Author Archive for Bill Kerr

the fast car, with Tracy Chapman

We only work here? True enough, but it lacks flesh and bone, it lacks sweat and tears.

The lyrics to Tracy Chapman’s The Fast Car plays out that sentiment as a real life story with all its problems, hopes and dreams ending in disillusion with the unanswered question: How do we live and die?

It outlines a problem. She belongs to a poor family, a broken family, she has a drunk father and feels some responsibility towards him and so she drops out of school.

The fast car is a romantic symbol for escape and belonging. The studied, descriptive lyrics burst into a life of romantic hope, freedom and the yearning to belong to something worthwhile, in the chorus:

I remember we were driving driving in your car 
The speed so fast I felt like I was drunk 
City lights lay out before us 
And your arm felt nice wrapped ’round my shoulder 
And I had a feeling that I belonged 
And I had a feeling I could be someone, be someone, be someone

The escape happens but before very long hope fades. She feels let down by her partner:

You got a fast car 
And I got a job that pays all our bills 
You stay out drinking late at the bar 
See more of your friends than you do of your kids

She finishes with the haunting question which she began with. We have come the full circle of social reproduction. There is no solution yet. We still have to think about the original question: How do we live and die?

You gotta make a decision 
You leave tonight or live and die this way

Here’s another version, this one has all the lyrics:



The Hitch is still fighting despite cancer

Christopher Hitchens, witnessing the Portugal 1974 revolution:

It was the last fall of the curtain on the last act of the 1968 style, with its “take your desire for reality” wall posters and its concepts of work as play. For me it was also the end of the line with my old groupuscule. I had developed other disagreements, too, as the old and open-minded “International Socialists” began to mutate into a more party line sect. But Portugal had broken the mainspring for me, because it had caused me to understand that I thought democracy and pluralism were good things in themselves, and ends in themselves at that, rather than means to another end….

… Conor Cruise O’Brien had phrased it better than I could then hope to do:

“Are you a socialist?” asked the African leader. I said, yes.

He looked me in the eye. “People have been telling me,” he said lightly, “that you are a liberal…”

The statement in its context invited a denial. I said nothing.

And yet, as I drove home from my interview with the leader, I had to realise that a liberal, incurably, was what I was. Whatever I might argue, I was more profoundly attached to liberal concepts of freedom – freedom of speech and of the press, academic freedom, independent judgment and independent judges – than I was to the idea of a disciplined party mobilising all the forces of society for the creation of a social order guaranteeing more real freedom for all instead of just a few. The revolutionary idea struck me as being more immediately relevant for most of humanity than were the liberal concepts. But it was the liberal concepts and their long term importance – though not the name of liberal – that held my allegiance.

George Galloway during a furious debate about the Iraq war, in 2005, famously called Hitchens “a drink-soaked former Trotskyite popinjay” (link). Drinked soaked, yes by his own admission, but a Trotskyite, not for long. Hitchens flirtation with the IS (International Socialists) may have served to prejudice him against Mao (how uncontrarian for such a contrarian to be against the Cultural Revolution without any analysis whatsover) but his far deeper attachment to freedom enabled him to break from the Trotskyite inclination of sabotaging united fronts. So he ended up supporting the liberation of Iraq (which required a very broad united front) and modernity in general. Hitchens is the iconic modern man. His warts and all bio, Hitch-22, is a mixed bag but contains some wonderful anecdotes and analytical gems.

the new normal by Mohamed A El-Erian

Is Capitalism Doomed? by Nouriel Roubini

After his death of capitalism rhetorical flourish Roubini provides us with a damn good overview of the world situation, the predictable “Marx was right” aside, followed by his own dubious plan to save capitalism

On the other hand, Mohamed A. El-Erian, CEO of PIMCO, a global investment management firm and one of the world’s largest bond investors provides this more measured evaluation:

PIMCO frames its discussions of the post-2008 outlook using four potential scenarios. We rate the current environment a “C-minus.”

■ Scenario A: A rapid V-shaped recovery
■ Scenario B: A slower bounce back
■ Scenario C: The New Normal of low growth, persistent high unemployment and recurring balance sheet issues in developed markets, and higher growth in emerging markets
■ Scenario D: Deflation and double-dip recession

As long as the global economy remains in the New Normal scenario C, the systemically important emerging markets will likely be able to manage their success, given their balance sheet cushions. The rest of the world should be able to accommodate that success because it’s happening gradually over a secular time frame.

