- posted by syed-m @ 10:44 AM

 
Long discussion on the market
(Below is an exchange between me and a friend. My comments are in capitals)

I think when you talk of not having rich-poor gap that you envision a post-market society. I don't necessarily disagree with the idea. We tried it previously with communism, but it failed dreadfully due to human corruption etc. At this stage I just don't see an alternative to the market when it comes to allocating certain resources and promoting certain exchanges. That is not to say that someone won't come up with a better idea at some point. But for now the market is the best thing we have. It is imperfect, I'll concede that, and the harsher aspects of the rich-poor divide are unfortunate. If we believe that the purpose of the market is to serve society, and for the most part I believe it does, then we will redistribute some of the wealth created by the market to the very poor in the interests of social cohesion and social justice.

I THINK IT'S A LITTLE SIMPLISTIC TO SAY WE TRIED A 'POST-MARKET' ECONOMY, VIZ COMMUNISM. BECAUSE COMMUNISM (PRESUMABLY SOVIET COMMUNISM) WAS A PRETTY ARCHANCE CREATURE, AND, AS AN ECONOMIC SYSTEM, CAN'T BE DIVORCED FROM THE SOCIOPOLITICAL HISTORY OF RUSSIA AND THE SURROUNDING AREAS. IN FACT IF YOU LOOK AT THE HISTORY OF THE FIRST RUSSIAN REVOLUTION THERE WERE SEVERAL DIFFERENT MOVEMENTS WHICH WERE SUBSUMED OR CRUSHED BY THE BOLSHEVIKS, WHO QUITE CONSCIOUSLY SOUGHT TO CREATE A ONE PARTY DICTATORSHIP. ALSO NOTE THAT IN THE SPANISH CIVIL WAR BOTH THE FASCISTS (SUPPORTED BY THE WEST AND BIG BUSINESS) AND THE COMMUNISTS (SUPPORTED BY THE SOVIETS) FOUGHT AND EVENTUALLY DESTROYED THE ANARCHISTS. OTHER 'COMMUNIST' STATES ARE DIFFICULT TO GAUGE, AGAIN FOR SOCIOPOLITICAL REASONS. CUBA HAS BEEN BLOCKADED FOR MANY DECADES. VIETNAM WAS DESTROYED BY THE AMERICANS. THROUGHOUT THE THIRD WORLD, ESSENTIALLY SOCIALIST STATES WERE UNDERMINED EVERYWHERE, QUITE CONSCIOUSLY, BASED ON THE FEAR THAT THEY MAY REPRESENT AN ALTERNATIVE, VIABLE OPTION FOR SOCIAL DEVELOPMENT TO THE ONE WHICH THE WEST OFFERS, WHICH FAVOURS BIG BUSINESS. I THINK THE FUNDAMENTAL PROBLEM WITH THE MARKET IS THAT IT FAVOURS INEQUALITY, RATHER THAN EMANICPATES PEOPLE FROM IT, BECAUSE 'THE MARKET' ISN'T A LEVEL PLAYING FIELD. MORE ON THIS BELOW.

I disagree with the idea that markets are consciously created by powerful interests. The market evolved out of barter exchange centuries ago. Most markets are very large and disaggregated so there isn't any one force guiding the market or manipulating events to their own advantage. But where we do have monopoly or monopsony the ACCC, or whatever other domestic regulatory body is in charge of competition law in the relevant nation if its not Australia, is meant to regulate and act to counter restrictive trade practices.

