El populismo socialista contra el desarrollo económico de los países

Dr. Antonio Morales Pita

David Zakaria, en el conocido programa de CNN “Global Public Square” el 12 de enero del corriente planteó cinco medidas emprendidas por el gobierno de Argentina que  probablemente den al traste con la ya tambaleante economía de ese país.  Este planteamiento recoge los principales puntos de un artículo publicado en www.ign.com/blogs/zubenel/2014/01/04 que se refiere al caso de Venezuela.

 

Los cinco pasos para arruinar cualquier país son los siguientes:

1. Atacar a los grandes negocios alegando altos precios, que son reducidos de inmediato para ganar simpatías en la población.
2. Promover hiperinflación aumentando el dinero en circulación por encima de los incrementos de la oferta.  Por ejemplo, un injustificado incremento salarial conllevará altos costos de producción, consecuentemente altos precios de los productos.
3. Inducir una crisis monetaria. Puesto que la inflación reduce el valor de la moneda, una solución a primera vista lógica sería apreciar el valor de la moneda o reducir el volumen del dinero en circulación.  El aumento en el valor de la moneda autóctona con respecto al valor de otras monedas afectaría el volumen de exportaciones afectando el balance comercial, lo cual es negativo para la economía en líneas generales.
4.  Subsidiar, especialmente con fines políticos, cuando el estado de la economía deja de estar en buenas condiciones para evitar erupciones sociales. El aumento de los subsidios incrementa el volumen del dinero en circulación sin el correspondiente aumento de la producción, lo cual alimenta la inflación.
5. Convertirse en una dictadura atacando la prensa, limitando las libertades civiles, concentrando los tres poderes en el ejecutivo, nacionalizando el banco central.

Continuar leyendo en cubanalisis >>

Matt Mitchell Discusses the Importance of Economic Freedom

MercatusCenter

10+10 Invaluable Quotes From Money Masters And Great Philosophers - Forbes

Forbes

With Wall Street reaching new highs this year, investors may want to pause for a moment and re-assess their investment strategy and personal lifestyle, reaching for the wisdom of money masters and great philosophers.

The wisdom of Money Masters can help investors manage money effectively and avoid costly mistakes that can reverse their fortunes. And the wisdom of Great Philosophers can help investors use their fortunes to live the good life, as a great deal of money doesn’t necessarily bring happiness.

In the text that follows the wisdom of money masters and great philosophers is condensed into 20 quotes that are easy to remember and apply in everyday life.

Ten Quotes from Money Masters:

1. Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell—Sir John Templeton

2. In bear markets, things first decline to reasonable prices, then they fall to cheap prices, and then they reach unbelievable giveaways prices. After that, things get really bad, and everybody gets cleaned out—Jim Rogers

3. Earning power is as valuable as assets, therefore try to buy earning power at a discount—George Michailis

4. The usual way I lose money is by buying concept stocks—Philip Carret

5. One must understand the interaction between intelligence and emotion as they in turn respond to the market —George Michailis

6. Investors operate with limited intelligence: they do not know everything. As long as they understand something better than others, they have an edge—George Soros

7. The investor’s chief problem—and even worst enemy—is likely to be himself—Benjamin Graham

8. Seek facts diligently; advice never—Philip Carret

9. On the long side, I’m looking for lower-multiple dull stocks, laggards, with a recovery potential. On the short side, I want to be in the best-known companies of America, the areas of speculative focus. I’m usually short the Who’s Who of the market, stocks in the institutional universe—Michael Steinhardt

10. My approach works not by making valid predictions, but by allowing me to correct false ones. —George Soros

Source: John Train, The New Money Masters (New York: Harper Perennial, 1989).

Ten quotes from Great Philosophers:

1. The unexamined life is not worth living—Plato

2. Remove utterly your desire; for if you desire some one of the things that are not under your control you are bound to be unfortunate. . . .Never say about anything, “I have lost it,” but only “I have given it back. . . .It is not things themselves that disturb men, but their judgments about these things—Epictetus

3. Friendship is a relationship in which two people come to share the same soul—Aristotle

4. By pleasure we mean the absence of pain in the body and of turmoil in the mind—Epicurus

5. No person is free who is not master of himself—Epictetus

6. Nothing in excess—Solon

7. Reproach yourself for the things you do wrong—Pythagoras

8. A prosperous fool is a grievous burden—Aeschylus

9. The man who does evil to others does evil to himself—Hesiod

10.  No act of kindness is ever wasted—Aesop

Source: M.A. Soupios And Panos Mourdoukoutas, The Ten Golden Rules, Hampton Roads, 2009

Larry Kaufmann: What culture teaches economics

American Enterprise Institute

Economic Growth Is the Best Way to Help the Poor, not Redistribution in Pursuit of Coerced Income Equality

International Liberty

By Dan Mitchell

Switzerland’s left-wing party has instigated a referendum for November 24 that asks voters to limit pay ranges so that a company wouldn’t be able to pay top employees more than 12 times what they’re paying their lowest-level employees.

I talked with Neil Cavuto about this proposal and made several (hopefully) cogent points.

Since Swiss voters already have demonstrated considerable wisdom (rejecting a class-warfare tax proposal in 2010 and imposing a cap on government spending in 2001), I predicted they will reject the plan. And I pointed out that Switzerland’s comparatively successful system is a result of not letting government have too much power over the economy.