However, if the global economy slips closer to the D scenario of a high chance of recession, then the outlook varies among emerging markets, depending on the strength of balance sheets and the ability for EM domestic consumption to increase to counter more limited global demand

Keynes questions, readings and analysis

John Maynard Keynes (1883 – 1946)

It seems like a good idea to focus Keynes discussion in one thread since it has already begun in other threads, particularly marx and the domains of ignorance.

What is the Keynes solution to economic crisis?

… a relatively painless route to recovery is offered by loan-financed public investment, increased government spending generating the income that, through increased tax revenue and savings, will provide the resources to finance the increase in expenditure and that will justify the expansion of the money supply required to fund the initial deficit
Keynesianism, Monetarism and the Crisis of the State by Simon Clarke, p. 238 (source)

Of course, this is open to interpretation.

His original main work is: The General Theory of Employment, Interest and Money by John Maynard Keynes (1936)

Lupin3 has suggested we read: Mr. Keynes and the Moderns by Paul Krugman

Please post your questions about Keynes, Keynes references and Keynes analysis here.

the second great contraction by Ken Rogoff

Summary of a couple of articles by Ken Rogoff, a former chief economist at the IMF. Note that the second article was written in 2008. As always, read the originals.

The Second Great Contraction by Ken Rogoff (2nd August 2011)

What is the difference between a Great Contraction and a Great Recession? A recession involves decreased output and decreased employment. A contraction or deep financial crisis also involves massive debt and credit issues which requires deleveraging, which take years to complete.

The real problem or number one problem is that the global economy is badly overleveraged, there is too much debt.

The solution is to transfer wealth from creditors to debtors. How?

  • Through defaults, financial repression or inflation
  • Housing: Write down mortages in exchange for a share of future home price appreciation
  • Countries: Rich countries in Europe fund a larger bailout of Greece in return for higher payments in 10 to 15 years time if Greece achieves growth by then

Inflation is Now the Lesser Evil by Ken Rogoff (2nd December 2008)

Modern finance is so interwoven and complex that it is impossible to restructure one financial institution at a time.

Moderate inflation (6% for 2 years) would ameliorate but not solve current problems

Policy suggestions:

  • aggressive macroeconomic stimulus
  • tax cuts
  • infrastructure spending
  • interest rates reduced to zero

Most of the world’s largest banks are insolvent! Further defaults are bound to occur in real estate, credit cards, private equity and hedge funds. Governments will have to carry out 2nd and 3rd recapitalization.

The hole in the financial system is too big to be filled by taxpayer dollars. More Banks should be allowed to fail but this is costly and painful. Housing prices need to fall another 15% in the USA and more in Spain, UK and others.

Central Banks will keep printing money to buy government debt. The main danger will be an inflation overshoot, 20-30%.

The Return of the Bear by Steve Keen

The Return of the Bear by Steve Keen (August 9, 2011)

Read the original. This is a brief summary only without any original analytical content of my own. Steve Keen is an Australian Post Keynesian economist who runs a popular blog about debt deflation.

We are headed for a Double Dip recession or more correctly a Second Great Contraction (Ken Rogoff’s term)

According to Hyman Minsky there are two price levels in capitalism:

  • consumer prices, which are determined by a markup on the cost of production
  • asset prices, which are determined by expectations and leverage

Ultimately, over the long term, these different price levels have to converge. The debt which finances asset purchases must be serviced by the sale of goods and services. But in the short term rising leverage can insert a wedge between these different price levels. In a modern economy the short term can last a long time!

A graph showing the variation in the ratio between asset prices and consumer prices reveals:
1890-1950: 113
1966: 438
1982: 157
1994: 471
mid 2000s: 1256
now: 709 (after the very recent falls)

According to Minsky the 1966 level marked the beginning of increased turbulence or instability of the capitalist system.

In the current economic environment with debt levels so high deleveraging dominates.

