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John Quiggin 
“The Queensland Labor Party should run background checks on their candidates”.
Discuss.
Alternative sub-topic for discussion:
“Section 64(2) of the Parliament of Queensland Act 2001 sets out the disqualifying factors for people wanting to run for election, these should be extended so that no person may run if they have any prior criminal or traffic history whatsoever.”
Our academic economists are now in a real fix – recession stalks the globe, Piketty has picked a few juicy points never admitted by Classical or Keynesians, and now our keepers are trying to cut minimum wages and hike the GST and cut company tax.
None of this fits into any economic model whatsoever except – greed is good.
How can any economist explain the simple fact from the Sydney Morning Herald, 28 March, Business Page 8 that:
there are 2325 billionaires in the world with a combined net worth almost a tenth of global GDP.
How does this relate to any sense of reasonable payments to factors, free markets, productivity without savage exploitation and expropriation?
Which equilibrium model of anything can produce this actual result?
Are our economists just a bunch of liars?
@Megan
I believe it is the non-disclosure rather than the record itself that is the problem here. If the voters want to be represented by a man with a record of domestic violence, that’s up to them, but they need to know about it first if they are to make an informed decision.
Could be interesting times ahead. I suspect the Premier is going to be having long talks with Mr Katter Jr.
Criminal History Checking for the Qld Public Service inlcudes;
“From 1 August 2006 a Queensland Health general criminal history check is to be conducted on
all persons prior to being appointed for general employment, permanently or when the period of employment will exceed three (3) months.”
Generally speaking, any person employed or seeking employment with Qld Health (and probably other departments) charged or convicted with an idictable offence will have to face a panel.
“The Criminal History Assessment Panel (CHAP) determines the suitability of an applicant who has a disclosable criminal history to perform the relevant duties of the position for which they are recommended for appointment or ongoing appointment.”
“Indictable offences include burglary and unlawful use of a motor vehicle …”
Given the above, why should an MP be held to a lower level of accountability than a person seeking a PS job? All prospective candidates and/or newly elected MPs should face this process. If it’s good enough for ordinary workers then it’s good enough for the MPs. People being placed in positions of public trust and responsibility rightly face these tests. With respect to Billy Gordon we can forget his childhood offences. They ought to be disregarded. However, he twice drove a vehicle unlicenced as an adult showing disregard for the safety of others and putting other people at risk. His judgement is clearly very poor on a repeat basis. I doubt he would get a job in Qld Health so why should he get a job as an MP? Should MPs be held to lower standards than the rest of us face?
@Ivor
I don’t think all academic economists should be clumped together in one heap. For a start, there are still academic economists who are Marxists or at least Marxian in some aspects of their thinking. In addition, many academic economists, at least in Australia, are social-democratic in perspective. The real negative criticism should be aimed at the business economists plus the ideological monetarist schools like the Chicago school.
Don’t forget Piketty is an academic economist. He has done the work to empirically and systematically expose capitalism’s inherent tendency to ever greater inequality. Of course, Marxists knew this all along. Some (not all) bourgeois economists are very late to this realistion.
Piketty has done sterling work to prove empirically what those with perception (or Marxian thinking) knew all along. Capitalism leads to ever greater inequality. His formula r>g really means that while r>g then inequality will axiomatically increase without extensive redistributive taxation and social spending. Furthermore, he has shown that the period where g>r was an historical once-only event associated with rapid scientific/technological growth in a system far from limits. The old standard case and the new standard case for a capitalist system embedded in a resource depleting natural system and a situation of diminishing technology returns is r>g.
I think r>g is a far more important and indeed valid law than the “law of declining profits”. Marx always saw the the tendency of the rate of profit to fall as just that, a tendency. He also posited countervailing tendencies which could see capitalist profits rising again in new sectors, new markets and with new technology. But r>g is fundamental. Where g becomes ultimately limited as it does in a system with limits to growth, this fundamental contradiction of capitalism becomes manifest.
If you had a car with a bad steering bias you could leave the bias alone and keep wrestling with the steering wheel to correct the bias. That is the position of people who advocate redistributive taxing and spending while retaining capitalism. Or if you had a car with a bad steering bias you could get the steering fixed. That is the position of the people who advocate worker ownership and management of the means of production. With that bias fixed there would be much less (though never zero*) need for redistributive taxing and spending.