MARKETS ARE CONSTANTLY CONSCIOUSLY CREATED BY POWERFUL INTERESTS. LOOK AT THE MOBILE PHONE MARKET. DO PEOPLE NEED VIDEO CAMERAS IN THEIR MOBILE PHONES? NO. BUT MOBILE PHONE COMPANIES ARE BIG ENOUGH TO ADVERTISE, CREATE A MARKET FOR, THEIR OTHERWISE USELESS ITEMS. FURTHER, IN A MARKET ECONOMY, WHERE PEOPLE'S LABOUR IS REWARDED PURELY IN MONEY TERMS, AND PEOPLE ARE NOT PART OF COMMUNITIES BUT A COLLECTION OF INDIVIDUALS COMPETING WITH ONE ANOTHER, ALL YOU HAVE TO DO WITH YOUR (INCREASINGLY LESS AND LESS) FREE TIME IS SPEND YOUR MONEY. WHICH PROMOTES A CONSUMERIST CULTURE FOR THINGS LIKE USELSS MOBILE PHONE CAMERAS. PUT ANOTHER WAY, THE SYSTEM IS MOST EFFICIENT AT PROMOTING THE PURCHASE OF GOODS AND SERVICES. NOT SO GOOD AT PROMOTING OTHER ELEMENTS BROADLY CATEGORISED AS SOCIAL CAPITAL. INDEED THE SYSTEM UNDERMINES SOCIAL CAPITAL. ALL ONE NEED DO TO PROVE THAT IS TO COMPARE HOW MUCH INVESTMENT THERE IS IN EDUCATION AS COMPARED WITH THE ENTERTAINMENT AND SPORTING INDUSTRIES.

I'm not sure I take your point on the aim of society being to render the majority of the population useless. What I think you are talking about is the economy of scale that results when we each specialise in a certain profession. Again I think this is one of the better and more fundamental aspects of the market. Professions guard their "secrets" in part to maintain their value. But I think you'll find that professions also self-regulate a lot to ensure that the quality of the profession is intact so as to maintain the long term value. I think this is beneficial for society. It makes sense that a group of people who invest in developing a set of skills, which are valued highly by society, should be rewarded. Where professions are excessive in their measures it is the role of the ACCC to counteract this. The US Dept of Justice and FCC are heavily involved in this type of work.

THE PROBLEM WITH THIS APPROACH IS IT PROMOTES INDIVIDUAL OBFUSCATION OF SOCIAL RESPONSIBILITIES. VIZ, THAT CERTAIN 'SPECIALISED' CLASSES OF PEOPLE HAVE A RESPONSIBILITY FOR SOME THINGS, NOT THE GENERAL POPULATION. OF COURSE THERE ARE SOME THINGS WHICH ARE TOO SPECIALISED TO BE 'GENERALISED'. BUT I SEE THAT AS AN EXCEPTION. EVEN A DR'S WORK COULD BE SHARED MORE EQUALLY WITH NURSES, PHARMACISTS, OTHERS (IN TRUTH IN MANY WAYS IT ALREADY IS, ONLY THE DRS GET MOST OF THE CREDIT). LAWYERS NEED NOT BE THE PRESERVE OF THE LAW EITHER. THIS IS WHY I SAY SOCIETY RENDERS THE MAJORITY OF THE POPULATION USELESS. BECAUSE THEY ARE NOT MEMBERS OF ONE OF THE SPECIALISED CLASSES OF PEOPLE WHO, BY VIRTUE OF THEIR SPECIALISED SKILL OR KNOWLEDGE, HAVE A SIGNIFICANT STAKE IN A SOCIETY'S POWER RELATIONS. I THINK THE WELFARE SYSTEM REFLECTS THIS. THERE IS A MINIMAL AMOUNT OF ATTEMPTS TO TRAIN PEOPLE, TO INVEST IN PEOPLE. AN EMPHASIS, EVEN NOW, IS TO GIVE PAYOUTS OR PRESSURE PEOPLE TO TAKE WHATEVER JOB IS AVAILABLE. BUT WHAT ABOUT A FREE EDUCATION SYSTEM, OR INCENTIVES FOR CONTINUED EDUCATION IN THE GENERAL POPULATION? WHY CAN'T MCDONALDS' EMPLOYEES GET TRAINING/BE INVOLVED IN THE MANAGEMENT OF THE COMPANY?

Regarding the employment issue which you touched on in various parts of your last email. Structural unemployment is difficult, but inevitable in a market. Hence its easy to sympathise with the factory worker and bank teller, but their plight is part of the proper operation of the market. New technologies will emerge. Markets are meant to facilitate their emergence. For example electricity and the light bulb put an awful lot of candlestick makers out of business, but that doesn't mean that the candlestick makers could just jump to making light bulbs at the same firm. They had to seek new employers and train for new skills.

