Weekend reflections

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. Civilised discussion and no coarse language please.

50 thoughts on “Weekend reflections

  1. In fact federal income taxes were sold to us on the basis that they would be temporary only until such time as the war was won. In short we were conned by our political masters and the yoke is on us.

  2. @Chris Warren

    The dialectic between commodity value and socially necessary labour time is definitely important.

    The shock and outrage on sweatshop worker’s faces when they are told of the actual selling price (money form, exchange value) of the goods that they are forcibly coerced to assist with manufacture is a useful reminder of this point.

    The issue of the price of a lot of labour (money form, exchange value) being less than the related price of corresponding products (money form, exchange value) is probably still not effectively resolved.

    Conversely, in overpaid (and relatively un/counterproductive?) developed countries (so-called) this point may have just as serious consequences (Iceland being a possible current example) as it is in underpaid (so-called) developing areas..

    As a general observation (not directed at Chris), it may be useful not to confuse terms such as price or value with understandings of true wealth. Labour is not the source of all wealth. Marx, and any systems ecologist (eg Howard Odum), will well tell you this.

    The real source of true wealth (nature, particularly societal net energy availability) may very well currently be at risk.

  3. Tim Peterson

    All such GE models are based on assumptions.

    The GFC has demonstrated the essential irrelevancy of such models.

    The whole area is under fundamental (and convincing) attack – see

    _Arrow Debreu_

    I like the idea that some method for modelling a economy may emerge, but any model, based on a proportionate rate of return on capital, and fixed wages (ie fixed final consumption fund) will always collapse.

  4. @Alice
    The Collins dictionary of economics is my source for the Marxist production function.

    If the labour theory of value does not entail that
    Y=L+delta*Lk, (1)

    eg output is proportinal to total labour input,

    then in what sense is it a labour theory of value? A labour theory of relative prices? This would assume that (1) is correct as well.

  5. Iain

    Yes, one should not confuse price and value with true wealth or your possession of useful things (however defined).

    Price, wage, value concern only “economic” wealth.

  6. @Alice

    Yep, Alice. It looks interesting. I had heard the result that Cobb-Douglas fits simulations where the capital share in income is constant. I will read it when I get the time.

  7. @Chris Warren

    Chris Warren, you reference a paper by David Ellerman, World Bank, titled “The Arrow-Debreu Model: How Math Can Hide a Fatal Conceptual Error”

    I’ve come across Ellerman’s paper before. It is freely available on the net. May I point out that David Ellerman is criticising his own invention or the invention of those who identify capitalism with market economics. No-where is there a claim made by Arrow or Debreu that they are modelling any form of capitalist economy.

    To relate the Arrow-Debreu model to the GFC is, if I may say, silly because there is no financial sector in the model at all. There is also no government and therefore there are no corporate laws and in particular no different regulatory systems.

    To use the Ellerman article to reach the conclusion that GE models are useless is an extraordinary jumpt to conclusions.

    Let me know when Ellerman has progressed to the Dreze model.

  8. As I promised in the “QR sale plan off the rails” forum, I have written an article to argue why people should sign my e-petition calling for new state elections. The teaser is as follows:

    Why Queenslanders must demand new state elections

    In the March 2009 Queensland elections, called early and conveniently before the Auditor General’s damning reports on Health and Transport, Labor clung to power by concealing the likely privatisation of publicly owned assets and promising to maintain the state fuel subsidy. Regaining office, the fuel subsidy went, charges for registration and public transport rocketed and a $15 billion public asset fire sale was announced – although opposed by 79% of the Queensland public – to pay for the cost of government-engineered population growth – again, without consultation.

    This is not democracy. This is not honest. It is not even polite. Help create a ground-swell by signing the E-petition calling for a new election. Not sure? Read why in this article.

  9. Beggars me the attacks on Daggett when he only tells the truth, after all.
    What turns his stomach, turns mine.
    I suppose I will be comsigned to the same social leper colony where some would banish him, for also being gobsmacked at the nature and scale of treachery and deceitfulness of Bligh and hidden rightwing stringpullers, led by that unspeakable creature you have as treasurer up there before, during and after that election.
    Democracy, RIP…

  10. Ernestine Gross

    I did not “reach the conclusion that GE models are useless “.

    Your comprehension skills are inadequate for your activities.

