Free Trade

Sargon of Akkad and Nazis Join UKIP and Break It

Okay, let’s have some fun at the expense of the Kippers and the extreme right-wingers Gerard Batten has brought into the party. Right-wingers like Count Dankula, Tommy Robinson and Sargon of Akkad.

Sargon, Dankula, Tommy Robinson and UKIP

Count Dankula is the idiot, who taught his girlfriend’s dog to do the Nazi salute when he said ‘Sieg Heil!’ and ‘Gas the Jews’. He put it on YouTube, and then, unsurprisingly, got prosecuted for hate speech. I don’t think he’s actually a Nazi, just a prat, who thinks really tasteless, offensive ‘jokes’ are hilarious. Tommy Robinson is the founder of the EDL, and has been briefly involved with that other Islamophobic organization, PEGIDA UK. He used to belong to the BNP and has a string of criminal convictions behind him. These included a number for contempt of court after he was caught giving his very biased very of the proceedings outside the court building during the trial of groups of Pakistani men accused of being rape gangs. Technically, Robinson isn’t a formal member of the party. It’s constitution bars anyone, who has been a member of the racist right from joining it, which rules him out. But he has become a special advisor on Islam and prison reform to Batten.

Sargon of Akkad, whose real name is Carl Benjamin, is another YouTube personality and ‘Sceptic’. I think he used to be one of the atheist ranters on YouTube at the time when the New Atheism was on the rise with the publication of Dawkins’ book, The God Delusion. Then a number of them, Sargon included, appear to have become tired of arguing for atheism and naturalism, and started talking about politics. This was from an extreme right-wing perspective, attacking feminism, Social Justice Warriors, anti-racism, immigration and socialism. Many of them appear to be Libertarians, or see themselves as ‘Classical Liberals’. This means their liberals only in the early 19th century sense of standing for absolute free trade and the total removal of the welfare state. Sargon’s one of these, although bizarrely he also describes himself as ‘centre left’. Which only makes sense to some of the equally bizarre individuals out there, who rant about how Barack Obama was a Communist.

The presence of these three characters at a recent UKIP conference was discussed in an article by the anti-racist, anti-religious extremism organization Hope Not Hate as proof that under Batten UKIP had very definitely moved to the Far Right. And Nigel Farage was apparently so concerned with this move a few days ago that he very publicly resigned from the party. And this naturally upset many long-time Kippers. One of them was a YouTube vlogger, whose channel is called People’s Populist Press. He posted this video four days ago on his channel bitterly attacking Sargon and the others he describes as ‘YouTube Nazi punks’ for ruining the party.

Kipper Official Tries to Dissuade Sargon from Joining

It seems, however, that some members of UKIP didn’t want Sargon to join. Not because they objected to his opinions, but because they were afraid that he and his followers wouldn’t take the party seriously. The Ralph Retort YouTube channel played a recording of a conversation between Sargon, his mate Vee, and an anonymous UKIP official arguing about whether or not Sargon should be allowed to join the party. I’m not putting this up, because I’m unsure of the Ralph Retort channel’s political orientation. Sargon’s not only upset left-wing YouTube controversialists like Kevin Logan, but also members of the extreme right, including the Nazi fanboys of Richard Spencer. The argument was also played by Oof Curator on his channel, about whom I have the same caveats.

From the conversation, it appears that the Kippers didn’t really want Benjamin in the party, because they wanted committed activists. Benjamin had said that he wanted to join the party simply to show his support and not to take a more active role. They were also concerned that his followers also weren’t taking politics seriously. The Kipper believed that most of Sargon’s followers on YouTube were people in the teens and early twenties. Sargon told him that the average age of his audience is 34. The Kipper accepted this, but stuck to his point that Benjamin’s followers don’t take it seriously. This included an incident when some of Sargon’s followers got drunk in a pub and started shouting ‘Free Kekistan’ at passing cars. Kekistan and Pepe the Frog are memes taken over by the Alt Right. They were originally the creation of a Latin American cartoonist, with absolutely no racist element. But they’ve been appropriated by the Nazi right, to the dismay of the cartoon’s creator, who now wants nothing to do with it. The Kipper contrasted the flippancy of Sargon’s followers with those of Tommy Robinson, who he believed would take UKIP seriously.