NO OF COURSE NOT, BUT THAT'S KINDA MISSING THE POINT. THE POINT IS TO SHARE THE NEW DEVELOPMENTS WITH THE POPULATION, FOR THEIR BENEFIT, RATHER THAN GUARD THE IP JEALOUSLY, SO THAT A FEW PEOPLE CAN MAKE ALL THE PROFIT AND BENEFIT ENTIRELY OUT OF THE NEW DEVELOPMENT. THE DUPONT DYNASTY WAS FOUNDED ON ONE SCIENTIST, WHO TOOK THE CREDIT FOR HIS MENTOR'S DISCOVERY (HIS MENTOR DIED IN THE PROCESS OF DISCOVERING NYLON, THEREBY SPRINGING A CLOTHING MANUFACTURE REVOLUTION AROUND WWII). YET I'M SURE IF YOU ASKED THE CURRENT VERY RICH MEMBERS OF THE DUPONT DYNASTY THEY WOULDN'T KNOW A THING ABOUT CHEMISTRY. I DOUBT PARIS HILTON KNOWS ANYTHING ABOUT RUNNING HOTELS. SEE ALSO MY LAST COMMENT.

Regarding corporate governance. Well I guess this is a difficult issue. Domestically our laws have been lax, but that's because we don't have a very far-sighted or reformist treasurer. He's been forced to make some changes to the Corporations Act but that its taken three years since HIH is not impressive. The directors have a fiduciary duty to shareholders and if they are seriously remiss in their duty they should be punished. Directors don't have that type of relationship with employees, but the employer-employee relationship in the market is about creating wealth. If its done right both parties should be well-served.

WELL OUR TREASURER, INDEED THE GOVT, AND SUCCESSIVE GOVTS, ARE UNDER SIGNIFICANT PRESSURE FROM BIG BUSINESS NOT TO INHIBIT BUSINESS'S 'PROFITABILITY' WHICH IS SQUARELY FOCUSED ON IMMEDIATE/SHORT TERM PROFIT. THE TREASURER IS A POLITICIAN AND MAKES POLITICAL DECISIONS. THE BUSINESS SECTOR IS VERY INFLUENTIAL.

I'd cautiously agree with you about workers being the first "victims" of the market. If a director makes a lousy decision and needlessly downsizes a part of the company, it will obviously be the workers who feel the heat first, but when the needless downsizing affects the bottom line in theory the shareholders should pull the director into line or get rid of him. Granted the lag time is a bit loose and the eventual result is probably of little comfort to the workers. But business is about risk. Sometimes people make bad decisions, that's a risk that all the actors in the market take and one they'll all be affected by. The discipline of risk, is that someone who is cavalier about risk eventually comes unstuck and then ceases to be a part of the market.

IMAGINE IF THE FRONT PAGE OF THE NEWSPAPER HAD YOUR 'RISK' COMMENT IN IT? THEY'D PROBABLY BE A HELL OF OUTRAGE. SOUNDS A LOT LIKE KEATING'S 'RECESSION WE HAD TO HAVE' COMMENT. BUT THEN AGAIN, FROM MEMORY, I THINK YOU ARE A KEATING FAN... :-) BUSINESS IS ABOUT TAKING RISK WITH OTHER PEOPLE'S MONEY. CF ENRON, ET AL.

On the same token, workers are also the first victims of structural change in the economy. But often that's beneficial for society as a whole. Would we really forego having a car just to keep people in the horse and carriage industry in business? I don't think we would. But we can redistribute some of the wealth created to alleviate the difficulties with structural unemployment.

ACCORDING TO YOU THEN, ALL THE CAPTAINS OF INDUSTRY SHOULD BE GREAT PIONEERS OF NEW TECHNOLOGIES. IN FACT THEY AREN'T AT ALL. WHO HAS MADE MOST OF THE PROFIT OUT OF CARS? PEOPLE WHO PROBABLY DON'T EVEN KNOW HOW TO CHANGE A FLAT TYRE. WHY DON'T ENGINEERS AND SCIENTISTS RUN ANY OF THE HIGH TECH CORPORATIONS?
- posted by syed-m @ 9:56 PM

 
Iraq Elections

United States officials were surprised and heartened today at the size of turnout in South Vietnam's presidential election despite a Vietcong terrorist campaign to disrupt the voting. According to reports from Saigon, 83 percent of the 5.85 million registered voters cast their ballots yesterday. Many of them risked reprisals threatened by the Vietcong. A successful election has long been seen as the keystone in President Johnson's policy of encouraging the growth of constitutional processes in South Vietnam.

