06 September 2013

One Thing Popa Marx Got Dead Wrong!....A Late Night Musing on the Rate of Profit in the US.........

Just started reading a book I bought a few years back that has just sat on the shelf.  "Wobblies & Zapatistas". Wishing I had picked it up sooner...The first chapter already has me worked up!

The book is interesting so far, but there is a major error in the application of Marxian theory in the first chapter.  When discussing "globalization" in the lens of the Zapatista movement, the book cites the rising Organic Composition of Capital in the 1970's leading to a falling rate of profit for U.S. capitalists and thus the need for expansion.  The result, of course, is NAFTA, and all the ramifications for the Mexican people*

What has not been adequately explained (at least to my mind) is that the profit rate did NOT fall during this period.  It is beyond the scope of what I am going to undertake for a blog entry to find data to prove this but I would direct my reader to a lot of Rick Wolff's semi-recent work for evidence.

This common misconception that globalization was caused by the American capitalist looking for ways to increase a falling profit rate (due to a raising OCC) is just a simple case of finding results where the theory predicts they should be.  The OCC rose, resulting in globalization, read Marx, the profit rate must have been falling???  I think Marx got this one really wrong!  Globalization is a rusult of too much profit, not a falling rate, and the necessity to stick all of this surplus somewhere.

What is at stake in this argument?  A valid question dear reader....please help me with it.

*As an aside, an interesting something cited in this book that I have never come across in my own NAFTA work (albeit years ago now).  The Mexican government removed a line from their constitution allowing land to be held communally by a village at the request of the U.S. government as a precondition to NAFTA.  Perhaps more on this another night.

23 August 2013

Spending, The Millennial Generation, and Life (Retirement) Goals, Some Bourgeois Consumption Commentary

Last night I had a discussion with my wonderful mother (Beth Miehls) about an article she had recently read about the millennial generation.  This is the generation that started with my birth in 1981 and encompass everyone born up to the early 2000s.  Thus there are hipsters, young business types, and a lot of over-educated bartenders.  

The point of the article that Beth read was that The Millennial Generation (Gen Y from this point on) has spending patterns that favor experiences over accumulation of material wealth.  Basically she was making the point that Gen Y'ers spend more of their money on travel and high end food and drink than on houses and cars, etc. because we have some type of conscious or subconscious economic preference for living well rather than owning well.  This concept is causality in neoclassical preference theory rearing its ugly head in the hegemonic bourgeois culture yet again.

I am not arguing with the basic premise here.  Gen Y has lead spending in the microbrew, localvore, eco-tourism, etc. movements.  But are we making a choice to do these things rather than spend on accumulation?

It is quite possible that Gen Y'ers are spending their money in ways other than accumulation of long term material assets such as property because these things are not available to us.  The baby-boomers (to their credit) have a higher life expectancy than any American generation before them and already own much of the property, and hold most of the high-paying jobs.  Life expectancy for American males was in the low 60s in the period leading up to the Golden Age of Capitalism (pre and durnig WWII) and has steadily increased post war.  The average American male can expect to live into their mid 70s today.  Living until 75 means that the average baby boomer (our parents) will hold their property for 15 years longer than their parents did.  This, combined with many other economic factors means that the mean property sale price in the US has increased from $19,300 in 1963 to  $272,900 in 2010 (US Gov. Census), far faster growth than the rate of inflation during this period.  *

Is my generation choosing to pay for experiences? or has the longer lives of our parents (thankfully I might add in the case of my parents, as we get along well and love each other) priced Gen Y out of the ability to buy land, houses and cars and forced us to spend our money on good beer and travel instead to give us a reason to get out of bed in this bourgeois culture of consumption?

*I haven't even started to discuss the collapse of credit markets as a factor here, which will deserve its own post when I return to this topic.

28 May 2013

Looking Forward to the Next Eight Weeks: Teaching "Intro to the Economics of Crime and Social Problems" (again)

I am pleased to be wearing my adjunct professor hat again this summer for John Jay College of Criminal Justice (part of  CUNY... the City University of New York system).  I am teaching a course that existed in the John Jay economics department before I started teaching there as an online adjunct (almost 3 years ago now), but I have made it my own.

The course is Economics 170 "Introduction to the Economics of Crime and Social Problems" (online).  I started out teaching this course as a hybrid between the syllabi of the chair of the economics department at John Jay who used mainstream methods with a liberal twist, and a John Jay professor who is a recent UMass PhD and radical economist.

Although still containing elements of both of these professor's syllabi, over the past three years the course has morphed into something uniquely my own.   I record video lectures in my home office and blend these with a non-mainstream into economics text (Understanding Capitalism) , and a large amount of discussion responses and supplementary readings throughout the semester.  For those interested, you can get a better feel for the course in my introductory video for this summer's students. (This will be the only material for the course that I will link to directly from my blog, as I don't want to get into intellectual property issues with John Jay).