USA figures:
1945 debt:GDP = 43%
2009 debt:GDP = 300%
Now debt:GDP = 260%
GD debt:GDP = 172%
(GD = Great Depression)

Alan Greenspan was the greatest cheerleader for asset price inflation. He helped create the greatest debt bubble in history! In the Greenspan era the government and central banks saw rising asset prices as a good thing.

After 2007 asset prices began their long overdue crash back to earth. This was temporarily interrupted with the stimulus and swings in the rate of debt acceleration.

The above figures, asset:consumer price ratios and debt:GDP ratio shows that there is still a long way to fall before capitalism returns to “normal”

Unpacking the value suitcase

This will never be finished so I will publish now.

Clarifying the meaning of and distinguishing between the words: value, wealth, quality and money

Suitcase words: Marvin Minsky (The Emotion Machine) has coined this marvellous term to describe words that are not clearly defined and mean different things to different people. For example, Consciousness is a suitcase word. It can mean unifier, self awareness, identity, animator of the mind, provider of meaning, detector of feelings. It refers to many different mental activities that don’t have a single cause or origin. In part Minsky’s book is about the need to create a new vocabulary in order to discuss the workings of the mind.

So, let us discuss the value suitcase. Over the years it has become a very large suitcase with many thousands of words devoted to different interpretations of value theory resulting in a tangled mass of incoherent vocabulary.

I start with the folk perspective because what we pick up as the everyday background noise of the meaning of words does influence our understanding when we get around to analysing those words in more detail. We cannot properly acquire new understandings without first subjecting our old understandings to critical scrutiny. No construction, without destruction.

Here are some popular uses of the word value:
1) Tom is good value, ask him to do the job
2) That car is good value for money
3) Gold increases in value during economic recessions
4) Steve Jobs adds value to Apple shares
5) The role of a teacher is to add value to their students
6) It was a valuable experience to attend that Noel Pearson lecture

So, in folk use, value might be used to describe an attribute of a person, a commodity (two examples, car and gold), a business, a process or an experience. In some cases there is a close connection between value and money (sentences 2 and 4) but in other cases it refers to the ability of certain people to successfully transfer their skill to a job of work or to other people. It can also refer to a learning experience. In all of these cases value is a good thing and the more value there is the better.

In Capital, Marx doesn’t start with value. He starts with the commodity and then splits the commodity into something which possesses both use value and exchange value. It turns out later that exchange-value is the form of appearance of value. Exchange value is “observable” in a transaction. For example, one 32GB USB stick = 20 litres of Pura full cream milk. We can equate these values in real life but more realistically in our imagination and it does not have to involve money. Value is the underlying category, an abstraction, a theoretical underpinning of exchange-value.

In Marx’s terms value has a form, a substance and a magnitude. The form of value is its capacity to be exchanged. The substance of value is embedded abstract labour. The magnitude of value is the amount of embedded labour or socially necessary labour time. This thumbnail needs to be discussed in more detail later.

Marx clearly distinguishes between value and use value. For Marx value is a social product (or in his language, a social form). It only exists in a commodity society, a society where products are produced and sold to others. For Marx value does not exist, or only exists in embryonic form, in primitive society where hunters and gatherers are mainly working for themselves. For Marx value is historically contingent whereas use value is not. Use value refers to the properties of products that make them useful. For example, a car is useful for transportation. This is true irrespective of whether it is bought and sold in the marketplace. Marx makes a radical separation between the usefulness of products (true for all social systems) and their value, which is only true for products which are made to be sold in the marketplace. Such products are defined as commodities.

What is the difference between the folk perspective of value and the Marx perspective of value?

Well, Marx mercilessly dissects or interrogates the commodity and teases out a variety of meanings and distinctions (use value, exchange-value, value). For Marx value becomes a central theoretical concept which is complex in its own right, having social form, substance and magnitude. But for Marx a line is drawn between value and use value.