Also, with worker owned and managed production we would have some chance of addressing climate change and limits to growth in time. Under capitalism we have virtually 0% chance of dealing with these issues in a pre-emptive way.
* Note: pensioners and orphans will always exist while the human race exists.
> Given the above, why should an MP be held to a lower level of accountability than a person seeking a PS job?
Because MPs define the criminal law, and there’s a prospect of rather-nasty feedback.
The guvmint wants thoughts on post 2020 emissions. They say when suffering creative block go back to what you first thought of so the early suggestion of an 80% emissions cut 2000-2050 should be a guide. That’s 1.6% a year but even if we make it just 1% we’re way behind. If year 2000 emissions (including land use) were about 550 Mt CO2e then a 14% cut takes us to 473 Mt. Actual emissions in the year to Sept 2014 were 536 Mt. Not good enough.
Even with just 1% there are various fiddles such as excluding land use, making it per capita emissions to somewhat excuse population growth of 1-2% a year or making the start date 2005. I note enthusiasts for Big Australia such as the PM also enthuse about Big Coal. If LtG is right then Peak Oil looms which might cause a slowdown that drags coal with it. Or we might all be driving electric cars powered by solar, in which case an 80% emissions cut by 2050 will be a doddle. So I think it should be 1% a year starting in Year X of total emissions.
@Ikonoclast
From the information you provided, he wouldn’t have to be reviewed by CHAP under PS guidelines.
He does not have a “disclosable criminal history”.
Uncle Milton, the “non-disclosure” depends on what is required to be disclosed. I don’t know what the ALP’s internal mechanisms are or whether there was any material “non-disclosure” in this case. It seems the sacking from the ALP was because he gave the answer “no” to an ambiguous question asked in a certain context (i.e. talking about child support payments and tax returns – “is there anything else I need to know?”).
Also “a record of domestic violence”, does he have such a record? Does that mean a “criminal record”?
@Megan
From the viewpoint of a political party, what is (or should be) required to be disclosed is anything in the candidate’s past that would cause trouble for the party should it come to light later. The candidate is asking the party to endorse them as representing the party in an electorate. In return the candidate owes it to the party to come clean before the event. Why? Because if something bad comes out later there is fallout not just on the candidate but the whole party. In this instance, the existence of the government is threatened.
If a candidate doesn’t want to come clean, citing privacy or whatever, they can always run as an independent.
@Ivor
Actually, most Keynesians have given Piketty an enthusiastic (though not uncritical) welcome. If you want an example of someone who has resolutely denied the facts pointed out by Piketty, look at the prominent Marxist economist Andrew Kliman, or Kliman’s main data source, Richard Burkhauser of the American Enterprise Institute. Kliman claims that the profit share is at an all-time low, and that CEOs are members of the oppressed working class.
Yes, the Realpolitik of it is that a potentially embarrassing past is political death. People ought to be realists before attempting to be politicians in the modern “trial by media” world. The Realpolitik of it is that parties now need more or less squeaky clean candidates (in the formal criminal sense) although at the same time they have to be morally bankrupt and inveterate liars to succeed in the political system. It’s a bizarre and antithetical combination. It pretty much equates to conventional bourgeois morality where no overt criminal record and no s e x or d r u g peccadilloes are permissible but lying and cheating especially for money and power and not getting caught doing it are permissible and indeed de rigueur.
@John Quiggin
Some doctrinaire Marxists are blind idiots. I don’t mean Ivor. I mean Kliman if your charcterisation of him is correct. At the same time, the more perceptive and philosophical Marxians are a very different kettle of fish. I have two substantive questions for you.
(1) Why prefer reform over transformation? Why prefer a biased system (where r>g most of the time), which requires massive tranfers to continually rebalance it, over a corrected system (worker owned and managed cooperatives for example) which would require considerably less transfer payments?
(2) Is it not likely that under conditions of secular (long-term) stagnation that r>g will be a permanent feature of the capitalist system? Will not Limits to Growth essentially and inevitably force g (growth) down to be permanently lower than r and even possibly lower than zero?