UKIP Factions

The argument also gave an insight into the deep divisions and delicate internal politics in UKIP. The Kipper official stated that UKIP’s made up of three different political groupings. There are Christian Social Conservatives. These are political Conservatives with traditional views on social morality, emphasizing the traditional family and condemning promiscuity and particularly homosexuality and gay rights. Then there are the Libertarians, who also free market Tories, but with liberal attitudes towards drug taking and sexuality, although some of these have moved away and become more traditional in the moral attitudes. And then there are the Social Democrats. This means Old Labour, standing for the nationalization of utilities but rejecting immigration, feminism, and gay rights. There are clearly strong divisions between the three groups, and the Kipper did not want this delicate balance disrupted by the mass influx of new members with very strong factional views. This was one of the Kipper’s concerns when Sargon tried to argue that he’d be an asset to the Kippers as when he, Dankula and another YouTuber joined, the party’s organization rose by 10,000. The Kipper responded to that by stating that raises the question of ‘brigading’, presumably meaning attempts to take over the party through the mass influx of supporters.

Sargon and Philosophical First Principles

The argument was also interesting for what it showed about the real depth of Sargon’s own political knowledge: actually quite shallow. Sargon’s despised by his opponents on both the Left and the Right for his intellectual arrogance. He’s been ridiculed for commonly responding to any of his opponent’s points by saying ‘That’s preposterous!’ and asking them if they’ve read John Locke or Immanuel Kant. The Kipper was impressed by Sargon’s support of property rights and popular sovereignty, which he had in common with the rest of the party, but was concerned about how Sargon derived his views of them. He asked him about first principles. Sargon replied that he got them from John Locke and the 18th century Swiss political theorist, Jean-Jacques Rousseau, although the latter was ‘too continental’ for him. The Kipper responded by asking about the specific derivation of his support for natural rights, as argued by Locke. Sargon responded by saying that they’d been put there by the Creator. The Kipper then replied ‘Ah! You’re a theist!’ To which Sargon replied that he wasn’t, because ‘We don’t know who the Creator is.’ This is the line taken by the Intelligent Design crowd, who argue that evolution isn’t the product of Neo-Darwinian random mutation and natural selection, but the result of planned, intelligent intervention by a Creator. Sargon’s response is strange coming from an atheist, as for many Sceptics, Intelligent Design is simply another form of Creationism. ‘Creationism in a cheap tuxedo’, as one critic called it.

Sargon objected to the question about how he derived his support for natural rights on the ground that it didn’t matter. And I think he’s got a point. I’ve no doubt that the majority of people in the mass political parties probably don’t have a very deep understanding of the fundamental basis of the ideologies they hold. I doubt very many ordinary members of the Tory party, for example, have read Burke’s Reflections on the Revolution in France or the works of the 20th century Tory ideologue, Trevor Oakeshott. It’s probably particularly true of the Tories, as Roger Scruton, the Tory philosopher, said in his book on Conservatism in the 1980s that Tory ideology was largely silent, consisting of the unspoken emphasis on traditional views and attitudes. But clearly, the people at the top levels and some of the real activists in the political parties, including UKIP, do have a very profound understanding of the philosophical basis of their party and its views. And Sargon didn’t.

In fact, Sargon’s ignorance has become increasingly clear in recent months. There’s a notorious clip of him shouting down his opponent, Richard Carrier, in a debate on ‘SJWs’ or something like that at an atheist convention in America, Mythcon. Sargon is shown screaming at Carrier ‘No! No! Shut up! Just f***ing shut up!’ That went viral around the Net.

Racism and Views on Child Abuse

He’s also got some other, deeply offensive views. Sargon considers himself a civic, rather than ethno-nationalist. Which means he stands for his country’s independence but does not believe, contra the BNP, that only members of a specific ethnic group can really be its citizens. He appears to hold a very low view of Blacks, however. There’s a clip of him telling his extreme right-wing opponents to ‘Stop behaving like a bunch of N****rs!’ Quite.

There’s another clip of Sargon going around the Net of him apparently supporting paedophile. He was talking another YouTuber, who believed that underage sex was fine, and that the age of consent should be lowered to 12 or 14. When asked about the morality of adults having sex with underage children, Sargon responded ‘It depends on the child’. Which has naturally upset and outraged very many people.