But I don’t want to focus today on the Swiss referendum. Instead, I want to expand on my final point, which deals with the misguided belief by some on the left that the economy is a fixed pie and that you have to penalize the rich in order to help the poor.

I’ve covered this issue before, and I even tried to educate a PBS audience that economic growth is key.

But maybe this chart is the most persuasive bit of evidence. It shows per-capita GDP in France and Hong Kong over the past 50 or so years. France is a nation that prides itself of redistribution to “help” the poor while Hong Kong is famous for having the most economic freedom of any jurisdiction.

Now look at this data and ask yourself whether you’d rather be a poor person in France or Hong Kong?

Since Hong Kong is richer and is growing faster, the obvious answer is that poor people in France almost surely face a bleaker outlook.

In other words, the welfare state can give you the basic necessities and allow you to survive (at least until the house of cards collapses), but it comes at a very high cost of lower growth and diminished opportunity.

The moral of the story is that prosperity is best achieved by a policy of free markets and small government.

P.S. If you want more evidence on the superiority of markets over statism, check out the comparison of South Korea and North Korea and the difference between Chile, Argentina, and Venezuela. Heck, even the data comparing America and Europe show similar results.

P.P.S. As you might expect, Margaret Thatcher addressed this issue in a brilliant fashion.

P.P.P.S. There’s a lot to like about Sweden, but click here if you want to see an impossibly absurd example from that nation of the equality-über-alles mentality.

P.P.P.P.S. There is some very interesting academic research that suggests humans are hard-wired by evolution to be statists. Let’s hope that’s not true.

Nobel Laureate Edmund Phelps: Two Kinds of Prosperity

Carnegie Council for Ethics in International Affairs

Labour's declining share: A spectre to worry about?

The Economist

The Proper Role of Debt in Public Policy

politicalcalculations

What is the proper role of debt in public policy?

Most people would agree that when a government borrows money, it should be used to fund projects today that will provide positive benefits to the community for years to come. That mainly means things like investing in physical infrastructure to support not just projects that have high costs to create, such as roads, bridges, water treatment facilities, airports or schools, but also that will also last for decades while providing a positive return on investment through increased economic activity.

Under no circumstances however should governments borrow large amounts of money for the sake of sustaining their day-to-day operations that they cannot pay off with their direct tax collections within the course of a single year. These are not just expenses like the wages, salaries, and benefits of government employees and the office supplies they consume, but also for things that have relatively short life spans, which means that they will need to be replaced within in much less than ten years time. Things like library books, computer software, mobile phones, police cars, trash bins, et cetera.

The reason why it is such a bad thing to begin using large amounts of debt to finance short-term operational expenses is because of the mismatch it creates between the life span of the expense and the term of the debt. It makes absolutely no sense to pay principal and interest payments for a government-issued bond for thirty years for the sake of buying something like police cars today that will most likely be decommissioned in less than five years time. By the time the debt that supported these kinds of expenses will be paid off, the benefits provided to the public will have been long forgotten.

When that kind of mismatch develops between the term of government-issued debt and the lifespan of the things it funds or sustains, it is a clear indication that the government has crossed the event horizon for its debt, which can now spiral out of control and become a debt death trap. In this situation, a government must issue ever-increasing amounts of debt to sustain the excessive spending ambitions of its politicians, who often will be long gone or perhaps even in prison by the time the bills they racked up through their fiscal malfeasance might fully be paid.

Unfortunately, that is the story of many local governments and municipalities around the United States, which are increasingly turning to bankruptcy proceedings to escape the fiscal recklessness of their civic leaders. And while it has not yet reached that point, it is today's developing story for the City of Chicago. The Chicago Tribune's Jason Grotto, Heather Gillers, Patricia Callahan and Alex Richards report:

When municipal officials want to build for the future, they have a powerful financial tool at their disposal: general obligation bonds that yield millions of borrowed dollars. The money is meant to let cities move forward on costly projects that will serve the community for decades.
But in an unprecedented analysis of Chicago’s finances, a Tribune investigation found that city officials have long abused their borrowing privileges, spending funds meant for long-term initiatives on problematic short-term expenses from library books to legal settlements.
Residents know little about it, as Illinois law doesn’t require Chicago to ask voters’ permission before issuing bonds. And when the city can’t pay what it owes, it uses yet more borrowed money as leverage to push off payments on old bonds.
This pattern of fiscal recklessness, which started under former Mayor Richard M. Daley, created a mountain of debt that threatens the financial future of the city. Now Rahm Emanuel is groping for ways to deal with the problem along with a looming pension crisis and chronic budget deficits.

Once a debt death trap begins, an ever-increasing portion of a government's spending must go to support its debt obligations. The interest rates that the increasingly fiscally-distressed government must pay to its lenders for new debt to sustain its spending also increase at the same time, because the lenders recognize that the government is less capable of making its debt payments from its available tax collections, so they must protect themselves from an increased risk of default by charging a higher price for the money they lend.

That vicious cycle then repeats and becomes amplified over time, which makes it more and more difficult to escape from that situation as the government's debt situation spirals out of control and it becomes stuck in a debt trap of the politicians' own making.