These are tough questions you need to answer rather than making snarks at the ratbags at the extremes of Marxist thinking. All schools of thought have their ratbags and blind ideologues. Orthodox economics has the Chicago School and the monetarists. I don’t judge all orthodox economists by those ratbags.
I was the Convenor of the Candidate Review Panel of my Greens branch in the lead-up to the Queensland State election. One of the standard questions we ask prospective candidates is whether they have any past criminal convictions or other issues in their past that could create difficulties if brought up in an election campaign.
@Paul Norton
What happens if they say “yes” (let’s say for example some minor property offences and probation breaches from their teenage years and a bit of traffic history)?
@Paul Norton
By difficulties, do you mean that a Greens candidate who hadn’t been convicted of trespass or obstruction or something similar at a forest protest would be an embarrassment to the party?
@John Quiggin
I would certainly expect Kliman to reject much of Piketty, as do I.
I also dispute some of Kliman’s TSSI (temporal single system interpretation) of Marx’s value particularly Kliman’s silly notion of intrinsic value.
Although I haven’t read Kliman on Piketty, my knowledge of Kliman, suggests his views are probably well considered and worth digesting from a Left-Marxist point of view.
Where have Keynesians ever noted that there is a central contradiction in capitalism, and that inequality increases due to this? Joan Robinson ??? Any living ???
Frank Stilwell is the main academic Australian economist addressing inequality before Piketty, and he is not a Keynesian. I guess Stilwell would agree that there is a structural contradiction.
This single point is the first differentia specifica between a Keynesian and a Marxist.
@Ikonoclast
I would put this to the test.
Presumably those running courses in political economy, would be half-Marxists and maybe have reviewed their positions. Maybe.
But our economists are a different breed. Excluding political economy, what percentage of Australian academic economists are Marxist?
What is an example.
Junankar wrote a reasonable near Marxist tract – before he moved to Australia.
Steve Keen is no Marxist. Cliva Hamilton, Richard Dennis (Australia Institute) are not.
We all know about international Marxist economists, – Wolff but it seems the one of the best Marxist economists trained as a geographer.
So who of our “economists” are Marxist?
@Ivor
This is a reply to both of your above posts. Piketty is not (so far as I can see) an ideological economist nor a political economist. He is a descriptive economist in the French sociological tradition (again so far as I can see). He makes no deep analytical interpretations and no normative judgements of capitalism per se. He simply measures how capitalism, as it has existed and exists, operates. He measures how it operates in one narrow sense but in a broad and data-deep field within that narrow sense; namely the distrubution of income and wealth over time. Obviously there are choices to be made in methods when deciding how to measure and quantify these things.
In the above narrow sense, I think Piketty produces something useful. His formula r>g is better understood as;
(a) when r>g under capitalism then wealth concentrates (sans redistribution); and
(b) r>g is the standard case under capitalism in most eras.
Only special events like revolution, war, massive inflation, massive redistribution and the one-off extreme industrial-technological growth spurt of the 20th C change the dynamics of r>g, meaning maybe a temporary g>r period or more likely reformist or reactionary change in other ways.
My personal opinion is that r>g is a much more useful insight than the doctrinaire claims (made by some old Marxists) that the tendency of the rate of profit to fall is a law. It’s not a law, it’s one tendency with countervailing tendencies as Marx made clear.
The formula r>g is also a tendency not a law. It’s perhaps an asymptotic law as Piketty uses the term in another context. It illustrates a tendency to a limit. The limits of the r>g tendency are reached usually at the point of war or revolution to which any unimpeded progress of r>g will lead. Not that Piketty explicitly said this last IIRC.
The above is a roundabout way of saying academic economists don’t have to be Marxists to be useful. Piketty is useful. I agree that they fail to see the big picture (namely that problem with capitalism is entirely systemic i.e. inherent to the very system itself).
John,
Saul Eslake makes a valid point regarding widening the base on GST; amongst other loopholes that need to be tightened/removed food needs to be included; apparently it’s the wealthy that spend more on raw food.
