[Peace-discuss] Some serious economics

[C. G. Estabrook]

Libertarians were of course correct when they thought that open borders were 
essential to liberty.

The paragraphs on immigration in the interview I cited note the importance of 
"illegal immigration" to neoliberalism.


On 2/1/11 3:04 AM, E.Wayne Johnson wrote:
> There are certainly TeaPartiers and Paulers for whom illegal immigration is a 
> central issue.
> I can remember when Libertarians thought that open borders were essential to 
> liberty.
>
> It looks like to me that one of the primary roots of the American Problem is 
> that they embraced birth control, thus creating in the land a vacuum that 
> sucks in immigrants.  The US is vastly underpopulated, hence the inrush of 
> immigrants.  Like the guy said, "illegal immigrants" are much easier to 
> control than the "legal" and independent kind.
>
> The anti-immigrant wing of the Tea Partiers is simply looking for a scapegoat 
> upon which they can lay their angst and frustration.  Illegal Immigrants are 
> to them as the Jews were to the Germans.  It's their fault that America is so 
> fucked up.  It couldn't be our fault.  See my "I Voted" sticker?  It aint my 
> fault.
>
> *
>
> Alienation, even unto that variety of civil disobedience that one might call 
> "illegal alienation" is likely a necessary stage in getting "woke up".
>
> It's hard not to feel a bit alienated after one realizes how badly its gone 
> down by been taken for a sucker by the system.
>
> I saw a Egyptian revolutionary guy on TV (maybe he was on the TV in the US too?)
> who said "I feel like an Egyptian for the first time".
>
> We get the idea that it's more important to be polite than to possess what 
> belongs to us.
> We confuse passivity with magnanimity.
>
> "Anyone who's well-adjusted is Sick!
> It's not my fault that I'm a confused asshole.
> It's America that needs to be changed, not me."
> (- attributed to Robert Crumb.)
>
>
>
> ----- Original Message ----- From: "C. G. Estabrook" <galliher at illinois.edu>
> To: "E.Wayne Johnson" <ewj at pigs.ag>
> Cc: "Peace-discuss" <peace-discuss at anti-war.net>
> Sent: Tuesday, February 01, 2011 1:52 PM
> Subject: Re: [Peace-discuss] Some serious economics
>
>
>> Brother, can you paradigm...?
>>
>> I had the peculiar experience over the weekend of trying (and failing) to 
>> explain the notion of alienated labor to an emerita professor of English.
>>
>> She insisted hers wasn't alienated at all: people simply hadn't recognized 
>> her talents appropriately because she was female.
>>
>> And she got very upset when I started to read this to her:
>>
>> <http://jacobinmag.com/archive/issue1/wbm.html>.
>>
>>
>> On 1/31/11 11:33 PM, E.Wayne Johnson wrote:
>>> My immediate knee-jerk responses are probably more toward the remarks of the 
>>> editor than the author of the book but I can't be sure about it.
>>>
>>> a) This, the Greatest Depression, is hardly getting warmed up good. Such 
>>> pretentious nonsense to look at it in retrospect. The big lollapalootza is 
>>> up ahead, just over that hill, there, on the horizon.
>>>
>>> b) It's pretty damn clueless to fix blame on the Evil Party or the Stupid 
>>> Party. The Stupid and Evil bailouts and corporatism are a bipartisan effort. 
>>> Ain't it grand when politicians work together?
>>>
>>> c) Hardly an ill event occurs that doesnt give the left-right paradigmers an 
>>> opportunity to blame the contralateral ideology. The progressives are 
>>> immoral and the TeaParties are corporate shills according to their pundits. 
>>> Fortunately, neither of these stereotypes are accurate.
>>>
>>> d) Child labor must be a very bad thing indeed. Growing up on the farm as I 
>>> did, we worked pretty hard beginning about age 8 or 9. It is a horrible 
>>> thing. :) You can see how it warped me into thinking that some of the 
>>> problem with Americans is that they dont know how to work.
