Tuesday 31 July 2018

Liberty Demands a Strong State - The Role of Capabilities

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A strong state is the prerequisite of liberty, and to become strong it is necessary for the state to bind itself to rules and institutions capable of controlling and constraining it. This theme, pioneered by the 16th century thinker Bodin, can be found throughout the history of liberty in modern times and at different stages in the development of living liberalism (Hobhouse, Dewey).

In my view, social democracy belongs in this tradition, being a liberalism updated to deliver capabilities that were unthinkable or hardly within reach when the modern state and liberalism were still in their infancy (though liberals were friends and supporters of the enlightened state from the outset).

A mature liberalism inevitably becomes a social democratic enterprise, a development that has taken place in the 19th and 20th century, and we are lucky to partake in it (though nowadays social democratic parties are hard at work destroying classic social democracy).

Indeed, it is the great irony of my research into freedom (initiated from a libertarian point of view) that it would ultimately convince me of the virtues of social democracy at a time when social democrats have given up their core convictions, having become hangers-on (like other traditional parties and the Catholic Church) of a new religion, the culturally dominant green mythology.

Anyone interested in the connection between the strong state and (getting the best from) liberty ought to read the absolutely magnificent book by Stephen Holmes: "Passions and Constraints. On the Theory of Liberal Democracy".

Sunday 29 July 2018

The Neoliberal Turn — The 1980s


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In a most blatant about-face in March 1983, François Mitterand spearheaded the all-out defection of the left from its traditional social and economic policies in favour of the neoliberal paradigm.  
On the one hand, domestic policy sovereignty was crucial if it was to lower unemployment and this predicated against participating in the EMS.

On the other hand, the desire to undermine German influence and to find a way to subsidise their farmers under the CAP forced them to engage in the European dialogue. They were caught betwixt!
By the third currency realignment in March 1983, the French were at the crossroads and the incompatibility of these competing ambitions was obvious.

At that point, France had a choice. It could retain its policy sovereignty and pursue its legitimate domestic objectives by floating the franc or remain within the EMS and subjugate its domestic policy freedom to the dictates of the Bundesbank.

Unfortunately, for the French and for Europe in general, they chose the neo-liberal path, however culturally alien this was to them.

History tells us that the French government fell lock step into the increasingly dominant Monetarist policy approach that involved using rising unemployment as a policy tool to discipline the inflation process.

That political reality was too stark for the public to accept and necessitated a smokescreen being erected to disassociate the rising unemployment from macroeconomic policy choices.

The rising unemployment was reconstructed by the political and bureaucratic spin doctors as a ‘structural’ problem reflecting a failure of individuals to be self reliant and assiduous in job search and skill development. A bevy of securely employed and highly paid economists pumped out a massive number of ‘research’ papers, which served to give authority and legitimacy to this ideologically tainted and empirically bereft view. 

Most of this ‘authority’ lacked credibility, but then mainstream economics has never really been concerned with its theoretical inconsistencies or lack of empirical traction.

The shift in policy in March 1983, the so-called ‘tournant de la rigueur’ (turn to austerity), took France back to the ‘fight inflation first’ policies of Giscard d’Estaing in the late 1970s and ended the few years of social advance in France.

The shift in language, from ‘d’austérité’ (as coined by Raymond Barre) to the softer ‘la rigeur’ was just window dressing.

The socialists were abandoning their principles to become part of the neo-liberal political convergence that captured social democratic parties in most advanced nations during this period.


Emphasis added. 

The Neoliberal Turn — The 1990s

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Brief German summary below.


When did the neoliberal turn happen? 

While the mid-to-late 1970s saw the rise of monetarist liberalism and the 1980s saw a dramatic about-face by Mitterand, who under massive pressure from French capital quickly switched from a socialist vision that had brought him to power to fully fledged austeritarian neoliberalism, it seems the 1990s were the period when Keynesian demand-oriented economics got entirely ousted by neoliberal supply-side thinking as the dominant economic paradigm in all leading Western nations.

The point is that mass unemployment was at very high levels in many European nations and was rising between 1993 and 1994 in most.

It coincided with a major recession in the early 1990s, which impacted on most nations. However, while, for example, the US began growth again in 1993 and Japan endured its massive property crash at the time, Europe stayed mired in stagnation with elevated unemployment rates.



At that point it was obvious that aggregate spending was insufficient and output gaps were large, as the next graph shows.

A lot of my own research at the time clearly demonstrated that the rising unemployment was driven by the insufficient aggregate spending.



However, that view conflicted with the growing Monetarist (neoliberal) orthodoxy at the time, which was intent on denying the relationship between spending and output and unemployment.

This was the period where supply-side biases began to dominate. Where mass unemployment was no longer constructed as a sign of a systemic failure of economies to generate enough work but, rather, as a sign that the unemployed, themselves, were deficient in one way or another – lazy, not prepared, not willing, priced out by trade unions and minimum wages, and all the rest of it.

Emphasis added.
Kurze deutsche Zusammenfassung: Wann hat sich die neoliberale Wende zugetragen? Mitte bis Ende der 1970er Jahre wurde der ohnehin verwässerte Keynesianismus à la Hicks vom neoliberalen Monetarismus des Milton Friedman abgelöst. In den 1980er Jahren erfolgte die ebenso rasante wie dramatische Kehrwende des François Mitterand, der die sozialistische Vision, mit der er an die Macht gewählt worden war, unter dem Druck der französischen Wirtschaft im Handumdrehen gegen eine neoliberale Austeritätspolitik vertauschte. Der intellektuelle Siegeszug des Neoliberalismus vollzog sich dann in den 1990er Jahren als der Widerstand gegen die Angebotsökonomie aufhörte und das zuvor noch oberste wirtschaftspolitische Ziel der Vollbeschäftigung von praktisch allen Ökonomen aufgegeben wurde.