@Uncle Milton Excluding those with a criminal record means that inspite of the justice system, criminal acts can never be redeemed
@Ikonoclast
Re: #5
Under Qld law this is absolutely correct. In fact, for the general population we can also forget convictions more than 10 years ago, and under the law covering electoral eligibility everything else in his record.
In Victoria in 1970 it was different (from Deakin Uni):
I’ve already questioned the strength of the argument that Gordon should quit parliament for being “dishonest” (I think it’s a stretch to accuse him of that, and legally he is perfectly entitled to his seat anyway).
Before succumbing to News-Ltd-Mob-Rule, I think we should ask the simple question of whether we want to go back to much stricter disqualifying rule for MPs, and perhaps also whether it is possible – or desirable – to have such a thing as a smear-proof candidate.
As I said in the ‘sandpit’, I view this as poor treatment and the ALP bowing in fear before Murdoch’s thugs. I hate the ALP/LNP duopoly, but I certainly don’t want Murdoch running the State either.
@John Quiggin
Where is there evidence for this.
Kliman writes about “compensation” received by top salaried executives, stating that he considers that most of this income:
[ Example ]
It would be odd for him to argue the opposite by suggesting that these people are in the “oppressed working class”.
However normal highly skilled workers thereby receiving higher incomes may be cast as in the working class.
@John Quiggin
Where is there evidence for this.
Kliman writes about “compensation” received by top salaried executives, stating that he considers that most of this income:
[ Example ]
It would be odd for him to argue the opposite by suggesting that these people are in the “oppressed working class”.
However normal highly skilled workers thereby receiving higher incomes may be cast as in the working class.
@John Quiggin
Where is there evidence of Kliman arguing that profit share is at an all time low?
Kliman argues that profits have declined but rebounded – which is a somewhat different matter.
See: Kliman Profit
@Ikonoclast
Marx made it very clear this was a Law. He stated that the gradual growth in constant capital in relation to variable capital must necessarily result in the gradual fall in the rate of profit.
It is this law that causes crisis.
On the other hand r>g just causes greater inequality but no necessary structural crisis or structural financial crisis. r>g applies to slave production and feudal economies which did not necessarily collapse based on internal structural contradictions. In fact slavery and feudalism persist in some tribal areas today.
@Ivor
Did Marx made it clear that TRPF (tendency of rate of profit to fall) is an invioable law? I have my doubts. David Harvey does mention that in the Grundrisse, “Marx lists a variety of other factors that can stabilize the rate of profit ‘other than by crises’.”
However, it is clear that there is a fallacy, or a number of fallacies, if the TRPF thesis is taken as invioable law. I strongly suspect that the overarching fallacy is a fallacy of composition of the form “TRPF occurs in individual cases therefore TRPF must be an over-arching feature of the entire system”. In point of fact, the system always finds ways to overcome TRPF by innovation.
Another part of the fallacy is the labour theory of value. It is not only labour (human physical and mental labour) which creates value. Energy as useful work (especially via automation) and natural replication also create value. The moral argument against capitalism is not solely based on a labour theory of value. Not only is it the case that each person’s labour product ought to be her/his own it is that what nature provides is the equal right of all.
The fundamental contradictions of capitalism exist in its push for endless growth (violates the limits to growth in a finite system) and in its intrinsically anti-democratic nature which makes decision-making in the interest of all the people impossible.
The capitalist is a predator. Predator-prey relationships in nature illustrate that the predators’ “profit” can be taken indefinitely in a stable, productive system. The predator simply cannot accumulate wealth (increased predator numbers) indefinitely. There is a natural limit to preying that is all. The predators can continually take a “profit” not greater than the amount which allows the continued reproductive success of the prey.
The logic of the capitalist system at the pure material level is the same as a predator-prey system in nature. The logic of the capitalist system at a formal system level (capital-finance-ownership) is quite different from nature and is indeed antithetical to natural processes. Without going into it in depth, suffice it to say that the unsustainability of capitalism derives from its having a formal system which posits nature (the biosphere) as limitless. It does this by positing that growth in capitalist wealth accumulation ought to be limitless.
