Sandpit

A new sandpit for long side discussions, idees fixes and so on. Unless directly responding to the OP, all discussions of nuclear power, MMT and conspiracy theories should be directed to sandpits (or, if none is open, message boards).

23 thoughts on “Sandpit

  1. Joseph Stiglitz’s latest talk on “Inequality” is on the ABC Big Ideas website.

    http://www.abc.net.au/tv/bigideas/stories/2014/07/30/4057169.htm

    As people from Stiglitz to Piketty have demonstrated, inequality of wealth and income is rising. Stiglitz’s work (and even some IMF work he refers to) indicates this is a bad thing in the sense that it reduces economic performance overall. The consensus view, according to Stiglitz, is that less inequality than we have at present would improve economic performance. This, of course, is not the same as saying economic performance would be best with no inequality at all. Stiglitz does not make that claim to my knowledge.

    If inequality is still rising it means the rich, the plutocracy, are winning. Warren Buffet agrees; “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” I do not agree with statements that the neoliberal tide is now turning. I will believe the neoliberal tide is turning only if and when inequality begins to decline again. Given the bias of my situation and focus, I am mainly thinking about the English-speaking West though I would include the EU too.

    Stiglitz made the point that the problem is not economics but politics. In one sense he is right. In another sense he is wrong. He seemed to mean that there is enough knowledge of economic behaviour in this system (which I might call “really existing capitalism”) to make better decisions. There is enough knowledge of macroeconomics, markets, consumer behaviour, firm behaviour, microeconomics and so on to make decisions which lead to less inequality than at present and also to better economic performance than at present. I myself am convinced of this by the arguments of Stiglitz and many others. The obstacles are political in this view. For various political reasons (for example the undue influence of the rich on political process), the majority are not getting their desired policies; though the rich are getting the policies that they desire.

    See the study “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens – Martin Gilens and Benjamin I. Page.

    Now, in what sense is Stiglitz wrong? (I mean at least in his statement in the speech I refer to. People have to abridge their arguments a lot in a 35 minute speech.) The economic realities condition the politics and thus condition what is possible in politics. As an example, the rich have much more money and indeed productive capacity at their disposal to make their case, often via MSM opinion and advertising, and to also buy candidates… er um I mean make political donations.

    This raises an alternative or at least modifying thesis that an economic system systemically biased to creating wealth inequalities will in turn generate the politics that support, legitimise, enforce and intensify inequality. The proof is in the pudding as this is exactly what is happening. The systematic bias can be traced right back to the fundamental ownership systems and wealth allocation systems of capitalism. I will leave that mainly as an assertion at this point as the argument will otherwise get too long.

    The one point I will make is that capitalism’s empirical tendency to monopoly has been observed and commented on for about 150 years by most economists worthy of that title. The observation of the natural or real tendency of capitalism to monopoly has not been limited to strands of political economy like Marxism. The history of politics under capitalism has very been a history which has demonstrated in practice the continual need to work against the natural tendency to monopoly (anti-trust laws etc.) and to continually redistribute wealth to counter the seemingly endless natural tendency to inequality.

    This raises the key point. A economic system with a strong bias to generate inequality and then to either maintain a kind of equilibrium at some quite extreme point of inequality or to break down in some chaotic way, is a system which can only be kept running and something like fair with certain kinds of great and continual effort (regulation and compliance effort against the monopolist tendency, welfare redistribution and so on). The alternative is to remodel the system itself to remove the inbuilt systemic biases. A good engineer, systems engineer, process engineer or complex systems analyst would have the sense to comprehend the fundamental correctness of this proposition. Redesigning the system to remove systemic bias makes more sense than expending enormous effort to continually correct the inbuilt bias of a badly designed system. Why are broadly orthodox economists different in this regard and not able (apparently) to comprehend this point? This is an interesting question both in the political economy sense and in the sociological sense.

  2. Redesigning the system to remove systemic bias makes more sense than expending enormous effort to continually correct the inbuilt bias of a badly designed system.

