There are only those ratios, which shall come across in the following chapters:
Consumption Income Ratio:
It is general income consumption relationship. It expresses the relationship between income (Y) and consumption (C). The relation is functional. We represent it as:
C = f (Y)
C – Consumption
Y – Income
f – Function
Saving Income Ratio:
Income is either spent or consumed. The saving function can be easily derived by subtracting consumption or spending from income.
S = Y-C
S – Saving
Y – Income
C – Consumption
Capital Output Ratio:
The number of units of capital required for each unit of output produced. More capital is required to produce more output for business and market. This ratio varies from firm to firm and industry to industry.
K = wY
K- Capital Stock
Y – Level of Output
W – Capital-Output Ratio
Capital Labour Ratio:
This ratio indicates factor proportion, the combination of labour and capital in the production process. It can be defined as:
K/L
K – Capital
L – Labour
Output-Labour Ratio:
It means the labour productivity. It can be written as
Y/L
Y – National Income
L – Employment.
Index Number:
Value in economy means value in exchange. The value of money is the buying capacity of money, which is expressed in terms of commodity and services you get in exchange.
If the price is high, then value of money decreases and vice-versa. They are reversely related to each other. Movement of price has two aspects: one is change in relative price and the other is change in overall price, which affects the purchasing power of money. Change in price is not uniform for all goods: for some goods it may decrease and for some goods it may increase. To bring the element of uniformity to the concept of general, price is used. This is done by index number.
Index number is statistical device which indicates relative changes of a variable over a period of time. It shows the general trend of prices. The value of money can be measured by means of price index numbers. We will discuss some types of prices indices. More specific price indices can be constructed which focuses on specific goods and services.
Have been mulling over whether the current rally on equity markets can be sustained. I’ve decided to stay long equities for a while longer yet. The global economy keeps improving. Yes, some news will be bad in the coming months but most will be at least in part expected. Its some unexpected, large scale bad news that could bring the end to the recovery and I don’t currently ‘foresee’ anything specific that might crop up. That of course is the problem with unexpected bad news!
The decade has ended, so too has 2009. Here’s a roundup of how it went. From political triumph and failure to sporting tragedy and comebacks. Of course we said our fair share of farewells and both sad and fond memories of special anniversaries.
The year began in January hot on the heals of the US historic election of Barack Obama, the first Black US President who was inaugurated. Of course, no-one can ever forget Aretha Franklin’s bold hat she wore for the inauguration.
Obama quickly had his first 100 days and even completed the one year anniversary of his presidency. His memorable White House correspondents dinner speech was matched by Wanda Sykes own address.
By then, the world was beginning to loose many of its public figures including Michael Jackson and maestro politician and only remaining Kennedy brother, Edward M. Kennedy who’s memorable DNC convention address we all still remember.
In October, the large scale military parade in China coincided with he 60th anniversary of the founding of the People’s Republic of China. Kayne West stole both Taylor Swifts mic and the media spotlight in one foul stupid move. The ‘jackass’ as Obama called him was only ridiculed as Beyonce made up to Taylor Swift. A gaffe matched by the balloon boy fiasco who’s parents are now being charged. Sarah Palin however stole the lie of the year with her comments on ‘death panels’.
PaulLau.WordPress.com was launched in October with this first blog post. In December, we discovered both Wood’s ‘transgressions and the most ‘legendary’ moment of the HKEAG, the Hong Kong Soccer Team’s surprise win. No star however rose faster than Susan Boyle and her dream.
The Economy seemed to be rebounding only for the hopes to fade as quickly as Hopenhagen became Brokenhagen before which Obama had just received his controversial Nobel Peace Prize. it took all the way till Christmas, but finally, Congress passed a much needed Health-Care reform bill.
Suppose that some rogue state, such as North Korea, entered the Copenhagen Climate Change Summit and effectively shut it down due to its unwillingness to participate with the rest of the world in light of its own economic concerns … what would be the appropriate recourse from the global community?
I usually think that these non-participatory rogue states, whose actions have the potential to harm other peoples around the world, should be sanctioned.
But unfortunately this time it is not Iran or North Korea, etc., but it is us, and I cannot help but think that on a fair playing field we, America, might need a threat of sanctioning posed against us by the rest of the world.
Free Market Mojo is proud to present an interview with Dr. Imad-ad-Dean Ahmad, President of the Minaret of Freedom Institute, a free market Muslim think tank.
Dr. Ahmad, a Palestinian-American Muslim, graduated cum laude from Harvard in 1970 and obtained a Ph.D. in astronomy and astrophysics from the University of Arizona in 1975. He is an internationally known interdisciplinary scientist and author of Signs in the Heavens: A Muslim Astronomer’s Perspective on Religion and Science.
He is a senior lecturer at the University of Maryland where he teaches courses on religion and progress and on religion, science and freedom. He also teaches a course on Islam, Science and Development at Georgetown University for the Center on Muslim-Christian Understanding.
Dr. Ahamd is also the Islamic chaplain at the Perkins Hospital, Imam of the Dar-adh-Dhikr Mosque, President of the Islamic-American Zakat Foundation, and arbitrator for the Coordinating Council of Muslim Organizations in the Greater Washington Metropolitan Area.
As with our other interviews, the author’s views are his own and are not necessarily endorsed by either author of Free Market Mojo.
FMM: Is Islam compatible with capitalism?
Ahmad: I would prefer to say it is compatible with free markets, although it is compatible with some aspects of capitalism and not others. The word capitalism was coined by Karl Marx as a term of disdain for both the free market and for the culture he believed that it engendered. It is fascinating that the capital-owning class he despised has embraced the term. Islam is not only compatible with free markets, but rather pointedly promotes many of their aspects including free trade, voluntary exchange, transparent and enforceable contracts, the making of honest profit, and no limitations on wealth accumulation. However, there is a cultural side of capitalism that Islam challenges, and that is Mammonism, that elevates the accumulation of wealth into the object of worship. The only limits Islam places on the accumulation of wealth is that it should be honestly acquired and it should be used to good purpose once acquired. Thus, while Islam favors free markets, it has two serious objections to capitalism as a system. The first is objection with the ethos that elevates the accumulation of wealth above all other values and turns human beings away from their spiritual nature, that is to say their purpose as the “vicegerents of God,” into objectified consumers or commodity fetishists. The mindset represented by that ethos says notions of good and evil should be omitted from the marketplace, that one’s moral belief that, say, prostitution is wrong, should not prevent one from becoming a pimp since that is providing a service for those who disagree. The second is with the “crony capitalism” that the imperial powers have imposed on the rest of the world, so that mixed economies, masquerading as free markets, allow the government and its friends to use the power of the state to dominate the markets to the exclusion of the masses who, denied the opportunity to compete end up as effectively as serfs rather than as the middle class actors indispensable to a true market economy.
FMM: There seems to be several distinctions between capitalism and Islamic economics, particularly with the prohibition of usury (riba), speculation (maysir) and certain commodities (haram). Do you see these as conflicting with capitalism?
Ahmad: The economist David Friedman has suggested that a pragmatic, as opposed to moral, defense of capitalism could be generated by beginning with the assumption that a unit of exchange (say the dollar) has equal value for every actor in the market. While he is aware that his is not literally true, he feels it is a good enough approximation to make his case. It is approximately true for the middle class, but it is emphatically not true when one compares the destitute with the super-rich. A dollar, which may buy a homeless woman enough formula to prevent her infant from starving to death, is infinitely more to her than it is to Bill Gates who, if a dollar fell through a hole in his pocket might never even notice. I subscribe to the view that the prohibition of usury applies to cases where the economic disparity between the lender and the borrower opens the door to loan sharking. That is to say, when economic disparity allows the lender to charge more than the market clearing rate of interest. Although we who hold this position are small minority (the majority of Muslims believe any interest in lending is usurious), but we have two strong arguments in our favor. The first is the economic argument, namely that usurious or unfair rates of interest are impossible (apart from coercion or fraud) unless such a disparity exists, since no one would otherwise knowingly choose to pay an above-market rate of interest. The second is a jurisprudential argument. Every single verse of the Qur’an that condemns “riba” does so in the context of an endorsement of charity, never in the context of trade. To the contrary, the Qur’an denounces those who equate “riba” with trade as being in the position of “one whom the evil one by his touch hath driven to madness. That is because they say: ‘Trade is like usury,’ but God hath permitted trade and forbidden usury.” (2:275) Further, I have written an article that shows that the traditions of the Prophet Muhammad (peace be upon him) also favor such an interpretation. Thus mutual agreements are binding unless the agreement is tainted by coercion, fraud, or unfair advantage. Thus Islam distances itself from crony capitalism (in which coercive states taint trade), fraudulent contracts, and loan-sharking.