I realize that this post is self serving as most of my readers will never take an economics course at John Jay (if you are interested in signing up I have three or four spots left this summer, but the course starts today...so get on it asap!). That said, I think it is important to share what I am trying to do, in this world dominated by neoclassical economic thought and teaching.  My goal when teaching Intro to the... this summer is to have the students study the interaction of economic, political, cultural (and criminal) processes not as something given, requiring the memorization of tools to analyze, but as a collection of fluid and changing ideas.

The question "what is a crime?" is in a state of rapid change in our society as we re-make and re-define while we re-build American capitalism after this most recent systemic crisis (recession).  The growing inequality in the United States in both wealth and opportunity for material advancement is going to require people to rethink many aspects of our criminal justice system.   The US criminal justice system has been, and remains, notoriously biased against certain classes of people, but as a larger and larger portion of the country becomes "working poor", how the definitions and ideas of what is criminal change will have vast impacts.  Will we allow the criminal justice system to continue as it has been operating, allowing affluence to buy justice when fewer and fewer people will be able to afford it?  Possibly growing economic inequality might finally force society to address issues of inequality in justice that should have been resolved decades ago during the civil rights movement?

 I am incredibly excited about the opportunity to draw a paycheck (albeit a relatively small one) while engaging with this type of question again this summer (especially considering the positive experiences I have had teaching the students of John Jay College in the past)

20 May 2013

Great Link: A Podcast on the Morality of Gun Control

(New favorite image lifted from the web for my blog.) 


It is clearly wrong to take someone's gun away as they are about to be murdered?  You are violating that person's right to self defense? Essentially you are complicit in that person's murder?  Correct?

Jeff McMahan (on the Philosophy Bites Podcast) argues that "self defense" is not a fundamental right, rather, "personal security" is a fundamental right and private gun ownership violates this right. 

Just look at the statistics people!
The U.S., with 4.5 percent of the world population, accounts for about 40 percent of the planet's civilian firearms, said Dr. Garen Wintemute, of the University of California, Davis, Medical Center.

I have not been writing lately (a lot of grading at the end of the spring semester this year), but as I ramp up my own writing I wanted to start posting again.  So I am starting slow, with a link, but a good one! 

*** To my valued readers: I have not been writing lately (a lot of grading at the end of the spring semester this year), but as I ramp up my own writing I wanted to start posting again.  So I am starting slow, with a link, but a very good one! The following is about a great episode from this past February of one of my favorite online shows. 

Philosophy Bites is a great podcast! Simple and short (usually about 15 minutes) on topics from current cultural processes all the way to philosophy's biggest questions.  I highly recommend a listen to a couple episodes.  I have found that the episodes often stimulate new lines of thought / perspectives in my own thinking.   The debt I feel from the free stimulation I have received leads me to link to them today.

23 April 2013

Congratulations to Fellow UMass Economist(s)

Thomas Herndon is getting a lot of attention for his critical replication paper, that attacks the data / methods of a paper by Harvard's Carmen Reinhart and Kenneth Rogoff. 


Those of us (and this includes most of my readers I imagine) who find policy implications based on econometric analysis in single papers are not terribly surprised to find errors in papers such as Reinhart and Rogoff's.  That said, it is rare that the mainstream is forced to listen to our critiques. That coupled with the fact that Thomas' work has significant implications for austerity programs and governments the world over, this is a major achievement!
Well done and congrats Tom!

11 April 2013

A Large Writing Project for This Year. Detroit, Fallen Cities and the US Macro Economy.

I have finally begin to "ink" some ideas that I have for a large writing project this summer.
These preliminary ideas have a long way to go and I would happily receive comments thoughts from my readers.

My work will be threefold.

1. I will need to write a summary of the coinciding economic histories of the city of Detroit (housing patterns, taxes, etc.) and the corporations that dominate the auto industry (mostly GM, but also Ford and Chrysler) as they relate to Wayne county Michigan.  Numbers such as populations, employment numbers, etc. This is essentially to establish statistical correlation between these corporations and the county that houses them.  This will be an important aspect as it will (hopefully) numerically demonstrate how the people involved and the enterprises symbiotically both built and destroyed a major urban area.  Included will be analysis of both the corporations, but also public services etc. offered by local governments to their employees. 