    Sure, if you know how to do it.

  3. @Tom Davies

    That’s a very valid point. We don’t have perfect knowledge or perfect foresight or anything like that. The economy is arguably the most complex thing we run aside from society or civilization in total. Re-engineering a running system is very different from the same job on a system you can close down for upgrades. We certainly can’t close the economy down while we re-engineer it. Violent revolutions probably come closest to a full shut down, “upgrade” and re-start if one can use that sort of analogy. I certainly would advocate making changes before things get to the violent revolution stage.

    At this point, I don’t want to reply on these issues (and others) until the discussion gets going. If it gets going.

  4. Windows 8.1, when set to do automatic updates, installs a service which sits on the taskbar, inviting you to install/upgrade to a trial of Windows 10. I found the offending update, KB3035583, uninstalled it, thought I’d set myself up so it wouldn’t re-install—but it did. It doesn’t politely offer to rack off once you’ve said, no, I don’t want Windows 10 on my machine; in fact, it doesn’t provide a means of saying, no thanks, I’ve got enough problems without a new one. Other than closing the dialog box by the X, (or shutting down the service), there are no buttons for saying No.

    This is very rude of Microsoft. It is push-advertising and egregiously so.

  5. I still miss Windows XP. It was good system…erm once it had had at least three major service updates.

    I avoided Vista and 8 like the plague and events have proved me right. Windows 7 is okay, but again only after many updates to iron out the kinks. Put it this way. I was a late adopter of 7 and I will be a late adopted of 10 most likely.

    But really, MS and Apple are both essentially evil. So what is one to do? I could run Linux I suppose but my son says I don’t know enough to use it and TBH I don’t feel like learning about it. I belong to the school of thinking that says “Operating systems should just work seamlessly. I shouldn’t have to be a geek computer hobbyist just to make my operating system work properly.”

  6. I’ve noticed that annoying Windows 10 thing too.

    I agree that XP was fine, but I had to get a new computer last year and it came with Windows 8 which I dislike. I’ve been told it works very well for tablet devices, but it’s rubbish on a laptop.

    Recently I’ve been getting a lot of “This page can’t be displayed” which appears at random (e.g. I try JQ and it won’t work, I go to my email and later on it will work for JQ but not for email etc…). When you run the “troubleshooter” you get “Windows could not automatically detect this network’s proxy setting”, which doesn’t help me at all. I’ve been searching for answers to this bug and it appears to be quite common, it also appears that Microsoft has no idea how to fix it.

  7. @Megan

    Yes, anyone who tries to make out that only big government is inefficient and that big business is always efficient has very selective perception.

  8. The ironic thing about the “(big) government is inefficient” line is that one thing they are very efficient at is collecting everyone’s internet data, very much the firehose approach. The episode of Lateline on the ABC tonight went into some detail about what has been going on.

    If that money were instead directed to charities, education, health, and public research, it would probably make a great deal of positive difference for far more Australians than would suffer for the loss of such all-you-can-eat mass suspicionless surveillance. Does anyone know how much this stuff actually costs the Australian taxpayer, or is it diluted across a series of innocuous sounding appropriations bills?

    In order to help keep the mass surveillance costs down, I’ll continue to use my real name on my unencrypted posts. Send the savings to the Heart Foundation or something.

  9. “NSA, the only government department that actually listens.”

    Whatever it’s costing, it would save money if they just stopped doing it.

    The ALP promises to keep doing it. That’s why clown-people will vote for them, or something like that.

  10. @Ikonoclast
    The system can be redesigned. It’s been done before – many times. Trouble is, it’s never been done successfully. Nor can it ever be.

    The simple reason for this is that the human condition trumps all other systems. In particular, certain “bad” properties of the species, greed and exploitation, trump other “good” properties, such as altruism etc. (Of course these are not strictly good or bad, they just are, period.) The tendency towards monopoly in economic systems is therefore really just the broad manifestation of the personal tendencies we each possess towards self-interest and survival.