As for whether lotteries (maysir) or gambling and such haram activities as prostitution conflict with capitalism, I would make two points. First, that in the United States today neither lotteries nor prostitution are unregulated free market activities. Second, I deny that capitalism constitutes a moral theory that can have any position on such activities whatsoever. Capitalism, when stripped of the coercion, fraud, and inequities with which it has been plagued in practice is a good economic system, but it is not a code of moral guidance. Even libertarianism, of which the free market is an economic corollary, is not a complete ethical system but only a code of political ethics. Not everything that is economically profitable is necessarily good. Not everything that is politically permissible is necessarily good. Do I not, under capitalism, or libertarianism, have a right to sit in a corner and cut away small pieces of my flesh until I eventually die of blood loss and infections? Should I therefore do this, say for perverse psychological satisfaction or for profit because someone has offered me a seductive sum of money that I can leave to my heirs? Islam is a complete way of life. It’s political system, in my humble opinion, is libertarian, and its economic system is free market. Yet, it transcends both, and its commands to the believers may prohibit activity that is neither uneconomic nor aggressive, but is bad for other reasons. Islam claims to offer the believers success in this life and the next. Thus, my investments will be guided by more considerations than monetary return. Perhaps I could make more money as a drug dealer than as a drug counselor, but there are other considerations.
In any case it is important to understand that laws such as the prohibition on buying, selling, or consuming wine apply to Muslims only and are not to be imposed on non-Muslims. Thus, Dubai has been an attraction to non-Muslims who have called it (with some hyperbole) the Las Vegas of the Muslim world.
There are some other elements of Islam that conflict with capitalist practice, including the prohibition of unbacked fiat currency, denial of the fiction of corporate persons that enables corporations to escape responsibility for their actions through limited liability, and the prohibition of speculation in perishable goods that enables speculators to make malinvestments that harm others as well as themselves.
FMM: Is it possible for a nation to live under Shari’a law and still respect individual rights? Specifically, how can a national legal system simultaneously respect individual rights while enforcing an Islamic legal code that seemingly promotes communal rather than individual interests?
Ahmad: The Islamic code is balanced between communal and individual considerations. This would indeed contradict that atomic individualism which has no consideration for communal interests, familial obligations, or good manners whatsoever, but in what society has atomic individualism ever been respected? A woman can no more go topless in the streets of Washington, DC, than she go bareheaded in the streets of Riyadh. Man is by nature a social animal and the communal considerations, while they should not violate individual rights, should not be completely discarded. The resolution to this paradox was dealt with by the philosopher Robert Nozick in his chapter on “The Framework for Utopia” at the conclusion of Anarchy, State, and Utopia. Rather than have an interventionist state as the guarantor of individual rights, let the state be the guarantor of the independence of mini-states living in peace with one another, each of which has a its own standards to which the inhabitants voluntarily agree. This is what the Shari`a envisions, since only those who are Muslims by choice are bound to the Islamic law in full, and those who subscribe to other religious codes (Jewish, Christian, Zoroastrian, whatever) shall follow their own laws insofar as it does not adversely affect the Muslims or other protected minorities. This was specifically stated with regard to the Jewish community in Muhammad’s compact for the governance of Medina and that model has been followed (more or less imperfectly) by most Muslim states in history. Certain modern Muslim states that follow the European Western models rather than the Islamic one are among the unfortunate exceptions, but even the puritanical Wahabis do not intervene in the unIslamic activities that go on in the private compounds in Saudi Arabia. (Even when such activities take place in Muslim households, they are ignored by the state because of the Islamic respect for the right of privacy.) I would expand the Muslim system of religious pluralism from its mandatory inclusion of the “People of the Book” to include all communities that want to peacefully coexist under the Muslim umbrella. At the risk of glibness, the short answer is that Shari`a law (like the law of gravity) is something to be obeyed, not to be imposed.
FMM: Promoting the virtues of capitalism in the West often centers on arguments concerning liberty. Has the Muslim experience, particularly under colonialism, created alternate perceptions of liberty? If so, are Western arguments in support of capitalism useful in the context of the Muslim world?
Ahmad: It has been said that when Muslims say “justice” they mean what Americans mean when they say “liberty.” In the Muslim world there is a deep suspicion that the world “liberty” is just a code word for colonialism and imperialism. How else to explain Western support for such illiberal regimes as Egypt in the name of liberty? How else to explain American indifference to the looting of Palestinian property in the name of a mythical Zionist collective land right? Arguments in favor of individual rights, property, contracts, free trade, etc., are easier to make to Muslim audiences when couched in terms of justice. However, as a libertarian, I am not ready to abandon the word liberty. Instead we should consistently use it honestly. If we will stop trying to defend colonialism and imperialism under the banner of liberty, I think it will be quite easy to add liberty to the canon of human rights traditionally included under Islamic law (life, property, intellect, family, and dignity) as issues of justice.
FMM: Part of Israeli Prime Minister Benjamin Netanyahu’s approach to reaching an Israeli-Palestinian peace agreement is through forging what he calls an “economic peace.” In this method, he has said that an improved Palestinian economy will create favorable conditions towards negotiations on a Palestinian state. Do you have any thoughts about this?
Ahmad: What Netanyahu means is that he thinks the Palestinians can be bought out by granting some critical Palestinians wealth in order to continue looting the rest of the population. This is the precisely the form of cronyism that gives capitalism a bad name. Instead, a true economic peace can be achieved by restoring to the Palestinians their property rights and their freedom of movement, releasing all political prisoners, and offering all citizens of Palestine-Israel (by whatever name one wishes to call it) equal rights and liberty, and a roadmap to attain self-determination through a democratic mechanism. Unfortunately, there are political obstacles to such an economic solution, primarily that it violates the collectivist basis of modern Zionism under which the land of Palestine is considered not to be owned by individuals but as trust for the Jewish people. There is also the problem that Hamas has imitated the Zionists by adopting its own variation on this theme by declaring Palestine to be a trust for the Muslim people. It may not be sufficient to solve the impasse, but it would certainly help to change the terms of debate for libertarians to openly reject these collectivist notions and to embrace the principle laid down by the late Palestinian statesman Fayez Sayegh that the solution to the problem lies in “the recognition of the primacy of the human person over the juridical-political abstraction of statehood.”
FMM: For better or for worse, much American political rhetoric concerning the Middle East has involved the spread of democracy. The use of force, particularly in Iraq, has proven to be an ineffective method for this end. On the other hand, many Middle East analysts contend that free elections across the Middle East may result in ruling governments hostile to democratic values. How then can Muslim countries transition into free societies?
Ahmad: The evidence is to the contrary. Elections have only given the people a taste for elections that are even more free and fair. The street demonstrations in Iran are sparked by the suspicion of fraud in the elections, not by any desire to put an end to them. When the late King Hussain of Jordan allowed the Islamists to participate in the elections there, they changed their position from opposing women voting to claiming it was an Islamic duty for women to vote. The U.S. accused Algeria’s FIS of calling for “one man one vote one time,” but one of the winners of the parliamentary election (not allowed to take his seat unfortunately), Anwar Haddam, has told me that he has only become more committed to the cause of freedom after participating in the elections. I think that Westerners have forgotten how long, drawn out, and riddled with wrong turns its own progress towards democracy and liberalism has been. England is held up as the paragon of progress, but from the Magna Carta to modern England took eight centuries, centuries that included reversals like Cromwell’s rise to power. The path to an open society in the Muslim world will also be uneven and erratic, but if allowed to develop organically using its Islamic heritage in a positive sense, it can happen without direct Western intervention and, hopefully, in a lot less than eight centuries (God willing).
FMM: How can Muslim societies make their indigenous concepts of democracy and representative government compatible with liberal notions of individual rights? Will they be able to do this?
Ahmad: The Turkish experience demonstrates how this can happen. In Turkey the secular ruling elites relied on military power to maintain their grip on society while the Islamist movement blossoming in the new entrepreneurial middle class of Anatolia has struggled for human rights and a liberalized economy. Of course, these are not American liberals, and they have a conservative social agenda, but their record on democracy, representative government and economic reform is very impressive. (The Justice and Development Party took inflation down from 80% to a single digit.) When it comes to making money, they live up to the American standards. They have used that money, not to indulge in drugs or build Playboy mansions, but to start schools and charitable organizations that have further whetted the Turkish appetite for reform. It was not the government but these private charities that came to the rescue when the earthquake hit Turkey. It is these schools, not the government schools, that are educating a new generation of business people, journalists, and intellectuals willing to think for themselves. They are motivated by a deep religious conviction in the direct responsibility of the individual to the Creator.
FMM: How has the Muslim community, both in the United States and abroad, responded to your message?
Ahmad: The response has been mostly favorable. Our book Islam and the Discovery of Freedom (a running commentary on the chapter on Islam in Rose Wilder Lane’s Discovery of Freedom) is now in its third printing and Signs in the Heavens (on the role of individual critical thinking to the progress) is in its second edition. Our website gets over 100,000 hits per month from over ten thousand unique visitors. I have been invited to speak at conferences in Turkey, Morocco, and Malaysia and most recently to give the keynote address at a conference on Islam and science in India. Donors to the Minaret of Freedom Institute include not only many Muslim Americans, but a Saudi entrepreneur. The response has been most favorable among the young people. At a conference in Turkey young people swarmed up after my talk to say that they were certain that what I said was correct because what their elders were saying made no sense. I have been invited to speak at mosques around the country and have collaborated with major organizations such as the International Institute for Islamic Thought and the Association of Muslim Social Scientists with whom we produced the Directory of Experts on Islamic Studies and Muslim Affairs. A member of Fethullah Gulen’s movement (based in Turkey and influential in many Central Asian countries) has asked me to write a book about how that movement touches on issues of liberty, human rights, and free markets. Although I have found few Muslims who have accepted the libertarian message whole (there have been some), the response in that respect is no different from the American public as a whole to libertarian activism. The basic message, however, that Islam must be understood to favor critical thinking, justice, human rights, and free markets, has received a favorable response from Muslims in general and an enthusiastic response from the young Muslims in particular. It is the latter who will determine the course of Islam in the future.
