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John Quiggin 
Again reminding readers: if any of you haven’t read John Quiggin’s article on the ‘democratic mixed economy’ – feel welcome to visit the URL below – and to comment there also. :))
http://democraticmixedeconomy.blogspot.com/
And also again – if you share our outlook – you’re also very welcome to join the Facebook group of the ‘Movement for a Democratic Mixed Economy.’
see: http://www.facebook.com/#/group.php?gid=152326549326
sincerely,
Tristan
Tristan
I tried to comment but your site did not accept it.
I am not sure whether this blog is suitable for such discussion (only because of a few posters).
Just putting words like ‘democracy”, “co-operativist”, “mutualist”, “participatory”, “mixed” or whatever, in front of economy, does not assist it only produces a placebo effect.
In any case I can only conceive of a mixed economy (mixture of capitalism and socialism) as a transitory measure, but you seem to seek it as a “traditional social democratic” model (ie a goal).
Re: the ‘democratic mixed economy’ and socialism – I think there are many interpretations of socialism and social democracy.
I know that the pure Marxist interpretation of socialism is that of a society where the means if production are brought under central state control – and developed as quickly as possible – theoretically creating the preconditions of communist society. And the ‘dictatorship of the proletariat’ can be interpreted in the sense Marx intended when he suggested that workers “Win the battle of democracy” – as part of this process.
But for my part – while I think there is much in the Marxist tradition that is valuable and relevant – I have a broader view of socialist tradition. The aim of the ‘democratic mixed economy’ website is to provide a platform for a range of beliefs on that theme – like a ‘popular front’ or ‘bloc’ to challenge the ‘common sense’ of neo-liberalism.
My view is also that history does not necessarily entail the teleology supposed by Marx. We all face different challenges given the circumstances we face in different contexts all over the world. Liberal democracy, here, is not just a ‘front’ to falsely legitimise capitalism… Although there is an element of this… But regardless – I think we have ‘room to move’ and should make the most of this…
Thinking of what’s possible – say over the next ten years: I think some of the ideas covered on the ‘democratic mixed economy’ site – could partly come to fruition… Not necessarilly “Overthrowing capitalism” – but maybe an expanded social wage. progressive tax, support for co-operative enterprise, moving back towards a mixed economy with a more robust social wage…
This does not in itself resolve all contradiction in capitalism… But is does suggest progress in the context of a long-term s truggle… Like Billy Bragg says “don’t expect it all to happen, in a prophecised political fashion”. We’re not going to re-create the circumstances of October 1917 – and really we shouldn’t want to – as the desperation of the struggle there led to great brutality. But a long term cultural and economic struggle – that’s what we face… And by building alliances – we can respond to the real ‘historic moment’ in building a bloc of social and economic forces… Yes – I think progress is possible.
Finally – again – please email me the response you want to make at the ‘democratic mixed economy’ site – and I’ll try my best to see it’s posted…
sincerely,
Tristan
nb: Chris – another thing – re: the ‘democratic mixed economy’ being a goal… Yes – In the long term I see a role for competitive markets – because through this we have market signals and pressures – which in turn lead to innovation… I think this is a positive side of economies based – at least partly – on markets… On the other hand – I would want that economy to be democratic… So I’d want to see co-operative enterprises competing in the context – in a context which empowered workers…
Also I’d want this in the context of a ‘campaign against alienation’ – shorter working week, participatory democracy and public sphere; opportunities for community education – and extensive participation in community life….
So yes – I would not want to see transition to a society based fully on the pure Marxist interpretation of socialism…
Finally – there are various reasons why I don’t think communism is possible – including the extended division of labour in modern economies – that because of this and other reasons we could not implement a ‘withering away of the state’… I also don’t believe that humanity is so perfectible that we could all live in pure harmony in a global community – with no need for a state apparatus to keep order…
Dear blog world, I wish to know why Jack Strocchi does not have his own blog. He is smart, prolific, opinionated and a bit mad, the perfect ingredients for bloggery.
Regards, Dolls.
@Tristan Ewins
Fortunately, you can be agnostic on these things since, while it may well be possible, there’s no reason for thinking we will be around to witness it. Chasing perfection and failing is not a dishonourable thing if one’s means respect the legitimate rights of others.