    We’re an egocentric and self-aware species perfectly adapted to exploiting all available resources. The individual exists at the centre of a series of concentric circles: the I, the family (the reproductive gene chain which perpetuates the I), the close friends, the acquaintances, the culture, the nation (a figment), the god (another figment) .. the further one moves from the I centre (actually the brain’s sense of self), the weaker the hold on the I. (Nation and god seem to be the only 2 outer circles that can push up the chain of command – they depend on a weak sense of I.)

    We are also both exploiters and exploited. I’ll stop there .. otherwise it’s an uncontrollable rant.

    One thing governments could do, but probably wont, would be to just spend like drunken sailors indefinitely. Deficits forever. That would NOT suit the rich. Bill Mitchell says that this could be done. Not surprisingly, no treasurer would dare agree.

  11. @dedalus

    It’s interesting that the standard “appeal to nature” argument proposes that something is good because it is “natural” or bad because it is “unnatural”. Yet, when it comes to humans the argument is often inverted and humans are found to be naturally “bad”. Thus human nature is asserted to be “naturally bad” in some way. You correctly note that natural properties regarded objectively “are not strictly good or bad, they just are, period”.

    The “nature of man” is a long argument and I agree a discussion on that topic on a blog can become an “uncontrollable rant”. I can only put my view that human nature exists at various levels, physical, psychological and social but as one moves along that path human nature becomes more alterable and malleable.

    You write “In particular, certain “bad” properties of the species, greed and exploitation, trump other “good” properties, such as altruism etc.”

    Is it really clear that such bad properties always and everywhere in all societies trump good properties? Do parents mostly kill their children or mostly nurture them? Are homes run like capitalist economies or socialist economies? Do the mother and father ask the children as follows? “What am I bid for this fine chicken dinner? Oh, you have no money? Then you get no food.” Fagin might do this but not the average parent. Do parents in fact follow the principle “From each according to his/her ability and to each according to his/her need.”? A slogan from Louis Blanc later popularised by Karl Marx. Indeed, we do find this is the principle parents follow. What actually makes our current society work at base is this familial socialism.

    The selfishness-altruism argument requires modification. This first step of altruism becomes the second circle of selfishness in your model: the I, then the family. Of course, it is just a kind of semantic game to call this second level “altruism” or “modified, secondary selfishness”. What matters is that it occurs and occurs without the money nexus being necessary to induce it. Indeed, most people suffer a huge money penalty for having and raising children. It is a highly irrational thing for that rational agent, homo economicus, to do.

    One can use both nature and socialisation arguments to explain why we nurture our own children. Both contain contributing validity in my opinion. Intriguingly, this area is still sacralised, as it were, even by conservatives and neoconservatives. They never seem to propose that human nature is so bad that humans have to be paid to care for their own children otherwise they might eat them.

    So why does human nature mysteriously transmute to naturally “bad” at the next level? Certainly, there is an attenuation of kin-feeling but I argue that it is not so great unless further encouraged by certain forms of enculturation which encourage a reduction in fellow-feeling. Indeed, one is tempted to call it deculturation and de-naturation. But this will become a long argument and there are examples to support my case and counter-examples to undermine my case.

    In summary, I don’t take it as definitively established that human nature is naturally bad and that capitalism is the one, best possible system to harness human nature for the common good. Contrary to Fukuyama, I do not think we have reached the “end of history” yet, especially in terms of evolving the best possible economic system. I think capitalism is just a way-station. It has its positives and it has played its role. It is close to the end of its usefulness in my opinion. It has internal contradictions (an inbuilt tendency to internal systemic failure) and external contradictions (an unavoidable conflict with the biosphere).

  12. @Ikonoclast
    The struggle for survival has ever been, only it gets redefined by all sorts of evolutions. What was once the neanderthal fearful of the sabre tooth tiger is now the 3 hour commuter en route to the business on its own edge of insolvency or takeover. Insecurity. But of course it’s not all bad. No, thank goodness there will always be priests and kings .. and many moneyed oracles for late night TV interviewers to consult with. And this is as it should be. We need our role models.