Conclusions: Robinson and Sargon Will Damage and Radicalise UKIP

There are therefore a number of very good reasons why decent, anti-racist members of UKIP wouldn’t want him in their party. Sargon’s own popularity also appears to be declining, so that it’s now a very good question of how many people he will bring with him into UKIP. Furthermore, a number of people are going to leave with the departure of Farage, though he isn’t the non-racist figure he claims to be. The association of Tommy Robinson with Batten is going to drive people away, so that the party will become even more right-wing and much nastier.

The conversation between the Kipper and Sargon also shows that the party is in a very delicate position at the moment, with a very precarious balance of power between the various factions. As the Kipper official himself said, the only thing they have uniting them is Brexit. If that balance is upset, or the unifying factor of Brexit removed, the whole thing could well collapse in a mass of splits and infighting, like the various overtly Fascist groups have imploded over the years. It also shows that while some people on the extreme right have probably a far too high opinion of themselves and their intelligence, others, like the Kipper official, are genuinely bright and very well read and informed. Even in a party like UKIP, those people shouldn’t be underestimated.

Pierre Kohler And Francis Cripps — Do Trade And Investment (Agreements) Foster Development Or Inequality?

Published by Anonymous (not verified) on Sat, 01/12/2018 - 11:42pm in

Pierre Kohler And Francis Cripps — Do Trade And Investment (Agreements) Foster Development Or Inequality?

A recent UNCTAD/GDAE working paper. Abstract:

This paper proposes to revisit the debate on trade and investment agreements (TIAs), development and inequality, looking at the role of Global Value Chains (GVCs) and transnational corporations (TNCs). It first presents stylized facts about trade and investment (agreements), declining global economic growth and rising inequality under the latest round of globalization. It then provides a long-run perspective on the mixed blessings of external opening, summarizing some key contributions of the mainstream literature, which are converging with long-standing research findings of more heterodox economists, and the eroding consensus today. Based on this stock-taking, it takes a fresh critical look at the TIAs-GVCs-TNCs nexus and their impact. Using data on value-added in trade and new firm-level data from the consolidated financial statements of the top 2000 TNCs going back to 1995, it examines whether the fragmentation of production along GVCs led to positive structural change or rather stimulated unsustainable trends in extractive and FIRE sectors. It then turns to the role of TNC-driven GVCs as a vehicle for economic concentration. Finally, it presents evidence linking TIAs and their correlates to rising inequality. Key findings include the fact that the ratio of top 2000 TNCs profits over revenues increased by 58 percent between 1995 and 2015. Moreover, the rise in top 2000 TNCs profits accounts for 69 percent of the 2.5 percentage points decline in the global labour income share between 1995 and 2015, with the correlation coefficient between annual changes in both variables as high as 0.82. The paper concludes by calling for a less ideological policy debate on TIAs, which acknowledges the mixed blessings of external financial and trade opening, especially their negative distributional impact and destabilizing macro-financial feedback effects, which both call for policy intervention. As an alternative to short-sighted protectionism, it further discusses possible options for anticipating undesirable effects arising from TIAs (e.g. rising carbon emissions, economic instability, inequality, etc.) and addressing those in TIAs themselves.

The Capitalist Nature of Nazism

Every now and then a Conservative defender of capitalism tries to argue that Nazism and Fascism were forms of Socialism. Jonah Goldberg tried it a few years ago in his book, Liberal Fascism, a Tory MP stood up in the European parliament a couple of weeks ago and made the same accusation, though he had to take it back and apologise. And Private Eye in recent weeks have also published a couple of letters from readers making the same claims.

Fascism did have Socialistic elements. Mussolini was originally a radical Socialist, who broke with the rest of the Italian Socialist movement in supporting Italy joining the First World War. The Fascist party was originally extremely left-wing in its programme of 1919. Its corporativism was not only based on the ideas of the right-wing Italian Nationalists, but also from part of the syndicalist movement, which moved away from demanding absolute workers’ control to advocating an industrial structure which included both capitalists and workers in a series of corporations set up to govern each industry, or sector of the economy. The Nazis also included socialist elements in their 1922 programme, such as the nationalization of firms and profit-sharing in industry, as well as the break-up of the department stores.