So, looking again at the starting sentences and adding some annotations about what the folk use of value means in each case:
1) Tom is good value, ask him to do the job (Tom is useful at work of an unspecified character)
2) That car is good value for money (I am prepared to exchange my money to buy that car)
3) Gold increases in value during economic recessions (Gold is special for unstated reasons because it is always valuable, even in economic crises)
4) Steve Jobs adds value to Apple shares (some individuals excel at their value interventions in the capitalist system because of their creative design and marketing skills)
5) The role of a teacher is to add value to their students (in the “knowledge economy” value can refer to added knowledge too; the teacher transfers their knowledge to their students)
6) It was a valuable experience to attend that Noel Pearson lecture (an experience can be valuable or personally enriching in its own right)

The folk usage of the word value does either mean or imply the similar concepts which Marx discovers in the commodity (usefulness, exchangeability), adds on a few more (creativity, knowledge transfer, enrichment) and then fuzzily blurs them all together. In folk usage value is a suitcase word. Folks are using the word value as a suitcase whereas Marx is starting with the commodity and meticulously teasing out various meanings in his analysis.

The folk perspective on value and Marx’s perspective also deviate when it comes to labour saving or productivity increasing technology. With technological progress the value of manufactured products decreases. They become cheaper to buy in the marketplace.

I said above in relation to the six introductory sentences which illustrate a variety of usages of value, that,

In all of these cases value is a good thing and the more value there is the better

But now I am pointing out that as technological productivity increases then the value of the manufactured products decreases. That experience is part of popular consciousness. We all know that we possess more products than our parents generation. We possess them because we can afford them since comparable items are cheaper relative to our wages than they used to be. But does the concept of declining value universally enter the popular consciousness?

7) Commodities are cheaper for my generation than previous generations. We’ve never had it so good!

There may be some awareness of this truth but it is not general folk wisdom. Why not?

Well, often prices don’t go down. Rather you buy a fancier equivalent of the commodity you want for the same price. You are getting more value for money but not getting the feeling that things are cheaper in an absolute sense. Windows 7 replaces Windows 6. It really doesn’t do anything different but has a few extra bells and whistles so you end up paying a similar price. In reality, absolutely free alternative operating systems such as Ubuntu are equivalent and better in some ways (no viruses).

Some prices do go up. For example, land, petrol, electricity, internet access in Australia.

It is cheaper to build a house now than previously, due to technological and organisational development. The house is cheaper but the land is often more expensive due to supply and demand for good location.

Petrol prices are subject to the control of a cartel (OPEC)

The price of electricity goes up due to lack of forward planning by governments who don’t build surplus capacity in good time.

The National Broadband Network (NBN) is potentially a good idea but due to government incompetence it is rolled out in a more expensive fashion than is needed.

Environmental costs contribute to rising prices. Once again, governments are generally incompetent in managing these issues, Julia’s carbon tax being a good current example.

It is hard to accurately compare our generation with previous generations. This arises from the nature of capitalist development. We have more things but in the main they are different things to our parents possessions. When I grew up we did not own a flush toilet, an electric frig, a TV, a microwave or a computer. They were either invented or became affordable consumer items later. Even the items that are common to both generations differ substantially. Houses and cars are far more sophisticated today, they possess added gadgets and functionality which was not present previously. This rough comparison makes it obvious that the current generation has far more material possessions than previous generations. The value of producing equivalent and / or better commodities has declined over time mainly due to productivity improvements.

What is the difference between value and wealth?

In folk usage wealth may refer to:
8 ) There are a wealth of ideas in the mind of that intellectual
9) James Packer is wealthy (aka filthy rich)
10) Capitalism increases the wealth of society but that wealth is distributed unevenly

If you substitute wealth for value in my original sentences it doesn’t work out. You wouldn’t say:
1′) Tom is good value wealth, ask him to do the job
2′) That car is good value wealth for money
5′) The role of a teacher is to add value wealth to their students
but you could say:
4′) Steve Jobs adds value wealth to Apple shares

This is because value means more than the finished product or money. It also means or implies productive labour. Wealth doesn’t fit in those sentences because it usually refers more to the end product or the market value of the end product than the productive labour required to obtain that product.

Marx and his predecessors also distinguished between value and wealth. Wealth is the sum of all use values irrespective of whether they require labour. Hence unadorned natural products, eg. virgin land, are part of wealth but not part of value. In Marx’s terms nature is not a source of value. Marx approved of his predecessor William Petty in distinguishing between labour and nature as sources of wealth:

“Labour is … not the only source of material wealth, ie of the use-values it produces. As William Petty says, labour is the father of material wealth, the earth is its mother.” (Marx, vol 1)

Wealth is the sum of all use values, which are concrete and particular. Wealth originates in both nature and labour. This applies to any society. Value is a creature of capitalism or a society where commodities are exchanged in the market place and display their exchange-value there.

