Ten years on … – no wisdom gained?

Of course, there are many contestable issues concerned with the “ten years on” – leaving the question of timing aside, one point may well be concerned with the word “on”, considering that it should be replaced by “into” or even “digging the grave deeper”. The success-stories so far are, if they exist, stories about de-synchronisation: the fact that some countries succeeded again in a more pronounced way to live on the back of others, temporary victories, and often victories for the countries, not for the people (for instance good overall “economic performance” often means increasing inequality)  …
Preparing the class for coming Monday, but also working on finalising the book
Changing the Socio-Economic Formation – Revisiting Value and Valuation in a Globalising Digital World
I looked up a Briefing Note, presented in 2008, in preparation of the OECD Global Forum on International Investment, titled
It is not looking at the crisis – if the collapse of Lehmann Brothers is taken as reference, it would be even a pre-crisis work, presented on a pre-crisis conference. What makes it interesting (surely – not only – for my classes “Development versus Growth”) is the fact of presenting in a masterful way the shortcoming of an understanding of economics and political economy that can well be seen as structural weakness leading to a crisis like the one we are still suffering from (sure, not everybody).
A quote right from the beginning of the briefing note:
The service sector makes an important contribution to GDP in most countries, providing jobs, inputs and public services for the economy. Trade in services can improve economic performance and provide a range of traditional and new export opportunities. However, services liberalisation also carries risks, and appropriate regulation and other complementary policies help to ensure that liberalisation delivers the expected benefits. We have reviewed the literature on these issues for 6 service sectors (tourism, financial services, energy services, information and communications technology, and Mode IV), … .
And it goes on and goes on and goes on in this spirit, not talking about the essentials of what should be at stake of any analysis. Engels, in 1884, wrote:
According to the materialistic conception, the determining factor in history is, in the last resort, the production and reproduction of the immediate life. But this itself is again of a twofold character. On the one side, the production of the means of subsistence, of food and clothing and shelter and the implements required for this; on the other, the production of human beings themselves, the propagation of the species. The social institutions under which men of a definite historical epoch and of a particular country live are determined by both kinds of production: by the stage of development of labour, on the one hand, and of the family, on the other.
(Engels, Frederick, 1884: Origins of the Family, Private Property, and the State. Preface [to the First Edition]; in: Karl Marx Frederick Engels. Collected Works. Volume 26. Frederick Engels. 1882-89; London: Lawrence&Wishart, 1990: 131-133)
The OECD-experts go exactly the other way round, starting from the end – and actually defining the end as ultimate point of departure and ultimate goal: growth, though remaining undefined, only specified by the reference to the GDP.
Indeed, there is something interesting about GDP and Development.
In fact, the up for some may mean the move back for others
Commonly the “concept” of GDP is attributed to Simon Kuznet – detailed in 1934 in
, it is time to acknowledge that already then the author spelled out – more or less at the outset:
The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above. (page 7)
And he continues:
The abuses of national income estimates arise largely from a failure to take into account the precise definition of income and the methods of its evaluation which the estimator assumes in arriving at his final figures. Notions of productivity or welfare as understood by the user of the estimates are often read by him into the income measurement, regardless of the assumptions made by the income estimator in arriving at the figures. As a result we find all too commonly such inferences that a decline of 30 percent in the national income (in terms of “constant” dollars) means a 30 percent decline in the total productivity of the nation, and a corresponding decline in its welfare. Or that a nation whose total income is twice the size of the national income of another country is twice “as well off”, can sustain payments abroad twice as large or can carry a debt burden double in size. Such statements can obviously be true only when gualified by a host of “ifs.”
A detail, mentioned at the end of the report, is surely of special interest:
The individual industries included here are photography, undertaking, mausoleum and cemetery operation, social service agencies, athletic, yacht, and country clubs, Y.M.C.A.’s, Y.W.C.A/s, and other services not accounted for elsewhere. Most of these services are of a type not easily curtailed or dispensed with, while social and welfare agencies have had a special reason for increasing since 1929. The number of employees was about a quarter of a million in 1929 and probably increased, or at least did not decline greatly, during the 3 following years (see table 200). The estimated average compensation of employees is probably fairly near the actual situation for 1929 but the trend shown since that year, except that there was probably very little per capita decline, is open to question as far as the country as a whole is concerned. (page 140)
Well, perhaps this is what the briefing says???: “Think of your people and your countries economy and accept: poverty is good for you.” In plain language – and this is very much the underlying gist of IMF and World Bank politics – be nationalist and socially unjust.
I am sure, those who write those reports, will not face what poverty or lack of wellbeing etc. mean.
Of course, this is only the visible, more or less tangible part of the underlying misinterpretation of economics: While calculations may well be correct, fact is – as John Maynard Keynes convincingly wrote in 1936:

Too large a proportion of recent ‘mathematical’ economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.