I’m not sure what you can even mean by “a society based fullu on a pure Marxist interpretation of socialism”. As someone who has spent the larger part of her life involved in considering the contribution Marxism can lend to insight into human possibility I see Marxism as a set of tools rather than a set of formulae for the design of the polity. “Pure Marxism” sounds like it must be some sort of pristine dogma rather than an account of the struggle of the working people of the world to empower themselves and free themselves from the constraints of nature.
Marxism is not confined to what anyone, Marx included, claimed about history or their times. Marxism, if it is anything at all, is a starting point for examining the constraints bearing upon the realisation by the working people of the world of their full human possibility. We should learn from the past so as to make best sense of the present and thus, in concert with others, author the best of all possible futures.
Fran – I think you’re right that ‘Pure Marxism’ might not be the best way of expressing what I was getting at… I look at the Marxist tradition – and there’s an awful lot there that I find useful and even inspirational. But I think there are some for whom Marxism is considered a dogma – who don’t adjust to changing circumstances…
Fran, if I may, which writers today from a Marxist tradition do you think are doing interesting/useful work?
A couple of weeks ago the perennial topic of a minimum wage was discussed:
https://johnquiggin.com/index.php/archives/2010/01/16/my-bet-with-bryan-caplan/
As could be expected, the neoliberal brigade who post on this blog. but stubbornly refuse to learn anything, advanced the Friedmanesque idea that any minimum wage that managed to raise anyone wage would create unemployment, and reduce economic ‘efficiency’.
Countering this claim, it was pointed out that if the supply of labour to a firm is not perfectly elastic then a firm has some monopsony power and then a minimum wage can both increase the quantity of labour demanded by the firm and increase economic efficiency.
Naturally the reaction of those who will not learn was “This is not usually the case.”
Recently some research on the elasticity of labour supply faced by Australian firms was conducted at the Centre for Economic Policy Research. The results can be found at:
http://www.apo.org.au/research/estimating-wage-elasticity-labour-supply-firm-there-monopsony-down-under
Click to access DP626.pdf
The following is a summary of the results:
” This paper estimates the elasticity of the labour supply to a firm, using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Estimation of this elasticity is of particular interest because of its relevance to the debate about the competitiveness of labour markets.
The essence of monopsonistically competitive labour markets is that labour supply to a firm is imperfectly elastic with respect to the wage rate. The intuition is that, where workers have heterogeneous preferences or face mobility costs, firms can offer lower wages without immediately losing their workforce. This is in contrast to the perfectly competitive extreme, in which the elasticity is infinite.
Therefore a simple test of whether labour markets are perfectly or imperfectly competitive involves estimating the elasticity of the labour supply to a firm. The authors do this, following the modelling strategy of Manning (2003), and find that the Australian wage elasticity of labour supply to a firm is around 0.71, only slightly smaller than the figure of 0.75 reported for the UK. These estimates are so far from the perfectly competitive assumption of an infinite elasticity that it would be difficult to make a case that labour markets are perfectly competitive. ”
Of course, this sort of research never managed to peculate into the dense grey matter of any of those who sat on the ironically labelled “Fair Pay Commission”.
Sorry mistyping percolate…
“These estimates are so far from the perfectly competitive assumption of an infinite elasticity that it would be difficult to make a case that labour markets are perfectly competitive.”
Who ever suggested they were? This is a demolition of a strawman. Yes, labour markets are not perfectly competitive, they are only somewhat so. Therefore minimum wages won’t have the effect predicted by PC models, but does this mean that minimum wages have zero effect on unemployment levels? I put it to you that the empirical research does not support that claim.
On a related note, do you disagree with Terje’s previous suggestion that any minimum wage should at least be region-specific to account for differing circumstances?
@Jarrah
How about learning some first year economics before you embarrass yourself further with a post like this?
Freelander – why not answer the question?
In terms of wage regulation creating unemployment I’d be looking at the demand impact of minimum wage laws more so than the supply impact. Assuming a low elasticity for supply the implication is that wages can drop with a low impact on willingness to work. So the question then is what is the impact on the willingness to employ. And I’d be looking less at existing firms and more at potential firms.
Sweden sets the minimum wage on a per firm basis. It seems much more sane than having a single minimum wage across the entire economy.
@Alicia
Sadly, there’s something of a dearth of good contemporary Marxist writing in what one might call “macro social theory”.
