Tag: Keynes

STRAIGHTFORWARDNESS ….

da Peter Herrmann's Blog, posted in academic life - living in academia, contemporary socio-economic situation, quotes, thoughts on life and its philosophy

straightforwardness – it could well mean not to follow the straight line …

Taking the words from Keynes’ General Theory we have to see:

The classical theorists resemble Euclidean geometers in a non-Euclidean world who, discovering that in experience straight lines apparently parallel often meet, rebuke the lines for not keeping straight—as the only remedy for the unfortunate collisions which are occurring. Yet, in truth, there is no remedy except to throw over the axiom of parallels and to work out a non-Euclidean geometry. Something similar is required to-day in economics.

And even beyond geometry and economics, the seemingly simple solutions, bringing us forward ling the straight lines, may be fatal, especially while standing next to the abyss.

A Debate

da Peter Herrmann's Blog, posted in contemporary socio-economic situation, Peter's Log, works, works, projects, publications

It is – in its own right – an interesting question why and how some ‘books make a career’ – in this case referring to Mazzucato’s ‘The Entrepreneurial State’. I am always skeptical when hearing about such ‘bestsellers’ and actually really hesitant to read, let alone to buy them. Having been invited to take part in a debate on the book I read the text – and now I am somewhat surmised to see that my ‘prejudice’ is in actual fact very much a ‘judice’, i.e. a reflection confirmed by this reading experience. There is not much new in it – it surely summarises important points, and even more sure is that it’s radical character has to be seen in ensuring that there will be no radical change.

Some points from the debate my be of some wider interest – and what follows is not a systematic critique of Mazzucato’s work or even one of the ‘one book’.
The foundation from which her argument is developed remains by and large unclear: there is a bit of economics, some political economy, some political theory and some philosophy and … a lot of confusion caused by not developing from all the wealth of borrowings a systemic approach. Thus, the possible wealth of a merger is lost to eclecticism. And the loss – or wasted opportunity – is even larger when considering the shallow reception of some of the references … – yes, of course, the Smithian ‘invisible hand’, which is taken out of its original context and supposedly suggests that Smith rejected any state intervention – generally and fundamentally and for everybody and at any time. It is not quite true, and leaving aside that there is a
Book V: Of the Revenue of the Sovereign or Commonwealth
there is in my reading of Smith another relevant point. He left with us another major piece of work, namely the
THEORY OF MORAL SENTIMENTS. An Essay towards an Analysis of the Principles by which Men naturally judge concerning the Conduct and Character, first of their Neighbours, and afterwards of themselves. TO WHICH IS ADDED, A Differentiation on the Origin of Language
In some way this was one of the genius acts: splitting the task in order to maintain through the backdoor its unity … – and much later this allowed him, namely Smith, to turn up in Beijing, with this remark I am obviously alluding to the highly interesting book
ADAM SMITH IN BEIJING. Lineages of the Twenty-First Century by Giovanni Arrighi. 
Discussing in this context secular stagnation: if one really wants to address this in a radical way, one has to take note of much more radical views, as expressed already a long time ago, for instance by Keynes – here reference is usually made to his writing on the
Economic Possibilities of our Grandchildren
– and even earlier by Mill [for instance in chapter xi ‘Of the Law of the Increase of Capital’ in his
Principles of Political Economy with Some of Their Applications to Social Philosophy].
Such radical ideas, however, are just what Mazzucato strictly rejects – instead she searches for ways that ensure that there is no ‘quasi-blasphemic’ attitude and politics towards the gods of eternal growth. And her proposal is that, if laymen’s activities are not sufficient, the entrepreneurial state could emerge as high priest, collecting the lost sheep, developing new grazing lands for their new thriving.
Indeed, there are interesting facts on the cowardliness of the stray sheep …, risk averse behaviour which are expressed in the statement
I think there is a world market for maybe five computers,
allegedly said 1943 by Thomas Watson, chairman and CEO of International Business Machines (IBM). The entirety of the  story, beyond the exiting individual chapters, is not much more than overcoming the stagnation of the history of great men by pulling now women on the same stage, while actually the real problems are about the need of changing the stage. Green growth remains commodity growth, regulated and controlled data extraction remains data extraction, prone to abuse and in need of a real public, common ownership, going much beyond the provision of a seedbed for renewed private profitability, retrieving new sources of value production needs a new understanding of what value is about, going beyond the concept of exchange values only.
The one fundamental problem with the work I see is as follows: As one of the colleagues mentioned during the discussion here in Vienna, he reads the text as reference to the rejection of private entrepreneurs to accept sitting down at the roulette table. And I would agree with such interpretation to some extent – to the extent to which we are talking about the simple game, played by simple minds. The limitation of such metaphor is soon showing up: While accepting ‘The Entrepreneurial State’, thus following Mazzucato’s suggestion, we would be accepting the specific hegemony, i.e. the need and justification of downgrading ourselves to the Dostoyevsky’ian Gamblers, in other words: the acceptance of a new round of what became known as casino capitalism.
It is the acceptance of the reality that I saw expressed in the slogan which was spray-painted on one o the walls:
…. Human capital of all countries, accumulate …