What is the difference between value and quality?

In Marx’s terms value is not metaphysical. By metaphysical I mean broad trans historical concepts which attempt to define meaning in a permanent or grandiose sense. Marx’s analysis is relevant to capitalism, not all of history. Marx is not writing a theory of everything to last for all time but is doing a specific critique of capitalism and classical political economy, the partly correct then existing theories of his predecessors Adam Smith, David Ricardo and others.

It is a different approach to my memory of the sense in which Quality is discussed at length in Pirsig’s Zen and the Art of Motor Cycle Maintenance. I had the sense there that if only the slippery concept of Quality could be grasped then that would be similar to solving the riddle of life itself.

However, folk usage does not always embrace metaphysical texts. In folk usage there is not a clear distinction made between value and quality. If you take the sentences I began with:
1) Tom is good value, ask him to do the job
2) That car is good value for money
3) Gold increases in value during economic recessions
4) Steve Jobs adds value to Apple shares
5) The role of a teacher is to add value to their students
6) It was a valuable experience to attend that Noel Pearson lecture

For most of them you could substitute the word quality for the word value. It is only in sentence (3) that this substitution does not work. This is because the phenomenon of gold increasing in value during economic recession requires a detailed economic theory to explain it. Even though the sentence is part of folk usage the explanation of that sentence is not.

What is the difference between value and money?

From the original sentences value is measured in money terms in sentences 2 and 4 or at least the connection is clear:
2) That car is good value for money
4) Steve Jobs adds value to Apple shares

In folk terms the value suitcase is much broader than money and encompasses usefulness, creativity and experiences as well.

For Marx value originates from labour and evolves into a universal equivalent, gold money, which further evolves into paper money. But for Marx value is in motion. The capitalist uses money or credit to buy labour and means of production, proceeds to a production process, sells the resultant commodities and finally invests more into the production process in a continual cycle. Value moves through this whole process dynamically.

So value is far more than money in both folk and Marx’s usage but in different ways.

The folk connotation of value is that it is a good thing, that valuable things (people, commodities, experiences) are worth having. This is different from the Marxist understanding, that value is a creature of capitalism an underlying theoretical concept which is the staring point to explain the motion of the whole capitalist system. For Marx, value is the starting point for further analysis and understanding of capitalism.

China’s economy by Humphrey McQueen

Chinese Crackers (pdf, 35pp)

This article is an analysis of China’s economy by Humphrey McQueen, published in February 2011 by Surplus Value. Thanks to Jim Sharp for drawing our attention to this. I don’t currently feel expert enough to evaluate Humphrey’s detailed research and interpretations but it does strike me as well worth discussion.

uncomfortable science

Uncomfortable Science

In her new blog Nicole Pepperell points out that a scientific approach requires epistemological humility but this does not preclude scathing critique and social activism. The nature of the scientific approach requires both.

It will likely be counter-intuitive for many readers for me to suggest that Marx’s work operates from a similar standpoint of humility – a similar sense of the boundedness and limitations of our present time – encased in a scathing critique of the so-called “scientists” of Marx’s own time, who claimed to be able to find a solid and incontestable ontological ground for their fleeting “discoveries”, who pretended to elevate short-term insights of a particular historical configuration – as if these had always and ever been the implicit and latent truths of material nature or human history. In Marx, this sense of humility – this awareness of our boundedness to our own time – did not stand in the way of a present-day commitment to practical transformation: it was instead its very basis. But even revolutionary transformation stands at a kind of event horizon – obliquely reaching forward with sensibilities engendered in our own moment, grasping for gratifications we have been socialised to desire – but in the process creating a new world, whose sensibilities and desires are necessarily opaque to us.