    “Economic growth.” Wonderful term. So Darwinian.

  13. Burma (Myanmar) is committing a slow genocide against the Rohingya. But they are also a strategically important country for the US empire.

    After the Lomborg WA Uni scandal, I hear that the ANU has a ‘Myanmar Research Centre’.

    Australia’s Woodside Petroleum has large fossil fuel interests in Burma. Their activities are displacing a lot of Rohingya in Rakhine province.

    Speaker of Myanmar parliament’s upper house, Khin Aung Myint, was in Canberra to help open the new Myanmar Research Centre at the Australian National University (ANU).

    Scores of boats are currently believed to be adrift in the Andaman Sea with up to 10,000 people onboard.

    “I want to urge everyone, to look at everyone among these boat people, they cannot speak the Myanmar language, and they don’t look like Myanmar people,” Mr Myint said.

    “When you try to investigate, clearly they are not from Myanmar.

    “We’re also aware that Australia is not accepting them, likewise Myanmar cannot accept them.” …

    Then I think of the deafening silence in Australia’s establishment circles.

    Also the silence from one of the world’s supposedly leading human rights icons Aung San Suu Kyi.

    This explanation is nauseating (but probably close to the mark):

    According to some observers, Aung San Suu Kyi and her strategists have decided that speaking up for the Rohingya may not be in their electoral interests.

    “Aung San Suu Kyi and her strategists are looking at the electoral maths,” says Nicholas Farrelly, director of the Australian National University’s Myanmar Research Centre.

    “They have long imagined that any perception the NLD is too cosy with the country’s Muslims could lose them millions of votes. That, at least, is the fear.

    “They are anxious that the Rohingya could serve as a wedge between Aung San Suu Kyi and tens of millions of Buddhists that she is counting on for votes. It doesn’t help that many NLD members probably support harsh treatment for the Rohingya and feel no special compassion for them.”

    Burma’s quasi-civilian government, which is headed by former generals, is in a similar situation. President Thein Sein’s success in bringing the country back into the international fold after decades of isolation is threatened by foreign coverage of the Rohingya boat crisis.

    Our ANU is getting into bed with this duopoly regime, “pragmatically” of course, while a pogrom is being carried out. But apparently it’s OK because…”reforms”.

  14. @dedalus

    I agree with the generality “The struggle for survival has ever been”. I am not sure that it provides any specific insight into a comparative discussion of economic systems. The basic tenet of economic psychologism is that man is naturally selfish. It is clearly derived from the Biblical notion that man is sinful by nature. Instead of looking at the wide variety of behaviours, from selfish to cooperative, of which humans are capable, economic psychologism takes one behaviour, selfishness, and elevates it into a complete explanation and justification for the capitalist economic system.

    Marxism is often criticised for displaying a wide strand of historical determinism in its thinking. Historical determinism is the stance that events are historically predetermined or currently constrained by various forces. It’s interesting that most fundamental justifications for capitalism are equally determinist in nature. The stance and method of psychologism is used to suggest that man’s innate selfishness determines that capitalism is the only workable economic system. It is also suggested that capitalism is the final form and only form possible for our economic system. I can think of no more rigid and deterministic philosophy than one which suggests any complex system, biological, ecological or socioeconomic system has reached its final immutable form.

    Proponents of capitalism are on somewhat better ground when they use market-based arguments rather than the arguments of from psychologism. “Innate selfishness” as a postulate is a kind of essentialism rather than being anything that can be empirically measured or observed. It abstracts from the total complex being, and its behaviours in different situations, some quality which is asserted to be the most essential and real. Asking if humans are innately selfish makes about as much sense as asking if humans are innately “brain-ish” or “body-ish”.