New Princedoms

da Peter Herrmann's Blog, posted in academic life - living in academia, contemporary socio-economic situation, general, thoughts on life and its philosophy

I know that several people are afraid of drawing long and occasionally somewhat contorted lines, preferring more technical approaches as those suggested in modern text books. But I am a bit afraid that this only defers matters and the history books in 50, 100, 200, 500 years, opening the view on the wider perspectives, will evoke the same disbelieve as the books today when they teach us about the cruelties of ancient and medieval times.

Sure, Keynes said in the First Annual Report of the Arts Council [1945-1946]

The day is not far off when the economic problem will take back seat where it belongs, and the arena of the ear and the head will be occupied or reoccupied, by our real problems — the problems of life and of human relations, of creation and behaviour and religion.

Now, when we look around, we can see already some of these grandchildren amongst us … — well, not really amongst us but when peeping across the walls of the gated communities we gain some insight. We then read for instance about an artist that

she also insisted she worked less than 20 days a year in order to be with their family.

She said: “I have to make one movie a year because I have to invest in their future and I have to be able to pay their way through college and be able to provide for them. I’m looking for movies that will shoot in Los Angeles, for projects where I’m part of an ensemble so I can shoot in and out in 10-20 days. It’s all about trying to spend as little time away from my kids as possible.”

Sooooo caring — this had been the “news” from August the 20th. News of the same day inform us about Rome:

Il funerale si è svolto in pieno giorno con sei cavalli con pennacchio che trainano una antica carrozza funebre, una banda che intona prima le note composte da Nino Rota per il film “Il Padrino”, poi la colonna sonora di “2001 odissea nello spazio” e la canzone Paradise, altra colonna sonora, ma, questa volta, del film “Laguna Blu”. Una scenda degna de “Il Padrino”. Adesso esplode la polemica per capire chi abbia dato l’autorizzazione al funerale.

It is about a “festive funeral” for a Mafia boss in the middle of Rome, blocking the entire traffic, which is bad enough though we are used to it. But dead as he is, he still sends a clear political message about “governance today”. Of course, this is frightening. And reading further one wonders what is more frightening:

  • the fact that such funeral happened — and had been allowed
  • or the fact that there are now investigations called for, signalling a state that is substantially weak … — and can only deal with the technical side of what happened, but does not have anything to say on the “state of the nation” that actually makes such things happen.

From my side, no word on this occasion on the church — the relevant article in today’s Il Messaggero’s Cronaca is written by Mauro Evangelisti.

It is indeed a sign that politicians — be they state actors, “societal civilians” or corporate actors — are completely disempowered, let alone people being able to gain and maintain power — just these days I stated in an article on the “Death of Representative Democracy”:

Und paradoxer Weise ist gerade auf diese Weise der Demos von den Herrschenden gewählt: an technischen Entscheidungen darf es teilnehmen und auf dem Jahrmarkt der Eitelkeiten darf es sich tummeln, während die eigentliche Politik hinter der Bühne gemacht wird.

Nur auf der Erscheinungsebene hat sich das Politikfeld zu einer Bühne verwandelt, auf der sich die Eitlen tummeln: Konsumbürger, Aktivbürger, Staatsbürger, Vereinsbürger … — für jede(n) findet sich eine scheinbar einheitliche Bühne. Sachverstand wird gern gesehen — soweit er sich an Details zermürbt. Als großer Sachverstand aber stört er die Schau, denn die großen Rollen bleiben immer noch den Mächtigen vorbehalten.

In short, I highlight there the degeneration of democracy — it is now a playing field of vanity, providing a stage for “different kinds of citizens” as consumption citizens, active citizens, citizens of nation states, citizens of associations … . They can present their specific skills, get crunched by discussing technical details, thus hiding the fct that the real power is still just that: power by way of force.

The latter can be taken from the interview with Yanis Varoufakis:

HL: You’ve said creditors objected to you because “I try and talk economics in the Eurogroup, which nobody does.” What happened when you did?