2. I plan to update the Marxian conception of the corporation.  The generation of surplus labor takes place not only within the settings of the corporate environment, but also within a certain geographic area. I hope to contribute to the Marxist corporate literature from this perspective.  Topics such as type of labor available, as well as surplus generating policies of the enterprise need to be updated to discuss the relationship with the communities in which the enterprises are contained.  Surplus is generated by real people and they have to exist within a geographic area, this dynamic is not adequately discussed in Marxian economics or geography.  This section will also include an analysis of labor relations, relative bargaining power of the workers of these companies over time, union actions, etc.  Basically wage/labor relations history stuff, but in the context of these things affecting both the enterprise and the community (something new as far as I know>)
3. Finally, and this is vague still...I want to be able to say something meaningful about municipal policy, certainly as it relates to "fallen" cities like Detroit, Pittsburgh, Holyoke, etc. and how they should attempt to use the resources/factories that they have to stimulate recovery (with or without the gentrification pattern that is being followed in many American cities), but also, the future of other American urban areas that rely upon manufacturing today, as well as possibly some contributions on positives/negatives to the broader idea of the moving away from "real" production into the service sector that the American macro economy as a whole has experienced.

Comments very welcome!

Finally...have we started to move past the need for sleep?

I have not been writing for a while. 
In an attempt to get (my sleep deprived) brain working again I am starting slow tonight, with a simple link.
This article discusses two new stimulant drugs that in trial seem to allow the brain to function normally without sleep. 
Is it possible that we won't have to waste hours a day in the fight against capitalist exploitation for much longer?
Not addressed are all the health and psychological benefits of a night of slumber. but .....still...steps in the right direction. 


12 March 2013

US News and World Report: Ranking of Graduate Programs in Economics. A Thought...


Check the "rankings methodology".
It is essentially the academic equivalent of asking Anheuser Busch / Inbev employees to rank the best breweries.  Hegemony breeds hegemony and bourgeois thinkers love bourgeois thought.   The most remarkable thing here might be that I am even bothering to remark on this.  

07 March 2013

Politics and Baseball: The Death of Hugo Chavez and Cowardice of the Miami Marlins

As some of you may know, and I would guess that many of you, dear readers, do not, the World Baseball Classic is currently taking place.  The WBC is an international tournament that takes place every 4 years during Major League Baseball's spring training season.  It is commonly accepted that "baseball" countries other than the United States take the WBC more seriously than most Americans (both players and fans) do.  This can be clearly seen by the players who choose to participate, with many top talent American players skipping the tournament while players such as Miguel Cabrera leave their major league training camps to represent their home nations.

It is no accident that I bring up Cabrera.  He is a native of Venezuela.   The Venezuelan national team (with Cabrera) played an exhibition game against the Miami Marlins on March 5th.  Prior to the game the Venezuelans requested a moment of silence to honor recently deceased leader Hugo Chavez.  This request was denied, with the cited reason by the Marlins being there was "not enough time". 

I love the game of baseball, but I will also be the first to admit that it is not the most action packed sport for the casual observer.  "Not enough time", is that really the best the Marlins management could come up with?  The 3 hour broadcast must have been too packed with adds for McDonald's "Fish McBites"?  (Which have a ridiculous and somewhat hilarious jingle, you can listen to it here) to include a moment to honor a fallen world leader?

Why do the Marlins, and by association Major League Baseball have such a hard time being honest?  They probably don't want "America's Game" associated in anyway with a leader who was openly critical of American consumerism, of US leadership as well as US foreign policy, not to mention being a self described socialist, and having a record of nationalizing most major Venezuelan industry and conducting major land reform.

I could easily argue that Chavez did a lot of good in Venezuela, and that many people there are far better off than they were before he came to power.  It would be completely in line with the general theme of this blog to make such statements.  For some statistics on the improvements under Chavez please see this chart, posted on a blog I read regularly. 

The truth is that I don't know as much as I should about Chavez and Venezuelan politics, and I don't want to comment where I don't have anything informed to contribute.  What I do want to add is that I think this is just another example of cowardice and poor leadership by the Marlins organization.  Either state that Chavez was not popular in the United States and you don't want him honored in your stadium, or accept that Chavez was a major world leader, and honor the Venezuelan team's request for a moment of silence before the game.

Bottom line; if a US leader was to pass away while in office and one of our national teams was denied a moment of silence to honor him during a sporting event in a foreign country we would likely go to war over it.  I don't think the Marlins ownership has the right to deny something like this to team Venezuela, and if they are going to deny the request, they should at least have the cojones to admit that they are doing it for a reason other than "being short on time".

This is just the latest in a long line of examples of the Marlins ownership/management treating baseball fans like we are a bunch of idiots, that rant will have to wait for another post.  I sincerely hope this becomes a major problem for the team.  From what I know, no one deserves the negative attention more.  Marlin's owner Jeffrey Loria and his management team should be ashamed of themselves. 

22 February 2013

Property Rights, Patents, and the Destruction of the Market for "Collectables", or , 3D Printing Series Part 4

Another possible economic implication of 3D printing technology that I have been pondering today:  It is quite likely that 3D printing machines will (and already are) be (ing) used to circumvent many copyrights and reproduce protected/patented commodities.