Faced with that situation, many politicians increasingly turn to tax hikes to try to balance their government's books, but these measures invariably fail because of how adversely they affect the local economy that supplies the tax revenue that supports the government's operations. The negative impact of these tax hikes create a massive fiscal drag that far outstrips the impact of what simply cutting their government's unsustainable amount of spending to more fiscally-responsible levels would have been, if only they had been willing to reduce their spending.

So why don't the politicians do the fiscally-responsible thing and reduce the amount of their spending to a more sustainable level long before it even puts the government at risk of a debt crisis?

In many cases, the unsustainable level of spending that puts their government at risk is really what the politicians promised to deliver to their political backers in exchange for the endorsements and campaign contributions that help put them in power, which is why they resist taking that responsible action so strongly. It is far more important to them to meet their backers' needs than those of regular citizens, and particularly so when their political backers gain so much from the government's spending.

In the end, the only way out is to make the political sacrifice and cut government spending to sustainable levels, while at the same time defaulting on their debt obligations and seeking relief through bankruptcy. The people who get hurt the most as that process plays out are the regular citizens whose real interests were being ignored by the politicians all along.

And how that process will play out is the real story that is developing in Chicago today.

Iceland, Switzerland, and the Golden Rule of Fiscal Policy

International Liberty

By Dan Mitchell

Being a glass-half-full kind of guy, I look for kernels of good news when examining economic policy around the world. I once even managed to find something to praise about French tax policy. And I can assure you that’s not a very easy task.

I particularly try to find something positive to highlight when I’m a visitor. While in the Faroe Islands two days ago, for instance, I wrote about that jurisdiction’s new system of personal retirement accounts.

And now that I’m in Iceland, I want to focus on spending restraint.

As you can see from this chart, lawmakers in this island nation have done a reasonably good job of satisfying Mitchell Golden Rule over the past couple of years. Economic output has been growing by 6.1 percent annually, while government spending has risen by an average of 2.8 percent per year.

If Iceland continues to enjoy this level of growth and can maintain this modest degree of fiscal discipline, the burden of government spending will soon drop below 40 percent of GDP.

As I’ve noted before, fiscal progress can occur very rapidly if spending is curtailed. Consider what’s happened, for example, over the past two years in America. Total federal spending didn’t grow in 2011 or 2012, and that de facto two-year spending freeze has led to a big reduction in the size of the public sector relative to GDP.

And because policymakers addressed the underlying disease of excessive spending, it’s no surprise that the symptom of red ink became much less of a problem with the deficit falling by almost 50 percent in those two years.

And nations such as New Zealand and Canada also have enjoyed quick benefits when limiting the growth of government.

Now let’s take a glass-half-empty look at Icelandic fiscal policy.

First, Iceland isn’t really moving in the right direction. Policy makers are merely undoing the damage that occurred in the latter part of last decade. As recently as 2006, the burden of government spending was less than 42 percent of GDP. So the current period of fiscal discipline is like going on a diet after spending several years at an all-you-can-eat dessert shop.

Second, three years of spending restraint could be a statistical blip rather than a long-run trend, especially since the 2014 numbers from the IMF are an estimate and the 2012 and 2013 numbers aren’t even finalized.

What Iceland needs is some sort of Swiss-style spending cap to impose long-run limits on the growth of government spending. As you can see from this second chart, Switzerland’s “debt brake” has produced more than ten years of spending restraint. Government generally has been growing slower than the private sector, which means that burden of government spending has been falling in Switzerland while other European nations are moving in the wrong direction.

By the way, it’s not just Iceland that would benefit from this type of spending cap. I explained last year that America would never have experienced trillion-dollar deficits if we had something similar to the Swiss debt brake.

Though it’s important not to overstate the benefits of this policy. A Swiss-type spending cap presumably wouldn’t have stopped the Fed’s easy-money policy. Nor would it have prevented Fannie-Mae and Freddie Mac from subsidizing a housing bubble. So we presumably still would have suffered a financial crisis.

But that’s not an argument against a spending cap. We lock our doors and latch our windows even though we realize that determined crooks can still break in. But at least we want to make our homes a less inviting target. Likewise, a spending cap doesn’t preclude all bad policies. But at least it makes it harder for politicians to increase spending.

The ultimate challenge, of course, is figuring out how to convince politicians to tie their own hands. The academic research suggests that spending caps need to be well designed if we want to limit the greed of the political class.

Iceland has made some progress, but Switzerland at this point is a better role model because the debt brake has been very durable.

P.S. If we’re going to copy Switzerland, we also should take a close look at their tax laws. Switzerland has the best ranking in the Tax Oppression Index, while the United States languishes in the bottom half of nations measured.

Freakonomics » How Does the Economy Actually Work?

Freakonomics » 

Tendencias emergentes. Economía Long Tail

Jose Monzo Marco
La popularización del término estadístico “long tail distribution” [distribuciones de “larga cola”] se debe principalmente a Chris Anderson, editor jefe de la revista Wired, que escribió un artículo sobre este interesante fenómeno asociado a Internet allá por el mes de octubre de 2004 y del que en 2006 se publicó el libro en inglés [el libro está publicado en castellano con el título “La Economía Long Tail” por la editorial Tendencias] convirtiéndose rápidamente en un éxito de ventas mundial.