@Ivor
Reread the article. This is the viewpoint Kliman attributes to his critics, and sets out to refute.
Uncle Milton @16, very good!
Megan @15, I think it would depend on what the issues were, but if it were the sort of examples you cite, and we had good grounds for thinking they’d subsequently made a clean fist of things, that almost certainly wouldn’t be an obstacle to preselection. In such cases what’s most important is that forewarned is forearmed if the local tabloid goes fishing.
Also, if a prospective candidate is honest about such matters, that definitely says something positive about their character
@John Quiggin
Good heavens! What is this about? You may need to be more specific.
In this article, Kliman argues generally against critics, but agrees with critics on the point I cited.
Kliman writes:
If you “arguably” “share” in capitalist profits you are not an oppressed worker.
Kliman’s use of the word “correctly” means he is not trying to refute this point.
Kliman then continues with a nested “if” statement:
If CEO’s received employee compensation, one could argue that the demonstrated failure of “profits” to rise at the expense of “compensation” is a statistical mirage since, if …..
Here he is presenting his critics position that (supposedly) CEO’s receiving incomes as workers artificially drags down the measurement of profit.
Kliman then specifically states that the assertion that CEO’s were receiving employees compensation – was false. See:
First identifies the assertion;
Then declares the assertion is false;
You need some other source to justify:
The ploy of playing that CEO’s are members of the oppressed working class sounds more like a line from Jeremy Clarkson.
As I said, Kliman is attempting (very weakly, IMO) to refute the argument, not putting it forward. The statement that CEOs are members of the oppressed working class is a summary of my own interactions with him, but it’s obvious from what you’ve already cited that he is (as I said) doing his best to deny the facts put forward by Piketty.
The G8 has withdrawn its support for Christopher Pyne’s university funding reforms. Genuine change of mind or a case of reculer pour mieux sauter?
@Ivor
It appears to me that Professor John Quiggin has misinterpreted Kliman’s article somewhat. However, I disagree with Kliman if he also asserts (implicitly in the article under question or explicitly elsehwere) that the tendency of the rate of profit to fall is a Law.
Professor Richard Wolff states (and I agree with him) that;
“Regarding the argument of Marx about the “tendency for the rate of profit to fall” (TRPF) – in his Capital, Vol 3, Chapters 13-15, as I recall – Marx shows that this tendency is just that: something that “tends” to happen unless and until contradictions with that tendency and/or “counteracting tendencies” undermine the TRPF.
Items (1) through (4) above [not listed in this quote] represent some of the contradictions and counteracting tendencies that transformed the TRPF into a short period when profits instead rose. As the European crisis persists and draws the already crisis-weakened world economy back down into broad decline – after an incomplete and weak recovery for a few months before April, 2012 – the TRPF reasserts itself.
The subtelty of Marx’s arguments is lost if readers transform what he calls a “tendency” into some absolute that must always occur. Those chapters in Capital, Vol 3 are entitled tendency, contradictions in the tendency and counteracting tendencies precisely to avoid the interpretation that Marx was describing something that would always occur.”
A “tendency” no matter how strong is not a Law. A (scientific) Law describes inflexible relationships. A scientific law is a statement based on repeated experimental observations that describes some aspects of the universe. A scientific law always applies under the same conditions and implies that there is a fixed “causal” relationship involving its elements. For philosphical reasons too complex to go into here the word “causal” must be in quotes as it is not quite the right word.
An economic system is a multivariate system with many unknown and imperfectly known variables. Causality is also contestable in a multi-feedback system or set of systems. No mechanistic or deterministic Laws (beyond physical laws, thermodynamic laws and perhaps some ecological and biological laws as they effect the economy) can be invoked or assumed in relation to our extant economy or any economy. That is why careful writers like Marx talk about tendencies not laws in such contexts.