>>>
>>>
>>>
>>> ----- Original Message ----- From: "C. G. Estabrook" <galliher at illinois.edu>
>>> To: "Peace-discuss" <peace-discuss at anti-war.net>
>>> Sent: Tuesday, February 01, 2011 12:16 PM
>>> Subject: [Peace-discuss] Some serious economics
>>>
>>>
>>> 23 Things They Don't Tell You About Capitalism
>>> By Ha-Joon Chang, Bloomsbury Press
>>> Posted on January 31, 2011, Printed on January 31, 2011
>>> http://www.alternet.org/story/149688/
>>>
>>> Editor's Note: Many books have tackled the great recession of 2008, the second
>>> worst economic crisis in history, after the depression. But I doubt there is 
>>> one
>>> book, written in response to the current economic crisis, that is as fun or 
>>> easy
>>> to read as Ha-Joon Chang's 23 Things They Don't Tell you About Capitalism. I'd
>>> never heard of this Korean economist, probably because he lives in England and
>>> teaches at Cambridge, but he is well known in economic circles, and well 
>>> respected.
>>>
>>> It is no secret that the American society is dominated by the super rich, held
>>> for hostage by the banks, dominated in the Nation's Capital by the tens of
>>> thousands of lobbyists and their big bucks, as the Republican party and their
>>> corporate Tea Partyists provide cover for giant theft of many billions of 
>>> wealth
>>> for the very rich, with of course the cooperation of the Democrats who 
>>> supported
>>> the extension of the Bush tax cuts for the very wealthy (Check out Rachel
>>> Maddow's op-ed, which explains why Dwight Eisenhower, who taxed the rich to
>>> balance the budget, which be a radical in today's political reality). In this
>>> very discouraging environment it is hard to imagine scenarios where normal
>>> folks, every day voters, the non-rich, who are not represented by lobbyists, 
>>> can
>>> have much influence.
>>>
>>> On top of that, making change even harder, is an enormously effective 
>>> propaganda
>>> system that perpetuates inaccurate and often destructive myths about virtually
>>> every element of capitalism and the US and global economy. And top economic
>>> officials in the Obama administration and leading mainstream economists often
>>> perpetuate these myths, and the corporate media marches along side repeating
>>> them like the gospel.
>>>
>>> So, as far as I am concerned there never can be too much truth-telling to
>>> attempt to pull away the curtain of propaganda and disinformation that shrouds
>>> our economic thinking and actions. I am not under the illusion that the facts
>>> will set us free. As research has shown, when people connect their opinions 
>>> to a
>>> set of values or leaders, they will not be open to changing their mind, and
>>> presentation of contrary "facts," may make them dig in more clinging their 
>>> their
>>> misinformation. But when it comes to the economy, the propaganda system has 
>>> been
>>> so pervasive, and supported by conventional wisdom that people who need to know
>>> better, buy into it, and yes that includes liberals and progressives who have a
>>> kind of inertia of the mind of their own. It is hard to change one's sense of
>>> things.
>>>
>>> AlterNet's Economics editor Joshua Holland made a nice contribution to this
>>> public education effort this Fall with his book: The Fifteen Biggest Lies about
>>> the Economy Now we have the funny, and sharp Chang. What follows is chapter one
>>> of his book: "There is No Such Thing as a Free Market." Other chapters are 
>>> quite
>>> revealing such as: " The Washing Machine Has Changed the World More than the
>>> Internet;" "More Education, in Itself, Is Not Going to Make a Country Richer;"
>>> "The U.S. Does Not Have the Highest Living Standard in the World;" "Companies
>>> Should Not Be Run in the Interest of their Owners."
>>>
>>> Chan's main point is the recent economic disaster wasn't by accident, that
>>> active government can promote economic dynamism, that tax cuts for the rich
>>> simply redistribute wealth upward, and that we will continue on the path to
>>> economic disaster,with no end in sight, unless the collective wisdom, goes in a
>>> different direction. -- AlterNet Executive Editor Don Hazen
>>>
>>> The following is an excerpt from 23 Things They Don’t Tell You About Capitalism
>>> (Copyright © 2011) by Ha-Joon Chang. Reprinted with the permission of 
>>> Bloomsbury
>>> Press.