El fenómeno de la “larga cola” se puede interpretar como una tendencia emergente por la que gracias a la tecnología de Internet el mercado de masas [donde la distribución de Pareto del 80/20 –el 80% de las ventas lo produce el 20% de las referencias- se cumple casi siempre: sólo unos pocos productos producen la mayor parte de los resultados] se está convirtiendo en un mercado de nichos: por primera vez en la sociedad de consumo, la venta de pequeñas cantidades es rentable.

La explicación del autor es bastante convincente: en un mercado marcado por la escasez de medios para exponer los productos [la metáfora del espacio de exposición de una tienda física es perfecta] es lógico que unos pocos productos alcancen el éxito [la limitación física de los escaparates en las tiendas o en los grandes almacenes actúa de filtro, al igual que el espacio publicitario destinado en los medios de comunicación] pero cuando el espacio de exposición es virtualmente infinito [tiendas virtuales en Internet] entonces la “larga cola” de productos que se extiende detrás de los éxitos es virtualmente infinita, como podemos observar en el gráfico.

Este fenómeno del Long Tail no implica necesariamente que con las tiendas virtuales desaparezca totalmente la típica distribución de Pareto, pero sí ejemplifica que la curva puede llegar a tener una distribución algo más parecida a una proporción 50/20 –el 50% de las ventas los produce el 20% de las referencias, lo que significa que el restante 80% de referencias produce el otro 50% de resultados-, o algo más plana en ambos lados, del orden de una proporción 20/20 –el 20% de las ventas lo produce el 20% de las referencias- lo que en la práctica algunos interpretan como el fin de la distribución continua de Pareto [1] [o de su equivalente discreto en la distribución de Zipf [2] o regla del rango-tamaño], lo que no es totalmente cierto porque en el mundo real o en el virtual siempre se venderán mucho más unas cosas que otras, pero, eso sí, “La Economía Long Tail” viene a recordarnos que ese 80% de referencias que aparentemente podríamos desechar en un entorno económico pre-Internet, en la economía virtual van a tener una importancia estratégica por la emergencia de mercados de nicho que van a nutrir y alargar la cola de productos, es decir con la tienda virtual seguirán habiendo productos “best-sellers”, sin duda, pero es muy posible que su cifra de ventas sea prácticamente igual al resto de productos que dejan tras de sí. Esa es la “La Economía Long Tail” que nos espera.

Continuar leyendo en Pensamiento Sistémico >>

Brookings/CEEC Study: “Políticas para el crecimiento económico: Cuba ante una nueva era”

vale la pena detenerse proximamente en realizar las acotaciones complementarias a este trabajo.

----------------------- 

By Arch Ritter

Juan Triana Cordoví and Ricardo Torres Pérez Centro de Estudios de la Economía Cubana, Universidad de la Habana

Original CEEC/Brookings Study here: Triana & Torres for Brookings  Politicas crecimiento economico

Este trabajo analiza los factores estructurales que afectan el crecimiento económico, incluyendo la dinámica y calidad de la fuerza de trabajo, la acumulación de capital físico, la acumulación y estructura de factores de producción, y el acceso a mercados internacionales y el mercado doméstico. Luego el trabajo promueve opciones de algunas políticas orientadas a atender los desbalances que se han acumulado a través de los años, con el objeto de colocar a Cuba en un camino hacia el crecimiento alto y sostenible. 

Continuar leyendo en The Cuban Economy >>

Cuban American Economics professor Antonio Morales-Pita weighs in on global economic isssues

the best professor I have ever known.
--------------------------
WCIU

DePaul University Economics professor Antonio Morales-Pita weighs in on global economic isssues.

The Swedish model | Fausta's Blog

Fausta's Blog

No, not this one,

not this one, either,

this one: The Swedish model for economic recovery (emphasis added)

After its crisis, Sweden reduced public expenditures by 20 percent of its gross domestic product, slashing social transfers such as unemployment benefits and sick-leave compensation. It cut its public debt in half (its debt, as a proportion of the economy, is now about half that of the United States). It cut marginal tax rates and simplified its tax code so much that nearly two-thirds of Swedes simply confirm by phone that the declaration automatically prepared for them by the tax authorities is correct. The banking system was thoroughly reformed and emerged unscathed from the global financial crises.
Structural reforms were also adopted. Successive governments deregulated one market after another and privatized as market conditions permitted. All children receive vouchers so their parents can choose private or public schools at public expense. Swedish social security became a true insurance system, rather than a pay-as-you-go one with huge unfunded liabilities as in the United States.
Sweden remains a social welfare society, and government spending still accounts for half of its economy; it finances all education and health care, as is common throughout Europe. Sweden did not dismantle the social system but, in addition to drastically reducing its costs, adopted macroeconomic and structural reforms to make it sustainable and greatly enhanced its efficiency by privatizing the delivery of many educational and medical services. The country’s guiding principle is that a successful social welfare society must be fiscally conservative and administratively efficient. This is the central Swedish lesson for the crisis countries of the euro zone and elsewhere.

Economic policies based on competition and openness, carried on a free-market economy and a high degree of government efficiency.

A model for our hemisphere.

And yes, a little Rule 5 for all is always good for catching your attention to the subject of economics, isn’t it?
Fausta’s blog: an equal-opportunity rule fiver!