(Keynes 1936)

Still, if we look at the title of the quoted opus magnum presented by Keynes reads

The General Theory of Employment, Interest and Money

and we still may remain without considering the entire depth of reference. Of course, not every book can start with all the life stories …- but at least it should commence by focusing on the real life situation and the supply conditions and the relationality that is part of it. – Think about employment conditions that allow flexibility and reduction of working time without lowering wage and without stress caused by any fear, thus possibly causing the GDP to drop, but enabling employees to care for relatives, to be politically active, to follow their “intellectual needs” … As much as items expressed by GDP are mere means to an end, the same is true for employment, the ends not being products and services, the end not being income but “production and reproduction of the immediate life”.

Even Alfred Marshall, rightly criticised for his contribution to the mathematisation of economics, knew better than many who still highlight the centrality of employment today, (and here; and many could be added) knew better. As we can read in the Memorials of Alfred Marshall (edited 1925 by Arthur Cecil Pigou), Pigou states in his own contribution to the book (page 84):

Though a skilled mathematician, he used mathematics sparingly. He saw that excessive reliance on this instrument might lead us astray in pursuit of intellectual toys, imaginary problems not conforming to the conditions of real life: and further, might distort our sense of proportion by causing us to neglect factors that could not easily be worked up in the mathematical machine.

Acknowledging this, there would not have been any need to write to the Queen …

Annunci

Failing projects

This week, meeting the students here in Lodz for the second time, the work will get more serious. The topics

I.

European Integration – A Failed Political and Social Union?

(from: Zeit Campus: September 2018/2019)

Though proposal had been made a while back – not focussing on issues GREXIT, BREXIT and the very recent “EU-developments” in Switzerland – one is wondering if these developments are seriously distracting the debates: Although they are highlighting the vulnerability, they are easily moving debates on solutions strategies – saving a torso – while neglecting the more fundamental issues that can be seen as fundamentally structural flaws, undermining the supposed plans and claims. In other words, the project had been from the beginning as half-hearted as the project of enlightenment. – In principle, already the lectures in Vienna (2017) had been dealing with these questions. However, in Poland the more philosophical may hopefully be more focussed upon.

II.

The second course will look at

Development versus Growth. Perspectives for a Qualitative Dimension in Developmental Economics

Not an easy one, as there is the fundamental issue of determining value, or to be more precise : to determine what economics/the economy is about. Unfortunately, also in debates one alternative paradigms, easily accept the flawed definition of economy

The economy of humans emerges from two roots. They have to beeconomically active because the means are scarce in relation to the ends …; and they are in a position that allows them to be economically active as, though with some limitations, they can make decisions about the purchase and use of the goods regarding the kind, quality, quantity, use etc., thus influencing the use-impact that are achieved …

(Schoenfeld, Leo, 1924: Grenznutzen und Wirtschaftsrechnung [Marginal Rate and Business Mathematics]; Wien: Manz’sche Verlags- und Universitäts-Buchhandlung; unchanged reprint München/Wien: Philosophia Verlag: 1)

While in very general terms there is nothing wrong with what is said, there is everything wrong if we use this as real point of reference or economy and development. An alternative is Frederick Engels’ proposition:

According to the materialist conception, the determining factor in history is, in the last resort, the production and reproduction of immediate life. But this itself is again of a twofold character. On the one hand, the production of the means of subsistence, of food, clothing and shelter and the implements required for this; on the other, the production of human beings themselves, the propagation of the species. The social institutions under which men of a definite historical epoch and of a definite country live are determined by both kinds of production: by the stage of development of labour, on the one hand, and of the family, on the other. The less labour is developed and the more limited the volume of its products and, therefore, the wealth of society, the more predominantly the social order appears to be dominated by ties of kinship. However, within this structure of society based on ties of kinship, the productivity of labour develops more and more; with it, private property and exchange, differences in wealth, the possibility of utilising the labour power of others, and thereby the basis of class antagonisms: new social elements, which strive in the course of generations to adapt the old structure of society to the new conditions, until, finally, incompatibility of the two leads to a complete transformation. The old society, based on ties of kinship, bursts asunder with the collision of the newly developed social classes; in its place a new society appears, constituted in a state, the lower units of which are no longer groups based on ties of kinship but territorial groups, a society in which the family system is entirely dominated by the property system, and in which the class antagonisms and class struggle, which make up the content of all hitherto written history now freely unfold.

(Engels, Frederick, 1884: The Origin of the Family, Private Property and the State. In the Light of the Researches by Lewis H. Morgan; in: Marx&Engels Collected Works. Volume 26: Engels 1882-89; Lawrence & Wishart, 2010 [Electric Book]: 129-276, here: 131 f.)