We would like to thank Dr. Ahmad for his time and wish him well in his future academic and political pursuits.
Click here to view other Free Market Mojo interviews.
The photo below suggests that scales and sizes are defined to vary so much as to mean the opposite from one community to another. It’s little wonder that the US has so much work to do in reducing emissions.
I won’t lie I’m not feeling very festive today. As I write this I’m waiting between my morning line up and my 11 o’clock group lesson line-up. You see I’m working today. I’ve recently started working as an adult ski instructor at Telluride, and as with most ski resorts we work on Christmas. It’s kind of weird, it’s my first Christmas I’ve spent away from my family. That means I’ve missed out on those little Christmas traditions I look forward to every year. No Christmas-eve bon-fires at the pueblo in Taos, no coffee and Nova Scotia lox in the morning, no passing around the Santa hat to pick presents, no fire roaring or holiday music. I’m doing my best to keep in the Christmas mood. I’ve been teaching in a Santa hat this week. I’ve been listening to some holiday music. My parents dropped off some presents and my stocking, so this morning I was able to open them. Thanking the specter of my parents for each gift as I opened them. But I guess what I’m really saying is I miss my family. Christmas is about spending time with family and loved ones. And I suppose when you don’t have your family close to you you tend to realize what Christmas is about even more.
I’d better run to work, but I wanted to share another thought quickly. The other day I had a movie night at my place and we watched It’s a Wonderful Life. A beautiful film-one of my all time favorites. But with this year’s economical crisis it really struck a chord with me. In the film the main character, George Bailey a home loans banker, gives selflessly to his community. And at one point even uses his own honey-moon funds to lend the townspeople. It’s a beautiful message, and one that more mortgage companies should pay attention to. Granted it’s a movie, but I don’t think any story like that could be placed in today’s time and be believable. Today not enough people do the right thing, and live selflessly for others. Today we’re all too concerned with ourselves, and our own lives. As the world becomes smaller through communications, the internet, and global media it’s even more imperative that we starts thinking about others, and helping others.
In a past post I mentioned how I didn’t like holidays that evoked certain emotional responses. To me I think Christmas is an except to the rule. In fact I think there should be more holidays where we practice unconditional giving and just plain being nice. And I’m not talking about giving in the commercial sense. I’m talking about giving cheer and spreading warmth. Today as I walked around the resort I wished Merry Christmas to random strangers. Even that little bit of kindness, that small iota of cheer was enough to make me smile inside. I’m not saying you should go out and join the peace core, just be a little nicer and a little more selfless. So today go wish some strangers “Merry Christmas!” Hold a door for someone with a package, offer a hand to that lady walking on that icy sidewalk. DO something nice for a stranger. Christmas is about spending time with family, but it’s also about thinking about giving. It’s about doing something, as tiny as it may be, to make this a kinder, happier, gentler world.
How would you feel if your local supermarket offered you the option of a 20 per cent increase in the price of all your food purchases?
I know that I promised in the last post, that I would start to explain the “why” bit, but I thought that it might be appropriate for me to highlight a little bit more of the “what”, but bring in a bit of “why”. Does that make sense? No? Okay… read on… and if it is still confusing, just call me, and I’ll explain…
One of the big mistakes that humans make consistently, is a tendency not to be very good at predicting the future. Or maybe, it would be better put as an over-inflated sense of our accuracy in predicting the future.
So when it comes to planning our food consumption, we tend not to. What I mean, is that most of our food shopping (in the wealthy developed world) is done on an incidental basis. We shop often, because (most of us) have easy access to food, and middle-class (I hate these types of labels) people, with a reasonable income, can afford to buy a whole range of foods that they don’t really need (but want). Marketing is very good at making wants – and turning these wants into needs (more about this later).
At Christmas, it is estimated that you will throw around 20 percent of the food you purchase. So, from an economic perspective, what you are doing is paying 20 per cent more than you should have. In other words, if you bought less, you would actually make a saving.
To put that into a different frame, think about whether you would feel okay if your local supermarket said that you would have to pay 20 per cent more for your food. You would be a little bit annoyed, wouldn’t you?
Now I fully understand that it is your prerogative, in an individualist society, to buy as much as you bloody well like, and you don’t need paternalistic academics, in their cosy little houses, in cosy little Melbourne, telling you how to live your life, but think about it. You are not only wasting food (thus putting undue pressure on the environment), you are also losing money.
The best way to avoid this, is to plan. But we rarely do.
So, in the next post, I’ll explain some of the psychological and sociological reasons about why we fail to plan.
Wednesday, December 23, 2009
REVIEW OF RADICAL POLITICAL ECONOMICS – VOL.41 NO.4
Review of Radical Political Economics — Table of Contents Alert
A new issue of Review of Radical Political Economics has been made available:
Introduction: The Political Economy of Financialization
Jonathan P. Goldstein
Review of Radical Political Economics 2009; 41 453-457 http://rrp.sagepub.com/cgi/reprint/41/4/453?etoc
Financialization and Marx: Giving Labor and Capital a Financial Makeover, by Dick Bryan, Randy Martin, and Mike Rafferty
Review of Radical Political Economics 2009; 41 458-472 http://rrp.sagepub.com/cgi/content/abstract/41/4/458?etoc
From the Gold Standard to the Floating Dollar Standard: An Appraisal in the Light of Marx’s Theory of Money
Ramaa Vasudevan
Review of Radical Political Economics 2009; 41 473-491 http://rrp.sagepub.com/cgi/content/abstract/41/4/473?etoc
Post-Keynesian Theories of the Firm under Financialization
Thomas Dallery
Review of Radical Political Economics 2009; 41 492-515 http://rrp.sagepub.com/cgi/content/abstract/41/4/492?etoc
Islamic Alternatives to Purely Capitalist Modes of Finance: A Study of Malaysian Banks from 1999 to 2006
Tamer ElGindi, Mona Said, and John William Salevurakis
Review of Radical Political Economics 2009; 41 516-538 http://rrp.sagepub.com/cgi/content/abstract/41/4/516?etoc
Financialization and Changes in the Social Relations along Commodity Chains: The Case of Coffee
Susan A. Newman
Review of Radical Political Economics 2009; 41 539-559 http://rrp.sagepub.com/cgi/content/abstract/41/4/539?etoc
Book Review Essay: Heterodox Crisis Theory and the Current Global Financial Crisis: The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash Charles, R. Morris; New York: Public Affairs, 2008, 194 pp.,$22.95 (hardback). The Credit Crunch: Housing Bubbles, Globalisation, and the Worldwide Economic Crisis, Graham Turner; London and Ann Arbor, MI: Pluto Press, 2008, 232pp., $27.95 (paperback). The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means, George Soros; New York: Public Affairs, 2008, 162 pp.,$22.95 (hardback). Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, Kevin Phillips; New York: Penguin Group, 2008, 239 pp., $25.95 (hardback)
Jonathan P. Goldstein
Review of Radical Political Economics 2009; 41 560-569 http://rrp.sagepub.com/cgi/reprint/41/4/560?etoc
Book Review: Poverty & Inequality: An End to Poverty? A Historical Debate, Gareth Stedman Jones, New York: Columbia University Press, 2005, 288 pp., $29.50 (hardcover). Inequality Matters: The Growing Economic Divide in America and its Poisonous Consequences, James Lardner and David A. Smith, eds., New York: The New Press, 2006, 328 pp., $16.95 (paperback). The Politics of Inequality: A Political History of the Idea of Economic Inequality in America, Michael J. Thompson, New York: Columbia University Press, 2007, 264 pp., $32.50 (hardcover)
Stephen Pimpare
Review of Radical Political Economics 2009; 41 570-576 http://rrp.sagepub.com/cgi/content/abstract/41/4/570?etoc
Book Review: Poverty, Work, and Freedom: Political Economy and the Moral Order, David P. Levine and S. Abu Turab Rizvi. Cambridge: Cambridge University Press, 2005. 159 pp + bibliography and index. ISBN-13 978-0-521-84826-8 (hardback), ISBN-10 0-521-84826-1; $65 (US) or {pound}40, hardback. (hardback)
Matt Davies
Review of Radical Political Economics 2009; 41 577-581 http://rrp.sagepub.com/cgi/reprint/41/4/577?etoc
Book Review: New Departures in Marxian Theory, Stephen A. Resnick & Richard D. Wolff; Routledge, 2006, 418 pp
Ian J. Seda-Irizarry
Review of Radical Political Economics 2009; 41 581-585 http://rrp.sagepub.com/cgi/reprint/41/4/581?etoc
Book Review: Multinationals on Trial: Foreign Investment Matters, James Petras and Henry Veltmeyer (2007), Aldershot Hampshire, UK: Ashgate, pp159; Price $89.95
Dennis C. Canterbury