Radical Abundance: How a Revolution in Nanotechnology Will Change Civilization

KurzweilAI

Author:

K. Eric Drexler

Publisher:

PublicAffairs (5/7/2013)

[+]

K. Eric Drexler is known as the founding father of nanotechnology—the science of engineering on a molecular level. In Radical Abundance, he shows how rapid scientific progress is about to change our world. Thanks to atomically precise manufacturing, we will soon have the power to produce radically more of what people want, and at a lower cost. The result will shake the very foundations of our economy and environment.

Already, scientists have constructed prototypes for circuit boards built of millions of precisely arranged atoms. The advent of this kind of atomic precision promises to change the way we make things—cleanly, inexpensively, and on a global scale. It allows us to imagine a world where solar arrays cost no more than cardboard and aluminum foil, and laptops cost about the same.

A provocative tour of cutting edge science and its implications by the field’s founder and master, Radical Abundance offers a mind-expanding vision of a world hurtling toward an unexpected future.

The topics include:

• The nature of science and engineering, and the prospects for a deep transformation in the material basis of civilization.
• Why all of this is surprisingly understandable.
• A personal narrative of the emergence of the molecular nanotechnology concept and the turbulent history of progress and politics that followed
• The quiet rise of macromolecular nanotechnologies, their power, and the rapidly advancing state of the art
• Incremental paths toward advanced nanotechnologies, the inherent accelerators, and the institutional challenges
• The technologies of radical abundance, what they are, and what they will enable
• Disruptive solutions for problems of economic development, energy, resource depletion, and the environment
• Potential pitfalls in competitive national strategies; shared interests in risk reduction and cooperative transition management
• Steps toward changing the conversation about the future

UnderstandingSociety: What about Marx?

UnderstandingSociety

By Daniel Little
At various points since the death of Karl Marx in 1883 his work has been regarded as a dead issue -- no longer relevant, too ideological, methodologically flawed, too rooted in the nineteenth century. And yet each of these periods of extinction has been followed by a resurgence of interest in Marx's ideas, as new generations try to make sense of the tough and often cruel social conditions in which they find themselves. What are the important dimensions of theory that Marx presented through his writings? And how can any of these be considered valuable in trying to come to grips with the global, capitalist, turbulent, unequal, violent world that we now inhabit?

We might say that there are a small handful of key theoretical frameworks that Marx advocated.

Materialism as a methodology for social science. Social change is driven by material circumstances, the forces and relations of production. This encompasses the property system and the ensemble of technologies present in a given level of society. Materialism denies that ideas and thought drive social change; so religion, patriotism, nationalism, and ideologies of patriarchy are epiphenomena rather than originating causes.

Emphasis on the primacy of property and class. Sociologists and historians want to explain processes of social change. Marx puts it forward that the economic interests created by the property system in a given society create powerful foundations for collective social action.  Those who occupy positions of advantage within a given set of property relations want to do what they can to preserve those relations; and those who are disadvantaged by the property relations have a latent interest in mobilizing to change those relations. Persons who share a location in the property system constitute a class, and their interests are systematically different from those in other such positions.

A sketch of a theory of consciousness and culture. Institutions of consciousness and culture play a role in stabilizing and attacking the most important relations of domination in a society. Educational institutions, it is argued, prepare young people for their specific roles in society -- workers, managers, elites, sub-proletarians. So struggles over the content and form of the institutions of enculturation can be expected to be polarized along class lines. Less directly, Marxists like Gramsci have postulated that worldviews reflect life experiences; so elites create cultural worlds that are quite distinct from those imagined by subordinate groups.

A diagnosis of social ills including exploitation, alienation, and dehumanization of social relations. Exploitation has to do with the flow of wealth and material goods through the property system from producers to property-owners. Alienation has to do with the loss of autonomy and self-control that individuals have within a capitalist structure. Marx's distinctive addition to this idea is that this loss of autonomy has psychic consequences -- disaffection, lack of self-respect, depression. The dehumanization of social relations follows from the structure of the capitalist workplace -- workers and bosses, each related to the other through the workings of a command system. Wittgentstein got it right when he described the "slab" language game: the boss says "slab", and the worker produces a slab. There is nothing "I-thou" about this relation (Buber, I and Thou).

A theory of several distinct modes of production. Marx believes that history takes the form of a succession of separable and structurally distinct modes of production: ancient slavery, feudalism, and capitalism differ by the structure of the production system, the property system, and the technologies that each embodied. Marx's most extensive analysis of social formations is his treatment of the capitalist mode of production in Capital: Volume 1: A Critique of Political Economy and the writings that were posthumously edited and published as volumes 2 and 3 of Capital.

A common thread through these framing ideas is the perspective of critique: a critical intelligence trying to understand why modern society produces such human misery. But even from the perspective of critique -- the perspective that tries to diagnose and understand the systemic flaws of contemporary society -- Marxism leaves quite a bit of terrain untouched: gender relations, racism, nationalism, and religious hatred, for example. Marxism doesn't do a good job of explaining a regime of sexual violence (rape in India); it doesn't have much to contribute to the rise of fascism; it doesn't have resources for understanding Islamo-phobia and hatred.  So Marxism is not a comprehensive theory of modern social failings; and we might say that its emphasis on economic conflict eclipses other forms of domination in ways that are actually harmful to our ability to improve our social relations.

