happen around 1970 or "from 1970 to 1975 or anyway in the decade now coming to a close." (195) 

As another aside, Foucault here very quietly, and prudently, skips the collapse of the third republic, and all the turbulence of the fourth republic, and the founding of the fifth, not to mention '68. Or to be more precise, he mentions some of it in the lecture, but from a vantage point, as if, of relatively little import. Given some of the flamboyant political persona associated with Foucault, it is  no surprise that his prudence when discussing his own society goes so unremarked so often. And, he turns the rise of Giscard into a turning moment in French history (197). But it means one misunderstands him easily.

Now, for Foucault the awareness among the technocrats that France is in economic crisis is triggered by the 1973 oil crisis. Foucault's interpretation of it is worthy of attention, but I skip to the effect of it (which gives a sense of his analysis of it):  

Liberalism, that is to say, the total, unrestricted integration of the French economy in an internal, European, and world market, was the choice which appeared, first of all, as the only way to be able to rectify the erroneous investment choices made in the previous period because of interventionist objectives, techniques, and so on; so, liberalism was the only means of correcting these investment errors by taking into account the new factor of the high cost of energy, which was in reality only the formation of a market price for energy. (196)

Crucially, then, the diffusion of the ORDO template means in France not just a correction on Keynesian countercyclical dirigisme, but more importantly an insertion of France into a new kind of political economy in which energy costs would be (potentially) high and a submission (to use a Hayekian phrase) to the discipline of impersonal market forces. For students of the EU Foucault's observation is key because it suggests that from a French political perspective, the EU's Delors era (starting in 1985) originates in a change of intellectual climate of the 70s. 

Foucault's discussion of French experience with social security and the negative income tax anticipates the far more elaborate treatment (and much to recommend) of American neoliberal (recall) family policy by Melinda Cooper (Family Values).  But while interesting today I skip  to Foucault's conclusion:

Full employment and voluntarist growth [of the Keynesian era] are renounced in favor of integration in a market economy. But this entails a fund of a floating population, of a liminal, infra- or supra-liminal population, in which the assurance mechanism will enable each to live, after a fashion, and to live in such a way that he can always be available for possible work, if market conditions require it. This is a completely different system from that through which eighteenth and nineteenth century capitalism was formed and developed, when it had to deal with a peasant population which was a possible constant reservoir of manpower. When the economy functions as it does now, when the peasant population can no longer ensure that kind of endless fund of manpower, this fund has to be formed in a completely different way. This other way is the assisted population, which is actually assisted in a very liberal and much less bureaucratic and disciplinary way than it is by a system focused on full employment which employs mechanisms like those of social security. Ultimately, it is up to people to work if they want or not work if they don’t. Above all there is the possibility of not forcing them to work if there is no interest in doing so. They are merely guaranteed the possibility of minimal existence at a given level, and in this way the neo-liberal policy can be got to work. (207)

Now, what's important, and remarkable, is that Foucault is not claiming to unmask. On his presentation, the new system is not hidden. It's a self-conscious construct of French technocracy explicit in "the speeches, writings, and texts." (194) It involves the creation of a floating population that is not starving, but available (note the modality) for possible work. And the intention is to keep this population above subsistence by a safety-net. The pay-off is both a more efficient and productive economy that is capable of giving consumers what they wish in a high cost energy environment as well as reduce the amount of compulsion in society. Because unlike the friends/partisans of taylorist social democracy, Foucault tacitly grants their critics that the previous era of full employment also involved a lot of forced homogeneity.+

Since plans for negative income tax and basic income are still thought radical (despite the earned income tax credit and equivalencies elsewhere), we must acknowledge that Foucault's diagnosis is in some sense premature. And as Cooper shows, when neoliberal ideas where implemented, when political winds followed, they involve non-trivial amount of force with an ideology of moral hazard--many more sticks than carrot we might say. From our vantage point, then, neoliberalism never arrived fully (because it was hijacked by intrinsically conservative ideology). 

 

 

 

*In this lecture Foucault makes it seem initially as if the roots of the Chicago school are in the German model. But while not denying the significance of Hayek and other exhiles, he quickly corrects that, "it can also be seen as a phenomenon which is absolutely endogenous to the United States." (193)

**There is more evidence of this in the lecture, because he treats American neoliberalism as homegrown (see the previous note).