One area that could be particularly hard hit is the market for "collectables".  This includes things such as vintage children's toys, "limited edition" figurines, etc.  As any collector knows, secondary markets for these types of goods can vastly inflate the price above the original "sticker". 

I will not get into the whole "transformation problem" debate here, or suggest that the secondary market prices are in any way (except of course a vague and complex overdetermined way) representative of the value of these goods.  Rather I will back up my point with an example: A search of EBay for "Star Wars Action Figure" followed by a sort of highest price to lowest shows numerous "toys" with active bids priced in the thousands of US dollars. 

These markets rely upon collectibility and extreme scarcity, artificially perceived or real, to keep  prices at these high levels. In the world of 3D printing I would imagine it is pretty easy to write a program to "print" a "vintage Yoda figurine" still in what appears to be original packaging. 

Just as digital media has faced extreme problems in protecting copyrights of commodities that can be easily reproduced at low cost by a vast number of people, I would imagine that 3D printing technology will begin to present the same problem to suppliers in many other markets over the next few years (the case of collectable toys given here is just one example). 

20 February 2013

3D Printing and the Household: Implications for the Division of Labor

In what is becoming a series of posts about the possible implications of 3D printing;
Following the lead of the New York Times (as embarrassing as that is for a devotee of Zinn's, Manufacturing Consent such as myself) , I am turning my attention away from the implications of 3D printing on industrial class relations to comment on one of the possible implications of having these machines in our homes.

As this article from the Times website today points out these machines are becoming affordable, and are capable of producing many things that we need around the home.  The article cites fixing clocks, espresso machines, etc.

Is it possible that this technology may in a sense allow the modern household to return to frontier farm stead.  It is easy to imagine a not to distant future where we are again producing ourselves, in the household many of the "small" commodities that we purchase for daily life. This change would essentially be a move backwards in time in terms of the division of labor in society.  The definition of modern life is one of great specialization.

As I am fond of telling my students, "if I had to grow my own food, make my own clothing or generate my own electricity I would be dead in a week".  I specialize in reading, writing, teaching, and mixing cocktails.  The monetary gains from these few activities allow me to exchange for everything else that makes up the myriad of consumption that comprises my material existence.   

It is possible with an in home 3D printer that many "highly" specialized people such as myself will no longer need to exchange for much of the array small commodities that we use in our daily life, but rather "print" them in our own homes.  It is possible that the manufacture of relatively simple, inexpensive commodities may soon be relegated to the type of process that washing the dishes, making the bed, and sweeping the floor currently is for most of us in society; a processes completed in the home.  The production of commodities for use, that were never intended for exchange, may be making a comeback.  I am not meaning to suggest that rates of specialization in our paid labor will decrease, but rather specialization in certain areas of production will be rendered obsolete, forcing those currently engaged in production of many commodities based in plastics to evolve or face structural unemployment.   

What are the economic impacts of these machines?  I think it is clear that only time will tell, but it is not a big leap to suggest that the technology with the greatest impact on the organization of production since the personal computer may be here and structural unemployment of makers of household commodities is probably just the proverbial tip of the iceberg.

So You Want to Work in the United States?

Just move to Luxembourg, Monaco, or Vatican City first...
I came across some information today* about a rather strange wrinkle in United States immigration law.  Leaving aside all the sub-programs for work specific visas it seems that the number of work visas available for people wishing to enter the United States is the same for every country of origin.

Every country of origin, regardless of size....that's right, the same number of visas to enter the US to work for people from the smallest countries as there are granted to people from the largest.  It would suggest then that the path for an Indian or Chinese citizen wishing to immigrate to the US would be to first immigrate to Tuvalu or a similarly tiny nation.   

I was aware that there were thousands of visas going unused each year, while hundreds of thousands of potential immigrants (mostly from Mexico and Asia) continue to wait in line.  This goes part of the way to explaining why.  Given that our current economic climate is one in which we desperately need economic growth, especially growth in employment markets, new blood, new ideas and new work ethic that can be brought by an influx of immigrants cannot help but be a good thing**.  I know that the current administration is targeting changes in immigration law, it would seem that getting rid of the caps based upon country of origin without considering population would be a logical move.  

*This information came from a  fairly reputable source, however I have been unable to verify it from a quick internet search.  If anyone happens to have navigated Home Land Security's site deep enough to verify this, or know where I can, I would appreciate it.

**  This sentence is written largely to fire up people who continue to argue that immigrants "steal" jobs from "hard working" Americans.  I intentionally did not argue the point well or back it up with data as I am hoping to start a fight with a certain college of mine whom I know reads my work.

17 February 2013

The Next Time Someone Asks Me for a Cigarette...