Since middle age, I have had a tendency to get fatter. However, it is just a tendency and there are countervailing tendencies. Periodic “crises” and “panics” of dieting and exercise have for years lead to a boom and bust bodily economy for me (commonly called yo-yo dieting). These have interrupted the upward trend for long periods by replacing it with a rising and falling graph with a flat overall trend. Currently, I am at a peak (unfortunately) that has plateaued (small mercy) for a considerable period (not so good). Where will the next movement be? I don’t know. There is no clear Law to describe these tendencies or my very variable “will power”. If I died soon (hopefully unlikely) where would my weight trend go? My live weight would instantly go to zero. My dead weight would quickly go to zero by decay or (much more likely) cremation. Where’s my tendency to get fatter then? It’s certainly no Law. 😉
r>g is just a mathematical abstraction of “inequality between capital and labour is increasing”. Piketty mistakes his description for a causal analysis.
As I understand it, Richard Burkhauser’s claim, repeated by Kliman, that profit share is falling and worker’s share rising rests on including welfare state transfers as part of the worker’s share.
Kliman is not a reasonable representation of Marxism. He is similar to Steve Keen, fixated.
I have listened to him at conferences in London, and found him more obscurantist and tendentious than revelatory.
I would not be surprised that your representation of his view is a simple misunderstanding.
It is not reflected in any source I am aware of – properly digested.
None-the-less Piketty needs a dose of cross-examination and Kliman is pursuing this. this is useful.
It may be possible to associate CEO’s with the working class but you would need to separate out their income as coming from actual skill, then rent from their monopolisation of this skill, and then the extra earnings from profits from capital.
My view is that CEO’s are in a middle class and will attack workers when capital desires.
Footnote: The continually interrupted and reversed tendency of the rate of profit to fall via capital overaccumulation (as much as anything) condemns capitalism to periodic crises but is not in and of itself the factor which condemns capitalism to ultimate collapse. The factor which condemns capitalism to collapse is its intrinsic propensity to endless growth which exhuasts resources and destroys environments. Capital seeks endless growth as that is the nature of competing capital. It is an endlessly escalating battle where anything less than growth for an “individual capital” means decay and death for that capital. All capitals to survive long term must grow. This means the entire system must grow indefinitely which is of course an impossibility.
The other source of capital’s contradictions is the issue of the control of inputs, production and consumption. Were all the people to control these elements, then the destruction of the environment would be felt AND acted upon (because the people are essentially diffuse and everywhere) and factored in to decisions. In other words, negative externalities are truly considered only under conditions of full worker and citizen democracy. Where a small elite makes the production decisions and takes disproportionate wealth, “enclave immunity” to negative externalities exists and persists for a long time. It becomes permissible and indeed desirable to trash most of the world environment while small benign, “pristine” and lavish environments can be maintained in enclave or metropole fashion.
Of course, there are limits to “enclave immunity”. Climate change is the big ticket item in this regard but there are many other natural factors which will degrade “enclave immunity” including the exclaved and excluded ravening hordes. Are zombie movies really an expression of the fear of under-fed, excluded hordes? In conditions of exclusion, both hopelessness and fundamentalism (political or religious) spread like a zombie infection. Specifically, hopelessness comes first. This leads to apathy and self-destruction or to violent radicalisation depending on internal nature and external influences.
@Nevil Kingston-Brown
If people want to make a point about what Kliman or Wolff or any other supposedly say, then they need to provide a reference.
It may be useful to look at factor shares data from some global database.
If you eliminate all the artificial boost due to trillions of QE, you may find that the leading capitalist stock market indexes, after CPI adjustment, have actually fallen or alternatively the period of doubling has lengthened.
It may be useful to look at after-tax minimum wages and after-tax average wages and compare to the henderson poverty line. This may show that household shares have fallen presumably implying that profits-share has been maintained or increased?.
Kliman is probably wrong on this point (and others), but we should not simply provoke his views on Piketty.
Piketty’s r>g (and associated formula) are not the root analysis we need. Picketty’s main fault is that he aggressively insists on not making a distinction between wealth and capital see his page 47).
This misunderstanding cascades all the way through his book.
@Ikonoclast
@Nevil Kingston-Brown
If people want to make a point about what Kliman or Wolff or any other supposedly say, then they need to provide a reference.
It may be useful to look at factor shares data from some global database.
If you eliminate all the artificial boost due to trillions of QE, you may find that the leading capitalist stock market indexes, after CPI adjustment, have actually fallen or alternatively the period of doubling has lengthened.