    On the other hand, markets are observable emergent phenomena. Markets emerge from many forms of economic activity and from many economic systems. Markets are not exclusive to capitalism though capitalist markets (in their various forms) are exclusive to capitalism. Markets are conditioned by their economic and institutional situation but it is arguable that there are some fundamental aspects of the market as such which can be observed across all markets. It is arguable that markets have a general abstractable form and set of relations behind all the specific forms of real markets. However, I will have to leave this as an assertion or this post will get too long. I will sum up by saying that it is arguable that many economic systems before and up to capitalism benefited from the ability of “the market” (of whatever particular form) to perform certain allocative functions for the economy.

    The key problem with advocacy of capitalism (to my mind) is that it conflates capitalism with the market as if the “free market” were the only factor which explains and fully explains the capitalist system. What is left out in this type of analysis is the ownership system of capitalism. The ownership system is swept under the carpet and not discussed openly. Or if it is discussed, the ownership system of current extant capitalism is assumed to be the only necessary and possible corollary of the free market. It is asserted that freedom exists in some having a lot and some having little (the consistent empirical outcome of capitalist markets, see Piketty) and that those have a lot and those who have a little can meet in the arena of the free market and be equal.

    I had better cut it short here. I am surprised that nobody else on this blog seems interested in Stiglitz’s speech and the issue of increasing inequality, or at least not interested enough to tear themselves away from discussing the minutiae of different of aspects of the system and its various expressions to discuss the overall system itself.

  15. @Ikonoclast
    That’s very well articulated. My own comments before I now see as a little superficial. I’m going to reassess my views and restate them in an appropriate thread. In the meantime, many thanks for your analysis, which I broadly agree with.

  16. @Ikonoclast
    Ikon I feel sorry i haven’t read the article you linked to, nor have I yet finished Piketty’s book. I am always interested in inequality, it’s just that I have had a lot of other reading to do.

    Also I second your remarks above about selfishness or cooperation vs competitiveness. Human beings actually cooperate a lot of the time, as anyone can see by simple observation. There is an economic fantasy land where everyone is selfish, everyone competes, and all important relationships are exchange relationships mediated by money. It’s nothing like the world we actually live in!

  17. 2,000 refugees rescued in the Mediterranean – TODAY!!

    Australia’s political duopoly and establishment media are a disgrace to this country and its decent people.

  18. @Megan

    What could Australia realistically do? I ask this question not rhetorically nor sarcastically. I ask it literally. What could Australia realistically do to help the world refugee problem if we actually had a humane government and a citizenry who demanded humane policy?

    Realistically there would be limits to what we could do. Australia has 0.329% of the world’s population. We have a 1.15% share of world GDP at PPP. We have about 5.15% of the world’s land area. About 6% of our country is listed as arable land. By comparison the USA is listed as having 17% arable land and the UK 25%.

    These numbers indicate we need to be realistic about what we can do to alleviate the world refugee problem. I agree, realistically we could do a lot more than we are doing now. But first should we not assist our own “Rohingya people”? I mean the aborigines and Torres Strait Islanders whom we dispossessed and pushed into camps and marginal areas? There is plenty of strong evidence that Australia’s indigenous people are the worst treated indigenous people on the world.

    I would argue that the first, best use of our scarce resources (scarce relative to total world wealth) would be to address indigenous inequality first (our internal refugee problem essentially) and then to address regional issues. Fretting about the entire world refugee problem is simply fretting about problems beyond our capacity.

    There is also the Realpolitik issue. We cannot dictate solutions to Indonesia, Malaysia, Vietnam. Thailand, Burma or others. Last time I looked at history, the USA could not successfully dictate various matters to Vietnam or even to Iraq or Afghanistan.

    If we implemented humane and sensible policies we could vastly improve the lives of our indigenous people. If we have a go at world refugee problems we could barely make a dent. We could make some difference at the regional level as an exemplar (by taking more refugees onto Australia soil and assessing them properly according to international law and UN treaty obligations). What could not do realistically is dictate humane policy to the whole of S.E. Asia even if we became humane ourselves.