>>>
>>>
>>>
>>> Thing 1: There is no such thing as a free market
>>>
>>> What they tell you
>>>
>>>
>>>
>>> Markets need to be free. When the government interferes to dictate what market
>>> participants can or cannot do, resources cannot flow to their most efficient
>>> use. If people cannot do the things that they find most profitable, they lose
>>> the incentive to invest and innovate. Thus, if the government puts a cap on
>>> house rents, landlords lose the incentive to maintain their properties or build
>>> new ones. Or, if the government restricts the kinds of financial products that
>>> can be sold, two contracting parties that may both have benefited from
>>> innovative transactions that fulfill their idiosyncratic needs cannot reap the
>>> potential gains of free contract. People must be left "free to choose," as the
>>> title of free-market visionary Milton Friedman’s famous book goes.
>>>
>>>
>>>
>>> What they don’t tell you
>>>
>>>
>>>
>>> The free market doesn’t exist. Every market has some rules and boundaries that
>>> restrict freedom of choice. A market looks free only because we so
>>> unconditionally accept its underlying restrictions that we fail to see them. 
>>> How
>>> "free" a market is cannot be objectively defined. It is a political definition.
>>> The usual claim by free-market economists that they are trying to defend the
>>> market from politically motivated interference by the government is false.
>>> Government is always involved and those free-marketeers are as politically
>>> motivated as anyone. Overcoming the myth that there is such a thing as an
>>> objectively defined "free market" is the first step towards understanding
>>> capitalism.
>>>
>>>
>>>
>>> Labor ought to be free
>>>
>>>
>>>
>>> In 1819 new legislation to regulate child labor, the Cotton Factories 
>>> Regulation
>>> Act, was tabled in the British Parliament. The proposed regulation was
>>> incredibly "light touch" by modern standards. It would ban the employment of
>>> young children – that is, those under the age of nine. Older children (aged
>>> between ten and sixteen) would still be allowed to work, but with their working
>>> hours restricted to twelve per day (yes, they were really going soft on those
>>> kids). The new rules applied only to cotton factories, which were recognized to
>>> be exceptionally hazardous to workers’ health.
>>>
>>> The proposal caused huge controversy. Opponents saw it as undermining the
>>> sanctity of freedom of contract and thus destroying the very foundation of the
>>> free market. In debating this legislation, some members of the House of Lords
>>> objected to it on the grounds that "labor ought to be free." Their argument
>>> said: the children want (and need) to work, and the factory owners want to
>>> employ them; what is the problem?
>>>
>>> Today, even the most ardent free-market proponents in Britain or other rich
>>> countries would not think of bringing child labor back as part of the market
>>> liberalization package that they so want. However, until the late 19th or the
>>> early 20th century, when the first serious child labor regulations were
>>> introduced in Europe and North America, many respectable people judged child
>>> labour regulation to be against the principles of the free market.
>>>
>>> Thus seen, the "freedom" of a market is, like beauty, in the eyes of the
>>> beholder. If you believe that the right of children not to have to work is more
>>> important than the right of factory owners to be able to hire whoever they find
>>> most profitable, you will not see a ban on child labor as an infringement on 
>>> the
>>> freedom of the labor market. If you believe the opposite, you will see an
>>> "unfree" market, shackled by a misguided government regulation.
>>>
>>> We don’t have to go back two centuries to see regulations we take for granted
>>> (and accept as the "ambient noise" within the free market) that were seriously
>>> challenged as undermining the free market, when first introduced. When
>>> environmental regulations (e.g., regulations on car and factory emissions)
>>> appeared a few decades ago, they were opposed by many as serious infringements
>>> on our freedom to choose. Their opponents asked: if people want to drive in 
>>> more
>>> polluting cars or if factories find more polluting production methods more
>>> profitable, why should the government prevent them from making such choices?
>>> Today, most people accept these regulations as "natural." They believe that
>>> actions that harm others, however unintentionally (such as pollution), need to
>>> be restricted. They also understand that it is sensible to make careful use of
>>> our energy resources, when many of them are non-renewable. They may believe 
>>> that
>>> reducing human impact on climate change makes sense too.
>>>
>>> If the same market can be perceived to have varying degrees of freedom by
>>> different people, there is really no objective way to define how free that
>>> market is. In other words, the free market is an illusion. If some markets look
>>> free, it is only because we so totally accept the regulations that are propping
>>> them up that they become invisible.