Review of Radical Political Economics 2009; 41 585-589 http://rrp.sagepub.com/cgi/reprint/41/4/585?etoc
Book Review: International Migration: Prospects and Policies in a Global Market, Douglas S. Massey and J. Edward Taylor, editors (Oxford University Press, 2004) Worlds in Motion: Understanding International Migration at the End of the Millennium Douglas S, Massey, Joaquin Arango, Graeme Hugo, Ali Kouaou chi, Adela Pellegrino and J. Edward Taylor (Oxford University Press, 1998)
Marcos T. Aguila
Review of Radical Political Economics 2009; 41 589-593 http://rrp.sagepub.com/cgi/reprint/41/4/589?etoc
Book Review: Ex Mex: From Migrants to Immigrants, By Jorge G. Castaneda. New York: The New Press, 2007. 222 pp. $25.95 hardback
Mary C. King
Review of Radical Political Economics 2009; 41 593-596 http://rrp.sagepub.com/cgi/reprint/41/4/593?etoc
Book Review: Communities Without Borders: Images and Voices from the World of Migration, David Bacon (Forwards by Carlos Munoz Jr. and Douglas Harper), Ithaca, NY: Cornell University Press 2006 235pp $29.95. ISBN13 978 0 8014
7307 4
Richard Leitch
Review of Radical Political Economics 2009; 41 596-599 http://rrp.sagepub.com/cgi/reprint/41/4/596?etoc
Book Review: Rethinking Municipal Privatization, By Oliver D. Cooke New York: Routledge, 2008. Hardcover ISBN 10: 0-415-96209-9
Tom Angotti
Review of Radical Political Economics 2009; 41 599-601 http://rrp.sagepub.com/cgi/reprint/41/4/599?etoc
Book Review: Solidarity Economy: Building Alternatives for People and
Planet, Jenna Allard, Carl Davidson, and Julie Matthaei (eds) Chicago,
ChangeMaker Publications, 2008; 427 pages, 978-0-6151-9489-91 by Len
Krimerman, GEO Newsletter and Director, Creative Community Building
Program, University, of Connecticut
Len Krimerman
Review of Radical Political Economics 2009;41 601-603 http://rrp.sagepub.com/cgi/reprint/41/4/601?etoc
Book Review: Doubt is Their Product: How Industry’s Assault on Science
Threatens Your Health, David Michaels, New York, Oxford University Press,
2008, pp372, ISBN 978-0-19-530067-3
Joan Greenbaum
Review of Radical Political Economics 2009;41 604-605 http://rrp.sagepub.com/cgi/reprint/41/4/604?etoc
Book Reviews: Labor-Environmental Coalitions: Lessons from a Louisiana
Petrochemical Region By Thomas Estabrook. Amityville, NY: Baywood
Publishing. 2007
J. Timmons Roberts
Review of Radical Political Economics 2009;41 606-607 http://rrp.sagepub.com/cgi/reprint/41/4/606?etoc
Book Review: Fair Trade: The Challenges of Transforming Globalization, Edited by Laura T. Raynolds, Douglas L. Murray, and John Wilkinson. London and New York: Routledge, 2007. 240 pp. ISBN: 978-0-415-77203-7. $29.95
Brewing Justice: Fair Trade Coffee, Sustainability, and Survival, By Daniel Jaffee. Berkeley, CA: University of California Press, 2007. 331 pp. ISBN: 978-0-520-24959-2. $22.95
Noah H. Enelow
Review of Radical Political Economics 2009;41 608-611 http://rrp.sagepub.com/cgi/reprint/41/4/608?etoc
Books Received
David Barkin
Review of Radical Political Economics 2009;41 612-618 http://rrp.sagepub.com/cgi/reprint/41/4/612?etoc
WASHINGTON — It was serendipitous to have almost simultaneous climaxes in Copenhagen and Congress. The former’s accomplishment was indiscernible, the latter’s was unsightly.
It would have been unprecedented had the president not described the outcome of the Copenhagen climate change summit as “unprecedented,” that being the most overworked word in his hardworking vocabulary of self-celebration. Actually, the mountain beneath the summit — a mountain of manufactured hysteria, predictable cupidity, antic demagoguery and dubious science — labored mightily and gave birth to a mouselet, a 12-paragraph document committing the signatories to … make a list.
A list of the goals they have no serious intention of trying to meet. The document even dropped the words “as soon as possible” from its call for a binding agreement on emissions.The 1992 Rio climate summit begat Kyoto. It, like Copenhagen, which Kyoto begat, was “saved,” as Copenhagen was, by a last-minute American intervention (Vice President Al Gore’s) that midwifed an agreement that most signatories evaded for 12 years. The Clinton-Gore administration never submitted Kyoto’s accomplishment for ratification, the Senate having denounced its terms 95-0.
Copenhagen will beget Mexico City next November. Before then, Congress will give “the international community” other reasons to pout. Congress will refuse to burden the economy with cap-and-trade carbon-reduction requirements, and will spurn calls for sending billions in “climate reparations” to China and other countries. Representatives of those nations, when they did not have their hands out in Copenhagen grasping for America’s wealth, clapped their hands in ovations for Hugo Chavez and other kleptocrats who denounced capitalism while clamoring for its fruits.
The New York Times reported from Copenhagen that Barack Obama “burst into a meeting of the Chinese, Indian and Brazilian leaders, according to senior administration officials. Mr. Obama said he did not want them negotiating in secret.” Naughty them. Those three nations will be even less pliable in Mexico City.
At least the president got a health care bill through the Senate. But what problem does it “solve” (Obama’s word)?
Not that of the uninsured, 23 million of whom will remain in 2019. Not that of rising health care spending. This will rise faster over the next decade.
The legislation does solve the Democrats’ “problem” of figuring out how to worsen the dependency culture and the entitlement mentality that grows with it.
By 2016, families with annual incomes of $96,000 will get subsidized health insurance premiums.
Nebraska’s Ben Nelson voted for the Senate bill after opposing both the Medicare cuts and taxes on high-value insurance plans — the heart of the bill’s financing. Arkansas’ Blanche Lincoln, Indiana’s Evan Bayh and Virginia’s Jim Webb voted against one or the other. Yet they support the bill. They will need mental health care to cure their intellectual whiplash.
Before equating Harry Reid to Henry Clay, understand that buying 60 Senate votes is a process more protracted than difficult. Reid was buying the votes of senators whose understanding of the duties of representation does not rise above looting the nation for local benefits. And Reid had two advantages — the spending, taxing and borrowing powers of the federal leviathan, and an almost gorgeous absence of scruples or principles. Principles are general rules, such as: Nebraska should not be exempt from burdens imposed on the other 49 states.
Principles have not, however, been entirely absent: Nebraska’s Republican governor, Dave Heineman, and Republican senator, Mike Johanns, have honorably denounced Nebraska’s exemption from expanded Medicaid costs. The exemption was one payment for Nelson’s vote to impose the legislation on Nebraskans, 67 percent of whom oppose it.
Considering all the money and debasement of the rule of law required to purchase 60 votes, the bill the Senate passed might be the only bill that can get 60. The House, however, voted for Rep. Bart Stupak’s provision preserving the ban on public funding of abortions. Nelson, an untalented negotiator, unnecessarily settled for much less. The House also supports a surtax on affluent Americans, and opposes the steep tax on some high-value health insurance. So to get the bill to the president’s desk, the House, in conference with the Senate, may have to shrug and say: Oh, never mind.
During this long debate, the left has almost always yielded ground. Still, to swallow the Senate bill, the House will have to swallow its pride, if it has any. The conference report reconciling the House and Senate bills will reveal whether the House is reconciled to being second fiddle in a one-fiddle orchestra.
Now check out what Will has to say in terms of data supplied by a serious polling firm
December 22, 2009 – U.S. Voters Oppose Health Care Plan By Wide Margin, Quinnipiac University National Poll Finds; Voters Say 3-1, Plan Should Not Pay For Abortions
As the Senate prepares to vote on health care reform, American voters “mostly disapprove” of the plan 53 – 36 percent and disapprove 56 – 38 percent of President Barack Obama’s handling of the health care issue, according to a Quinnipiac University poll released today.
Voters also oppose 72 – 23 percent using any public money in the health care overhaul to pay for abortions, the independent Quinnipiac (KWIN-uh-pe-ack) University poll finds.
American voters also disapprove 51 – 44 percent of President Obama’s handling of the economy and disapprove 56 – 37 percent of the way he is creating jobs. But voters favor 52 – 42 percent his plan to use $200 billion left over from the bank bailout for a new stimulus package to create jobs rather than to reduce the budget deficit.
Only 31 percent of voters say Obama’s policies will help their personal financial situation, while 37 percent say his policies will hurt and 30 percent say his policies will make no difference. Among voters in households where someone has lost a job in the last year, 37 percent say Obama policies will help them personally, while 37 percent say they will hurt.
Looking at the health care plan, independent voters “mostly disapprove” 58 – 30 percent, as do Republicans 83 – 10 percent. Democrats “mostly approve” 64 – 22 percent.
4. In general, how satisfied are you with the way things are going in the nation today? Are you very satisfied, somewhat satisfied, somewhat dissatisfied, or very dissatisfied?