It may be useful to look at after-tax minimum wages and after-tax average wages and compare to the henderson poverty line. This may show that household shares have fallen presumably implying that profits-share has been maintained or increased?.
Kliman is probably wrong on this point (and others), but we should not simply provoke his views on Piketty.
Piketty’s r>g (and associated formula) are not the root analysis we need. Picketty’s main fault is that he aggressively insists on not making a distinction between wealth and capital see his page 47).
This misunderstanding cascades all the way through his book.
@Ikonoclast
Marx specifically states it as a Law in ch.13 vol 3, Capital titled:
“The Law Itself”, and elsewhere.
he develops his model and then explicitly states that:
[p318, Penguin Classics ed.]
The fact that we have balloons, satellites and planes that can stay high in the sky above the earth does not mean that the Law of Gravity is not a law but a tendency.
Maybe someone can spot anywhere where Marx says the structural fall in profits (due to worsening disproportionality of capital to labour) is a tendency.
Marx generally used “tendency” w.r.t. countervailing issues. In any case, is there a meaningful difference between a “necessary tendency” and a “law”?
@Ivor
I’d rather argue with the American Enterprise Institute directly (since they have some influence) than deal with the second hand presentation of the same arguments by Kliman (who doesn’t). I just pointed to him as someone who, in your words, has never admitted the juicy points raised by Piketty.
This morning there was an article in The Age about an article in The Economist about criticism of Piketty that asserts he overlooked that the increase in r since the 1970s was primarily in housing wealth rather than non-housing wealth (the rate of return of which has been relatively stable according to this).
This was used in The Age and The Economist to argue that instead of a general wealth tax policy interventions should concentrate on the housing market — such as cutting out red tape and NIMBYism.
I wondered if this criticism of Piketty was accurate?
And I do not think having less controls on housing development and less concern with heritage and neighbourhood character is a very good solution to inequality — although I agree we do need more affordable housing with appropriate services and infrastructure.
http://www.theage.com.au/business/the-economy/inequality-is-growing-in-our-own-backyards-20150330-1mb83o.html
http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality
This morning there was an article in The Age about an article in The Economist about criticism of Piketty that asserts he overlooked that the increase in r since the 1970s was primarily in housing wealth rather than non-housing wealth (the rate of return of which has been relatively stable according to this).
This was used in The Age and The Economist to argue that instead of a general wealth tax policy interventions should concentrate on the housing market — such as cutting out red tape and NIMBYism.
I wondered if this criticism of Piketty was accurate?
And I do not think having less controls on housing development and less concern with heritage and neighbourhood character is a very good solution to inequality — although I agree we do need more affordable housing with appropriate services and infrastructure.
http://www.theage.com.au/business/the-economy/inequality-is-growing-in-our-own-backyards-20150330-1mb83o.html
@John Quiggin
Yes, I would avoid Kliman unless you want to drown in leftist sectarian Marxism.
But some of his points may be useful.
@Ivor
The fact that Marx wrote something is not proof that it is true or that it remains true beyond his own epoch. We have to pass a more critical eye than that over Marx’s works. Knowledge marches on and history marches on. There have been many developments in science, technology, extant forms of capitalism and the availability of economic data since Marx’s day.
The new data and new developments easily put to rest the idea that TRPF is a universal law for all epochs of capitalism. TRPF is an historical artefact if anything. It is an artefact of one form of organisation of industrial capital (and industrial capital only) before the advent of full automation, robotisation and the employment of amounts of inanimate power which now vastly dwarf human muscle power (by several powers of ten). These factors I mention have introduced a qualitative as well as a quantitative change into the character of capitalist production.
There is no intrinsic reason that less material surplus of goods and services (including the profit component) can be drawn out of a near fully automated system powered by inanimate energy forces and run by a tiny operating crew. There is no valid claim that inanimate or non-human processes cannot produce significant surplus value themselves under current modern technology with minimal though not zero human mental and physical labour power.* The increase of constant capital (buildings, plant, automation and machinery) over variable capital (human labour) does nothing in itself to explain the over-accumulation of capital. There would be no over-accumulation if displaced workers were employed and remunerated elsewhere in human and environmental services (for example) or even simply given adequate living stipends to be citizens.
