Requests for help*

by John Quiggin on November 15, 2011

A couple of requests for CT readers

  1. I’m running a half-marathon in Philadelphia at the weekend and raising money for an East Africa Famine appeal in Australia. The Australian government will match donations dollar for dollar, and you may also be able to claim a tax deduction, so this is a real bargain. You can sponsor me here – I’m currently a dollar short of halfway to my target of $5000
  2. I’m writing a piece about social democratic responses to what Colin Crouch has called the “strange non-death of neoliberalism“, and I’m looking for books that focus on restoring more equality in market incomes, for example by rebuilding unions or constraining the financial sector, as opposed to redistribution through the tax/welfare system. Any suggestions would be much appreciated.

* I’ll ask nicely, but I refuse to bl*g

{ 21 comments }

1

dictateursanguinaire 11.15.11 at 6:52 pm

2

John Kurman 11.15.11 at 9:06 pm

3

John Quiggin 11.15.11 at 11:07 pm

@JK that was perfect thanks. Ask and ye shall be given

@ds I can’t seem to get access to YouTube at present, but the choice is appropriate

4

Doug K 11.16.11 at 12:28 am

on neoliberalism, Giovanni said,
“I fear we may be witnessing the undeadening of neoliberalism – killed with the wrong weapon, it shall become immortal. ”

which probably isn’t particularly helpful for your piece, but I liked the zombie tie-in..

5

chris 11.16.11 at 1:34 am

(1) All the best for the marathon and the good cause
(2) From a European perspective a recent book by IMK, the macroeconomic institute of the German trade unions might be relevant to your poject:
http://www.boeckler.de/5254.htm?produkt=HBS-005104&chunk=3&jahr=
Stabilising an unequal economy?
Niechoj, Torsten / Onaran, Özlem / Stockhammer, Engelbert / Truger, Achim / van Treeck, Till
Public debt, financial regulation and income distribution. Reihe: Schriftenreihe des Forschungsnetzwerk Makroökonomie und Makropolitik (FMM), Band 14.
Marburg: Metropolis-Verl. 2011, ISBN: 978-3-89518-878-7. 432 Seiten

You can contact the first author at “Torsten-Niechoj[at]boeckler.de ” for the relevant papers.

6

bobbyp 11.16.11 at 3:13 am

I second Dean Baker’s Loser Liberalism….download it free on the web thingie.

7

BT 11.16.11 at 2:32 pm

Dean Baker’s ideas go back to Chomsky’s “the free market is socialism for the rich” article in 1994.

http://archive.8m.net/chomsky.htm

The meme has since been amplified by many, including Robert Reich:

http://en.wikipedia.org/wiki/Socialism_for_the_rich_and_capitalism_for_the_poor

8

wufnik 11.16.11 at 2:42 pm

The one the springs most readily to mind is Cornered, by Barry Lynn, which basically deals with the results of effectively abandoning any kind of anti-trust enforcement in the 1980s and since. I think he’s largely correct–much of our current situation is the result of the emergence of the “monopoly capitalism” that resulted.

My review and discussion here.

9

Glen Tomkins 11.16.11 at 2:56 pm

Charity begins at home

I’ll donate to the cause of famine relief in East Africa readily enough, as it’s an obviously good and needful cause. But I am finding that we have hunger right here in the USofA, and not just way up in the hills someplace, but in Fairfax County, VA.

When I went to medical school, they taught us much more about the problems of hypernutrition than malnutrition, and only bothered with the latter at all in case we should ever go do some pro bono work in the Third World. I remember in particular a Hem-Onc professor discussing folate deficiency in particular, vitamin deficiency in general, with the rule of thumb that such deficiency, in our patient population, would always be due to malabsorption, not inadequate diet. He claimed that in his entire career, he had seen only one case where the folate deficiency was due to inadequate diet, and that was a man so severely depressed that he ate exclusively at McDonalds for a year, and would still have avoided folate deficiency if he hadn’t insisted on no tomato/no lettuce with his burgers and fries.