>>>
>>>
>>>
>>> Piano wires and kungfu masters
>>>
>>>
>>>
>>> Like many people, as a child I was fascinated by all those gravity-defying kung
>>> fu masters in Hong Kong movies. Like many kids, I suspect, I was bitterly
>>> disappointed when I learned that those masters were actually hanging on 
>>> piano wires.
>>>
>>> The free market is a bit like that. We accept the legitimacy of certain
>>> regulations so totally that we don’t see them. More carefully examined, markets
>>> are revealed to be propped up by rules – and many of them.
>>>
>>> To begin with, there is a huge range of restrictions on what can be traded; and
>>> not just bans on "obvious" things such as narcotic drugs or human organs.
>>> Electoral votes, government jobs and legal decisions are not for sale, at least
>>> openly, in modern economies, although they were in most countries in the past.
>>>
>>> University places may not usually be sold, although in some nations money can
>>> buy them – either through (illegally) paying the selectors or (legally) 
>>> donating
>>> money to the university. Many countries ban trading in firearms or alcohol.
>>> Usually medicines have to be explicitly licensed by the government, upon the
>>> proof of their safety, before they can be marketed. All these regulations are
>>> potentially controversial – just as the ban on selling human beings (the slave
>>> trade) was one and a half centuries ago.
>>>
>>> There are also restrictions on who can participate in markets. Child labor
>>> regulation now bans the entry of children into the labor market. Licenses are
>>> required for professions that have significant impacts on human life, such as
>>> medical doctors or lawyers (which may sometimes be issued by professional
>>> associations rather than by the government). Many countries allow only 
>>> companies
>>> with more than a certain amount of capital to set up banks. Even the stock
>>> market, whose underregulation has been a cause of the 2008 global recession, 
>>> has
>>> regulations on who can trade. You can’t just turn up in the New York Stock
>>> Exchange (NYSE) with a bag of shares and sell them. Companies must fulfill
>>> listing requirements, meeting stringent auditing standards over a certain 
>>> number
>>> of years, before they can offer their shares for trading. Trading of shares is
>>> only conducted by licensed brokers and traders.
>>>
>>> Conditions of trade are specified too. One of the things that surprised me when
>>> I first moved to Britain in the mid-1980s was that one could demand a full
>>> refund for a product one didn’t like, even if it wasn’t faulty. At the time, 
>>> you
>>> just couldn’t do that in Korea, except in the most exclusive department stores.
>>> In Britain, the consumer’s right to change her mind was considered more
>>> important than the right of the seller to avoid the cost involved in returning
>>> unwanted (yet functional) products to the manufacturer. There are many other
>>> rules regulating various aspects of the exchange process: product liability,
>>> failure in delivery, loan default, and so on. In many countries, there are also
>>> necessary permissions for the location of sales outlets – such as restrictions
>>> on street-vending or zoning laws that ban commercial activities in residential
>>> areas.
>>>
>>> Then there are price regulations. I am not talking here just about those highly
>>> visible phenomena such as rent controls or minimum wages that free-market
>>> economists love to hate.
>>>
>>> Wages in rich countries are determined more by immigration control than 
>>> anything
>>> else, including any minimum wage legislation. How is the immigration maximum
>>> determined? Not by the "free" labor market, which, if left alone, will end up
>>> replacing 80–90 per cent of native workers with cheaper, and often more
>>> productive, immigrants. Immigration is largely settled by politics. So, if you
>>> have any residual doubt about the massive role that the government plays in the
>>> economy’s free market, then pause to reflect that all our wages are, at root,
>>> politically determined.
>>>
>>> Following the 2008 financial crisis, the prices of loans (if you can get one or
>>> if you already have a variable rate loan) have become a lot lower in many
>>> countries thanks to the continuous slashing of interest rates. Was that because
>>> suddenly people didn’t want loans and the banks needed to lower their prices to
>>> shift them? No, it was the result of political decisions to boost demand by
>>> cutting interest rates. Even in normal times, interest rates are set in most
>>> countries by the central bank, which means that political considerations creep
>>> in. In other words, interest rates are also determined by politics.
>>>
>>> If wages and interest rates are (to a significant extent) politically
>>> determined, then all the other prices are politically determined, as they 
>>> affect
>>> all other prices.
>>>
>>>
>>>
>>> Is free trade fair?