What is the nature of Marx’s contribution to the scientific world view? I’m looking forward to more discussion of this question.

marx and the domains of ignorance

The domains of ignorance:

Known unknowns: All the things you know you don’t know
Unknown unknowns: All the things you don’t know you don’t know
Errors: All the things you think you know but don’t
Unknown knowns: All the things you don’t know you know
Taboos: Dangerous, polluting or forbidden knowledge
Denials: All the things too painful to know, so you don’t
– from The Domains of Ignorance

The domains of ignorance are relevant to Marx. Some people don’t read it because it is taboo. Some people read it and think they understand it and they don’t. Some people have a superficial knowledge of Marx and think that is good enough. But none of that really explains the extent of the marginalisation of Marx. I think the main issue is that he is difficult to understand. The thing missing from the domains of ignorance is contradictory knowledge.

This problem is not new. Isaac Deutscher provides an anecdote about the knowledge of Marx in that era (the 1930s):

“Capital is a tough nut to crack, opined Ignacy Daszyński, one of the best known socialist “people’s tribunes” around the turn of the 20th century, but anyhow he had not read it. But, he said, Karl Kautsky had read it, and written a popular summary of the first volume. He hadn’t read this either, but Kazimierz Kelles-Krauz, the party theoretician, had read Kautsky’s pamphlet and summarised it. He also had not read Kelles-Krauz’s text, but the financial expert of the party, Hermann Diamand, had read it and had told him, i.e. Daszynski, everything about it”

Marx’s critique of political economy is old knowledge, forbidden or marginalised knowledge and difficult to understand knowledge. Because it was written 150 years ago many think it is no longer relevant. Because communism is believed to have been tried and found wanting many who want radical change think it could not provide the answers. Because Marxism is an insignificant part of mainstream education and in particular not taught in the economics faculty then it is only going to be accessed by those who think outside of the mainstream. Finally, the many volumes of Capital and related works are difficult to understand for a variety of reasons.

Conceptually the work is very rich and it is difficult to keep the whole of it in your head. Marx uses a method of investigation (his adaptation of Hegelian dialectics) that is unfamiliar to moderns. Much of the language he uses is unfamiliar and this issue is exacerbated through a variety of translations. The prose is dense. Marx established a precise, strict terminology, eg. use value, exchange value, value, relative and absolute surplus value and then uses it rigorously for hundreds of pages. Therefore you must pay close attention, otherwise you are lost. He frequently uses French and Latin quotations. He also employs fascinating, tangential footnotes, which must be read.

The economic crisis which began in 2007 revealed an intellectual crisis, which did already exist, but was not so obvious before the economic crisis. For much of time following WW2 economic crisis was absent, the capitalists had appeared to work out how to stabilise an unstable system. That assumption has now been shown to be false.

My contention is that to understand the inner workings of capitalism you have to understand Marx. Although this will not provide a magical solution to the current issues of ongoing economic crisis it will provide a deep appreciation of the inner contradictions of capitalism that make it forever an unstable and unpredictable system.

the grapes of wrath

The Grapes of Wrath (1940) is a movie based on John Steinbeck’s Pulitzer Prize-winning, widely-read 1939 novel. I watched it in my youth and was moved by the graphic descriptions of grinding poverty in The Great Depression and the fight by the Joad family underdogs (and their preacher friend, Casy, who stopped preaching because he didn’t know what to preach anymore) against the powerful forces of the State.

I watched it again a few days ago (here is the torrent) and it is still an amazing movie. The overall wealth of industrialised countries has improved dramatically since The Great Depression. Rather than abject, grinding poverty and starvation the poor are better off absolutely although not relatively. Nevertheless, the fundamentals haven’t changed, the rich get richer and the poor adapt and / or resist according to their organisation and circumstances. How much things have changed and yet how much they remain the same.

Filmsite Movie Review: The Grapes of Wrath

making sense of the eurozone

Will Greece default? Or will the debt be restructured? What will then happen to Portugal, Ireland, Spain, Italy etc.? Does the structure of the eurozone create its own special problems on top of the declining world economy?