The problem rather arises in the place where I located it (and where Marx located it orignally for he is correct on this point). The problem arises with the ownership of the means of production and thus the power to (mis)-allocate resources which accrues to the owning elite at the expense of the masses.
* Final Note: There is no way that a labour theory of value encapsulates and accounts for all the value produced in the modern age. Marx’s TRPF was approximately valid under the conditions of early industrial capitalism as he knew them. It is no longer even approximately valid. The labour theory of value itself was originally approximately valid. It too is no longer even approximately valid.
The fact that the labour theory of value does not hold any longer does not in any way legitimise capitalist ownership of the means of production. Where labour is not the generator of surplus value, natural capital and natural processes are the generators and this surplus does not rightly belong to a small sub-set of humans (owners) any more than does the labour surplus. More precisely a sort of dialectic is involved. Value and surplus value are created by the interaction of human labour and natural resources/processes. Labour is useless without resources and resources are useless without labour (or at least work be it machine-work or human-work). Technology leads to capital deepening and a reduction in variable (human) capital. Technology is a lever precisely as a lever is technology.
@Ikonoclast
I think you may need to review this with at least some references.
You cannot deal with this issues based on duelling opinions.
Any statement such as:
lacks rigor.
It all depends on what was written, which anyone is free to contest with references, evidence and analysis.
Anyone can set up a simple spreadsheet model of capitalism and show it soon collapses. Just assume that all business expenditures are recovered by final consumption expenditures.
On the other hand Marx’s model of simple reproduction with department I and department II continues infinitely. Marx’s flow ensures that all business expenditures are covered by consumption expenditures.
I see no substantive change with modern capitalism apart from credit, paper money, and exploitation of oppressed labour offshore.
For Marx, money was specie. He excluded trade and credit issues from his work intending to cover these later, but he died.
Marx did not support the labour theory of value – this was a classical theory (John Locke, Adam Smith etc). Marx developed a different “socially necessary labour theory of value” where this quantity is determined by competitive markets provided there is no “alien power or barrier” to market forces. [cf. Capital vol 3, ch 45. Penguin ed. p895-896]
Attacks on Marx are a dime a dozen. They all usually misinterpret him and you can always attack someone by misinterpreting them.
The Age of Entitlement is alive and well, for some: job employment agencies will now be able to place jobseekers in contracts lasting as few as four weeks, and will be incentivised with cash rewards for doing so. To wit:
Four Corners had a program recently which outlined the scale of corruption of the Jobs Services Australia system; they showed clear evidence of falsification of jobseeker forms to say they attended training (when they didn’t), or forms with cut-n-paste signatures forged to claim the jobseekers were still placed at a particular job (when they weren’t), and so on.
Given the bleeding of taxpayer cash on this Howardistic shambles of a privatised employment services sector, you would think the current government would look long and hard at the cost/benefit of such short term placements being admissible, and would install proper checks and balances, as they like to say. But that isn’t likely, is it? No, no red tape! No red tape! And so we will lose even more cash on subsidising small businesses, offering the crumbs of gaining experience when that isn’t what it is truly about.
Unemployment is at its highest in 12 years, and this is the kicking jobseekers get, through no fault of their own. Where is the real incentive for job services sector agents to actually reduce the unemployment rate? Perversely, the incentive is the opposite: keep the churn in job seeker chum going, and the money rolls in—just not for the job seeker.
@Ikonoclast
I think the withdrawal of support is because the bill, in its current form, does not go far enough. The Go8 most definitely want deregulation by the bucket load; they figure they are now in a great negotiating position with the government, so long as they can shift a couple more pollies to their cause.
Beyond that, I’m fairly sceptical of de-politicised committees under this government. A look at the appointed heads of various departments, commissions, review boards, public boards, advisory groups, etc, and a pretty strong whiff of favours for friends emanates, certainly a biased selection towards like-minded individuals rather than a diverse base. It’s infantile behaviour.
Hmm, that’s weird: I clicked on the Reply button for Uncle Milton’s post and ended up with Ikonoclast instead. My apologies for the mix-up.