However, the Fascists and Nazis came to power through their alliance with business and the aristocracy. Both the Italian Fascists and Nazis in Germany were hostile to socialism, communism and workers’ trade unions. In Italy, they also allied with the Vatican to destroy the Populists, a party set up to represent Italian Roman Catholics against persecution by the Liberal state, which was distrusted by the Papacy because they considered it too radical. Once in power, the socialist elements of these parties’ programmes was soon jettisoned. Hitler declared that he had no intention of nationalizing businesses, unless they were badly run. He had the SA massacred in the Night of the Long Knives because this part of the Nazi party did take the socialist elements of party programme seriously. The word ‘socialist’ had only been included in the name of the Nazi party – the National Socialist German Workers’ Party – against bitter opposition by some of its founders. Hitler stated that he did so in order to steal potential recruits from the real left-wing parties. Furthermore, the Nationalist intellectuals who first advocated a right-wing ‘socialist’ order in the 1920s stated that they did not refer to the nationalization of industry, but to the socialization of people to serve the state. And just before the Nazi seizure of power, Hitler made a speech to German industry stating that Nazism would protect private industry.

Robert A. Brady, an associate professor of economics at the University of California, made the capitalist nature of the Nazi regime very clear in his The Spirit and Structure of German Fascism (London: Victor Gollancz 1937). The book is a thorough description of German society under the Nazis – its ideology, social structure, the coordination of science, industry and agriculture, the instruments of power and the various party organisations used to recruit and control the masses. Brady states

The regime which the Nazis proceeded to establish is fairly described, by the very nature of the major interest which sponsored it, as a dictatorship of monopoly capitalism. Its “fascism” is that of business enterprise organized on a monopoly basis, and in full command of all the military, police, legal and propaganda power of the state. (p. 33, emphasis in the original). He lays out the essential capitalist nature of the Nazi state as follows on pages 41-2.

1. Productive Property and natural resources are to be privately owned; freedom of contract is guaranteed (excepting to “aliens” and the peasants under the Inheritance laws).
2. Individual initiative, the business entrepreneur, conduct of business for profit (“reward for services performed”), and ownership (individual or stockholder) control are basic.
3. Business men are to be free, if “responsible” (“self-government in business”), to fix by agreement prices, production totals and quotas, marketing areas, and the conditions and terms of purchase and sale.
4. Stock and commodity exchanges, commission houses, brokers, and speculative transactions are inevitable and necessary for the conduct of “organic business.” (Business as usual.)
5. Heavy industries, particularly those catering to the military and foreign trade, are encouraged; large-scale units, unless “uneconomical” are to be kept intact; co-operatives are to be broken up.
6. The social class structure of society is sanctified, strengthened, made semi-hereditary, and hardened into caste lines
(Standestaat, class state); the “Middle Class” are the Myrmidons of the Elite (Fuhrerstaat, leader state) and, as such, the backbone of the state.
7. Employers have practically complete control over workmen in regard to wages, hours, and working conditions. They must “take care” of their workmen-i.e. see that they are fed and do not grumble.
8. Collective bargaining is completely abolished; strikes are illegal; trade unions are forbidden; requests for wage increases are
lese majeste.
9. Control is completely from on top; there is and can be no such thing as control or discussion of policies from below; the “leaders” decide all things as they see fit; each holds appointed office for indefinite periods at the will of his superior.
10. The National Socialist Party and the German State are one and inseparable, as spirit and body. Legislative, executive, and judicial authorities are fused together. The central government controls all local government and all activities in all their details.
11. Civil and military are fused together; as in the military there can be no freedom of speech, of assembly, of writing, of acting, of “thoughts.” “Anyone may grumble or criticize the government who is not afraid to go to a concentration camp.” (Goebbels).
12. Germany must be made self-sufficient at all costs.
(Autarkie).
13. Non-Germans cannot be citizens; as a corollary, all Germans residing outside Germany either belong or owe allegiance to the Third Reich.
14 Communism (Bolshevism, Marxism) is the major enemy. There can be no such thing as equality of rights, opportunities, or income for classes, races, or sexes. The “broad masses” are fools and must be duped and led to meet the purposes of the elite
(Herrenstaat). Class war is the major crime; material rewards for the rank and file sheer folly.
15. All sciences and “culture” must be co-ordinated and made to serve the purposes of the “leader,” “total,” “corporate” “master”
(Herren)state. propaganda is the method. Propaganda knows neither right nor wrong, neither truth nor falsehood, but only what it wants.