Geoff Boucher takes up the issue of the continuing relevance of Marx in the contemporary world in Understanding Marxism. Here is how he opens the book:

Today, radical thinking about social alternatives stands under prohibition. According to defenders of the neoliberal transformation of every facet of human existence into a market, Marxism has failed…. Marx is dead; Marxism is finished -- and it must stay that way. (1)

But Boucher rejects this neoliberal consensus.

Marxism as an intellectual movement has been one of the most important and fertile contributions to twentieth-century thought. The influence of Marxism has been felt in every discipline, in the social sciences and interpretive humanities, from philosophy, through sociology and history, to literature. (2)

Here are the core reasons that Boucher offers for thinking that Marxism is still relevant in the twenty-first century:

1. Marxism is the most serious normative social-theoretical challenge to liberal forms of freedom that does not at the same time reject the modern world.
2. Marxism is the most sustained effort so far to think the present historically and to reflexively grasp thought itself within its socio-historical context. (2)

And later:

Marxism is a distinctively historical theory that normatively challenges liberalism in a way no other modern theory does. (3)

Much of Boucher's book contributes to one of two intellectual aims: to give a clear exposition of the most important of Marx's theoretical ideas; and to explicate the several "Marxisms" that followed in the twentieth century. The successive Marxisms take up the bulk of the book, with chapters on Classical Marxism, Hegelian Marxism, The Frankfurt School, Structural Marxism, Analytical Marxism, Critical Theory, and Post-Marxism. So the book provides very extensive explication of the theoretical ideas and developments that have grown out of the Marxist tradition.

What Boucher doesn't really provide is a clear rationale, based on contemporary sociology and history, for the conclusions he wants us to share about the continuing utility of Marxism as a framework for understanding the present and future. We don't get the reasoning that would support the affirmative ideas expressed above. The best rebuttal to the neoliberal triumphalism mentioned above is a compelling collection of sociological studies grounded in the perspectives mentioned above. Michael Burawoy's sociology of factories is a good example (e.g. Manufacturing Consent: Changes in the Labor Process Under Monopoly Capitalism). But this isn't an approach that Boucher chooses to pursue.

So what about it? Is Marxism relevant today? Yes, if we can avoid the dogmatism and rigidity that were often associated with the tradition. Power, exploitation, class, structures of production and distribution, property relations, workplace hierarchy -- these features certainly continue to be an important part of our social world. We need to think of Marx's corpus as a multiple source of hypotheses and interpretations about how capitalism works. And we need to recognize fully that no theoretical framework captures the whole of history or society. Marxism is not a comprehensive theory of social organization and change. But it does provide a useful set of hypotheses about how some of the key social mechanisms work in a class-divided society. Seen from that perspective, Marxist thought serves as a sort of proto-paradigm or mental framework in terms of which to pursue more specific social and historical investigations.

Michael Tanner: "We’ve made poverty too ’comfortable"

www.nationalaffairs.com

inplainsight

What if, instead of operating a variety of anti-poverty programs, the government simply mailed every poor person in America a check big enough to lift them out of poverty? That, says the Cato Institute’s Michael Tanner, would make more sense than what we do now – and, he says, we’d still have money left over.

Michael Tanner, CATO
 Institute senior fellow.

Here’s Tanner’s math: By his count, the federal government spends more than $668 billion a year on a total of 126 anti-poverty programs, including those that address housing, hunger, health care, and cash assistance. They range from TANF (Temporary Assistance to Needy Families), which most people associate with traditional welfare, to much smaller programs for Indian tribes, at-risk youth, and others. If you divide Tanner’s total by the roughly 46 million people with incomes below the poverty line, you get nearly $15,000 for every poor man, woman, and child in the U.S.

Tanner acknowledges that poor individuals don’t receive that much money, and that’s his point: government spending isn’t laser-targeted to those most in need. In fact, he says, “throwing money at the problem has neither reduced poverty nor made the poor self-sufficient. It is time to re-evaluate our approach to fighting poverty.”

You’ve taken a fair amount of heat for saying that America should “focus less on making poverty more comfortable.” What do you mean by that? Is poverty ever comfortable?

Poverty is never a good thing. But most of the programs we have to combat poverty are based on taking people who are in poverty and giving them a little more income so their poverty doesn’t feel quite as bad. Instead, we should be focused on how to we get more people out of poverty.

What do you think we are doing wrong?

The problem is that our welfare programs aren’t targeted at the right things: education, pregnancy prevention, and job creation. They’re targeted at giving people who are poor the resources to live in poverty.

We know that if you drop out of high school you’re likely to be poor. If you graduate from college, your chances of escaping poverty are much greater.  

We know that if you’re a woman, don’t get pregnant if you’re not married. That’s not a moral judgment, it’s an economic one. It’s simply more difficult to raise a child if you have one income rather than two.

And get a job, any job, even a low-wage job, and stick with it. Even a low-paying job is better than no job at all. People are more likely to move out of poverty if they have a low-paying job than if they are on welfare.

And we need to create more jobs. The fact is, we still have an anti-job atmosphere. Too many taxes, too many regulations. We don’t do a very good job of creating an environment that’s going to create more jobs.

What do we do about the millions of people who are in poverty right now? They are poor, they don’t have skills, they don’t have a good education, they don’t have or can’t get a job. Do we pull the safety net out from under them?

