sábado, 30 de mayo de 2009

z course economics

the answers from prof. bond from my online course:

me:

Hello everyone, I am a preemie with this stuff, as my following questions will demonstrate. Attempting to stay afloat, but enjoying the readings nonetheless.

“One indicator of the super-profitability of the financial sector is that while profits in the US manufacturing sector came to one percent of US gross domestic product (GDP), profits in the financial sector came to two percent.” What constitutes the other 97 percent?

PB: Hi, it's just a measure, e.g., how much do I weigh in proportion to,say, all the things in my apartment: about 2%, I'm guessing. And my 14 year old son? His weight is closer to 1%. The other 97% is the furniture, the appliances, the books in the little study, etc. Most of the 97% of the GDP that you refer to is the input cost of production; a typical surplus in the 10% range is divided into all the various economic sectors. (I'm surprised its so low for finance, insurance and real estate, and maybe can get around to looking at that again).

ME: Bello talks about bubbles and that the profits are only made by selling before ‘reality sets in’ - is there any such thing as ‘real values’? If someone is willing to pay x amount for a house, why isn’t it worth that much? If the loans could not have been restructured would things have turned out any different?

PB: An underlying value in the marxian sense is the potential for maintaining a decent rate of return by extracting surplus value. That's the ultimate 'real sector' productive value we would look for, to see if an investment can be sustained. We would look for that, but capitalists don't, they look for profit. So if a company like GM makes much more money from GMAC financial gimmicks than from making cars, GM will still get investments in the stock market from gullible brokers and consumers who believe they're buying 'value'. When the bubble bursts and GM goes under, it is all revealed as speculation, with so little production that the company can be trashed. In the case of mortgages, the real estate bubble was fueled by easy credit (not just subprime but more generally). Once the credit ends, as we're seeing, prices crash.


ME: What exactly is speculation – and its connection with fictitious capital. It seems that speculation is referred to not how much something could be worth, but rather how much people can be tricked into thinking its worth.

PB: These are great questions, and I should have backed up long ago on this to try making these links. Let me append the section from my book Uneven Zimbabwe which covers all this, ok? Again, I'll apologise in advance for jargon, but I hope you will see where financial speculation, financial control and financial crisis are all rooted.

Colombia! ILRF

final draft.. not yet approved for my new internship at the International labor rights forum (!) apparently all my cool little links i had put in were de-installed with the copy and paste. I am not (yet) tech savvy enough, nor motivated enough to fix it. My new project is on the colombia free trade agreement, and to make a simple graphic to make it easily understood why we oppose it. This should be fun.

Colombian Senator and Liberal Party Presidential candidate, Cecilia López, spoke about her ideas for peace and human rights in the country yesterday in Washington, DC at an event sponsored by the Washington Office on Latin America and the Center for Justice and Environmental Law. Senator Lopez founded the organization ‘Agenda Colombia Foundation’, has taught economics and demography at various universities, and has written numerous publications addressing solutions to the conflict. She described the current situation in Colombia as a human rights catastrophe.

Her platform, titled ‘Security with Rights’, combines safety with social concerns - “there is no real peace without development”. The elimination of poverty is not simply humane, it is essential for ending the conflict. This is no simple task. In the book she contributed to: “Colombia: Essays on Conflict, Peace and Development”, she says that poverty is an effect of limited democracy and is not the driving force of the conflict. Poverty alone does not cause violence, “the cause… and the resulting escalation in violence, is the insufficiently acknowledged political, economic, and social exclusion which has characterized its [Colombia’s] society.” The solution is to fundamentally change the power structures and opportunities for citizen participation. Unless citizens have a greater say in determining their own fate, the cycle of poverty and violence will continue.

Some of those rights include freedom at work. Intimidation, violence, threats and displacement characterize workers’ daily lives. USLEAP has documented that even though there has been improvements, more unionists are killed in Colombia than the entire world put together – still! Less than 2% of these cases are ever even prosecuted. Fighting for small protections has always been an uphill battle, yet companies’ have still found ways around them. According to the ILRF report, “The Right to Associate”, contract labor has substantially increased in Colombia. Contract laborers do not have access to any of the protections of being in a union, and are often used as ‘union busters’ through mass firing of workers and re-hiring of contract laborers. One of the bottling plants in Bogota was found to have contracted more than 70% of its workforce from associated work cooperatives. One of our previous blogs discusses the five worst offenders of worker rights, and what we, as consumers, can do about it.