A lengthy quote, a position that should also allow thinking what “the old society, based on ties of kinship, bursts asunder with the collision of the newly developed social classes” means today.
In a forthcoming publication – titled

About You – Nur frage nicht ob Du ueberhaupt bist

part of the topic, dealing with modes of life, will be looked at. After publication in the Tarantel, published by the Ökologische Platform bei Der Linken it will be announced here.

Corporate irresponsibility ?

Tomorrow, in the framework of the ‘hour of contemporary issues’, organised at the Max Planck Institute for Social Law and Social Policy, Munich, Amalienstrasse 33, Peter Herrmann will give a presentation titled

The Comedy of Big Data, Or: Corporate Social Responsibility Today, While Corporations wither away?

The following gives some idea what the presentation is about.

Understanding Corporate Social Responsibility requires at least a bit of historical clarification: it would be surely misleading to attribute any kind of entrepreneurial ‘social activity’ to the array of Corporate Social Responsibility. However, such review will be only briefly introduced in order to classify certain activities as related to what may be called social responsibility, the emphasis on the corporation as actor. What, however, if we come to the conclusion that certain shifts in the economy lead – in some digitization industries – to forms of the classical corporation withering away, being successively replaced by a new formation of which we cannot see clear, elusive contours. Are we moving towards revived arbitrary systems of socio-charitable controls, Lidle financing professorships, Aldi and Lidl presenting themselves as supporters of social housing and Facebook controlling elections?  Or can we foster a model which leans towards inherent publicness?

Changing the Vita Activa

Digitisation – Challenges between Changing Social Securitisation and Changing the Vita Activa

Recording of the Presentation at the Symposium ‘Digitalisation’, organised by the Academy of Sciences and Arts – taking place at the Faculty of Law, University of Salzburg, March 2nd, 2018.

In general, having worked on this topic for quite a while now, I see the following major questions that urgently require thorough systematic consideration:

  • In which way and to which extent is digitisation a matter that changes also the process and mode of production [not limited top robotisation]?
  • What are the conditions for pursuing forms or digitisation in the interest of users and the common wheal instead of being solely an instrument for new businesses?
  • Which different perspectives on law and justice are emerging from the new political- and socio-economic conditions that go hand in hand with digitisation?

Of course, this requires not least thorough and systematic classification and demarcation of the different aspects that are commonly loosely and vaguely subsumed under such catchall term as digitisation.

I am grateful to a friend, discussing life with her, helped me taking much of the mist of the topic, and also remaining aware, and feeling the challenges of real life, persisting when talking about the virtual one – 감사합니다 !

Artificial intelligence is like …
Poetry in translations is like
taking a shower with a raincoat on.

Alternative Economic Policy Today

 

In the presence of the two award winners:

the award ceremony is scheduled for the 6th of December at 18:00. The event will take place at the Rosa-Luxemburg-Stiftung [Salon], Franz-Mehring-Platz 1, 10243 Berlin.

The Scientific Advisory Board of Attac Deutschland, Attac, the Working Group on Alternative Economic Policy, the EuroMemo Group and the Rosa Luxemburg Foundation award the Jörg Huffschmid Prize 2017 in memory of Jörg Huffschmid’s scientific work and socio-political commitment.

This prize is awarded every two years since 2011.

Schedule of the event:

Welcoming address by Prof. Dr. Rainer Rilling, Member of the Executive Board of the Rosa-Luxemburg-Foundation

Introduction by Prof. Dr. Peter Herrmann, Max Planck Institute for Social Law and Social Policy, Munich

‘A different and better way of running the European economy! Alternative Economic Policy Today’ lecture by Dr. Axel Troost, Working Group Alternative Economic Policy e. V.

Speech by Dr. Silke Ötsch, Innsbruck; Member of the Scientific Advisory Board Attac Germany

Laudatory speech by Prof. Dr. Thomas Sauer, Ernst-Abbe-Hochschule Jena; Member of the Scientific Advisory Board Attac Germany

Replies by the winners

Verleihung des Jörg-Huffschmid-Preises 2017

In Anwesenheit der beiden Preisträger: Dr. rer. pol. Ulaş Şener für seine Arbeit «Die relative Autonomie der Zentralbank – Eine politökonomische Analyse der türkischen Geldpolitik nach 2001» und Etienne Schneider für seine Arbeit «Raus aus dem Euro – rein in die Abhängigkeit? Monetäre Dependenz und außenwirtschaftliche Restriktionen alternativer Wirtschaftspolitik unter den Bedingungen der Eurozone und des Weltmarktes»

Der Wissenschaftliche Beirat von Attac Deutschland, Attac, die Arbeitsgruppe Alternative Wirtschaftspolitik, die EuroMemo Gruppe und die Rosa-Luxemburg-Stiftung vergeben im Gedenken an das wissenschaftliche Werk und das gesellschaftspolitische Engagement von Jörg Huffschmid den Jörg-Huffschmid-Preis 2017.