This was at Charity Hospital in New Orleans, where the patient population included the most desperately urban poor in the US. Occasionally the peditricians would see marginal malnutrition in kids, as part of a pattern of abuse. But in adults, even in the most desperately (urban) poor in the country, you would not see malnutrition.

Well, fast forward 25 years, and I’m on my second case in six months at the free clinic where I volunteer. Whoever says the US is stagnating and not making progress needs to take into account the wonderful broadening of opportunities for physicians to study malnutriton cases first hand without having to take the trouble to go the Third World.

I would post a link to the contribution page of the free clinic where I work, but I am hesitant to ask for charity on behalf of residents of the US. Just after Katrina, freshly retired from the Army, I spent a day frantically looking for opportunities to join whatever relief effort was going to be sending in field hospitals. I tried the Army, but found that there was no such plan to send aid. I tried the Red Cross, ditto. I finally called Medecins Sans Frontieres, to which I had donated in the past, and had it explained to me that they only intervened in countries too poor to address their own calamities. When I pointed out that what we were seeing on TV looked pretty Third World, and that I had just ascertained that the US wasn’t going to address this calamity, the MSF official gently pointed out that they didn’t recognize self-inflicted Third World status as a natural disaster or act of God.

So, by all means, direct your charitable donations to countries that may be poor, but haven’t proven to be hopelessly stupid and cruel.

10

Glen Tomkins 11.16.11 at 3:23 pm

“restoring more equality in market incomes, for example by rebuilding unions or constraining the financial sector, as opposed to redistribution through the tax/welfare system.”

Surely the two are complentary.

In particular, social insurance as the way to do retirement savings creates a powerful self-interest in the majority of the electorate tosupport public policy that promotes high wages. In the US, if we bolstered Social Security to the point that it became all the source of all the retirement income that most people would ever really need or want, then people would start thinking in terms of preserving and extending the earning power of working people as the surest ways of maximizing their returns in retirement. The details of exactly what policies they would support seem less iomportant to me than creating an incentive structure.

The low-hanging fruit seems to me to be the removal of govt encouragement of market-based alternatives to social insurance. The US should never have started 401k and similar programs to encourage people who have no business being invested in securities to throw their money at the NYSE. That market will probably crash soon, along with all sorts of others, and take care of the problem of getting working people in this country out of the unthinking reliance on such inherently dangerous and destructive means of retirement security. Every cloud has its silver lining.

Our side should be prepared to make use of the coming market apocalypse. One particular use should stem from using resolution rather than bail-out to deal with failing investment institutions. Rather than trying to make retirement plan counterparties whole, you would substitute enhanced Social Security benefits for market-based plans that you do no more for than to doff your hat to them as the they slip below the waves. Definitely simpler than trying to untangle the web of counterparties who need to made whole from those who don’t, whose wealth needs to be let sink beneath the waves. I suspect it would be cheaper as well, and definitely result in a more equitable distribution of retirement income.

11

wufnik 11.16.11 at 4:37 pm

That was embarrassing–apparently I’ve forgotten the tools of blogging; Here’s the link to the Lynn book:
http://www.scholarsandrogues.com/2010/04/16/another-nail-in-the-coffin-of-the-chicago-school-an-unsolicited-review-of-barry-lynns-cornered/

12

actio 11.16.11 at 8:20 pm

http://treasureislands.org/
Seek, uncover and destroy all pathways to tax haven use. Institutional reform with that aim in mind will have major long run redistributive consequences without raising/progressing official tax levels.