We should target our aid to those people who need the help the most. We have created a situation in which there are a certain number of people who are not going to be able to become an economically viable family unit anytime soon, and we probably have to support them in the short term. In the long term, however, we want to give people in the future more of an opportunity to avoid poverty and to get out of poverty.

It’s unfair to compare my approach to utopia. Let’s compare it to the real world and in the real world, the approach I’m talking about would mean fewer poor people than there are today. Would there be zero? No. I don’t know if a society in the history of the world has ever had zero. Poverty in many ways is the natural condition of man. Throughout most of mankind’s history, most people were poor. The question is, how do you create more prosperity?

People on my side of this have often appeared to be hard-hearted, by arguing on a dollars-and-cents basis. But you shouldn’t measure compassion by inputs. You measure by outcomes. And by that measure, we’re failing. And the burden is on the poor, who are the ones suffering in poverty.

So you think it would be more compassionate to blow up and restructure the system?

It’s not fun to live in poverty. Poor people don’t want to be poor. Most poor people would like to work. Most poor people would like to be non-poor. But we’re not giving them that opportunity. The goal should be that each person gets to achieve their full potential. Most people trapped in the welfare system are (NOT?) getting to do that.

It was Ronald Reagan who said, we fought a war on poverty and poverty won. Do you agree with that?

Let’s put it this way: We are certainly not beating poverty. We may have had a draw but that’s not where we want to be.

Stephen King on the end of affluence: The battle over scarce resources

EconomistMagazine

Von Mises: Salarios brutos y salarios netos

El Independent/ Publicado por Gabriel Gasave

Por Ludwig von Mises

Mises.org

(Artículo extraído del capítulo 21 de La Acción Humana)

Lo que compra el empresario en el mercado laboral y lo que obtiene a cambio por los salarios pagados es siempre un rendimiento definido que obtiene de acuerdo con su precio de mercado. Los usos y costumbres que prevalecen en los distintos sectores de mercado laboral no influyen en los precios pagados por cantidades definidas de rendimientos concretos. Los salarios brutos siempre tienden hacia el punto en que se igualan al precio por el que el aumento resultante del empleo del trabajador marginal puede “venderse” en el mercado, fijando el pago a partir del precio pagado por los materiales requeridos y el interés originario sobre el capital necesario.

Al sopesar los pros y contras de contratar trabajadores, el empresario no se pregunta lo que obtiene el trabajador como salario que lleva a casa. La única pregunta relevante para él es ¿Cuál es el precio total que tengo que pagar para obtener los servicios de este trabajador? Al hablar de la determinación de los salarios, la cataláctica siempre se refiere al precio total que el empresario debe gastar para una cantidad definida de trabajo de un tipo definido, es decir, a los salarios brutos. Si las leyes o costumbres mercantiles obligan al empresario a hacer otros gastos aparte del salario que paga el empleado, los salarios que se llevan a casa se reducen en proporción. Esos gastos accesorios no afectan a los salarios brutos. Su incidencia recae completamente sobre el asalariado. Su cantidad total reduce el nivel de los salarios que se llevan a cas, es decir, los salarios netos.

Es necesario apreciar las siguientes consecuencias de este estado de cosas:

No importa si los salarios se fijan por tiempo o a destajo. Asimismo, donde se paga por tiempo, el empresario sólo tiene una cosa en cuenta, a saber: el rendimiento medio que espera obtener de cada trabajador empleado. Su cálculo descuenta todas las oportunidades que la jornada laboral ofrece a holgazanes  y tramposos. Se deshace de los trabajadores que no rinden el mínimo esperado. Por otro lado, un trabajador dispuesto a ganar más deba trabajar a destajo o buscar un trabajo en que se pague más porque se espera un mayor rendimiento medio.

Tampoco importa en un mercado laboral no intervenido si los salarios se pagan diaria, semanal, mensual o anualmente. No importa si el tiempo de preaviso es más largo o más corto, si los contratos se hacen por periodos definidos o por toda la vida del trabajador, si el empleo conlleva una jubilación y una pensión para é, su viuda y sus huérfanos, vacaciones pagadas o no, cierta asistencia en caso de enfermedad o invalidez o cualesquiera otros beneficios y privilegios. La pregunta que afronta el empresario es siempre la misma: ¿Me merece la pena realizar un contrato así o no? ¿No pago demasiado por lo que recibo a cambio?

Consecuentemente, la incidencia de las llamadas cargas y beneficios sociales acaba recayendo en los salarios netos del trabajador. Es irrelevante si el empresario puede o no deducir las contribuciones de todo tipo de seguridad social en los salarios que paga en efectivo al empleado. En cualquier caso, estas contribuciones recaen sobre el empleado, no sobre el empresario.

Lo mismos es cierto en relación con los impuestos sobre los salarios. Aquí tampoco importa si el empresario tiene derecho o no a deducirlos de los salarios que se llevan a casa.

Tampoco el acortamiento de la jornada laboral es un regalo gratis al trabajador. Si no compensa la jornada reducida aumentando su producción en proporción, los salarios disminuirán también en proporción. Si la ley que decreta un acortamiento de la jornada laboral prohíbe esa reducción en los salarios, aparecerán todas las consecuencias de un aumento en los salarios decretado por el gobierno. Lo mismo pasa en relación con todos los demás llamados beneficios sociales, como vacaciones pagadas y similares.