Tot Rep Dem Ind Men Wom Wht Blk
Very satisfied 2% - 4% 2% 2% 3% 2% 8%
Smwht satisfied 24 8 41 21 22 26 20 43
Smwht dissatisfied 34 36 35 32 34 34 34 26
Very dissatisfied 40 56 19 45 43 37 43 23
DK/NA 1 - 1 - - 1 1 -
AGE IN YRS....... INCOME............. POL PHIL.........
18-34 35-54 55+ <50 50-100 >100K Lib Mod Con
Very satisfied 1% 4% 2% 2% 1% 3% 4% 2% 2%
Smwht satisfied 27 21 25 24 22 28 32 29 14
Smwht dissatisfied 39 33 32 33 38 33 42 40 26
Very dissatisfied 34 42 41 41 38 35 21 29 58
DK/NA - 1 1 - 1 1 1 1 -
WHITE.............
NoColl Coll BrnAgn Mltry JobLoss
Degree Degree Evngl Prot Cath HsHlds HsHldsQ18
Very satisfied 2% 2% 1% 1% - 2% 2%
Smwht satisfied 22 29 13 18 24 18 15
Smwht dissatisfied 32 38 31 29 38 31 33
Very dissatisfied 43 31 55 51 37 49 50
DK/NA 1 - 1 1 - - -
Large numbers of people are dissatisfied.
74% of people who make less than 50K per year are dissatisfied!!
77% of Independent voters are dissatisfied!! Look our Democrats in 2010!
73% of young people, 18-34, who usually incline toward Democrats, are dissatisfied!!
No, no, no, wrong start… I remember when America was a free country. Yeah, that’s the one.
I just went over to the grocery store. As I was leaving, I saw this nice big ranch truck with Obama and Udall stickers on it. That got me to thinking.
You may remember what I’ve written in the past about the Utopian Society ideal. How everybody can have whatever they want or need because somebody makes it. How there is no want, because everybody contributes to provide. How you help those who cannot help themselves, and fuck those who will not help themselves.
And Caveman commented on the Detroit thing. And that triggered this.
The government was not supposed to be the be all and end all of all. The government was supposed to be small, unobtrusive, and only the final arbiter of arguments between the several states. B
Communicators and our audiences have shifted focus over the past couple of years. Everybody is looking for the next breakthrough, the next big idea. I am not saying that there is something wrong with that, but there should be more to it. How will the next breakthrough or big idea help:
-Your business?
-Your audience?
-Your community?
-Your society?
If the breakthrough and/or new idea is worthwhile, then a good answer should be able to be applied to the above questions. Below though, are four themes that I believe communicators should focus on for our feeble society to stay at least near the top of industrialized nations.
1. Increased Incentive for the best and brightest in the Arts and Sciences
Yes, this is a business/economic lover encouraging the next best and brightest to focus on issues other than business, finance and the like. Why? Read this article that came out in November 2009. It highlights that the sectors that help our society (education, science, sociology, psychology, social work, etc) suffered a massive brain drain from the elite colleges and universities. There simply wasn’t enough incentive (salary, notoriety) for the top brains to attract them. There are too many of us business-minded people out there already (law of diminishing returns would also apply here- the more brain power going to business, the less reaped benefit for every next businessperson entering the field). My extreme scenarios:
-The first elementary school that offers a base salary of $1 million dollars.
-A school district governed like a corporation’s board of investors.
-Teachers actually invested in like stock; go to specific schools around the nation.
I like said, they are extreme. But something needs to be done. And communicators, let’s use our voice to help that happen.
2. More Attention on Small Businesses
The coined phrase “too big to fail” is probably the worst phrase we had to hear this decade (actually it’s a toss up between that, and anything that came out the mouth of Paris Hilton).
Quite frankly, these organizations got “too big to fail” due to our society’s reluctance to work with the little guys.
With millions of businesses out there, you’re telling me that less than 100 businesses crippled our economy?
Supporting small business increases the survival of our economy, cost of living, and overall quality of life. Go local, help the nation.
Few tips:
-Banking: If you decide to trust a bank again, use local and regional.
-B2B: The blame goes to small businesses too. We got to work together to stay relevant.
-Marketing: From my post, “Open letter to Charlotte…” statistics are there stating the dismal online performances- FREE performances actually- of small businesses. Contact those businesses that have dedicated to work with you. (Insert self-plug here).
3. Communicators: Can We Stop with the “Thought Leader” Nonsense?
Marketing, advertising, and public relations combined is the language of business; large and small. Of course we are going to have forums and conferences about “the state of marketing, advertising, public relations,yadda yadda”, but let’s get back to basics here. This industry was created because many businesspeople need assistance getting their message out. Period. Why not focus on the biggest segment of the U.S. Economy (psst, that’s small business)?
In any case, we, communicators, make the world go round. If business controls government (which it does), and marketing/communications is the language of business (which it is), it seems like we got some work to do.
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The Insurance Regulatory & Development Authority (IRDA) is likely to permit banks to sell insurance products of more than one company.
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The move will allow banks to retail insurance products and not just be distributor for one insurer.
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A panel, set up by the IRDA to look into bancassurance, is finalizing its report, an IRDA official said.
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From 2002, IRDA had allowed bancassurance.
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A bank was allowed to act as an agent for only one life and one general insurer according to the norms.
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Bancassurance is a delivery channel in which an insurance company uses a bank’’s sales channel to sell its products.
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At present, bancassurance garners more than a quarter of the entire premium collected by the insurance industry.
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Combining scheduled commercial banks, co-operative banks and regional rural development banks, India has close to 1,70,000 bank branches.
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IRDA has been concerned about tie-ups between banks and insurance companies and is considering a regulatory framework for an open architecture for such arrangements
By Edward Harrison who writes the blog Credit Writedowns:
Excerpt 1:
When debt is the real issue underlying an economic downturn, the result is either Great Depression-like collapse or a period of stagnation and short business cycles as we have seen in Japan over the last two decades. This is what a modern-day depression looks like – a series of W’s where uneven economic growth is punctuated by fits of recession.
Excerpt 2:
We will go through a giant debt-restructuring, because we either have to bring debt-service payments down so they are low relative to incomes — the cash flows that are being produced to service them — or we are going to have to raise incomes by printing a lot of money.
Excerpt 3:
So where are we, then? We are in a fake recovery that could last as long as three or four years or could peter out very quickly in a double dip recession.
One of the gratifying things about being in the historic preservation/heritage conservation field is that it is future-oriented. Usually the position preservationists take – which may seem radical at the time – becomes the mainstream position later. So all those blogs of mine earlier this year about preservation as the road to economic recovery? Here is it from the AIA today:
Hello Friends here we come up with another write up on “SMC Gyan Series”.
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INFLATION…. “THE SILENT CREEPER”
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Topic is INFLATION…. “THE SILENT CREEPER”
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Here, we would go through the Brief of like what are the impacts of inflation on economy in current scenario and what are the reasons for the inflation?
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It is an alarming situation when the entire world is fighting with this historical economic crisis.
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Inflation is adding additional pressure on government as well as consumers.
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Major contributor of this whopping hike in inflation is food inflation at present context.
Mismatch between demand and supply worldwide created chaos and sent prices of many commodities at multi year highs.
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According to the latest data, food inflation rose to 17.47 % for the week ended
November 21, 2009 against 15.58 % in the previous week owing to spiraling prices of
vegetables, pulses and sugar.
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If we talk about overall WPI inflation, it doubled to 1.34 % in October as compared to 0.50 % in the previous month.
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On year on year basis, food prices jumped by 13.32% in October only.
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Rice, pulses, sugar and potatoes, onions were up by 13.22%, 22.81%, 45.70%, 96.43% and 37.60% respectively.
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Reasons for inflation and its impact on economy:
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• Bleak monsoon coupled with worst drought in nearly four decades in the country situation is haunting the entire economy.
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According to an estimate, India may see a drop of 18% in Kharif crop.
It will create further demand and supply mismatch.
People will spend less, if prices will move in the same way and ultimately it will affect most of the sector of economy.
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• To encourage farmers to produce more, government has recently increased the MSP (Minimum support Price) of rice, oilseeds, cotton, sugar and many more.
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Higher MSP immediately pushed the prices up.
Though the long term impact of this step will be positive, as more farmers will produce more to get good remuneration.
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• Hoarding by stockist, farmers in anticipation of further hike in prices is also creating a demand supply mismatch, resulting in higher food inflation.
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• Government has to compete high with the large scale entry of private players, which procure grains aggressively for biscuits, millers and manufacturers of processed foods.
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• Declining trend of public investment in agriculture is another concern for government at present.
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Next Blog we would try to know about the possible Measures to check inflation.
Stay Tuned for more and more on this
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However For More latest Industry,Stock Market and Economy News Updates, Click Here
Copenhagen has little to do with Global Whatever, it is just another excuse for poor countries to us AGW (read “White Guilt” for being economically successful) to demand a transfer of wealth from rich countries to poor countries.
At the conference, Venezuela’s Chavez got a rousing ovation with this line “our revolution seeks to help all people…socialism, the other ghost that is probably wandering around this room, that’s the way to save the planet, capitalism is the road to hell….let’s fight against capitalism and make it obey us.”