13

Tomboktu 11.16.11 at 11:19 pm

I don’t know if it’s what you had in mind — the focus may be too institutional and not economic enough — but the ETUI published the following two earlier this year:
===========
http://www.etui.org/Publications2/Books/Exiting-from-the-crisis-towards-a-model-of-more-equitable-and-sustainable-growth

Exiting from the crisis: towards a model of more equitable and sustainable growth
David Coats (Research Fellow, The Smith Institute, London) Report of a trade union task force

Publication date : 2011

Number of pages : 278

Edited by :

David Coats (Research Fellow, The Smith Institute, London)

The global economy is still struggling to emerge from the worst financial crisis and global recession since the Second World War. In this context, TUAC, ETUI, GURN and ITUC created a Task Force to define the parameters of a new growth model. This publication which is the initial result of its work, takes up the challenge of developing progressive alternatives to the failed neo-liberal model that has dominated economic policy for over three decades. It consists of contributions by more than 30 authors, all with links to the global labour movement, and a preface by Nobel Prize laureate Joseph Stiglitz.

The different chapters analyse the causes and implications of the crisis and propose alternative ways toward more equitable and sustainable models of growth. A comprehensive approach is taken and the topics addressed include: the need for a new approach to macroeconomic policy to promote strong and stable growth and high employment; developing alternative welfare measures to GDP; how to re-regulate financial markets so that they serve the real economy; a development model for the global South; a new approach to labour markets that ensures that they deliver decent jobs and promote greater equality; the need for a comprehensive set of policies to make economic activity ecologically sustainable.

===========
http://www.etui.org/Publications2/Books/The-Sustainable-Company-a-new-approach-to-corporate-governance

The Sustainable Company: a new approach to corporate governance
Sigurt Vitols and Norbert Kluge

Publication date : 2011

Number of pages : 265

Edited by :

Sigurt Vitols and Norbert Kluge

For the past two decades corporate governance reform in Europe has been guided by the ‘shareholder value’ model of the firm. That model has been discredited as one of the major causes of the financial and economic crisis.

In a new book published by the ETUI an alternative approach to corporate governance is presented by members of the GOODCORP network of researchers and trade unionists. This new approach, entitled the Sustainable Company, draws on both traditional ‘stakeholder’ models of the firm and newer concerns with sustainability. The main elements of the Sustainable Company and the institutions needed to support it are presented. Key themes in the book are the need for worker ‘voice’ in corporate governance and for a binding legislative framework to promote sustainability. Individual chapters deal with the issues of worker involvement, employee shareholding, sustainability-oriented remuneration, international framework agreements, NGO-trade union relationships, reforming financial regulation and carbon taxes and emissions-trading schemes.

14

Tomboktu 11.16.11 at 11:21 pm

And, adding to Chris at post no. 5

The Impact of Financialization on Income Distribution in the USA and Germany: A Proposal for a New Adjusted Wage Share

Dünhaupt, Petra

Reihe: IMK Working Paper, Nr. 7/2011.
Düsseldorf: 2011, ISSN: 1861-2199. 28 Seiten

Over the recent decades, the USA has witnessed major changes in corporate governance partly due to an overall increase in financialization. The most pronounced development is the escalation of management salaries caused by the rise of stock options. On theoretical grounds, this trend was fostered by advances in the economic discipline of agency theory. In practice, changes in tax laws contributed to promoting the change. Empirical evidence shows that income concentration has increased at the top.This paper contributes to the ongoing debate about income shares by introducing a new adjusted wage share. Arguing that top incomes are closer to profits than to wages, top incomes are removed from the calculation of the indicator. The presented evidence shows that the wage share and the adjusted wage share start to diverge by the end of the 1980s, exactly at the time when the compensation practices of corporations changed considerably. Although shareholder value orientation has increased in Germany as well, business owners are still at the top of the income hierarchy. Therefore, the adjustment of the German wage income share for top management salaries shows only minor discrepancies, which, however, are in the same direction as in the US.

http://www.boeckler.de/5254.htm?produkt=HBS-005005&chunk=1&jahr=

15

gordon 11.17.11 at 12:27 am

Good luck with #2. I’m sure you’ll find many interesting policy proposals, personal hobby-horses being ridden hard, and some outright quackery.