The Colombian Free Trade Agreement, (FTA) which is not expected to be debated in Congress this session, has been criticized on many levels. The most common critique is of Colombia’s substantial number of human rights violations. While important, this fails to take into account the causes of these violations as well as the other things inherently wrong with the agreement. (And as if being the worst offender in the world by a small margin rather than a large margin implies victory!) Upside Down World activist, Heidi Andrea Restrepo Rhodes, notes that heavily subsidized US goods would be allowed to enter Colombia duty free. The service and agricultural workers could not possibly compete, and job loss is estimated at 250,000 – mostly rural farmers. In an open letter to Obama and Nancy Pelosi last year, the Association of Indigenous Authorities of Northern Cauca Council adamantly rejected the FTA. In a popular referendum, 98% of the people responded unfavorably towards the agreement. They say that, “We want an agreement that has real trade as its content, trade that guarantees reciprocal opportunity, so that the well-being of peoples is realized in a manner that is autonomous and sovereign and protects nature and life.”

As Colombia becomes integrated in the global economy, worker rights are even more important. This includes the right to land. Agrarian reform is essential for environmental and cultural protections, as well as moving towards a more egalitarian society. Colombia’s roots are derived from unequal land distribution which has left a lasting legacy of inequality. The conflict continues to drive people off their lands, and the millions of people internally displaced have also been driven from their livelihood.

Senator López declares “the rights of the people are a duty of the state and not a favor”. While current President Alvaro Uribe has dismissed unionists concerns and human rights groups as ‘guerrillas’, she says that it is precisely these things that a democratic government should defend. Laws protecting trade unionists should be enforced and backed by the government. These bold statements will serve as a challenge to Uribe in 2010, arguing that he has put security ahead of everything else, including peace.

lunes, 18 de mayo de 2009

colombia / guatemala

from upside down world "The water is ours damnit!" - (signs in bogota against water privitization)

lawyer from guatemala murdered, accuses government. Who is probably guilty. even though he is the first 'progressive' government in almost fifty years. He has ruined the reputation. continuing the policies of corruption and money laundering.

While studying in Xela i had many conversations with my spanish teacher over the politics. Apparently a few years ago the national bank went bankrupt and refused to pay back people's money. People lost their entire life savings and suicides went up tenfold. even though it was a government bank, the gov't did not feel obligated to pay the money back. And the banks have been revived with out this burden.

There were both military and police patrolling the streets. Colom (the pres.) had disbanded the military due to Guatemala's violent past, crime spiraled out of control and some cities requested to have them back. Many rural villages took justice in their own hands wishing neither for military nor to just let the crime go. The gangs of Guatemala city had effectively taken it hostage and the police force was entrenched in corruption and collusion. The prison system was critized for holding theives and murderers for a week or so, and then letting the criminal go. In an effort to limit corruption police forces rotated cities they patrolled, so as not to develop ties to the community and give favors. My critique of this (and my teaachers as well) is that the net effect is the corruption becomes integral of the entire police force. They feel no obligation to any community which increases violence. As the police rotate in and out of Guatemala city the ties have already been made with the gangs - to the police force institution, rather than to only a few corrupt ones. The alliance becomes a national one. As Jessica tells me - even if someone wanted to be a good police officer, there is nothing they could do. They will either be killed, or they can benefit. police officers are underpaid and seen as corrupt and disrespected. Since the military was disbanded by the gov't without re-integration programs, many become angry and joined the narco traffickers. Many are well trained with no job, or job relocation programs. Guatemala city has not invited the military back, despite the highest crime rate in central america, (possibly latin america with the exception of mexico). So in the city where i was studying, police patrolled some areas, miltary were in other's, and private security guards were mandated in front of businesses. The crime was not very high in this town, but the gangs were reportedly trying to move in. About 30 bus drivers had been murdered in the last few months for not paying ransom to the gangs. They were killed along with their assistant. Some threats had been made to do the same in Xela and the drivers were going to go on strike.
Femicide: premeditated killing of women - as a hate crime, for simply being female. This often includes torture
Feminicide: a government policy of femicide.