You may recall that Senator Obama was a sponsor of the Global Poverty Act, which would have added as much as $100 billion a year to American humanitarian aid to poor countries. That act died on the Senate floor…but leftists never quit.
The National Financial Capability Study established a baseline measure of the ability of Americans to manage their money, benchmarking four key indicators of financial capability and evaluating how these indicators vary with underlying demographic, behavioral, attitudinal and financial literacy characteristics. Link to the study below.
FINRA: 2009 National Financial Capability Study | December 2009
HONG KONG (Reuters) – The Australian dollar fell and bonds jumped on Wednesday on decreased chances of an interest rate rise in February, while Japanese bank shares surged on a report of a possible delay in new global bank capital rules.
Dealers scrambled to slash bets that the Reserve Bank of Australia would raise rates a fourth consecutive time after a top central banker said rates were already back in a normal range.
The news came as the Aussie was already in retreat after data showed the economy grew at a slower-than-expected pace in the third quarter.
In Japan, shares of leading banks posted double-digit gains, pushing up the Nikkei index (.N225), on a media report that global bank regulators were effectively delaying stricter rules to prevent another financial crisis.
Shares of No.2 Mizuho Financial Group (8411.T) vaulted nearly 18 percent and third-ranked Sumitomo Mitsui Financial Group (8316.T) surged 15 percent.
Stocks in much of the rest of Asia eased as investors awaited to see if a statement from the U.S. Federal Reserve later in the day (2:15 p.m. EST) would signal any policy changes.
* The Australian dollar fell 0.6 percent to US$0.9005 to its lowest since November 27, while March bill futures were up 0.12 point, indicating investors now see a lower chance of a policy rate rise in February after the central bank remarks and Q3 GDP data infrared heaters.
* The U.S. dollar was largely unchanged, near a 2-1/2-month high against the euro ahead of the final U.S. central bank policy meeting of 2009. A surge in wholesale prices in November has increased speculation the Federal Reserve could tinker with language in its statement to keep inflation expectations at bay.
* Nikkei share average up 0.9 percent after briefly hitting the highest intraday level since October 27.
"One of the biggest problems for the Nikkei has been supply and worry about additional equity fundraising, and if this news is true it means that we don't need to worry about this, especially in connection with banks, for a while," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities in Tokyo.
* The MSCI index of Asia Pacific stocks outside Japan was down 0.5 percent (.MIAPJ0000PUS), weighed by the materials and consumer staples sectors.
* March 10-year U.S. Treasury futures were up slightly after the cash market took a beating overnight after energy costs helped to push up producer prices in November for the biggest monthly rise since August.
(Additional reporting by Elaine Lies in Tokyo)
(Editing by Kim Coghill)
Aussie dollar falls on rate view
Hot News: Citigroup Reaches Deal to Repay U.S. Bailout Funds
I’m currently enjoying reading the new book by John Cassidy: “How markets fail: the logic of economic calamities“.
I was led to this book by the review of it in the Economist:
In “How Markets Fail”, Mr Cassidy, a British writer for the New Yorker, recounts the story of America’s housing boom and its devastating bust. It is more than just an account of the failures of regulators and the self-deception of bankers and homebuyers, although these are well covered. For Mr Cassidy, the deeper roots of the crisis lie in the enduring appeal of an idea: that society is always best served when individuals are left to pursue their self-interest in free markets. He calls this “Utopian economics”.
This approach turns much of the book into a very good history of economic thought…
Having set out the tenets of Utopian economics, the author then pokes holes in them. Individual self interest does not always benefit society, he argues, and draws on a deep pool of research (what he calls “reality-based economics”) to support his case…
I’m half-way through the book. It’s a bit like a who-done-it page-turner: each additional section introduces new twists and turns. I can hardly wait to find out what happens next
But in the meantime, in parallel, I’ve got a minor market failure of my own to explore. I’ll be grateful for insight that any readers can provide.
As well as being a fan of books, I’m a fan of audio books. I’ve been downloading audio books from Audible.com for at least four years. They’ve got a good selection. However, I’m often surprised to notice that various books are missing from their catalogue. I think to myself: such-and-such a book is really popular: why don’t Audible provide it?
The market failure I mentioned is that Audible frequently do have these books in audio format, but if I ever find them on their site, and click on them to buy them, they for some reason display a most irritating message:
“We are not authorized to sell this item to your geographic location”
It appears that the UI of Audible tries to hide such books from people, like myself, who are based in the UK. (I’ve heard similar reports from people who are based in Australia.) But sometimes there are glitches, and some of these books can be glimpsed.
For example, the front page of their website currently promotes an audio book that caught my attention immediately:
The Strangest Man: The Hidden Life of Paul Dirac, Mystic of the Atom
Paul Dirac was among the great scientific geniuses of the modern age. One of the discoverers of quantum mechanics, the most revolutionary theory of the past century, his contributions had a unique insight, eloquence, clarity, and mathematical power. His prediction of antimatter was one of the greatest triumphs in the history of physics.
One of Einstein’s most admired colleagues, Dirac was in 1933 the youngest theoretician ever to win the Nobel Prize in physics. Dirac’s personality is legendary…
Back in my days at Cambridge, I learned a lot about Dirac – both from studying mathematics, and from researching the philosophical implications of quantum mechanics. Some of my lecturers had been taught, some decades earlier, by Dirac himself. He’s a fascinating character. I’d never come across a book about Dirac before. So I jumped at the chance to download this audio book – until I hit the message
“We are not authorized to sell this item to your geographic location”
It doesn’t help me if I log out of the international website, Audible.com, and log into the UK-specific site Audible.co.uk instead. I’ve learned from bitter experience that books which are “not authorized” for sale from one site fail likewise to show up on the other one. Nor can I find this audio book on any other site.
What’s going on here? There are at least some customers in the UK who are prepared to spend money to purchase these audio books. What’s the rationale for a restriction? Why can’t we willing customers find a market where our “demand” can be balanced by “supply” of these audio books? (Is it that the owner of the book is somehow reserving the opportunity to sell the audio book, in the UK, in due course, at a higher price than Audible are presently prepared to charge?)
Of course, this particular case of apparent market failure pales in comparison to the failures reviewed in Cassidy’s book – calamitous outcomes such as environmental degradation, lack of development of much-needed medicines that would primarily benefit poorer parts of the human population, and the recent global financial crisis. My reason for writing about this case is that it is so annoying when it happens!
Over 2 years ago we applied to 2 co-ops and then another the following spring. This past spring, we were offered a place in the one that we really wanted. I explained that we had just moved, I was 6 months pregnant and dealing with dad’s death and that now was not the right time. I figured we would have at least another 6 months before our names came up. Nope, 2 months later we got another call that we were up on the list and as I was due to give birth at any moment, we again had to turn it down and lose our spot. Two weeks previously we had received a call from one of the other co-ops that we had applied to that our names had come up. As that place was offering a 2 bedrooms it was easy to turn it down and wait for a 3 bedroom.
You can already see what is coming, can’t you.
This Friday we got a call that our name had come up again for the co-op (not the one that we really want) and this time it is a 3 bedroom available for February. We decided to go to the interview and check the place out. It was essentially offered to us but they had been unable to show us the place so they couldn’t offer it to us outright.
Sounds great! My housing needs solved and I can focus my attention on my other two wishes. So why am I feeling like it doesn’t seem like the right decision to take the place? When Ryan and I got together we promised ‘no settling’ and we repeated that promise to one another in our wedding vows. This feels like we would be settling because we are afraid. Neither of us have felt very good since our landlords implied that they would be moving in sooner that the 2 years that they had previously thought. That combined with Vancouver’s crazy housing market that seems to defy all known laws of economics and common sense has led us to feel like suspect financial decisions will be be the only way for us to purchase a house in the Lower Mainland (one day I’ll write about the advice we got from financial planner as to how we could purchase our house). If we don’t purchase, our home stability will always be at the whim of another person. It would seem, then that getting into a co-op is exactly what we should do.
Except, I don’t want to live there.
It is not just that there is carpeting in the living space and that we would be living on top of somebody. There is also the fact that it is not as walking friendly as our present location and I worry about mould. However, there are many positives – lots of kids, community oriented, stable, 1250 square feet, and cheap rent.
Still don’t want to live there.
I feel like I am being childish and over-demanding in not being ecstatic about being offered this place. It feels like we would be settling because we can put check marks in most of the boxes and as no one ever gets to check off all the boxes taking the place is the ‘right’ and ‘responsible’ decision to make.
We will go and look at the place (tonight if the snow isn’t too bad) and then we will have to make a decision by tomorrow.
As stated in a previous post on the same subject, when a country achieves a certain level of economic growth – or, more precisely, rising levels of GDP per capita because economic growth as such can be the result of rising population levels – it is assumed that this reflects a higher average standard of living for its citizens. Economic growth is therefore seen as an important tool in the struggle against poverty (if you wonder why poverty is a human rights issue, go here). If a country is richer in general, the population will also be richer on average. On average meaning that GDP growth isn’t necessarily equally distributed over every member of the population. That is why GDP growth isn’t sufficient proof of poverty reduction. Separate measurements of poverty and inequality are necessary.