While I don’t endorse her views on the class character of the USSR, Dunayevskaya more than any other single figure of late has contributed to a grasp of the role of human agency in Marxism. One might also, in this context, look at the work of Fredric Jameson, Terry Lovell, Terry Eagleton and others on broader issues of culture.
p.s. A reasonable way to cut the minimum wage would be to compensate those workers effected by providing tax relief. Preferably by increasing the tax free threshold but also possibly via the low income tax rebate.
@Tristan Ewins
This sort of vague innuendo is no better than spiritualists or astrologers claiming that there are some for whom science is considered a dogma and don’t adjust to changing circumstances.
The same technique is used by climate deniers, claiming that climate change is a dogma etc.
Meanwhile it is capitalist theorists who can easily be implicated in dogma, particularly that a capitalist market produces the most efficient outcome, that capital has it own productivity, that low offshore wages represent low productivity, that households provide factors of production for equal revenues (including profit), that wages cause wage-inflation spiral, etc etc.
These are all dogmas.
They also ignore changing circumstances, ratcheting unemployment, mounting per capita debt and expanding macroeconomic imbalances, reaching limits to growth/population.
Words such as “pure Marxism” reflect western dogma. Marx himself distanced himself from such dogma saying if this was Marxism – he was not a Marxist. But still western ideologues keep peddling this canard.
Anyone who equates Marxism necessarily with
is engaging in arrant dogma.
Marx specifically said the opposite, stating that changes in each country depending on the level of political institutions within that country. In general he disclaimed blueprints for the future, stating clearly
.
Most importantly, in terms of these measures, and in the context of eventual abolishing of private ownership in property (not personal property) he called for:
– the centralisation of credit in the hands of the state and
– extension of production by the state
– and similar.
But most of all, he called for better understanding of what was then the “new science”, ie critical analysis of political economy based on social creation of surplus value.
Our capitalists and middle class maverick intellectuals are the dogmatists, who are ignoring the changing circumstances even as they sink within them.
1. Perfectly price elastic supply of anything is impossible with a finite supply of the anything. While the alternative characterisation of ‘competitive market’, namely price taking behaviour, is also not water-tight, it points to differences in market power. For example, without requiring much empirical research, simple statistics and reported cases make it pretty clear that CEOs of publicly listed companies have market power when it comes to setting their remunerations while cleaners, shop assistants, school teachers, university employees, other than a few Professors in some areas and the CEO, have negligible market power unless they are heavily unionised. In this context, market power refers not only to the monetary income but also the conditions of work.
2. As for Terje’s suggestion that the minimum wage should at least be region-specific to account for differing circumstances, I’d say the answer is pretty obvious. It depends on what you mean by ‘region’. I recall some commenters on this blog-site and elsewhere trying to promote the idea of ‘global absolut proverty’ measures. These people would disagree with Terje and I would agree with Terje. When it comes to a country then it becomes much more difficult to form an opinion. Considering a geographically small country, say Denmark or The Netherlands, with ‘small’ populations, relative to other countries, and a well developed social security systems then I’d be prepared to say the answer is No. Australia is geographically very large, in comparison to EU countries, with a ‘small’ population and a social securty system. If one thinks in terms of housing costs, then there are huge differences betwen the metropolitan areas of Sydney and Melbourne versus other locations, suggesting that allowing differences in the minimum wage would make sense. But there are other factors, for example expenditure on education, travel expenses, food costs, access to medical facilities and the disincentive for people to work in the country if the minimum wage (say for farm workers) is lower. Hence, one may say that having different minimum wage rates is not obviously consistent with the desirability of labour market flexibility. Furthermore, I suggest the question cannot be treated without considering simultaneously the social security payments and the administrative costs associated with refining a policy.
@TerjeP (say tay-a)
If you ask this question my last post applies to you as well. You make a great pair of zombies!