- Peter Grose, 'U.S. Encouraged by Vietnam Vote,' New York Times Page 2, September 4, 1967.

prop·a·gan·da n.

The systematic propagation of a doctrine or cause or of information reflecting the views and interests of those advocating such a doctrine or cause.

Material disseminated by the advocates or opponents of a doctrine or cause: wartime propaganda.

All over the Western world, particularly in 'Coalition of the willing' countries, conservative commentators heralded Iraq's recent elections as the great new democratic hope for the Middle East. Gerard Henderson recently wrote an opinion piece in the Sydney Morning Herald to this effect. For those who haven't heard of him before, Gerard Henderson is a conservative social commentator. He runs The Sydney Institute, a right-wing think tank with ties to The American Enterprise Institute. If you're unfamiliar with either The Sydney Institute or The American Enterprise Institute, this precis of an upcoming forum at the AEI should give you an idea of what side of the fence they're on:

Energy is back at the top of the news again. Rising oil prices, a recent national commission recommending new policies, a gridlocked energy bill on Capitol Hill, and the continuing controversy over climate change have generated a new round of hand-wringing over energy policy not seen since the 1970s. Fossil fuels, it is feared, are becoming scarce, or should somehow be made scarce. In The Bottomless Well (Basic Books, January 2005), Peter W. Huber and Mark P. Mills shatter the conventional wisdom about energy, arguing that fossil fuel is abundant and energy efficiency mandates are counterproductive. Moreover, Huber and Mills explore the continuing revolution in energy technology, explaining why we can expect an energy-abundant future that will transcend the last drop of oil or lump of coal.

The AEI is probably the most influential body of its type in American, and therefore global, politics. A good beginner's guide to the AEI is available here. But back to Iraq, elections, and conservative commentary.

Let's stick with Henderson's op ed on Iraq. It's one of the better argued commentaries around. In it, Henderson says the real resistance fighters are those braving the polls to vote despite the risk of attack from Saddam Hussein loyalists and the al-Qaeda-aligned forces led by Jordanian-born Abu Musab al-Zarqawi. One of the implications of this statement is that Iraqis are resisting the threat of violent reprisals, from other Iraqis and other Muslims, to support the US's occupation of their country. The op ed also assumes that those making the attacks must be Hussein loyalists or al-Zarqawi supporters. At one stage, Henderson even states that to suddenly withdraw the US-led multinational force from Iraq would hand the nation over to the insurgents, who are loyal to Saddam or Zarqawi. Of course no one else would mount an armed resistance to the occupation right? Wrong. But stating this gives Henderson the opportunity to imply that there is no reasonable or reasonably foreseeable reason for someone to commit acts of terrorism, other than because they are evil terrorists who like nothing better than to inflict death and destruction on innocent people (sound familiar yet?). Further, putting Saddam and Zarqawi in the same sentence acts as a kind of retrospective link between Saddam and Osama - a link that was trumpeted as a reason for invading Iraq in the first place, and which has never been substantiated.

It's indisputable that it takes some measure of courage for Iraqis to go to the polling stations given there is a chance that the station might be subject to a suicide bombing. Indeed, given the current anarchy throughout Iraq, it is an incredible achievement that voting did take place, and that a large proportion of the population voted. Yet it should also be noted that the greatest threat to Iraqis remains the occupation itself.

Henderson goes on to note selected 'left-leaning' commentators, highlighting their alleged support for those resisting the occupation, and, by extension, these commentators' implicit support for even the most gruesome aspects of the resistance. At one stage, Henderson quotes John Pilger:

"Do you think the anti-war movement should be supporting Iraq's anti-occupation resistance?" Pilger replied: "Yes, I do. You cannot afford to be choosy. While we abhor and condemn the continuing loss of innocent life in Iraq, we have no choice now but to support the resistance." No ambiguity there.

Even if people like Pilger do support suicide attacks that kill Iraqi civilians, and that is highly questionable, it should not obfuscate from certain basic truths which any commentary with even a shred of objectivity ought to analyse.