So in theory, you can have GDP growth and increasing levels of poverty, on the condition that GDP growth is concentrated in the hands of a few. However, that’s generally not the case. GDP growth benefits to some extent many of the poor as well as the wealthy, which is shown by the strong correlation between poverty reduction and levels of GDP growth (always per capita of course). It’s no coincidence that a country such as China, which has seen strong GDP growth over the last decades, is also a country that has managed to reduce poverty levels substantially.
Unfortunately, growth isn’t a silver bullet. Poverty is a complex problem, requiring many types of solutions. Promoting economic growth will do a lot of the work, but something more is required. In a new paper, Martin Ravaillon gives the example of China, Brazil and India. The levels of poverty reduction in these three countries doesn’t mirror the levels of economic growth. Although half of the world’s poor live in these three countries, in the last 25 years China has reduced its poverty level from 84% of the population in 1981 to just 16% in 2005 (see chart below). China is exceptional, but Brazil also did well, cutting its rate in half over the same period (8% of Brazilians still live on less than $1.25 a day). Regarding India, there are some problems with its statistics, but whichever statistic you use, there’s a clear reduction.
poverty reduction in China, India and Brazil
(source)
Ravaillon points out that the intensity of poverty reduction was higher in Brazil than in India and China, despite lower GDP growth rates.
Per unit of growth, Brazil reduced its proportional poverty rate five times more than China or India did. How did it do so well? The main explanation has to do with inequality. This (as measured by the Gini index, also marked on the chart) has fallen sharply in Brazil since 1993, while it has soared in China and risen in India. Greater inequality dampens the poverty-reducing effect of growth. (source)
Which is rather obvious: higher levels of income equality means a better distribution of the benefits of growth. So the “pro-growth strategy” against poverty is important but not enough, and should be combined with Brazilian type anti-inequality measures (focus on education, healthcare and redistribution).
I liked the idea of a long title for a short post.
Last week I read My Ishmael and Beyond Civilization back-to-back, and by doing so also (in all likelihood) concluded my reading of works by Daniel Quinn. I think it was in the latter that he made this point, although it might have been present in some form in the former (and was certainly present in The Story of B). Anyway, the point is this: no program (system, policy, whatever—use whichever word you find pleasing here) has ever been designed that will save humanity and create a lifestyle that will work for people indefinitely because every program that exists depends on people just being better. This is stupid. Obviously people aren’t going to be better, and these programs/systems/policies invariably fail because of it. Instead of trying something new, the attempt to reinforce them is made—more money, more infrastructure, more rules, more guidelines, etc.—but people still aren’t better, and so the program fails—again.
He also studies laws. The people of our culture(s) (civilized, globalized, etc.) create laws that are, in a very real sense, made to be broken. The people of our culture create laws that state thou shalt not, and they are things that people are going to do, no matter what. These laws are made for a society of people who are just better, and therefore they do not work in the real world, because people are just how they are.
In tribal societies they do the opposite; instead of telling the people of their culture(s) thou shalt not, they outline what is to be done when certain deeds are—invariably—committed, in order to make things right once again.
This examination of our laws, and by extension programs, shows exactly why our laws and programs will not work: they are reality-denying, and thus can never work in the real world. Thou shalt not kill/steal/commit adultery/whatever depends on people being better; a law that explains what to do when murder, theft, or adultery are committed depends on people continuing to be the way they are now, the way they have forever been. This view is not reality-denying, but rather reality-affirming. People will never be perfect—they’ll change, might even get better in a way we cannot quantify, but they’ll never be perfect.
Today’s politicians—at least the American ones I am familiar with, but I’m given the impression that it is much the same throughout the world—want to create programs to “save the world,” and they will therefore fail because they are suggesting a route that is reality-denying and Utopian. Since this route is at odds with reality it cannot succeed. Both sides depend on people being better and not remaining how they are, but the left chooses to hate on one side of human nature while the right chooses to hate on the other. Both miss the point, which is this: hating either part of us isn’t going to help us find a new way to live on this world that works for people—not aliens, not lions and tigers and bears, not super-evolved robo-humans, but people. The left will hate our potential for violence, which has always been present; the right will hate our potential for lust, which has always been present; all the while, both will continue hating reality and will therefore remain ineffective.
This is what I mean when I say both parties are much the same. It has almost nothing to do with their policies—their programs—which will always be ineffective, just in different ways, but with their equal inability to embrace reality. I’m tempted to go on, but I don’t even see the point. Until the people of our culture(s) embrace what they are, and until those in power see that programs will not save the world, I’ll continue ignoring every fucking thing they say. That’s all there is to it.
Currently, we face a situation where the fate of the poorest Americans would be better off had they been paying more in taxes.
The biggest problem facing low income Americans today is the paucity of job openings. There is strong reason to think that additional government stimulus could help that. Yet, the effort to increase stimulus has been stymied by concerns over the US debt-to-GDP ratio.
Yet, if we look back on the past decade a low flat 5% consumption tax would have eliminated most of the debt. No doubt low income households would have been worse off paying such a tax. However, they are much worse off without the possibility of stimulus, today.
When we think of helping lower income households we typically think of transferring wealth from the rich to the poor. However, perhaps more useful is transferring wealth between the poor under different circumstances. Taking more from the poor when times are good and giving more when times are bad. Providing low income households with this type of consumption smoothing is at the margin likely eliminate much more hardship then small increases in wealth.
Of course it has come as no surprise to Curly that Gordon Brown has twisted Darling’s arm so far up his back and decreed that the out of control public spending must not be tackled by his government, but that the horrendous economic mess should be cleared up by the next residents in Nos. 10 and 11 Downing Street. This has always been the strategy since Brown was handed the job of PM by a gutless Labour Party who were too afraid to challenge a bullying Chancellor when Blair stepped down to make his millions, keep going until you run out of other people’s money to spend, build a mountain of debt, and let the next lot deal with it, in certain knowledge that unpopularity will dog the next government within weeks of taking office. No government has ever had to sort out such an economic catastrophe since the end of WWll in the UK.
But Brown has already been laying out the battleground for the next election, he has tried to use the economy as useful tool bleating on repeatedly about Labour’s investments vs Tory Cuts, but this strategy is now shot to shreds after Alistair Darling’s pre budget report unravelled within hours, and the new strategy has already been trailed during PMQs after Brown accused Cameron of devising policy on “the playing fields of Eton”. It will be class warfare, tribalism on a huge scale, back to basics when it’s backs to the wall for the rest of us.
Trouble is , with Gordon Brown living for free in two well appointed grace and favour properties at our expense, and Labour minister Quentin Davies spending nearly £21000 of our money on his bell tower, Northern Ireland Secretary Shaun Woodward (the richest man in the Commons) spending over £21000 of our money on one of his numerous properties, Labour MP Harry Cohen using £2000 of our cash for a new bath, ………..well the list goes on an on, this class war theme is already blowing up in Brown’s neatly decorated toilet (again at our expense).
At a local level here in South Shields and South Tyneside you are unlikely to find any toffs in South Shields Conservative Association, no big wigs from business, no jet set class with huge property portfolios or £millions hidden away in off shore bank accounts, by golly no! You are far more likely to find the elite of the business classes supporting the local Labour Party (hint, past Presidents of the Royal Pharmaceutical Society and former MEPs building a fortune from a short life in public service and now mixing it as a successful lobbyist).
No the con of the class war has been revealed sharply by Alistair Darling’s very regressive move to increase NI contributions and all those “well off” folks who earn more than £20000 a year are now to be considered as having the broadest shoulders to carry the years of debt created by Labour’s profligacy! Any left wing economist will know that this measure, along with the VAT increase, will hurt the lowest paid far more than than those on higher bands of remuneration.
The respected Institute for Fiscal Studies has calculated that Darling’s pre budget report, which postpones all serious pain until after the next election, will cost every family nearly £2500 per year for many years to come to reduce the budget deficit, and that people earning as little as £14000 per year will feel the pain, and that some public services will suffer cash cuts of up to 20%, and that £700m of the child benefit increases will be clawed back in 2011.
At the time the next election is eventually called, when Brown and Darling have ran out of cash and money, when they start fighting politics in a tribal and class atmosphere, we should remind them in the strongest possible way that once again Labour has failed to look after the most important class of electors in the UK, those who work to support their families and those left reliant on benefits because of a lack of entrepreneurial drive in a Britain now turning into a giant Poundland.
Guido suggests that the Irish delivered a budget that ought to have been announced in Westminster.
Today’s Wall Street Journal reported on a relatively new trend in the United States. A growing percentage of homeowners whose mortgages are underwater are walking away from their houses and renting even nicer properties at lower total monthly costs. Given California’s trendsetter history, it is likely that this phenomenon will make its way across the United States.
The Bad
Bad things occur when homeowners walk away from underwater mortgages. Lenders take losses and property values go down depressing the housing market. In addition, mortgage holders are given bad credit ratings.
The Good
There are also positive effects for the economy when borrowers get out from loans they cannot afford. For example, when a borrower cuts the monthly mortgage payment by renting, let’s say from $4,000 to $2,000, that household then has $2,000 more per month to spend on other goods and services allowing the economy grow.
The Ugly
The government helped create the housing bubble, an economic imbalance, by making interest rates artificially low earlier in the decade. This was done to avoid a previously needed correction to our economy. Unfortunately, that action led to the housing bubble that then popped. In other words the government’s intervention or tinkering with the market led to an even worse problem then the issue they “cured”.