Here’s a thought that might be useful; do you want to look at causes of the present inequality in market incomes with a view to reversing them, or do you want to search for new ways of achieving more equal outcomes starting from today’s unequal distribution? To me, this is a fundamental issue.

Cause and effect is important, I need hardly say, in explaining what is going on around us. But I notice an increasing tendency among commentators to despair of reversing the causes of the effects which they deplore – increasing inequality being important among the latter. “Politically impossible” seems to be a widespread consensus when it comes to talking about strengthening the labour movement, modifying globalisation, reining in the financial system or addressing most other recognised causes of our present unequal predicament. This leads commentators to what might be called the “start afresh” strategy – think up new and politically practicable prescriptions for achieving that greater equality (of market incomes, for your project) which they desire; abandon the “cause and effect” analysis which would mitigate the effects by removing or mitigating the causes. I haven’t read The Strange Non-Death of Neoliberalism but I have read a couple of reviews, and Crouch seems inclined to take the “start afresh” route insofar as he addresses prescription at all.

I can sympathise with that orientation in the very unforgiving political climate we find ourselves in. However anybody who takes that route needs to consider that the causes which have brought us to the present situation would remain in place. Here is Lane Kenworthy’s brief list: “The wage distribution has become more unequal in many countries, though by no means all. This owes to [sic] a host of developments, including globalization, deregulation of product and labor markets, manufacturing decline, weakening of collective bargaining, and increased immigration of people with language barriers and/or limited job skills”.

http://lanekenworthy.net/2011/06/05/reducing-relative-poverty/

And that’s only partial. I’m sure you’re more familiar with that long list of causes than I am. The point is that adopting the “start afresh” strategy means that all those things will still be there and will still operate against the sorts of changes your new proposals will aim for. So although the “start afresh” strategy might look easier in one sense – it avoids the huge political difficulties inherent in trying to reverse causes – it turns out to be harder in another sense – the whole neoliberal project remains intact.

So much for strategy. For my five cents’ worth of concrete policy proposals (in a US context), you might look at the EPI’s Agenda For Shared Prosperity:

http://www.sharedprosperity.org/

16

David in NY 11.17.11 at 1:26 am

Do any of the resources out there suggest that one of the things that held down inequality during and following the Great Depression was the fear of Communism, coupled of course with an actual union movement to take advantage of that fear? That’s been my view, but I don’t know if anyone else has considered it.

17

John Whitfield 11.17.11 at 4:24 pm

“books that focus on restoring more equality in market incomes”

Apologies if you’ve come across this already, but you might want to check out the work of Maurice Glasman. He’s gotten into some trouble (with some justification) on the left for hist statements about immigration, but I’m sympathetic to the idea he calls ‘democratic micro-entanglement’. To quote David Runcimann in the LRB:

“What’s needed… is the power of community-based organisation, because it’s only when individuals are joined together by something more substantial than the rights they share that they have any real say in the way the world treats them. Glasman is not fussy about what provides the glue: family, church, local pride, a sense of place, a sense of tradition… Anything will do so long as it makes community life sticky enough to trap the forces of globalisation as they come roaring through. “

18

actio 11.17.11 at 5:55 pm

Richard Murphy’s The Courageous State: Rethinking Economics, Society and the Role of Government
http://www.searchingfinance.com/products/soon-to-be-published/the-courageous-state-rethinking-economics-society-and-the-role-of-government.html

19

Sasha Clarkson 11.17.11 at 7:46 pm

20

Tom Geraghty 11.18.11 at 5:59 am

21

Michael Harris 11.18.11 at 12:20 pm

John, I have just finished reading Ha-Joon Chang’s “23 things they don’t tell you about capitalism” — discussed here: http://www.guardian.co.uk/books/2010/aug/29/ha-joon-chang-23-things

It covers a lot of territory but he does have specific things to say about finance e.g. that new financial innovations (derivatives) should be tested in the same way new food products are, before they are approved for sale/use. So there’s that!

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