In fact, business autonomy was severely limited by the imposition of the apparatus of state planning as Nazi Germany became a centrally planned economy similar to the Soviet Union, though in the case of Germany and Fascist Italy the economy was still very definitely capitalist private industry. Brady also goes on to discuss in his book how the Nazis celebrated and lauded the businessman as biologically superior through their social Darwinist ideology, and made sure that the leaders of industry, whether state-owned or private, were all drawn from the private sector.

Nazi rhetoric was anti-capitalist, but by this they meant free trade, which they identified with the Jews, just as they claimed the Jews were behind Socialism, Communism, the trade unions and other left-wing movements. They also borrowed some elements from Communism. Fellow Germans were ‘national comrades’, rather like the Marxist use of the term ‘comrade’ to describe a fellow Communist.

However, it is clear from this that Nazism was deeply Conservative and capitalist in its economic and social policies, and bitterly anti-socialist. It had socialist elements, but they were not taken seriously and only ever used as propaganda against the genuinely socialist parties and organisations. Any description of the Nazis as really socialist is utterly false and a lie, a rhetorical attempt to discredit contemporary socialism through guilt by association, and must be seen as such.

Is there life after NAFTA?

Published by Anonymous (not verified) on Mon, 08/10/2018 - 4:17am in

 

Like all sensible folk I was myself opposed to the NAFTA at the outset, convinced that it did more for the corporations than for the rest of us. I’m still of that view.

Is it possible that the biggest change that is now taking place is in the name itself, from NAFTA to USMCA- perhaps done so that Trump can boast that he delivered on his promise to get rid of NAFTA? A number of commentators on both sides of the CanAm border have written, in the words of John Ibbitson in the Globe and Mail, that the USMCA is “essentially the old NAFTA tilted more in America’s favour.” Is that all there is?

Firstly it’s quite a tilt – like the US keeping a special tariff on aluminum and steel from Canada, on the grounds, believe it or not, of national security. Talk about absurdly fake facts.

Let’s go back to the beginning in the late 1980s. US and Canada had just signed the Free Trade Agreement when, with the ink hardly dry, the US insisted on adding Mexico. We thought we’d made a one-on-one deal, a special arrangement that got us inside what our government thought, wrongly as it turned out, was a rising tide of American protectionism, which has now happened a quarter of a century later, and we waited almost a year to join this new round of negotiations. This initial lack of enthusiasm has not stopped us, from that time forward, peddling the praises of NAFTA  and fighting hard to keep it.

If we didn’t know it before we now do: that trade agreements go way beyond trade in their breadth of corporate rights making it hard to judge which side of ordinary people gets the net advantage. And we’re also learning, at least in the case of Brexit,  that abrogation, untangling it all, is hard to say the least.

Should Canada at some point – and not simply as a negotiating position – have left the table never to return?  To come down to earth, recall that Trump said that without an agreement he would impose a 25% tariff on cars made in Canada entering the US. The consequences would have been simply devastating, beyond contemplation, for southern Ontario, for Canada’s industrial  base. Significantly, Jerry Dias, President of Unifor, thinks the deal is good enough. It will push up car prices, but that will lessen carbon emissions.

Ibbitson goes on to write that the message from all this is “the mother of all wake-up calls for Canada to diversify.”  We’ve got too many eggs in the American basket and have to diversity our trade beyond the American market. That may strike y0u as a no-brainer. But what is being said is that, one trade agreement having failed us, we should sign on to more. Which is what we are already doing.

Methinks that is the wrong lesson. The whole vast apparatus that passes under the name of globalization has gone too far. We need less reliance on trade, not more.  We need to strengthen our domestic economy so it plays a bigger role in generating jobs and incomes.

Lest that sounds like whistling in the dark, it isn’t. Most economists admit that globalization has increased inequality within economies. In this regard, less globalization is of itself a good thing. What is likewise in order is active policies, like real rather than fake American-style tax reform, to increase equality within Canada and thereby the demand for goods and services.

One more point. Too much trade means too many goods being transported too far which means too much carbon emitted which means too much climate change which threatens to get us all. I’m too old to do the arithmetic, but diversifying Canadian trade reliance away from the US next door could be a mistake.

 

 

Is there life after NAFTA?

Published by Anonymous (not verified) on Mon, 08/10/2018 - 4:17am in

 

Like all sensible folk I was myself opposed to the NAFTA at the outset, convinced that it did more for the corporations than for the rest of us. I’m still of that view.