>>>
>>>
>>>
>>> We see a regulation when we don’t endorse the moral values behind it. The
>>> 19th-century high-tariff restriction on free trade by the U.S. federal
>>> government outraged slave-owners, who at the same time saw nothing wrong with
>>> trading people in a free market. To those who believed that people can be 
>>> owned,
>>> banning trade in slaves was objectionable in the same way as restricting trade
>>> in manufactured goods. Korean shopkeepers of the 1980s would probably have
>>> thought the requirement for "unconditional return" to be an unfairly burdensome
>>> government regulation restricting market freedom.
>>>
>>> This clash of values also lies behind the contemporary debate on free trade vs.
>>> fair trade. Many Americans believe that China is engaged in international trade
>>> that may be free but is not fair. In their view, by paying workers unacceptably
>>> low wages and making them work in inhumane conditions, China competes unfairly.
>>> The Chinese, in turn, can riposte that it is unacceptable that rich countries,
>>> while advocating free trade, try to impose artificial barriers to China’s
>>> exports by attempting to restrict the import of "sweatshop" products. They find
>>> it unjust to be prevented from exploiting the only resource they have in
>>> greatest abundance – cheap labor.
>>>
>>> Of course, the difficulty here is that there is no objective way to define
>>> "unacceptably low wages" or "inhumane working conditions." With the huge
>>> international gaps that exist in the level of economic development and living
>>> standards, it is natural that what is a starvation wage in the U.S. is a
>>> handsome wage in China (the average being 10 per cent that of the U.S.) and a
>>> fortune in India (the average being 2 per cent that of the U.S.) Indeed, most
>>> fair-trade-minded Americans would not have bought things made by their own
>>> grandfathers, who worked extremely long hours under inhumane conditions. Until
>>> the beginning of the twentieth century, the average work week in the U.S. was
>>> around 60 hours. At the time (in 1905, to be more precise), it was a country in
>>> which the Supreme Court declared unconstitutional a New York state law limiting
>>> the working days of bakers to 10 hours, on the grounds that it "deprived the
>>> baker of the liberty of working as long as he wished."
>>>
>>> Thus seen, the debate about fair trade is essentially about moral values and
>>> political decisions, and not economics in the usual sense. Even though it is
>>> about an economic issue, it is not something economists with their technical
>>> tool kits are particularly well equipped to rule on.
>>>
>>> All this does not mean that we need to take a relativist position and fail to
>>> criticize anyone because anything goes. We can (and I do) have a view on the
>>> acceptability of prevailing labour standards in China (or any other country, 
>>> for
>>> that matter) and try to do something about it, without believing that those who
>>> have a different view are wrong in some absolute sense. Even though China 
>>> cannot
>>> afford American wages or Swedish working conditions, it certainly can improve
>>> the wages and the working conditions of its workers. Indeed, many Chinese don’t
>>> accept the prevailing conditions and demand tougher regulations. But economic
>>> theory (at least free-market economics) cannot tell us what the ‘right’ wages
>>> and working conditions should be in China.
>>>
>>>
>>>
>>> I don’t think we are in France any more
>>>
>>>
>>>
>>> In July 2008, with the country’s financial system in meltdown, the US 
>>> government
>>> poured $200 billion into Fannie Mae and Freddie Mac, the mortgage lenders, and
>>> nationalized them. On witnessing this, the Republican Senator Jim Bunning of
>>> Kentucky famously denounced the action as something that could only happen in a
>>> "socialist" country like France.
>>>
>>> France was bad enough, but on 19 September 2008, Senator Bunning’s beloved
>>> country was turned into the Evil Empire itself by his own party leader.
>>> According to the plan announced that day by President George W. Bush and
>>> subsequently named TARP (Troubled Asset Relief Program), the U.S. government 
>>> was
>>> to use at least $700 billion of taxpayers’ money to buy up the "toxic assets"
>>> choking up the financial system.
>>>
>>> President Bush, however, did not see things quite that way. He argued that,
>>> rather than being "socialist" the plan was simply a continuation of the 
>>> American
>>> system of free enterprise, which "rests on the conviction that the federal
>>> government should interfere in the market place only when necessary." Only 
>>> that,
>>> in his view, nationalizing a huge chunk of the financial sector was just one of
>>> those necessary things.