In searching for answers I have found the analysis of blogger Protesilaos Stavrou (Critical views on current affairs) helpful. Although the following does not directly address the wider problem of the ailing world economy he does make a strong case that there is a problem with the euro itself which makes things worse:

European leaders created a monetary union, a single currency, without a coordinated fiscal policy (a fiscal union), thus leaving the euro open to serious shocks that would hit directly at this systemic flaw. This is the reason why the once two-speed eurozone has become two-tier, since national economies grew unequally, as the economies of the more efficient countries of European center were concentrating the surpluses of the eurozone, while the periphery was left with debt and the illusion of prosperity that came from the once cheap loans. That is the reason why we say that the surpluses of the North (Center) are the deficits of the South (Periphery).

Failing to address the structural flaws of the euro, means failing to see the real problem, which is basically what happens today, since all European officials speak of the “Greek”, “Irish”, “Portuguese” crises, as if those are not related anyhow to the way that the single currency functions. That kind of approach, is made manifest in the bailout packages that are given to these countries, which do not aim at preventing defaults and bringing national economies back on track, but at buying precious time for German and French banks, who hold around 30% of their respective countries GDP in government bonds of the European South, so as to avoid a more generalized crisis. The bailouts are thus a means of indirectly financing German and French banks and minimizing loses.

These practices will not solve the problem. All they will do is accumulate more problems that go beyond the scope of economics into social and political spheres that will at some point erupt with unpleasant consequences for the EU architecture. For as long as the systemic flaws of the single currency are not touched upon, there will be no viable solution to the eurozone’s debt crisis
Systemic flaws of the Euro are the root of the debt crisis

Here are direct links to some of his key blogs:

update: July 6: An overview of the four dimensions of the Greek Crisis

July 4: Systemic flaws of the Euro are the root of the debt crisis

July 3: Eurogroup chairman speaks of limited Greek sovereignty

July 1: Market relief will be short lived over Greek debt

June 29: Evaluation of the new austerity measures in Greece

June 28: Ad hoc measures can not save the EU

June 19: The effects of a Greek debt restructuring

June 1: The scenario of Greece switching to the Drachma – Goodbye Euro

update: May 30: About the “change” the Indignant want

May 23: Better for Greece to default rather than take new austerity measures

May 16: What if Greece goes bankrupt?

May 10: Two-speed Europe becomes TWO-TIER

May 4: The European safety mechanism dooms Greece

update: April 7: The Greek Odious Debt and its Essential Lies

Class, Capital and Crisis

Australian economist John Quiggan (“Commentary on Australian & world events from a social-democratic perspective”) has written the first of three blogs about the Marxist themes of Class, Capital and Crisis: Marxism without revolution: Class


And for now, the ruling 1 per cent has managed to turn the anger generated by their failures to their own political advantage. But, far more than in the 1980s and 1990s, or even the first decade of the 2000s, the opening is there for a radical alternative. Even within the dominant class, faith in the beneficience of markets in general and financial markets in particular, has largely dissipated. What remains is a grimly determined class view that “what we have we hold”

movie review: the social network

A very smart computer hacker with appalling relationship skills pisses off his girl friend so much that she calls  him a low life and leaves. To take revenge and impress his lost love he somehow – despite his appalling social skills – builds an amazingly successful digital social network worth several billion dollars. In the process he pisses off more of his friends and colleagues who then take him to court to extract their share. He ends up rich and famous but still unfulfilled.


The Channel 4 production, Catastrophes, is currently running on SBS in Australia. The final episode is scheduled for next Wednesday.

There is some hype and melodrama but the catastrophe theme of evolutionary development is backed up by reasonable, although one sided, scientific comment. When you research it you find there are opposing theories. Nevertheless, this series is good for a discussion IMO.

The evidence for the destruction of the dinosaurs and 70 percent of other species 65 million years ago by an asteroid the size of Mount Everest was well presented. From the  iridium, shocked quartz and soot in the Cretaceous-Tertiary boundary layer we learn that this giant asteroid collided at Mexico’s Yucatan peninsula. The crater was discovered by an oil company so I guess there are unexpected benefits arising from oil exploration 🙂

I was less clear about the reasons for the end of snowball earth 650 million years ago. How come those volcanoes that released CO2 into the atmosphere weren’t sufficiently active earlier. This wasn’t clear to me at least.

The general theme, that evolution proceeds in part through a series of catastrophes is one that resonates with me. The challenge is to present this theme in a more thoroughly scientific manner.

The torrent is available: Catastrophe_complete_series