Why does Henderson not mention the significant limitations on the powers of those elected (a good summary of these limitations are available here)? Henderson also neglects to mention that turnout amongst the Sunni population was very low, effectively a boycott. Under Saddam, the Sunnis were the ruling class. Even now, they are a significant portion of the countries professionals and upper middle classes. Their omission raises significant questions of legitimacy for the entire process.

Further, there is no mention of the fact that voting could not take place at all in many parts of Iraq either. Interim leader Ayad Allawi stated that there are 4 provinces in which voting could not take place because of the security situation. This happens to include Baghdad, and up to half of Iraq's population. The people of Falluja have not been registered to vote or given voting cards. A lot of Iraqis believe that a lot of the attacks and unrest have been orchestrated by the occupying forces using covert operations, stock-in-trade of both the interim prime-minister Allawi and the current US 'Ambassador' John Negroponte. Are the areas where the security situation is used to prevent voting areas where voters are expected to support candidates less likely to favour the occupation and Allawi's regime? There's been intimidation in some areas. As Margot Kingston relayed in Webdiary:

Felicity Arbuthnot reported a case of a family visited by their local shopkeeper who asked for their ration book 'for safekeeping'. Ration books are needed as ID for voters and the family refused. Later the shopkeeper came back in tears – he'd been threatened, on his family's lives, to collect all the ration books.

Why is Henderson silent on so many other atrocities being committed in Iraq by the Americans? As Robert Fisk recently reported:

Right up to the election hour, US jets were continuing to bomb "terrorist targets", the latest in the city of Ramadi, which - although US President George Bush and Britain's Prime Minister Tony Blair do not say so - is now in the hands of the insurgents as surely as Fallujah was before the Americans destroyed it. Every month since Allawi, the former CIA agent, was appointed premier, American air strikes on Iraq have been increasing exponentially.

Why has Henderson not mentioned the thousands directly, in many cases deliberately, murdered by the United States and its allies? In October 2004 The Lancet, a respected international medical journal, published a report which estimated that around 100,000 Iraqis had died since the American invasion in March 2003 (another excellent analysis of assessing Iraqi casualties during that period is available here).

Why are there no words in Henderson's commentary on the thousands killed on account of the disease and destruction wrought upon Iraq during and following the invasion, on top of the many thousands of Iraqis who died during a decade of brutal sanctions imposed by the United Nations, with the backing of the United States, the United Kingdom, and others? Why are there no comments on the first Gulf War, which plunged Iraq back into the third world? Near the 1980s, and before the first Gulf War, Iraq had the highest standard of living amongst all Arab nations in the region.

Why is there no mention of the critical military, diplomatic and economic support given to Saddam in the 1980s by all the major Western powers, when he was at his strongest and most dangerous?

Surely answering these questions would provide an important basis for understanding why the current situation in Iraq is as it is?

The fact that Henderson chooses not to address these issues, but instead addresses those other commentators who have been critical of the American occupation belies the true purpose of his commentary. That is, to push a certain line on the Iraq Election and the American occupation of that nation, and, by pushing that line, obfuscate the ongoing misery and crimes being perpetrated there in our name.

- posted by syed-m @ 9:30 PM

 
US an obsbstacle to political solution in Iraq

http://www.smh.com.au/news/National/US-an-obstacle-to-political-solution-in-Iraq-Beazley/2005/02/02/1107228770090.html

This is a surprisingly robust position for Beazley to take, and an eminently sensible one (although he does step short of saying the US has committed war crimes in Iraq, opting instead for the lighter 'fog of war'/mistake/collateral damage motif). At least on this score, good stuff!

Beazley's ALP to champion the new rich

On another Beazley pronouncement, this time re tax cuts, see this story: http://www.smh.com.au/news/National/Beazleys-ALP-to-champion-the-new-rich/2005/02/02/1107228770766.html

Interesting how tax cuts for the middle and upper class are trumpeted as populist. I mean how many Australians are middle or upper class? I know we live in a country with a relatively high standard of living. But seriously, does anyone have any figures handy or know where I could find out how many Australians earn > $58,000 (and would therefore benefit from the tax cuts Beazley's proposing)?

- posted by syed-m @ 1:36 PM

 
Plastic bullets?

http://edition.cnn.com/2005/WORLD/meast/02/01/iraq.hostage/index.html

- posted by syed-m @ 10:55 PM