Chris: It seems that there are different translations of the Communist Manifesto – but the following – which I took from a website – is common, and I have seen it before:
:The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state, i.e., of the proletariat organized as the ruling class; and to increase the total productive forces as rapidly as possible. ”
http://www.age-of-the-sage.org/philosophy/communist_manifesto.html
Re: Marx’s disdain for “the mentality of the blueprinter” – I’ve come across this many times in the past – I think it arose in Marx’s criticism of ‘utopian socialism’. Although Marx did envisage a transitional program… And perhaps we need a comrpromise here – By this I mean that we need concrete proposals as well as flexibility…. Some have called these “provisional utopias” – But while I sympathise with the sentiment, I think it could be expressed better…
Thanks for that very interesting article there, Gerard19. I just sent off the link to an old friend in NZ. He is an ex political scientist who has lived in NZ for 20 something years now, but preciously resided in Colorado Springs where he had a hot dog cart business (now manager at Hertz NZ for many years).
Re First year economics, minimum wages in Sweden and elsewhere.
The following article contains information on labour market conditions in the EU. Things are a little more complicated than represented in talking points or in first year economics texts.
http://www.eurofound.europa.eu/eiro/2005/07/study/tn0507101s.htm
@20 Tristan Ewins
Provided you include the necessary qualification that the “state” is the proletariat organised as the ruling class, (as per Manifesto) then there is no real issue.
However to maintain:
without this qualification, changes the intent.
A kibbutz or Yugoslav “Basic Organisation of Associated Workers (BOAL)” are mini- examples of means of production being under central state control where the ‘state’ is embedded with the proletariat.
Capitalists see the state in entirely different terms, as a form of Leviathan over-lord dictating laws and waging wars – with or without universal suffrage or secret ballots. It is used to restrict wages but allow capitalists to freely set prices through politics (as facilitated by degrees of monopoly).
If you read the paragraphs directly following your quote from the Manifesto, the real relevance will become clear.
Marx was writing long before adult suffrage existed and the vision of the state as the organised propletariat, was a revolutionary advance on the State as monarch, House of Lords, and Gladstone/Pitt/Palmerston puppet show in the House of Commons (based on Rotton Boroughs).
These issues need to be understood in the whole – not in part.
Just saw a news story on Abbot’s emission reduction policy. It seems that he does not know the difference between price and cost.
Is there still that bug whereby once a second page starts you get link rot if you linked to earlier comments? I want to link to Freelander‘s minimum wage remarks without it rotting.
This is just forcing a new page to see if the link rots.
Drat – I misremembered that the new pages triggered at every 25th comment.
“see if the link rots” …… “drat” ……..
OK, thanks PML 🙂
Signed: Easily Amused
I love you too.
A lively set of Letters to the Editor in the SMH this morning (tuesday) on the issue of banning the niqab or burqka (face covering) as France and Denmark are currently contemplating variously for public institutions.
The letters are are all opposed to the wearing of such regalia in response to its anti-feminist characterisation. If ever there was a sleeper issue in metropolitan Australia of whatever importance or otherwise, my guess is this is it. Okay so it is divisive in our you beaut multicultural Oz but it is obviously troubling many of us.
Terje, I guess Freelander can’t answer the question, and is trying to save face with bluster. 🙂
@Jarrah
Asked and answered. Given that I have already given TerjeP an answer to that question last time the topic was discussed why should I repeat the answer again. I suppose I should not be too surprised to find the undead have some cognitive deficiencies.
Pablo – since when did we become a nation that tells women what they can and can not wear? Such attitudes are troubling.
I think Freelander can answer the question but prefers to play silly name calling games. It’s a maturity issue.
I guess the great feminist Tony Abbott now has a back-up plan in case “Great Big Tax” ever gets old.
@TerjeP (say tay-a)
Asked somewhat earlier and already answered. Why do you want me to answer the same question twice?
@TerjeP (say tay-a)
We have always been a nation that tells women (and men) what they can and cannot wear. This issue is whether or not wearing the niqab or burqka should be restricted not whether you ought to be allowed to wear or not wear whatever you wish in whatever circumstances you wish. People are dissuaded from wearing motorcycle helmets in Banks. I don’t know whether they are prohibited by law, but whether they are, I can’t see any obvious reason why there shouldn’t be such a law. If motorcycle helmets are not ok in Banks, why should the niqab or burqka be ok?
@gerard
I imagine Tony Abbott, told all his girlfriends, including the one whose baby he thought he had fathered, that he thought they ought to “keep it” for the marriage bed. So very quaint.
Of course, he would have added that he didn’t believe that his views on the subject should necessarily influence their (or his own) behaviour!
Great that at about that time he decided he had what it takes (or was it a calling) for (moral) leadership as a priest or politician.