Zur Bewerbung um die mit 2.000 Euro dotierte Auszeichnung, die seit 2011 alle zwei Jahre verliehen wird, konnten für 2017 Studienabschlussarbeiten (Magister-, Master- und Diplomarbeiten) sowie Dissertationen eingereicht werden, die thematisch im Bereich der politischen Ökonomie der Finanzmärkte angesiedelt sind.

Ablauf:

Begrüßung durch Prof. Dr. Rainer Rilling, Vorstandsmitglied der Rosa-Luxemburg-Stiftung

Einführung durch Prof. Dr. Peter Herrmann, Max-Planck-Institut für Sozialrecht und Sozialpolitik, München

«Anders und besser wirtschaften in Europa! Alternative Wirtschaftspolitik heute.» Fachvortrag von Dr. Axel Troost, Arbeitsgruppe Alternative Wirtschaftspolitik e. V.

Laudatio von PD Dr. Silke Ötsch, Innsbruck; Mitglied des Wissenschaftlichen Beirates Attac Deutschland

Laudatio von Prof. Dr. Thomas Sauer, Ernst-Abbe-Hochschule Jena; Mitglied des Wissenschaftlichen Beirates Attac Deutschland

Antwort der Preisträger

Moderation: Peter Herrmann

To where do we go from here?

From teaching economics at Bangor College China, in Changsha, China – some reflections had been published here earlier, and also here – I arrived now – after some interim work in France and The Netherlands – in Munich, Bavaria, a generous grant from the Max-Planck-Institute for Social Law and Social Policy allows me occupying from today a research position for the next twelve month, looking at issues around digitisation – some books I asked for are already at my disposal on my new desk. And right at the beginning, after having been giving out against orthodox economics [not so much from a heterodox, but from an unorthodox position (or was it more from an alternative orthodoxy?)], I am now wondering if – cum grano salis – heterodox thinking is needed also when it comes to law?

[scan from: Johann Wolfgang Goethe, Faust – Der Tragödie Erster Teil, mit Illustrationen aus drei Jahrhunderten, ed. by Hans Hanning, Berlin: Rütting & Loening, 1982, 2nd ed., p. 123
Teufelspakt_Faust-Mephisto, by Julius Nisle]

And much as Marx did not ‘invent communism out of the blue’, but based it in historical analysis [see in particular Engels’ Work on ‘The Origin of the Family, Private Property, and the State’] , such historical review is also most valuable in jurisprudence. A nice passage I found – in a book by St Germain, writing  on the Dialogues between a doctor of divinity and a student in the laws of England –  and surely not suggesting that we find the alternatives in divinity …

And so it appeareth, that equity taketh not away the very right, but only that that seemeth to be right by the general words of the law. Nor it is not ordained against the cruelness of the law, for the law in such case generally taken is good in himself; but equity followeth the law in all particular cases where right and justice requireth, notwithstanding the general rule of the law be to the contrary. Wherefore it appeareth., that if any law were made by man without any such exception expressed or implied, it were manifestly unreasonable, and were not to be suffered …

Reading this on page 45, we read already a page earlier as definition:

Equity is a right wiseness that considereth all the particular circumstances of the deed, the which also is tempered with the sweetness of mercy. And such an equity must always be observed in every law of man, and in every general rule thereof: and that knew he well that said thus, Laws covet to be ruled by equity. And the wise man saith, Be not overmuch right wise; for the extreme right wiseness is extreme wrong: as who saith, If thou take all that the words of the law giveth thee thou shalt sometime do against the law.

Questions of a customer who reads …

There is a poem, written by Brecht:
I recently wrote about academics who may also have some special questions.
Perhaps it could also be ‘re-writtten’, like this … as
Questions of a customer who reads …
What is it one can find in a shop, for instance in a small town like Confolens, FR:
The shop: it is Lidle, German company
a chain soaring across more and more countries
distributing Asian food
produced in Germany
sold in France
with English-language label
– where did they produce the package,
from where did they get the oil for the plastic
from where the truck to transport the stuff to the train
which railway company brought the stuff to …
and from where are the workers who uploaded and unloaded the trains and trucks ..?
Who looks after the kids of the workers – are there creches maintained by the enterprise, public facilities or what solution is there for them?
Where do the owners of the enterprises pay taxes
– if they pay taxes at all
And what do they do with the profits …?
Who prepares the meal for the workers if they have to work all day long?
And what do the boss and the worker talk about
if they meet on the soccer pitch …?
There would be so many more questions to be asked – though Lidle has a shop, not a school, and a school has not time to go to shops, there are too many models to be learned about, not leaving space for reality, the pace not allowing to think too much …