Femicide was finally recognized as an official crime about ten years ago. There still have been very few prosecutions, but awareness and acknolwedgement is nonetheless being made. The woman who came to speak about women and politics believed many of these crimes in the past ten years were because of the feminist movement and women challenging the status quo. Domestic violence is extremely high as is domestic murder. 4 women were violently killed and tortured and xela in the past year. occaisonally these are political crimes. women are vastly under represented in politics and organizations in general. Because education is expensive male children are given priority to study. So lack of education and skills keep women locked into poverty and less job opportunities.

Health: very poor health system. Colom was actually making some head way on this. It is upsetting that the left is most likely going to be discredited because Colom is upholding the status quo in other areas (corruption and intimidation). pneumonia is the leading cause of death in Guatemala. Illiteracy reaches 40% in some of the rural areas. Public hospitals are available for free and open to anyone. The better hospitals are mostly located in the bigger cities. Patients must pay for their drugs though. since almost half the population lives in rural areas this makes health care in those areas very difficult. there is also a separate system for privitized care and for people with insurance. Some people with government jobs have "IGGS" which is insurance provided by an employeer, or purchased. It works very well except hardly anyone has it. The other main complaint with IGGS is that it may take up to three weeks in order to receive care. For serious illnesses this can be dangerous and inneffective.
- "pharmacists" sell pills on the bus. They tell people how to take the medicine.
- wandering caravans of missionaries to provide health care are everywhere. The lecturer on this topic was highly critical of the practice. i asked what the effect is of the high number of foreign NGO's that received most of the aid from foreign sources - ie the obligation is to the funders not to the people who recieve treatment. She said there are some very good NGO's who have developed very good ties to the community. But not often. most pay more attention to attracting volunteers and making it a good program for foreigners rather than the locals. Some of the doctors don't even speak spanish. Some have lost their license and can't practice in their own country - so they come to guatemala where there is no regulation. or, most common, they do not know the culture, the illnesses, or the causes for the problems they wish to fix. They bring medicine for a disease that does not exist, or antibiotics that do not work.

domingo, 17 de mayo de 2009

palestine

what is the difference between a militant and a civilian? A civilian is a citizen of a state, so perhaps a better term is militant civilians. Do you categorize child soldiers as children killed, or as militants?
The catch 22 of war. It is impossible not to resist.
From an article critiquing the philosophy of israeli warfare "concerning the difference between combatants and non-combatants, justifying it thus:"
[Israeli war manual]
'We reject such conceptions, because we consider them to be immoral. A combatant is a citizen in uniform. In Israel, quite often he is a conscript or on reserve duty. His blood is as red and thick as that of citizens who are not in uniform. His life is as precious as the life of anyone else (p.17).'"

So is a militant. The difference i see is that soldiers are sent to kill, that is why the distinction has historically been made. That supposedly the fight should be between willing parties. (although mandatory conscription has made this arguement less relevant as does modern warfare which expertly targets civilians)

After having finished reading the article I think his words say it better than mine:
"The moral distinction is based on the fact that combatants have intentionally embarked on acts of violence and are actively seeking to endanger others, whether they are conscripts or not, thereby forfeiting their right to security and to be left in peace. In addition, combatants are armed, prepared for combat, and capable of defending themselves militarily."