As long as Tony doesn’t lose his voice, he should keep us all amused until the election (also assuming his replacement stays in the wings).
Freelander – I agree with your qualification about context. However people are free to wear motor bike helmets on mainstreet and there is no good reason they shouldn’t also be allowed to wear the burqka on mainstreet.
@Freelander
“Asked and answered. Given that I have already given TerjeP an answer to that question last time the topic was discussed”
I was unaware, or had forgotten. But instead of telling me that to begin with, you went to insults straightaway. I think Terje’s right, it’s a maturity issue.
Can anyone confirm to me if the coalition’s Emissions Reduction Fund will penalise companies based on; total emissions above baseline, or on emissions intensity above baseline?
Also, does anyone understand what the (financial) penalty actually is?
@iain
I saw no detail on the penalty (and would like to know what it is) but I’m guessing the penalty will be that you don’t qualify for the bonus for going under
@gerard
Gerard – well look where privatisation gets us all…signs in parks saying put out your rubbish? Welcome to governments so enamoured with the private sector that was going to rush in and take all those bothersome public services off their hands…so that they can spend the money on worthwhile things like perks, travel and super.
Welcome to a state of utter disarray and loss of civilised order. (welcome to NSW – a sister city to Colorado Springs USA – hopelessly broke but still privatising their most profitable income earning assets!! Are they stupid or what? Its really hard to deal with such stupidity and to think they actually make it be to politicians. We need a political IQ screening badly).
@TerjeP (say tay-a)
But religions telling people what they should (or must) wear is even more oppressive and therefore more troubling.
Australia is full of dress codes.
I am happy banning Nazi uniforms, KKK outfits and presumably it is reasonable to ban people wearing Orange regalia in Catholic areas of Belfast.
A supermarket in the UK (Tesco) has banned shoppers turning up in pyjamas due to complaints.
PNG airlines have refused to carry passengers in traditional dress.
So there is no basis to general arguments that so forms of dress in public cannot be subject to public mores.
The nature of this public function can change according to any number of subjective circumstances.
Moslem people I know state emphatically that the full burqua is not a requirement in the Koran – it is a political expression of an extreme version of religion that places women under a social stricture not applicable to men. The aspiration of those advocating this restricted clothing is that it becomes compulsory on all women (even if the women disagree).
You only have to look at the situation of burqua entombed women under the Taliban in Afghanistan.
“I am happy banning Nazi uniforms, KKK outfits and presumably it is reasonable to ban people wearing Orange regalia in Catholic areas of Belfast.
A supermarket in the UK (Tesco) has banned shoppers turning up in pyjamas due to complaints. PNG airlines have refused to carry passengers in traditional dress.”
There’s a difference – the first examples are in public space, the latter two are on private property. You can’t discuss them as if they’re identical issues.
@Chris Warren
I heard a French politician / philosopher (not sure) speaking of the ban and i agreed – the point being that the covering of women is both sign and implementation of oppression. Why should we stand for that?
Forcing women to veil themselves when they don’t want to is wrong. Forcing women to unveil themselves when they don’t want to is wrong. The difficulty is telling which is which – indoctrination and social pressures will confuse the issue.
Personally I think we should err on the side of individual choice (I know, big shock), and allow veils to be worn. However, that shouldn’t be considered abandoning women to oppression by domineering men and religion. By surrounding veiled women with examples of a strong, honourable womanhood that doesn’t require a veil, as will be the case in any Western country, we will show them that the chance exists to opt out.
And who knows – maybe having a proportion of the population being keen on modest garb will do something to counteract the shift to an overly-sexualised ideal of comportment.
I don’t see how anyone who supports freedom of choice or separation of church and state can logically oppose the right of anyone to dress as they please in public. Nobody has a right to avoid being offended by the non-criminal behaviour of others.
So whatever one makes of the garb and its cultural meaning, one must endure it.
Of course, that is an entirely separate issue from those occasions where a person enters private premises or even public premises in which there are good public policy reasons for insisting upon ready and definitive means of identification.
Fran
In some societies women do NOT HAVE the freedom of choice about the burqua.
The ideology of those using it now, is such that they want to make it compulsory for all women even if the women DO NOT agree.
In several countries, the burqua is a pure symbol of radical and violent denial of freedom of choice.