Si el gobierno otorga al empresario un subsidio por emplear a ciertas clases de trabajadores, sus salarios netos aumentan por la cantidad total de ese subsidio.

Si las autoridades otorgan a cada trabajador empleado cuyas ganancias quedan por debajo de cierto mínimo estandarizado una asignación que aumenta su ingreso hasta este mínimo, el nivel general de salarios no se ve directamente afectado. Indirectamente, una caída en los salarios podría producirse en la medida en que este sistema podría inducir a buscar trabajo a gente que no trabajaba antes y así producir un aumento en la oferta de mano de obra.[1] 

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[1] En los últimos años del siglo XVIII, en medio de la consternación producida por la prolongada guerra con Francia y los métodos inflacionarios de financiarla, Inglaterra recurrió a esta provisión (el sistema de Speenhamland). El objetivo real era impedir que los trabajadores agrícolas dejaran sus trabajos y fueran a fábricas donde podían ganar más. El sistema de Speenhamland fue así un subsidio oculto para la nobleza rural, ahorrándoles el gasto de salarios mayores.
Ludwig von Mises es reconocido como el líder de la Escuela Austriaca de pensamiento económico, prodigioso autor de teorías económicas y un escritor prolífico. Los escritos y lecciones de Mises abarcan teoría económica, historia, epistemología, gobierno y filosofía política. Sus contribuciones a la teoría económica incluyen importantes aclaraciones a la teoría cuantitativa del dinero, la teoría del ciclo económico, la integración de la teoría monetaria con la teoría económica general y la demostración de que el socialismo debe fracasar porque no puede resolver el problema del cálculo económico. Mises fue el primer estudioso en reconocer que la economía es parte de una ciencia superior sobre la acción humana, ciencia a la que llamó “praxeología”.

Mark Carney’s parting shot at Alan Greenspan

The Globe and Mail

By Kevin Carmichael 

JASON FRANSON/THE CANADIAN PRESS

Mark Carney, who has been called the “outstanding” central banker of his generation, has used one of his final speeches as governor of the Bank of Canada to criticize the legacy of Alan Greenspan, who often was characterized as the greatest central banker of his generation.

Mr. Carney said Wednesday that central banks likely left interest rates too low for too long ahead of the financial crisis, mistakenly believing there was little they could do deflate asset-price bubbles.

“It appears likely that monetary policy would ideally have leaned against growing domestic imbalances in the pre-crisis period, thereby mitigating the eventual fall,” Mr. Carney said in a lecture at the University of Alberta in Edmonton.

By “imbalances,” Mr. Carney is referring to the housing busts in the United States and parts of Europe that brought down the global economy.

Alan Greenspan

As those bubbles were inflating, central bankers generally were of the mind that it was less costly to let them burst and then clean up the damage by quickly lowering interest rates. Mr. Greenspan, the former chairman of the Federal Reserve, (in)famously argued that bubbles could too easily be confused with desirable wealth creation.

Mr. Greenspan’s approach to monetary policy has come under a considerable amount of scrutiny in recent years, for obvious reasons. Mr. Carney, who in July takes over as governor of the Bank of England, clearly has concluded that the crisis has left Mr. Greenspan’s theory wanting. Mr. Carney says central bankers should “lean” against asset-price bubbles under certain circumstances.

“While there clearly would have been economic costs to leaning, these must be viewed in relation to the enormous costs associated with the crisis,” he says. “Relative to the previous consensus, the lean versus clean debate now appears to be, at the very least, more finely balanced, if not tipping in favour of pre-emptive leaning,” he adds in the speech.

Mr. Carney’s conclusions about pre-crisis monetary policy matter because post-crisis monetary policy is rather similar.

The Bank of Canada’s benchmark lending rate has been 1 per cent or lower since January 2009, and the central bank’s current guidance suggests the overnight target will stay at 1 per cent until at least the end of next year. If that approach created “imbalances” a decade ago, it can do so again. That’s why so many critics think central banks such as the Bank of Canada are sowing the seeds for another crisis.

Mr. Carney concedes there is a risk of a repeat. That’s why the Bank of Canada has been so vocal in warning against the perils of household debt and why the central bank continues to tilt toward raising interest rates even as the economy’s momentum approached stall speed.

Yet Mr. Carney’s critique of the Greenspan doctrine isn’t absolute.

He agrees that raising interest rates to cool a specific market is an inelegant way to guide an economy. Which is why he emphasizes that monetary policy is the last line of defense. First, one hopes households, executives and investors will be guided by common sense. When that fails, they next play is regulatory policy; for example, tightening mortgage requirements, as Finance Minister Jim Flaherty has done on four separate occasions. If that fails, then the central bank must raise interest rates, even if that risks impeding economic growth more broadly, to avoid a calamity.

In effect, by stressing the possibility that bubbles could result in higher interest rates, the Bank of Canada has been leaning against the housing market. Mr. Carney said in his lecture compared it to the way central banks use communication to root inflation expectations – if economics actors believe the central bank will react to excessive debt accumulation with by raising borrowing costs, those actors will take on less debt.

“If leaning is understood, expectations will do some of the work for us,” Mr. Carney said.

Some will question to extent to which that is true. Few should question whether it is worth trying. The new generation of central bankers only is trying to correct the mistakes of the previous one.