Welfare:
In reading Globalization and its discontents' side by side with milton friedmans book there seem to be a point both miss. friedman says ' you cannot do good with other people's money'. stiglitz uses the term 'spread' the wealth or re-allocate it etc. I agree with friedman. The point these interpretations miss is WHOSE wealth has been stolen. When a corporation, or single individual takes over a river to build a dam, they are stealing the resources of the community. the water for the farmers, the land from the people who live there. Land allocation shows the history of collective theft all over the world. They are not doing good with other people's property. When Stiglitz uses the term 're-allocation' it buys into this same idea that you are giving people hand outs of something that does not belong to them. welfare. free money. pity. When in fact, this ideology is better attacked head on. Stolen land, stolen wealth, give it back.
Unionization fails in the sense it does not challenge the idea of ownership. A corporation cannot have entitlement to a communities' wealth. so just as the person who does no work is not entitled to the earnings of the hard working man, an individual has no right to take away someone's means of being able to do work. Namely resources. ideologically it seems friedman would agree. He says he is suspicious of concentrated power. and that ownership breeds productivity. (main critique of communism). So let the people own their own land!!

martes, 12 de mayo de 2009

milton friedman chapter 1

'capitalism and freedom'. it seems that there is the inherent contradiction between "the preservation of freedom is the protective reason for limiting and decentralizing government power" and then advocating for state militarism and absolute control. One might even say these are opposites. 'Contradictions don't exist.' Is it like the perversion of communism under totalitarianism pretending it is marxism? did he actually see Chile in its form as being free? on to chapter two. no. not yet.

Questions and critiques. Perhaps chapter 2 will make more of a case that capitalism is PRO freedom rather than using the law of negatives. Totalitarian communism limits freedom. capitalism apparently is the exact opposite because it is NOT communism, (stalinist) therefore, it is free.

Question: why is freedom important? eg - what do you get out of it? ayn rand would say it is for the expression of the ego. But he states that in a "society freedom has nothing to say about what an individual does with his freedom... leave the ethical problem for the individual to wrestle with.." Briefly used an example of amazing writers as a product of nongovernment interference, but did not equate freedom with being amazing. (also did not include space exploration, or government funding in research, including his own school...)
- i am also looking for a better definition of coercion

I agree: the market place should be: "both parties to an economic transaction is bilaterally voluntary and informed...individuals are effectively free to enter or not to enter into any particular exchange, so that every transaction is strictly voluntary"
- however, he seems to define involuntary as explicit state violence. does not address other types of involuntary transactions such as forced labor (poverty, child labor, etc)

"Economic power can be widely dispersed...But can there be more than one really outstanding leader, one person on whom the energies and enthusiasms of his countrymen are centered? There seems to be something like a fixed total of political power to be distributed."
what??? no comment. democracy... (true democracy)

"historical evidence speaks with a single voice on the relation between political freedom and a free market." he backs this up with "i know of no example". he doesn't use any historical evidence, so one must trust that him not knowing is equivalent and better than backing up statements with facts. He uses this "not that i know of" to back up similar wild statements.

he critiques socialism: "in order for men to advocate anything, they must in the first place be able to earn a living". precisely. This is one of the biggest critique of the free market!! because it leaves most the population unable to earn a living. therefore, unfree. right on, miltie.

This one had to be quoted in its entirety:
"In a capitalism society, it is only necessary to convince a few wealthy people to get funds to launch any idea, however strange, and there are many such persons, many independent foci of support. And, indeed, it is not even necessary to persuade people or financial institution with available funds of the soundness of the ideas to be propagated. It is only necessary to persuade them that the propagation can be financially successful.."
- does this not then advocate that capitalism is irrational? quality need not be important in the free market. the only obstacle is you need to persuade a rich person. At what point does the idea change from 1. working in the area one wishes to work, 2. pandering to what the population will consume 3. pandering not only to the population but to the rich financier. there are inherently less millionaires than poor people.

when Hollywood people were blacklisted (by Hollywood, not the government..) and says "Their appeal to the fifth amendment would have been a hollow mockery without an alternative to government employment."
I agree. however, he fails to recognize the same goes true when there is no alternative to exploitative employment. And by using the Hollywood example he plainly shows that private enterprises indeed discriminate. the free market, just like government is made up of people.

"To the liberal, the appropriate means are free discussion and voluntary co-operation, which implies that any form of coercion is inappropriate."
one word. Pinochet. Why did he advise the dictatorship and draw up plans for its economy? I don't understand. I had been wondering if he did believe that the ends justified the means, but he says he doesn't. So what then explains for this glaring contradiction?