>>>
>>> Mr. Bush’s statement is, of course, an ultimate example of political
>>> double-speak – one of the biggest state interventions in human history is
>>> dressed up as another workaday market process. However, through these words Mr.
>>> Bush exposed the flimsy foundation on which the myth of the free market stands.
>>> As the statement so clearly reveals, what is a necessary state intervention
>>> consistent with free-market capitalism is really a matter of opinion. There is
>>> no scientifically defined boundary for free market.
>>>
>>> If there is nothing sacred about any particular market boundaries that 
>>> happen to
>>> exist, an attempt to change them is as legitimate as the attempt to defend 
>>> them.
>>> Indeed, the history of capitalism has been a constant struggle over the
>>> boundaries of the market.
>>>
>>> A lot of the things that are outside the market today have been removed by
>>> political decision, rather than the market process itself – human beings,
>>> government jobs, electoral votes, legal decisions, university places or
>>> uncertified medicines. There are still attempts to buy at least some of these
>>> things illegally (bribing government officials, judges or voters) or legally
>>> (using expensive lawyers to win a lawsuit, donations to political parties,
>>> etc.), but, even though there have been movements in both directions, the trend
>>> has been towards less marketization.
>>>
>>> For goods that are still traded, more regulations have been introduced over
>>> time. Compared even to a few decades ago, now we have much more stringent
>>> regulations on who can produce what (e.g., certificates for organic or
>>> fair-trade producers), how they can be produced (e.g., restrictions on 
>>> pollution
>>> or carbon emissions), and how they can be sold (e.g., rules on product 
>>> labelling
>>> and on refunds).
>>>
>>> Furthermore, reflecting its political nature, the process of re-drawing the
>>> boundaries of the market has sometimes been marked by violent conflicts. The
>>> Americans fought a civil war over free trade in slaves (although free trade in
>>> goods – or the tariffs issue – was also an important issue). The British
>>> government fought the Opium War against China to realize a free trade in opium.
>>> Regulations on free market in child labour were implemented only because of the
>>> struggles by social reformers, as I discussed earlier. Making free markets in
>>> government jobs or votes illegal has been met with stiff resistance by 
>>> political
>>> parties who bought votes and dished out government jobs to reward loyalists.
>>> These practices came to an end only through a combination of political 
>>> activism,
>>> electoral reforms and changes in the rules regarding government hiring.
>>>
>>> Recognizing that the boundaries of the market are ambiguous and cannot be
>>> determined in an objective way lets us realize that economics is not a science
>>> like physics or chemistry, but a political exercise. Free-market economists may
>>> want you to believe that the correct boundaries of the market can be
>>> scientifically determined, but this is incorrect. If the boundaries of what you
>>> are studying cannot be scientifically determined, what you are doing is not a
>>> science.
>>>
>>> Thus seen, opposing a new regulation is saying that the status quo, however
>>> unjust from some people’s point of view, should not be changed. Saying that an
>>> existing regulation should be abolished is saying that the domain of the market
>>> should be expanded, which means that those who have money should be given more
>>> power in that area, as the market is run on one-dollar-one-vote principle.
>>>
>>> So, when free-market economists say that a certain regulation should not be
>>> introduced because it would restrict the "freedom" of a certain market, they 
>>> are
>>> merely expressing a political opinion that they reject the rights that are 
>>> to be
>>> defended by the proposed law. Their ideological cloak is to pretend that their
>>> politics is not really political, but rather is an objective economic truth,
>>> while other people’s politics is political. However, they are as politically
>>> motivated as their opponents.
>>>
>>> Breaking away from the illusion of market objectivity is the first step toward
>>> understanding capitalism.
>>>
>>> Support AlterNet by purchasing your copy of 23 Things They Don't Tell You About
>>> Capitalism through our partner, Powell's, an independent bookstore.
>>>
>>> Ha-Joon Chang teaches in the faculty of economics at the University of
>>> Cambridge. His books include "Bad Samaritans: The Myth of Free Trade and the
>>> Secret History of Capitalism" and "Kicking Away the Ladder."
>>>
>>> © 2011 Bloomsbury Press All rights reserved.
>>> View this story online at: http://www.alternet.org/story/149688/
>>>
>>> _______________________________________________
>>> Peace-discuss mailing list
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>>>
>>
>