Is it possible that the biggest change that is now taking place is in the name itself, from NAFTA to USMCA- perhaps done so that Trump can boast that he delivered on his promise to get rid of NAFTA? A number of commentators on both sides of the CanAm border have written, in the words of John Ibbitson in the Globe and Mail, that the USMCA is “essentially the old NAFTA tilted more in America’s favour.” Is that all there is?

Firstly it’s quite a tilt – like the US keeping a special tariff on aluminum and steel from Canada, on the grounds, believe it or not, of national security. Talk about absurdly fake facts.

Let’s go back to the beginning in the late 1980s. US and Canada had just signed the Free Trade Agreement when, with the ink hardly dry, the US insisted on adding Mexico. We thought we’d made a one-on-one deal, a special arrangement that got us inside what our government thought, wrongly as it turned out, was a rising tide of American protectionism, which has now happened a quarter of a century later, and we waited almost a year to join this new round of negotiations. This initial lack of enthusiasm has not stopped us, from that time forward, peddling the praises of NAFTA  and fighting hard to keep it.

If we didn’t know it before we now do: that trade agreements go way beyond trade in their breadth of corporate rights making it hard to judge which side of ordinary people gets the net advantage. And we’re also learning, at least in the case of Brexit,  that abrogation, untangling it all, is hard to say the least.

Should Canada at some point – and not simply as a negotiating position – have left the table never to return?  To come down to earth, recall that Trump said that without an agreement he would impose a 25% tariff on cars made in Canada entering the US. The consequences would have been simply devastating, beyond contemplation, for southern Ontario, for Canada’s industrial  base. Significantly, Jerry Dias, President of Unifor, thinks the deal is good enough. It will push up car prices, but that will lessen carbon emissions.

Ibbitson goes on to write that the message from all this is “the mother of all wake-up calls for Canada to diversify.”  We’ve got too many eggs in the American basket and have to diversity our trade beyond the American market. That may strike y0u as a no-brainer. But what is being said is that, one trade agreement having failed us, we should sign on to more. Which is what we are already doing.

Methinks that is the wrong lesson. The whole vast apparatus that passes under the name of globalization has gone too far. We need less reliance on trade, not more.  We need to strengthen our domestic economy so it plays a bigger role in generating jobs and incomes.

Lest that sounds like whistling in the dark, it isn’t. Most economists admit that globalization has increased inequality within economies. In this regard, less globalization is of itself a good thing. What is likewise in order is active policies, like real rather than fake American-style tax reform, to increase equality within Canada and thereby the demand for goods and services.

One more point. Too much trade means too many goods being transported too far which means too much carbon emitted which means too much climate change which threatens to get us all. I’m too old to do the arithmetic, but diversifying Canadian trade reliance away from the US next door could be a mistake.

 

 

Trumponomics and the next recession

Published by Anonymous (not verified) on Sat, 06/10/2018 - 2:06am in

Progressives for balanced budgets and free trade
It was the best of times; it was the worst of times. Or that is what you would think if you follow the economics press lately. Sebastian Mallaby has a column on Trumponomics a while ago, suggesting Trumponomics is not working. I wouldn't disagree with the verdict, but the explanation is far from correct, and that is a common feature of discussions of Trumponomics in the media, and frankly by many progressive (not just liberal, in the US sense of the word) economists. On the other hand, you can expect a lot of praise in conservative circles (and bragging from the Trumpsters) about the unemployment level reaching 3.7%, the lowest since the Kennedy/Johnson boom of the 1960s. Many would say we are at full employment, and in a sense they might not be wrong (I think it's debatable; more on that below).

The question is then how things can be both good and bad. First, let me explain the more obvious, the labor market story. The recovery from the 2008 crisis has been long and slow, as it is well-known. And it is unclear what impact Trump's tax cuts will have, but it is highly unlikely that they would lead to any significant acceleration of growth, if past evidence is a good guide. So the current low unemployment level is the result of a process that started with the Obama fiscal package and has proceeded at a slow pace pushed essentially by consumption (after the initial fiscal stimulus). And that's why it has not been a more robust recovery (it remains very slow, even in the two Trump years).
This is reflected in an employment to population ratio that is still below the previous peak, even if now recovering. In other words, the participation rate in the labor market remains relatively low. And, hence, wages have not yet started to pick up significantly, and inflation remains subdued, which casts at least doubts about the meaning of full employment.