YV: It’s not that it didn’t go down well — it’s that there was point blank refusal to engage in economic arguments. Point blank. … You put forward an argument that you’ve really worked on — to make sure it’s logically coherent — and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply. And that’s startling, for somebody who’s used to academic debate. … The other side always engages. Well there was no engagement at all. It was not even annoyance, it was as if one had not spoken.

(Varoufakis, Yanis, 2015: The full transcript of the former Greek Finance Minister’s first interview since resigning; Interview in the New Statesman: 13.7.2015; 17:37)

It remains a declaration of war — a scenery that is not much more than a translation of what Bert Brecht had in mind, talking about Freedom and Democracy.

So it makes much sense when the German PDS notes in a press release highlights

that Tsipras decision to step back and to call for bend elections shows how far the intervention of the creditors in the national sovereignty of Greece reaches: under the conditions imposed by the institutions Syriza can not fulfill its mandate to govern.

Now, it remains an open question if and to which extent politicians should be blamed — at least the intellectual elites have to bear their part. After recent allegations against Zygmunt Baumann, a new muddy wave had been launched. Just believe me, as I refuse to name the person who does not deserve an increase of his citation-index — as a commentator rightly states, it is an

appallingly crass piece of attention grabbing nonsense.

(sorry for omitting reference, Leslie — see the argument before)

In sum it is about this: a critique bringing forward that Bauman, on many occasions, is guilty of self-plagiarism. It is one of many similar debates: substance does not matter, is not even recognised and only form counts — as it is form that can be counted — see also the recent entry here.

If we want to look at figures, we should look at figures that are relevant: unemployment rates, orientation of economic policies on national performance instead of global responsibility, the privatisation of hospitals and the subsequent maltreatment of patients and staff, the Making of the Migration Crisis, going hand in hand with fears of extinction of nations, prices that make accommodation unaffordable, thus opening space for speculation and leaving places prone to alienation by different forms of   ghettoisation …

We can be somewhat cynical-optimists and turn Clausewitz’ statement around. Instead of

War is the continuation of politics by other means

it is nowadays still:

Politics is the continuation of politics by other means.

Indeed, a matter of establishing New Princedoms, while the old princes are finding their pompous chaperon to the last rest.

But how long will this last? the last rest, and the war by politics?

— Nomen est omen? A friend of mine said the other day that the danger of the Northern American trump …, ops Trump, with capital T of course, is that he says what many USNA-citizens want to hear. And also Mr., ops, sorry: Dr. Schäuble and his mates clearly showed this link between the two wars.

Even if history does not repeat itself, the question remains if we can see at the horizon a new Spartacus, a new Cicero or a new Cesar … .

There are thoughtful words coming from a possibly unexpected corner of the world, written in a letter by Fidel Castro Ruz on the 5th of July of this year, and published in the Granma

Cuba conoce el valor y la capacidad combativa de las tropas rusas, que unidas a las fuerzas de su poderoso aliado la República Popular China, y otras naciones del Medio Oriente y Asia, tratarán siempre de evitar la guerra, pero jamás permitirán agresión militar alguna sin respuesta contundente y devastadora.

En la actual situación política del planeta, cuando la paz y la supervivencia de nuestra especie penden de un hilo, cada decisión, más que nunca, debe ser cuidadosamente elaborada y aplicada, de modo que nadie pueda dudar de la honestidad y la seriedad con las que muchos de los dirigentes más responsables y serios luchan hoy por enfrentar las calamidades que amenazan al mundo.

Of course, there is more to be said.

Dear Mr Juncker … ;-)

da Peter Herrmann's Blog, posted in contemporary socio-economic situation, general, works, projects, publications

History is not a matter of repetition; and it is true that at times there are coalitions that would not haven thought of at other times …

The following may be usefully considered when thinking about EU investment policies today

“Forgive the candour of these remarks. They come from an enthusiastic well-wisher of you and your policies. I accept the view that durable investment must come increasingly under state direction. […] I regard the growth of collective bargaining as essential. I approve minimum wage and hours regulation. I was altogether on your side the other day, when you deprecated a policy of general wage reductions as useless in present circumstances. But I am terrified lest progressive causes in all the democratic countries should suffer injury, because you have taken too lightly the risk to their prestige which would result from a failure measured in terms of immediate prosperity. There need be no failure. But the maintenance of prosperity in the modern world is extremely difficult; and it is so easy to lose precious time.
I am, Mr President
Yours with great respect and faithfulness,
J.M. Keynes

from John Maynard Keynes (1938), “Letter of February 1 to Franklin Delano Roosevelt,” in Collected Works XXI: Activities 1931-1939 (London: Macmillan).