    We need to clean up our own backyard first and that is (1) indigenous disadvantage and (2) meeting regional refugee obligations under UN refugee treaty obligations. The Mediterranean is not our region and we have no influence there. We can assist prevention of those sorts of world-wide refugee problems by stopping our involvement in illegal and counter-productive wars and by stopping burning fossil fuels to stop climate change and sea-level rise.

  19. @Ikonoclast

    You largely answer your own question:

    “What could Australia realistically do?”

    “We can assist prevention of those sorts of world-wide refugee problems by stopping our involvement in illegal and counter-productive wars and by stopping burning fossil fuels to stop climate change and sea-level rise.”

    We currently take about 200,000 people a year into this country. Whether that is desirable thing or not, it means we could take at least that number of refugees instead. Of course claims need to be assessed via a just system and in accordance with international law etc..

    We spend somewhere around 2 billion on our concentration camps etc.., most or all of that could be spent on indigenous people’s needs. I believe that issue needs much more than money – firstly it needs a level of decency at the political level which we don’t have (the “intervention” was racist, unnecessary and based on a grotesque lie pushed by the ABC).

    We can go further than ceasing involvement in the wars etc.. (I would include that we should also condemn neo-liberalism), by actively using whatever avenues are available to call for an end of all the wars, corruption, support for dictatorships, the military industrial complex, etc.. instead of giving those things vital support.

    If we had a humane government Australia could do a lot to ensure safety for existing refugees and massive reduction of future refugees.

  20. P.S. – re: The Mediterranean, we have a frigate there right now while navies such as Italy’s are saving thousands of lives. But it has more important things to do:

    Anzac departed Sydney in March 2015, and has transited the Southern Ocean, Indian Ocean, the Red Sea and Suez Canal before arriving in the Mediterranean Sea.

    During the five month deployment, the ship has represented Australia at Centenary of Anzac commemorative events in the Sea of Marmara, Cape Helles, Gallipoli and Italy, and is continuing to do so in Malta.

    While in Malta, members of ship’s company will participate in a commemorative service at the Cappucini Naval Cemetery, Kalkara. Two sailors are among the 27 Australian service personnel buried at the cemetery.

    Together with the Australian High Commission in Valletta, Anzac will co-host an official reception during the port visit, and Anzac’s Commanding Officer Commander Belinda Wood, RAN, will also host a mentoring session with female members of the Maltese Armed Forces.

  21. Val,

    “Also I second your remarks above about selfishness or cooperation vs competitiveness. Human beings actually cooperate a lot of the time, as anyone can see by simple observation”

    At the talk by the Chief Justice he quoted the legal scholar Patrick Atiyah, who now I have looked him up wrote a book called The Rise And Fall Of Freedom Of Contract, which is about how contracts used to be judged according to whether they were fair, then due to historical developments there was the idea that people were free to enter into even unfair contracts, then due to further historical developments this freedom to enter into unfair contracts was again limited by consumer laws etc.

    From Wikipedia:

    “The central theme is that the notion of a contract based on consent (or a “meeting of minds”) was almost entirely absent before 1800 in the law. Instead it was based on reliance or the receipt of a benefit.[1] You could revoke a promise, and the concept of an executory contract was unknown.[2] Moreover, courts were more concerned with the fairness of an exchange, and not concerned merely to uphold promises or the parties’ will. Damages reflected that, only being for the value of exchange, not the loss of a bargain.[3]

    Then, after 1800, the concept of contractual freedom “rose”. Promises and the “intentions” of parties “became the paradigm of contract theory.”[4] Atiyah argues that it began with the notion of freedom of property, summed up in the phrase of Sir Edward Coke in Semayne’s case that every man’s home is his castle.[5] Following that was the transition from a property to a contract based society.

    After 1900, however, freedom of contract had had its heyday. Atiyah illustrates how the growth of consumer protection, rent and employment legislation has moved contract back into smaller confines, based on general notions of fairness”

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