This suggests that we would need more fiscal stimulus, and not austerity. That's one concern I have with some critics of Trumponomics. That they presume that fiscal deficits and Trump's tax cuts are both bad. I would suggest that the latter is certainly bad, for distributive reasons. But deficits in the current situation in which the recovery has not raised all boats is far from a problem. I think it was Barbara Bergmann (citing Alvin Hansen) that said that the full employment deficit was the fiscal deficit necessary to bring the economy to full employment. We are probably not there yet. Btw, this is what used to be called functional finance and Trump's critics should learn about it.

Some critics, like Mallaby, are concerned with the trade wars. Here too I'm a bit worried about the positions taken by critics. Progressives have complained about Free Trade Agreements (FTAs) for a long while now. And also criticized the concept of Free Trade (see here for a list of entries in this blog). Mallaby, for example, suggests that the trade war with China, and the new version of NAFTA (USMCA now), which is worse for him than the original (the name for sure, Moreno-Brid suggested at a conference in Mexico this week MEXCUSA, a good pun in Spanish), would reduce productivity and growth.

I still don't have a full picture of the USMCA deal, but it seems that beyond the clauses about North American content and percent being produced with higher wages in the auto industry (both clauses that seem to favor the US and not Mexico), the liberalization of Canadian dairy industry, and tighter restrictions on generic medications (all of which seem to favor US corporations against Canadian citizens), the most important is the one that allows any member country to essentially veto free trade agreements with non-member countries. That is, most likely, a clause for the US to veto FTAs with China.

In that sense, USMCA is just an extension of the trade war with China. I don't want to write much on this, but it seems to me that the US finally decided to revert the opening policy towards China, that harks back to Nixon, and to take the Chinese challenge (and at this point it's just that; I don't see a Sinocentric world any time soon) seriously. In all fairness, it seems to make a lot of sense, from an American security position to make it difficult for Chinese firms to go about the process of catching up, which includes acquiring companies, reverse engineering, violations of copyrights and patents, industrial espionage and more. And yes, there will be disruption of the commodity chains. For example, maybe Apple will move some of its i-Phone production out of China into other developing countries in the region (don't think many manufacturing jobs will return to the US though). But productivity won't suffer much.

If you're concerned with productivity, fiscal policy and its impact on growth should be a greater concern to you. Expansion of demand is what pushes labor productivity (productivity is not the cause of growth, but the result; search the entries on Kaldor-Verdoorn Law in the blog). The slow recovery is the problem.

Finally, I'm still unsure about when the recession will come, but neither the fiscal or trade fronts, which are the ones attacked mostly by Trump's critics seems to be the crucial problem. Monetary policy might be though. If the Fed continues to raise rates, something they suggested they would do, then there is a serious possibility of a crisis ahead. Higher rates would affect the already overextended American consumer, and lead to a recession. Nothing like the last one, I think. And the Fed would be forced to reverse course pretty soon. But the Fed remains independent, also something that old critics of the concept have embraced in the Trump era.

Eisenhower’s Speech Warning about the Military Industry Complex

Published by Anonymous (not verified) on Fri, 21/09/2018 - 2:58am in

This short video from RT, posted on YouTube, was under the title ‘Speeches that Still Matter’. It’s American president Dwight D. Eisenhower’s speech of January 17th, 1961, warning America about the threat posed by an unrestrained military-industrial complex.

After a few words about the structure of society at the beginning of the snippet, Eisenhower declares

We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defence with our peaceful methods and goals so that security and liberty may prosper together.

It has become one of the classic speeches in modern American history, and is referred to whenever activists and politicians criticize the military-industrial complex. Because since Eisenhower’s time, it has grown and seized power. The American military machine and armaments industry sponsors American politicians, and generals, senior civil servants and politicians frequently take up positions on the boards of armaments firms after their military or political career has ended. And the American government gives billions, if not trillions to its weapons manufacturers and armed forces.

I’ve read left-wing analyses of this situation which suggest that this is a deliberate policy of the American government to stimulate the economy. It’s a form of Keynsianism, but as the right-wing ideology of free trade and laissez-faire prevents the government from openly stimulating the economy through public works projects and a proper welfare support network that allows the poor enough to purchase the goods and services they need, which will also stimulate production and industrial growth, the only way the government can actually do so is by giving more and more money to the arms industry.

And all those planes, tanks, ships, missiles, guns and bombs have to be used.