+Critics of neoliberalism forget that at heart it is an emancipatory project that was welcomed by those who wished to break the traditional gender/family/sex roles enforced by the state. 

SSRN Top 5 Papers – October 20 to 26, 2020

Published by Anonymous (not verified) on Tue, 27/10/2020 - 5:12am in

Tags 

Economics

SSRN Top 5 Papers – October 20 to 26, 2020

#
ID
Abstract Title
Authors
Affiliations
Downloads

1
1968579
A Brief Introduction to the Basics of Game Theory
Matthew O. Jackson
Stanford University – Department of Economics
4762

2
3621446
COVID-19 Severity in Europe and the USA: Could the Seasonal Influenza Vaccination Play a Role?
EBMPHET Consortium
Evidence-Based Medicine, Public Health and Environmental Toxicology (EBMPHET)
3817

3
3718952
VIP in the treatment of Critical COVID-19 with Respiratory Failure in patients with severe comorbidity: A prospective externally-controlled trial
Jihad G. Youssef, Jonathan Javitt, Philip Lavin, Mukhtar Al-Saadi, Faisal Zahiruddin, Mohammad Bitar, Sarah Beshay, Joseph Kelley, Mohi Sayed, Philip Lavin
Houston Methodist Research Institute Johns Hopkins School of Medicine Boston Biostatistical Research Foundation Houston Methodist Hospital
1675

4
3715610
Rain, Rain, Go away: 137 potential exclusion-restriction violations for studies using weather as an instrumental variable
Jonathan Mellon
University of Manchester
1027

5
3557504
Economic Effects of Coronavirus Outbreak (COVID-19) on the World Economy
Nuno Fernandes
University of Navarra, IESE Business School
1007

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The radical façade of randomistas do not help us fight poverty

Published by Anonymous (not verified) on Tue, 27/10/2020 - 2:02am in

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Economics

Perhaps the most concerning aspect of the randomista enterprise is their claim to neutrality and objectivity. While knowledge generated by RCTs may be able to generate useful insights in some instances, evidence always requires interpretation … The findings of the randomistas do not speak for themselves; they require interpretation. The randomistas’ interpretation of these results […]

Why is Amazon advising the government on procurement?

Published by Anonymous (not verified) on Tue, 27/10/2020 - 1:13am in

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Economics, Ethics

As the Mirror notes today:

Amazon is advising ministers on how to buy goods and services after Brexit, while raking in millions of pounds in contracts itself.

The Mirror can reveal the US firm was on a “secretive” panel set up by the Cabinet Office to help shape public sector procurement in future.

As they add:

Amazon has been awarded 82 central Government contracts, worth £225million, in the past five years and has a deal enabling local councils to buy supplies in one marketplace.

And as they noted:

Paul Monaghan, of the Fair Tax Mark, which highlighted Amazon’s involvement on the “secretive” panel, said it was “truly frightening”.

He said: “The manner in which Amazon is embedding itself into national and regional public procurement in the UK has long been cause for concern.

“We are close to the point where it will be impossible for anyone else to compete.”

Paul Monaghan was not alone in his criticisms:

Amazon has been criticised for its track record on paying UK corporation tax. TUC boss Frances O’Grady said: “Amazon’s reward for its exploitative business model is a seat at the table on an influential Government board advising on public procurement, on top of the multi-million-pound Government contracts it receives.”

As the Mirror noted:

Amazon declined to comment.

The Cabinet Office refused to comment on the firm’s involvement, but said: “This panel is an important part of our engagement as we look to improve procurement rules.”

They are, of course, at liberty not to comment. But others are free to question, and I do.

Amazon is not in the position of a normal business: it is an effective monopoly supplier in some sectors, and has very few competitors in others e.g. large-scale computer hosting. This does not make its experience representative. Nor does it broaden the base of suppliers to government, which is one of the few things that Brexit might deliver.

So what is going on here? I think that the Fair Tax Mark is entirely right to ask, even whilst noting that I am an advisor to it, whilst also recording that I had no part in developing this story.

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