Left alone the free market will correct the current imbalance, even though it is severe. Housing prices will go down to where they belong based on supply and demand. Borrowers that took mortgages that they could not afford will get out of them and some will loose their properties. Lenders who made imprudent loans to people that they should have known could not pay for them will take losses. While painful, these corrections are necessary to bring the various parts of our economy back into balance.
Instead of allowing the rebalancing, the government is once again doing just the opposite. Its attempts to stop the corrective actions from occurring will create even larger imbalances in the economy and greater problems. The current efforts include making interest rates even lower, repeating the same mistake once again. They are also offering tax incentives to purchase homes to increase demand. Finally, they have created policies to try to keep people from defaulting on mortgages. Washington keeps trying the same failed formulas expecting different results. Knuckleheads!
The government’s efforts are succeeding in the short run, luring consumers and the economy into a larger trap. Instead of allowing consumers to rebalance their mortgage payments in line with their incomes, the government incentives have some taking on more debt. This will result in: 1) less money for consumers to spend on other goods and services prolonging the recession , 2) consumers once again taking on more debt than they can afford, and 3) consumers buying houses whose values will drop creating more underwater mortgages.
The government is once again doing battle with the laws of supply and demand. They can’t win this war. The longer the government delays the needed economic corrections, the more painful the rebalancing will be when it inevitably occurs.
The story behind this mess would be humorous if not so tragic. Chapter 1; The government helps create the housing bubble that lead to the meltdown. Chapter 2; When the housing loans and their derivatives go bad, the government bails out the banks so that they can make more imprudent loans. Chapter 3; The government offers incentives for people to buy homes that they would otherwise not buy in a market where housing prices are dropping. Anyone that can make sense of all this will need to write the final Chapter.
Because publishing has historically had very high fixed costs (printing presses and distribution warehouses), the industry is threatened by lower-cost digital distribution. Simon & Schuster as well as Lagardere SCA’s Hachette Book Group have announced that they will not publish a ebook until four months after the hardcover, positioning the ebook in-between the hardcover and paperback editions.
Even as the retail price of many new hardcover novels creeps above $27, Amazon and Barnes & Noble boast many new best sellers for only $9.99 in the e-book format.
Increasingly, publishers have come to fear that the bargain prices will lead consumers to conclude that books are worth only $10, or less, upsetting the pricing model that has survived for decades.
[...]
For customers, the e-book savings are striking. Barnes & Noble sells the hardcover edition of Stephen King’s new thriller, “Under the Dome,” for $22.75, but the e-book edition is only $9.99, a 71% discount off the $35 cover price.
Retailers generally pay publishers half the hardcover list price of each book, which means retailers lose money on current best sellers discounted to $9.99 or lower. Some publishers worry that retailers will eventually insist on paying less.
via online.wsj.com
This latest artificially-imposed scarcity is ironic, given that publishers have successfully stymied the growth of the ebook market by removing the property rights associated with owning a printed book: it’s not possible to resell the ebook, it’s not possible to “gift” the ebook after reading it, it’s not possible to share the ebook with family members (except by sharing the reader itself). Some people dub this draconian DRM.
Responding to a tweet, Ian Soboroff notes: “it makes more economic sense to hold back the hardcover edition and release the e-book early. Let e-book sales drive the print run.” I’m guessing that Cory Doctorow and Chris Anderson might say something similar, if they respond to this WSJ article.
The Simon & Schuster business model cannot survive. The firm, owned by CBS, publishes 2,000 titles a year and employs 1,500. This means that on average each book’s revenue has to support not only the author but also one S&S employee’s salary and benefits as well as printing, distribution, promotion, advertising, overhead. It’s a business model that requires “hits” to survive; in 2007, S&S had 140 titles on the NY Times bestseller list.
Publishers have market power over retailers even though that industry is dominated by a handful of firms. This article implies that rewards programs like Barnes and Noble and discounts offered by online retailers like Amazon come at the expense of the retailer’s bottom-line, that the publisher can count on revenue equal to 50 percent of the cover price.
According to Robyn Jackson, a “successful” fiction book sells 5,000 copies; nonfiction, 7,500 copies. Only 1-in-5 American families bought or read a book “last year” and about 3-out-of-4 books published do not earn back the advance given the author.
No wonder the cover price keeps inching upwards.
See a list of the top publishers in the world by 2008 sales (Simon & Schuster is number 26).
The Millennium Development Goals are eight international development goals that 192 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015, one of them is reducing extreme poverty. However, as teh world enters a new era of globalization and technology advancement, does international aid still play the most crucial role in eradicating global poverty?
The UN and Millennium Development Goals
In retrospect, international aid has always been the main driver and plays the most crucial role in eradicating global poverty. But, as global population continues to burgeon in recent years, how far reaching can international aid be? Essentially, we ask ourselves what is the long-term solution to eradicating global poverty.
International aid usually comes in humanitarian aids, providing basic necessities for the impoverished. Indubitably, this allows them to be able to survive and continue to live in such dire and horrendous living environment; however, is this what they hanker for? Surely not, they would want to get rid of poverty as soon as possible. But, does international aid allow them to do so? I doubt. Aid is a basic income grant, and it creates a dependency among the poor on international need, slowly, they begin to lose incentives to fight against poverty and start to rely on this “oxygen tank” to survive. in fact, most of the time, international aid has gone to the pockets of the politicians, causing widespread corruption, inefficiency and bureaucracy. And example the dictator of Zire, Mobuto Sese Seko. After he lost the support of the West when the Cold War ended, he had sufficient personal wealth to pay off the entire external debt of Zaire.
The pace of economic growth has definitely outgrow the pace of international aid. As population continues to expand, are we able to tackle the root cause of global poverty– lacking development?
Historically, poverty reduction has been a result of economic growth. The Industrial Revolution that took place during the 18th and 19th century has led to high economic growth and succeeded in reducing poverty in the West. In 1820, 75% of the population lived on less than a dollar a day, while in 2001, only about 20% do.
Hence, development is the only solution. This can achieved know-how to the locals and facilitate them in planning their economy. Bangladesh’s Bank offers a worldwide famous example- provide microloans to locals to do business, this gives locals a source of income and employment opportunities so as to reduce their dependency n aid. Recently, China announced its plan to provide a US$10bn loan to Africa and reduces its tax on African goods; its aid comes with no sting attachments. World Bank has also joined China in moving some of China’s lower skill manufacturing so provide employment. Development now plays a more crucial role in eradicating global poverty. China’s late leader Deng Xiao Ping set development as China’s main objective for governance for the next few decades and he succeeded as China ascends to become the world’s largest economy by 2050. Development is crucial but where does the capital come from? International aid. A combination of both will reduce people’s dependency on aid and provide them with a source of income.
Sounds easy right? Improving infrastructure such as education, improve living environment and personal wealth through development, the road that China, South Korea and Taiwan have walked, a perfect plan indeed. However, this is too idealistic. Why is global poverty able to stagnates for so many decades? There must be other factors that are acting as barricades to our goal of eradicating global poverty. One of these factors is poor administration, as I have touched a bit just now. Poor administration has poor policies, adding on to its corruption conundrum. In terms of economics, such administration lacks the knowledge to derive sensible and investor friendly fiscal and monetary policies; in terms of infrastructure, such administration’s over-bureaucratic nature stymies the refurbishment of the country due to corruption and inefficiency; in terms of stability, citizens’ complaints and hatred for the government has often provided a fillip for militants and revolutionary to fight against the government, worsening the situation further. An example of such country will be Somalia. The Economist honored it as the “Worst Country on Earth“.
Of course, economists have listed other ways of eradicating global poverty. However, I have seen them falling into these three broad categories- development, international aid and good governance. It is difficult to suggest which one can stands out from the rest. In-depth examination indicates that none of them can eradicate global poverty without another. Development needs the supervising of good administration while international aid provides supports in logistics, technology and capital. Coordination among these three measures is able to allow us to combat global poverty. However, the question of “which plays the most crucial role” has to be answered. In my perspective, it is good administration. A good administration can provide all the necessary conditions for a economic prosperity. It gives us investor-friendly and sound economic policy, stability in the country so that we can place an emphasis on development, education- the ultimate way to rid poverty and ultimately GDP growth. In sum, development and international aid without a good government comes at high costs and hinders mission to reduce poverty.
(It’s my first time writing on poverty, hope it flows.)
Merry Christmas!
I’m currently enjoying reading the new book by John Cassidy: “How markets fail: the logic of economic calamities“.
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A growing percentage of homeowners whose mortgages are underwater are walking away from their houses and renting even nicer properties at lower total monthly costs. Given California’s trendsetter history, it is likely that this phenomenon will make its way across the United States.
This was done to avoid a previously needed correction to our economy. Unfortunately, that action led to the housing bubble that then popped. In other words the government’s intervention or tinkering with the market led to an even worse problem then the issue they “cured”.
The current efforts include making interest rates even lower, repeating the same mistake once again. They are also offering tax incentives to purchase homes to increase demand. Finally, they have created policies to try to keep people from defaulting on mortgages. Washington keeps trying the same failed formulas expecting different results. Knuckleheads!