The result is endless war in which small countries in the Developing World are invaded and their leaders toppled, their industries and economies plundered and seized by American multinationals, and Fascist dictators or sham democracies are installed instead. All in the name of giving more profits to the military machine. If you want an example, think of the close connections between the Bush family and the massive industrial conglomerate Haliburton.

When Martin Luther King said in one of his speeches that America was the chief exporter of violence in the world today, he had a point. And our government under the Tories and Blair has been no better. Blair lied to us to get the support of the British public for the Iraq invasion. Maggie Thatcher promoted British arms exports, as did Blair, as did Cameron, drooling all over the ‘wonderful kit’ produced in that BAE factory in Lancashire.

And all the while ordinary people have seen services cut and the infrastructure of countries – roads, railways and so on – left to decay by the profiteering firms that should be maintaining and building them. There are cuts to public services and even more attacks on welfare payments, all in the name of ‘austerity’, ‘making work pay’ and the other lies and buzzwords used by the right to justify their impoverishment and victimization of the poor. And this is done to give massive tax cuts to the already bloated rich.

It’s high time this was stopped, the military-industrial complex reigned in, the wars for their profits ended, and the government invested instead in proper economic growth, domestic industries, infrastructure, public services, a proper welfare state and medical care, and giving working people a proper, living wage.

Misinterpretation Of Joan Robinson’s Quote On Dropping Rocks

Published by Anonymous (not verified) on Thu, 12/07/2018 - 1:11am in

In her famous 1937 articleBeggar-My-Neighbour Remedies For Unemployment, Joan Robinson made this famous remark about dropping rocks into our harbours, i.e., imposing tariffs as retaliation:

The popular view that free trade is all very well so long as all nations are free-traders, but that when other nations erect tariffs we must erect tariffs too, is countered by the argument that it would be just as sensible to drop rocks into our harbours because other nations have rocky coasts.6 This argument, once more, is unexceptionable on its own ground. The tariffs of foreign nations (except in so far as they can be modified by bargaining) are simply a fact of nature from the point of view of the home authorities, and the maximum of specialization that is possible in face of them still yields the maximum of efficiency. But when the game of beggar-my-neighbour has been played for one or two rounds, and foreign nations have stimulated their exports and cut down their imports by every device in their power, the burden of unemployment upon any country which refuses to join in the game will become intolerable and the demand for some form of retaliation irresistible. The popular view that tariffs must be answered by tariffs has therefore much practical force, though the question still remains open from which suit in any given circumstances it is wisest to play a card.

6 Beveridge, op. cit., p. 110. [Tariffs: the Case Examined]

[bolding and italics mine]

Joan Robinson

Joan Robinson, left. Picture credit: Nationaal Archief

This quote however gets misinterpreted often as a recent Financial Times article did:

… All these complications are real, but they do not change the fundamental nature of the argument about trade, which was best summarised by the British economist Joan Robinson. In 1937 she pointed out that, except as a narrow negotiating ploy, it made little sense to meet tariffs with tariffs: “It would be just as sensible to drop rocks into our harbours because other nations have rocky coasts.”

This quote makes it look like Joan Robinson was a free trader, whereas Robinson was opposed to it from the very beginning to the end and her stand free trade was far ahead and louder than John Maynard Keynes.

But what Robinson is saying is that according to the arguments of those for free trade, retaliation is wrong. But as Joan says, it has a practical force. Robinson is saying that if you retaliate you don’t believe in free trade.

At the Rick Smith Show on the Economy and the Exit from the WTO

Published by Anonymous (not verified) on Sat, 30/06/2018 - 11:23pm in

Tags 

Free Trade, WTO

I suggested my posts on Free Trade during the show. Here a series of posts that might be helpful.

Globalisation 2.0 & the Rise of the East

Published by Anonymous (not verified) on Sat, 26/05/2018 - 3:30pm in

The West has dominated globalisation to date, but that balance of power is shifting and it's happening much faster than Western leaders are willing to accept, as new countries demand a seat at the table. The global pecking order is rebalancing to get a broader view on the risks and opportunities in this new global economy. We traveled to Southeast Asia to meet former World Bank economist, Dr Kirida Bhaopichitr. We began by talking about the unstoppable rise of the East, the problem with protectionism in the West, and the inevitability of a multipolar world.

The post Globalisation 2.0 & the Rise of the East appeared first on Renegade Inc.