...I am going to denounce them as a communist and suggest they move to Russia with their like-minded brethren. 

I suppose this post would be more accurately titled:  "Some Thougths on the First 100 pages of David Graeber's "Debt the First 5000 Years", but the cigarette example, lifted from Graeber's book, has more literary flair.

I have been reading Debt: The First 5000 Years, by David Graeber
In "Debt" Graeber is bold enough to suggest that at the most basic level many human interactions are communistic in nature. He suggests that  "From each according to their ability, to each according to their need" is how we respond to many situations in life.  Graeber suggests that people act according to this tenant of communism in many daily situations including those in which a smoke is "bummed".   

I have the ability to give someone else a smoke, they have the need for it.  The person asking me doesn't think much of the asking (according to Graeber they think far less of asking for a smoke than they would think of asking me for an equivalent amount of money or food), and I am not meant to think much of the giving.  It is second nature to provide for each other in a community setting.  If nothing else being a communist costs me at least half a pack of smokes a week.  That aside, Graeber's book seems interesting so far:  The argument that "communism" is not a system of political organization (he brings up the point that most prominent regimes have tagged themselves as "socialist" and "communism" will come far in the future after Marx's "withering of the state"), but rather something that is one of the basic (Graeber describes 3) ways in which humans interact with each other daily in regards to our material world is something that I would like to explore further.

An idea that has been nagging me for awhile is that as we form groups and arguments, (and yes...institutions as well) to organize production, we are essentially just expanding upon interactions that we are already familiar with from the processes of our daily lives, childhoods, etc.   The past is of course the strongest predictor of the future.  Reading the beginning of Debt, (for the record, is itself critical of capitalism), has brought back to the front of my consciousness the idea that the way out of capitalism (as well as its contradictions and problems), and into another system (albeit with its own sets of contradictions and problems to be sure), with a stronger sense of justice from a class perspective, might be steps towards decentralization of power and slightly more anarchy in our organizational processes (both political and economic).  The idea, somewhat re-introduced by Graeber that many humans default to a variety of communistic practices in our daily interactions revives my hope that post 20th century capitalism our material lives can remain rich, while at the same time becoming less institutionally exploitative of each other, if we work at it that is. 

There is tone to Graeber's analysis that suggests an arrogant rationalism behind many of his arguments, This is perhaps not a bad thing as the implications I have drawn out of the first 100 pages of his book seem quite positive, and possibly even hopeful for our future as a society.  So far "Debt" is proving to be an enjoyable and thought provoking read.  Chances are I will have more to write about it here in the coming days (especially if I find something to be more critical about).  

16 February 2013

The Downside of Reliability

According to a JD Power study released this week, cars (all brands) that are reaching market in the United States are getting increasingly reliable (the number of major problems is declining). 

At first glance this is clearly good news for the consumer.  Reliability has been a major point of competitive struggle throughout the history of the auto industry, in fact it was a major factor that allowed the Japanese automakers to gain such a strong foothold in the US market in the 1970s and 80s. 

A clear downside of cars not breaking as often is the lack of consumer spending that will result as less people need to fix their vehicles.  In a similar contradiction to the realization problem, no individual wants their car to break, but it benefits the rest of society economically when any given individual is forced to spend money.

 In the current economic climate of uncertainty and low consumer confidence (ever since the collapse of 2008) discretionary spending cannot be counted on to lead recovery.  Something like a broken car on the other hand, it seems a good way to force people to spend, perhaps even to go further into debt....Debt spending got us into our current mess, can it not lead the way out? People need vehicles to get to their job interviews.....or drive to the unemployment office. The less people have their cars break, the less they will be forced to spend fixing them.  Maybe reliable cars will help to make consumers more confident to spend elsewhere?  But for now,  it seems recovery will not be lead by auto mechanics becoming wealthy. 

The entire tone of this post is meant to be somewhat sarcastic.  The bigger picture point here is that historically US consumer culture has been one of "consume and discard".  Just perhaps,  quality is starting to matter as much as novelty to Americans in the automotive industry?    

12 February 2013

The Product Diversity of Modern Capitalism

Generally speaking product diversity (greater choice) is supposed to increase our total utility.  This is economics 101 correct? Greater product diversity leads to increased marginal benefit when we make choices with our limited income? 

In this case is anyone better off?  Those who choose to purchase this product?  Those who don't?  Those who took the time to even think about it (sorry).  Pizza Hut has followed the lead of the Burger King cult classic "Flame" cologne by releasing a scent of their own onto the US market.  A difficult choice, do I want to smell like a burger or a pizza this valentines day?  It seems this abomination started in Canada, just like me. 


11 February 2013

Welcome Back Boys!

Spring Training STARTED today!   No more pretending to care about football for a few months.  Praise be to whomever you send your prayers in the direction of.  

