Archive for October, 2011

Occupy colleges

Posted: 28 October 2011 in Uncategorized
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Colleges and universities may not have been at the forefront of the current Occupy movement. However, the new Occupy College movement may be bringing the concerns of OWS to a campus near you.

Neoclassical economist Jagdish Bhagwati argues against redistribution as a way of solving the problem of poverty.

There’s nothing surprising there. Like all other neoclassical economists, Bhagwati promotes economic growth, not redistribution, as a solution to the problem of poverty in the Third World.*

But he does worry that the “growth-first model” is, once again, being called into question, because of obscene levels of inequality. So, he does offer one suggestion:

the political sustainability of the growth-first model requires both symbolic and material efforts. While growth does benefit the poor, the rich often benefit disproportionately. So, to keep the poor committed to the system as their economic aspirations are aroused, the wealthy would be well advised to indulge less in conspicuous consumption.

* Note also that, in the world of neoclassical development economics, the redistribution of income is presented as the only alternative. What Bhagwati and other neoclassical economists fail to consider is a policy that would both eliminate poverty and create a more equitable distribution of income: a redistribution of assets.

Special mention

What’s the alternative to an economy based on self-interest?

As it turns out, two different proposals to move beyond self-interest, both related to the Occupy Wall Street movement, crossed my desk at the same time.

The first, by Stephen Healy and Boone Shear [ht: gh], is based on the idea that economic relations based on self-interest are only one possibility among many. The problem is,

Ethical values and actions beyond self-interest are understood in our present society to be extra-economic; they are supposed to take place outside the formal economy. It is precisely for this reason that they are frequently dismissed as mere sentimentality. How then do we move ethical values and social commitment to the very core of our economic values? Is this even possible?

Their view is that Occupy Wall Street has given the gift of recognizing economic enterprises that encourage community rather than individualism, which already exist in the midst of an otherwise capitalist economy. They give the examples of the Alliance to Develop Power, Worcester Energy Barn Raisers, and the Valley Alliance of Worker Cooperatives—all in Massachusetts.

Coincidentally, the Pontifical Council for Justice and Peace has elaborated a similar critique of self-interest in the context of the current crises, although its proposals for an alternative economy tend in a more macroeconomic direction.*

The inequalities and distortions of capitalist development are often an expression not only of economic liberalism but also of utilitarian thinking: that is, theoretical and practical approaches according to which what is useful for the individual leads to the good of the community. This saying has a core of truth, but it cannot be ignored that individual utility – even where it is legitimate – does not always favour the common good. In many cases a spirit of solidarity is called for that transcends personal utility for the good of the community.

The Council focuses on reforming the international financial and monetary, based on the idea of creating “some form of global monetary management. . .as a first stage in a longer effort by the global community to steer its institutions towards achieving the common good.”

The criticisms of self-interest by Healy and Shear and by the Pontifical Council for Justice and Peace, while looking to the creation of alternative economic institutions at different levels—in the former case, at the level of individual enterprises; in the latter, at the international level—certainly share a commitment to community and the common good.

They also share a commitment, as expressed by the Council, to “the revolutionary power of ‘forward-looking imagination’ that can perceive the possibilities inscribed in the present and guide people towards a new future.”

* According to E. J. Dionne Jr. [ht: mkb], the Vatican denied that its report was a direct response to the Occupy Wall Street movement. But, as Dionne explains, it’s clear the report got more attention because of the issues raised by the worldwide movement.

What’s going on?

First, the Art Institute of Chicago hosts an exhibition of Soviet TASS posters. Now, London’s Royal Academy of Arts is hosting a new show, “Building the Revolution: Soviet Art and Architecture 1915-35.”

The word “revolution” has become discredited, and this show thoroughly re-energises its meaning in art and architecture. The key fragments of Russian revolutionary creativity still glow like radium, living on in its remaining art and buildings, and hard-wired into the imaginations of some of the 20th and 21st century’s most influential architects.

Could it be that, now that the Cold War is over and in the midst of the Second Great Depression, the revolution that was all but dead and buried is now being rehabilitated?

Sandeep Baliga rediscovers Keynes’s distinction between risk and uncertainty.

Of course, he wouldn’t have to rediscover it once again if mainstream economists actually took seriously the notion of uncertainty—the idea that “we simply do not know”—instead of attempting to domesticate and contain it.

The fact is, we don’t know what the world would be like if mainstream economists had taken uncertainty and other such disruptive ideas seriously. . .

Special mention


What the hell do city officials and the policy think they’re doing in Oakland and Atlanta?

Here’s Matt Taibbi on the issue of the relationship between Occupy Wall Street and banking:

I was at an event on the Upper East Side last Friday night when I got to talking with a salesman in the media business. The subject turned to Zucotti Park and Occupy Wall Street, and he was chuckling about something he’d heard on the news.

“I hear [Occupy Wall Street] has a CFO” he said. “I think that’s funny.”

“Okay, I’ll bite,” I said. “Why is that funny?”

“Well, I heard they’re trying to decide what bank to put their money in,” he said, munching on hors d’oeuvres. “It’s just kind of ironic.”

Oh, Christ, I thought. He’s saying the protesters are hypocrites because they’re using banks. I sighed.

“Listen,” I said, “where else are you going to put three hundred thousand dollars? A shopping bag?”

“Well,” he said, “it’s just, they’re protests are all about … You know …”

“Dude,” I said. “These people aren’t protesting money. They’re not protesting banking. They’re protesting corruption on Wall Street.”

“Whatever,” he said, shrugging.

As it turns out, OWS has chosen a bank for the donations it’s received: Amalgamated Bank.

Established in 1923 by the Amalgamated Clothing Workers of America, Amalgamated Bank continues the progressive traditions of its founders as the only 100 percent union-owned bank in the United States. Chartered by New York State, Amalgamated Bank is an FDIC insured commercial bank with $4.5 billion in assets. The Bank’s corporate divisions also include Commercial Banking and Real Estate Finance. Through its Institutional Asset Management and Custody Division, the Bank is also one of the leading providers of investment and trust services to Taft-Hartley plans in the United States.

Chart of the day

Posted: 26 October 2011 in Uncategorized
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