    And in fact I said the opposite: viz;

    I like the idea that some method for modelling a economy may emerge, but any model, based on a proportionate rate of return on capital, and fixed wages (ie fixed final consumption fund) will always collapse.

    I fully expect a GE model of market socialism to be feasible and desirable.

    Current GE models do not work because they assume capitalism. They rely either on beneficial exogenous factors, or worsening endogenous countervailling tendencies.

    However there is also a major problem with all GE models. Noone has found a way to predict exchange rates. Therefore what is the point of GE models?

    GE modellers assume the economy is based on economics. It is not. The economy, and the distribution of wealth, is determined at least to some extent, by politics.

    There are several other issues, but I do not have the time …..

  11. Elderly at risk from heat stress!!! Read and discuss

    Today the Australian Medical Association (Victorian branch) made a powerful plea for compassion, justice and common sense. This statement was made in light of extreme heat conditions recently – which have seen appalling rates of death amongst the aged and the infirm.

    See:

    http://www.facebook.com/l/935f3;leftfocus.blogspot.com/2010/01/protect-aged-this-summer-stop-deaths.html

    Please feel welcome to discuss these issues at the Left Focus blog itself – and/or at the Left Focus Facebook group – or otherwise here at this thread you’re reading right now!

    sincerely,

    Tristan Ewins (Left Focus moderator)

  12. @Chris Warren

    Chris Warren,

    I am replying to your post @41, which is your reply to my post @36, which is my post regarding your post @28.

    Your post @28 reads:

    “All such GE models are based on assumptions.

    The GFC has demonstrated the essential irrelevancy of such models.

    The whole area is under fundamental (and convincing) attack – see

    _Arrow Debreu_

    I like the idea that some method for modelling a economy may emerge, but any model, based on a proportionate rate of return on capital, and fixed wages (ie fixed final consumption fund) will always collapse.”

    @41 you write:
    ” I did not “reach the conclusion that GE models are useless “.

    Chris Warren, are you sure you comprehnd yourself?

    But I grant you that you have not reached a conclusion but rather made an apparently uninformed assertion because:

    I have no information which would lead me to the conclusion that you have ever read the Arrow-Debreu model, in particular the 1954 paper in which the method of proof of existence of an equilibrium for the specified model involves a “social market system”. And, as I said, it does not aim model ‘capitalism’ (as observed during the 19th century or at present) and, as I said, it does not have a financial market and therefore cannot be used regarding the current GFC. (The model does not aim to model ‘marxism’ – whatever this means – either.)

    Clarification, not obfuscation (deliberate or otherwise), is the game, Chris Warren.

  13. yes

    I am sure I comprehend myself.

    I have not made such as “uninformed assertion”.

    Is this the clarification you need.

  14. @Ernestine Gross
    I rather like Dreze’s approach here Ernestine

    “In the 1980s and early 1990s, Drèze wrote about the policy front, campaigning for two-sided policies of demand stimulation and supply-side restructuring (100). With Edmond Malinvaud, Drèze organized a group of thirteen Belgian and French economists who wrote “Growth and employment: the scope for a European initiative” (103, 104): This position paper advocated an ambitious program of public investments coupled with elimination of social security contributions by employees on minimum wages. That paper has influenced the programs of reduced contributions on low wages introduced recently in several countries, especially France and Belgium.

    It seems quite balanced to me and not so poisoned by an ideological divide that is more than apparent in other schools of economic thought.

  15. You may find this link historical JQ. Personally…I rather preferred Wheelright and Stilwell over Warren Hogan….but warrior for conservative neoliberal market ideology is an apt description…. the legacy continues.

  16. I might just add…Warren Hogan disnt just split his own economics department. He contributed to an ideological split in the entire profession and made it much narrower than it was before. That is my opinion. He brought to econmomics an unacceptable level of intolerance and saw his role as helping corporate institutions not the economy as a whole. He may as well have stood on a dais thirty or forty years ago and announced “political economy doesnt matter.”

  17. Thanks to Chris Warren for framing the terms of this conversation, then others for further explication. Much to chew over.

  18. I went to sign the E-petition that Daggett mentioned, but unfortunately one needs to be either a current resident of Queensland or a former resident of Queensland in order for one’s e-signature to be accepted. And I fall into neither of those categories.

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