The only small down note on this otherwise great day:

A public thank you, and fond farewell (regarding the show only of course) to the hosts, and in general  ESPN's "Baseball Today" podcast. It is now "off the air".  It has been replaced by a podcast version of "Baseball Tonight" with Buster Olney.  I will miss Eric, Mark and especially the "snark" of Keith Law. 

For better or worse these gentlemen have been a major part of my daily life for quite awhile.  The "nerdish" commentary and statistical analysis will be missed.  There is always Fan Graphs, but still.....Thank you for hours of mediocre entertainment, I will miss the show!

The 3D Printer Revisited

The link below which connects to a paper by Yannick Rumpala of le Université de Nice was shared by an anonymous commenter on my recent post about the potentially economically destabilizing forces of 3D printing technology. 

Although I have a couple of methodological issues with the author's approach (especially around cause and effect in the sphere of political processes), the paper provides a solid background of what is at stake with 3D printing, as well much more detail on the technology itself than I feel is pertinent to share in the "quick-hit" realm of the blogisphere.

My original post has drawn enough interest that I would imagine there are many people out there who would like to know more about this topic.  As such, I recommend reading this to anyone who wants to dig deeper into this issue.  I especially would like to draw attention to the arguments around growing industrial autonomy in the modern economy as I feel this is potentially the greatest area of impact?

Thank you to the original commenter for sharing!

06 February 2013

"Link of the Day" Some Thoughts From David Ruccio on the Teaching of Stephen Resnick

David Ruccio's Blog is daily filled with valuable critique of capitalism.
One of his posts today was more personal.
I encourage you to read this short summary of what Professor Resnick meant to Ruccio as a teacher.  Many of his thoughts echo my own (that I have not yet been able to face and clearly articulate since Steve's death).
I would also like to draw attention to the point that capitalism, has a history, thus a beginning and an end.  Profound and beautiful in summary.  Thank you to David for this post....

Canadians Continue to Complain About "Price Gap"


It is irritating for Canadians no doubt.  The Canadian and American dollars are currently at par, yet every time a resident of Canada goes to make an online purchased they are faced with the fact that the price is lower in the United States.  14% lower according to the article above (based on a Bank of Montreal study of a basket of goods).

I am still baffled as to why the main arguments here seem to be about tariffs and discrimination?  It doesn't take an econometric study to confidently state that distribution costs are much higher for large corporations in Canada. Getting goods to people just costs more! Although much of Canada's population is concentrated in South Western Ontario and on the west Coast of British Columbia it remains the case that Canada is a country of 9,984,670 sq km and only 34,300,083 (July 2012 est.) people.  Compare this to the United States with a population of 313,847,465 (July 2012 est.) inhabiting 9,826,675 sq km (including Alaska) and if anything it is surprising that the price discrepancy isn't larger.  The model of distribution for large online retailers is the same as the (struggling) postal service.  Charge more than shipping cost to people in concentrated population centers to offset the cost of getting goods to people is sparsely populated areas. 

This is a call to my fellow Canadian's.  Every since I can remember being first aware of the existence of the United States as a child, I felt as if all Canadians had a neglected little brother type inferiority complex.  It is time to stop feeling this way, economically and otherwise.  Perhaps prices are 15% higher, but is Canada not at least 15% more wonderful?  Subjectively speaking of course, but life expectancy, literacy rates and self reported happiness have to count for at least as much as prices on Amazon.com? 

04 February 2013

Gambling on Sports, is it Good for the Economy?

In a word, YES, gambling is good for an economy.   It is spending that might not otherwise take place, and since the gambler has already accepted the likelihood of losing the "stake" the propensity to consume on any winnings tends to be very high.
In an event such as today's Superbowl there is around 100 million dollars gambled legally at the sports books in Nevada alone.

This doesn't include illegal gambling websites, ridiculous prop bets, or the focus of my brief points here, small (or not so small) wagers between friends.

In betting with 3 different people on tonight's game, though shear luck, I won 6 beers to be purchased at local establishments and a gift of small monetary value (around $20) to be purchased on ebay.  The important thing for the economy is that none of this money would have been spent without gambling on the American football game.  When we make small wagers with the aim of making an otherwise fairly pointless sporting event slightly more interesting (tolerable) to sit through, we are essentially increasing both our spending (individually and on an aggregate level), and as I will argue, temporarily increasing our propensity to consume.

Without the Superbowl tonight neither myself nor my "victims" would be spending the small amounts of money necessary to pay off / collect on our wagers.  This extra little bit of money spent at local pubs on a Sunday evening (and on ebay tomorrow) multiplied by the millions of people who bet small amounts on the game with their friends just as I did tonight, has to have a large economic impact.  Instead of staying home and cooking dinner tonight millions of people went out, spent money and left tips.  Assuming some kind of multiplier effect, illegal gambling on the Superbowl is a far more effective economic stimulus than much of what is being discussed in Washington these days.

Gambling revenue / economic activity like all economic activity based upon "vice" continues to drive a significant portion of the American economy.  We are a depressed working class (in many ways), who are getting further in debt, watching inequality in our country skyrocket, and for many of us experiencing chronic un or under employment   Drinking, drugs and gambling continue to be part of the solution for millions of self medicating American proletarians.  American's self medicating actions are always there, they are just more obvious during a large scale sporting event.  It is during events like today's Superbowl, the World Series, the Kentucky Derby, etc. just how much we rely upon the little joys that "vices" bring to continue to stick our heads in the sand about the exploitation taking place all around us, and to us, everyday in our capitalist system. 

As a side note.  I really wanted to bet the "prop" for tonight's game that Jay-Z would show up on stage at half time.  Turned out it was Destiny's Child making a special guest appearance with Beyonce instead.  I'm glad my credit card didn't work on the gambling web-site based outside of US territory or I would have lost my wager.  

28 January 2013

Immigration and Fear: Should We Really Be Afraid for the State of Public Education?

I wondered into a classroom today that had a real VCR.  Unbelievable.  I don't think I even own a VHS tape that I could show to my students (on any topic, let alone something relevant to any of the courses that I am teaching).   This experience combined with a radio story about Republican's not getting the Latino vote (no big surprise) got me thinking about immigration issues.  Being a former illegal immigrant myself (of sorts) these issues are somewhat personal for me.  Admittedly less so as a white, English speaking male, but still I did live through the immigration process into the United States.  As well as the process of becoming an American citizen as an adult. 

I bring this up because the real issue that we are going to have with immigration going forward into
the next generation in this country is not the number immigrants coming into the US, but rather  the lack of opportunity in our economy.  The current "recovery" is still considered mostly jobless and the wealth/inequality gap continues to grow.  

Latin American immigrants are currently feared by many Caucasians in this country, just as other groups (Asian, Italian, Irish, etc.) have been in the past.   This is becoming an increasingly obvious issue in the north east where I live, and I know it has been a big issue in the south western US for years.

The two big fears that people have around immigrants are that the immigrant population will steal opportunities from current Americans, or that the immigrants will bring with them an increase in crime rates.  There are also those who fear the changing of culture that immigrants bring, but I will leave a discussion of this particular brand of ignorance and racism for another post.

It follows then that the solution to the immigration "problem" is not restrictions on who or how many can get into the US, better boarder security, etc. rather we should be investing large amounts of money into our public education systems.
If we can provide adequate public education for both less well off Americans as well as the children of immigrant families both of the major fears around immigration should be alleviated.  Crime will not increase if immigrant populations are prepared for and can find meaningful well paying jobs.  Also, immigrants will not be "stealing" jobs from American's if our own working class children receive high quality educations.

It is time to shift money away from building fences and into replacing vcr's in classrooms. 

22 January 2013

"Hurry Up and Die"

Toronto's The Globe and Mail had the following story today:
Japan's finance minister has formally told the nation's elderly that living long lives is a source of shame as they are draining the resources of their country. 

This is a problem facing many developed countries, how to pay for increased life expectancy.  We will undoubtedly see increases in retirement ages in more countries, as well as the possible decrease in social security systems, government financed medical care, etc. over the coming decades.  This issues have already become very politically relevant in the US as well as other western countries in the last few years. 

I chose this news story to make my point as it is both somewhat amusing and also very callous.  My point; capitalism is not a system of production that is well designed to protect members of society that are not active in class processes.  If you are not either producing, appropriating/distributing, or ensuring the conditions of existence of the surplus what are you doing for a capitalist society?  Certainly there are non-class processes necessary for capitalist production (politics, culture of consumption, etc.) but do the elderly fill any of these rolls? 

It seems that as our populations age we face three choices:

1. Move away from capitalist dominated methods of production where the interaction of class and non-class around the creation of surplus value is our primary goal, at all costs. Can we find a way to return to a culture in which we value the wisdom and experience of the elderly?  I think it is not likely as the pace of technological change speeds up rather than slows down.  Wisdom and experience around obsolete ideas will have a had time finding a valuable place in society.

2. Find a way for the elderly to contribute to the conditions of existence of exploitation.  Working for merchants such as Wal-Mart for low wages certainly fits this.

3. Put our hands together and pray that our elderly "Hurry Up and Die"  

17 January 2013

Growth and the Destruction of the Environment: Do We Have any Right to Make These Choices for the Chinese?

*Picture taken from the NYT "Room for Debate" page.  Find the Link here. 

The argument about the choices faced by societies between economic growth and environmental damage becomes increasingly important as much of the non-Western European world, most notably China's pace of industrialization speeds up.

At this point it has become almost cliche to pick on the New York Times for running ignorant economic analysis and presenting it as fact. This time they at least had the good sense to relegate the ignorance to the opinion section. 

There are issues with each of the four individual arguments made in this forum published on the Times website about economic growth.   In this "debate" however, I want to point out what was not included in the arguments, that is, an acknowledgment of the historical context, rather than critiquing what was written. 

So often (almost always) in arguments from westerners about the "proper" path for growth in the developing world, especially in China, the argument is made that there needs to be a balance between growth and environmental sustainability.  We are far more educated about the environmental and health costs of industrial pollution than any generation before us.

There are (of course) two sides to this growth coin.  The positive way of viewing this argument is that countries that are developing now, can, and should, learn from the mistakes of The US, Western Europe and the former Soviet Union.  China "learning" from our "mistakes" and slowing growth to preserve the environment is a popular stance in the west.  Clean, slow growth in China is a win-win for the west.  They grow slower, and thus pose less of a threat to our global financial dominance while doing so, and the world stays pretty and green so that the wealthy among us can enjoy it on our vacations.  

The other side of this coin, which these arguments by westerners always seems to miss is the historical context of US and Soviet development.  It was largely through unregulated (and massively polluting) industrial growth that many of the world's leading economies were able to become wealthy enough to have the wealth and time to care about environmental degradation.  

I am not arguing that rapid growth at high environmental cost is path China should take (In my opinion).  What I am arguing is that those of us living in wealthy countries that developed at such a high environmental cost that at certain points in our history our rivers were so polluted as to become flammable, are not in a moral position to tell a currently industrializing nation not to pollute at the cost of economic growth.  Just perhaps, the Chinese and other developing countries should have the right to make their own decisions about the trade off between cheap growth and environmental destruction?  Or at very least, they should not have to be told by a bunch of wealthy westerners to "do as we say, not as we did". 

12 January 2013

3D Printing: Possibly a Fundamental Change to the Economy?

Both NPR in general and their podcast Planet Money (story here) have had numerous stories recently about the newish technology of 3D printing.  These printers are essentially duplicating machines a la Star Trek that use raw materials (matter) to create objects by running computer programs and essentially assembling complex objects by combining raw materials based upon computer programs.  The hope for development is that this technology will eventually be able to make organs, bones, etc. as well as complicated manufactured goods.

Health and well being implications aside, I found something remarkable in the Planet Money podcast.  They  mentioned that the 3D printing technology will dramatically lower barriers to entry in manufacturing, as the machines are not terribly expensive.  They of course (and are still in their early stages) cost thousands of dollars, but no millions of dollars. Even more remarkable in the story there was an open, honest and unabashed reference to Karl Marx.  The argument made is that in modern manufacturing the steps from prototype to producing for the market will no longer require massive capital investments just to start out. It could become possible to start a manufacturing firm with just the investment in a 3D Printer.  I couldn't believe my ears hearing Planet Money openly state that "to some degree this innovation of modern capitalism has the potential to put ownership of the means of production into the hands of the masses".  Essentially manufacturing capital could become accessable to a "middle class" member of society.  Using another definition of class, members of the proletariate may be able to afford high technology capital for manufacturing start up.  

I'm not suggesting that there is a major shift in class structure coming immediately out of 3D printing, there will still be owners and workers, and exploitation  present,  I don't think this means the end of capitalism or anything that dramatic, in the world of 3D printing, but the key point made in the story, was one common in  classical Marxism: Ownership of the means of production in highly developed manufacturing could become much more wide spread, thus less concentrated in the hands of the very wealthy.

If nothing else, I see some potential here for a reduction in the massive (and worsening) wealth inequality problem in the developed world. Our massive inequality problems stem in part from a system in which massive amounts of capital are required to start any kind of new product launch.  Is it possible that with 3D printing  that capitalism entrepreneurship  has innovated a product that will put ownership of the means of production into the hands of the masses?  Probably not...but it is a very intriguing idea!

04 January 2013

Farewell O Great Teacher

I am sure I will have much more to write about this in the future:
For now... It saddens me greatly to post a farewell to wonderful Economist, Marxist, Teacher, Mentor, Adviser and Friend, Stephen Resnick.  Steve passed away yesterday, January 2nd 2013. Contrary to everything he has taught me about overdetermination, no other single human being has had such an impact on my life.  For the most part words fail me at the moment, but I wish the best for Steve's family and for him, in whatever (if anything) comes next.  This blog will be filled with writing remembering Steve and his work in the coming weeks/months/years, but for now, I love you Steve, You will be remembered fondly and missed terribly. 
Thank You for everything!