Saturday 28 July 2018

The Left Veils Itself Behind the Invisible Hand (English)

 
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Here is the full German article.


Bootleggers and bootleggers 



Bootleggers I

Neoliberal economic arguments serve among other things prominently as a subterfuge to advance the special interests of mighty industrial forces.

Neoliberalism is a theory of individual markets interlocking harmoniously to give rise to an overall economy that is in equilibrium. 

Important implications and insinuations derived from it suggest that the market economy is an alternative to a world depending on politics, that free markets not only deliver superior economic results but also a desirable society, and that the state and the nation are a source of dubious interference with this ideal order.

In reality, traditional adepts of neoliberalism are opportunists happy to defer to the state as quickly as making use of neoliberal arguments if only their own interests are expedited.

We are dealing with a ruse. 

Ruse?

Bootleggers II

Ah, says the reactionary left, never let a ruse go to waste.

The capitalists rationally, if not reasonably, like to conjure away the disciplining demands of the state whenever they can, so as to attain their ambitions not burdened and undiluted by social considerations.

And that is exactly what the reactionary left craves for: do their own thing without interference from the most powerful player there is - the state.

So, they have eagerly adopted the neoliberal narrative of the invisible hand, being laden nowadays with concern for free trade and ardently promoting the epitome of neoliberal thinking, the EU.

Today's regressive left has no principles, only conceit and hatred, and they will leave the neoliberal ship as soon as it becomes opportune to do so. For the time being, however, taking or condoning the neoliberal stance is most helpful in advancing their destructive aims which require circumvention and emaciation of the only instrument capable of achieving pluralism, democracy, a balance of power between weaker and stronger social forces, the support of the disadvantaged and vulnerable, the prevention of unnecessary crises and the boosting of an economy when no other players are capable of it.

The Left Veils Itself Behind the Invisible Hand (Deutsch)

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Seit längerem trage ich mich mit dem Gedanken, eine Serie von Posts zu schreiben, die aufzeigen, dass das neoliberale Wirtschafts- und Gesellschaftsbild in seinen grundlegendsten Annahmen inkonsistent und empirisch falsch ist.

Mir scheint dieser Nachweis deshalb besonders wichtig, weil im Zeitalter der politischen Korrektheit, also in einer Ära, da Politik, Sonderinteressen und die Medien dem gefügigen politischen Konsumenten das Denken vorschreiben - statt dass Politik die Interessen, die Auffassungen und den Widerspruch der Bevölkerung repräsentiert - das neoliberale Glaubensbekenntnis erstaunlicherweise  zum allgemeinen Kulturgut heran gereift ist, dem sich seine früheren Gegner mit Haut und Haaren angeschlossen haben: die Sozialdemokraten und andere Fraktionen der inzwischen reaktionär gewordenen Linken.

Dazu mehr unter The Left's Treason.

Dieser Schulterschluss aller politischen Kräfte unter der Ägide des Neoliberalismus hat folgenschwere Konsequenzen für die westlichen Gesellschaften.

Grob gesagt bestehen diese in zwei gesellschaftstransformierenden Offensivbewegungen gegen den allgemeinwohlorientierten demokratischen Nationalstaat. 

(1) Pragmatischer Pro-Kapitalismus

Traditionelle Befürworter des Neoliberalismus neigen dazu, Staat und Nation als Ordnungsprinzip so weit zu unterhöhlen, als dies ihren individuellen wirtschaftlichen Interessen entgegenkommt. 

Ein Trick, mit dem sie nationalstaatliche Widerstände auszuhebeln trachten, ist die Ermächtigung supranationaler Institutionen, die dem breiten Volk als Säulen eines hehren Friedensprojekts angepriesen werden, wie im Fall der EU - als ob die Länder des Nachkriegseuropa jemals in Gefahr waren, in kriegerische Handlungen untereinander verwickelt zu werden.

Supranationale, aber noch nicht nationale Institutionen verhelfen mächtigen Wirtschaftskräften zu einem privilegierten Zugang zu politischen Entscheidungsträgern (siehe die EU, die die Bevölkerung entmündigt, um sich desto intensiver auf die Bedienung wirtschaftlich starker Sonderinteressen zu konzentrieren) unter dem falschen Vorwand, der Nationalstaat sei nicht mehr zeitgemäß und supranationale Konstruktionen seien der "neuen, globalisierten Welt" besser gewachsen. 

Ich spreche hier von einem pragmatischen "Pro-Kapitalismus" (vertreten vor allem durch mächtige Wirtschaftsinteressen), der Staat und Nation im Namen des Kapitalismus herabsetzt und zu demontieren sucht, um die Stellung der Arbeitnehmer zu schwächen, unliebsame  Regulierungen zu vermeiden oder abzustellen oder auf andere Weise, seine wirtschaftlichen Interessen zu befördern. 

In Wahrheit sind die typischen Vertreter des pragmatischen Pro-Kapitalismus sehr für Staat und Nation, wenn diese ihnen zur Verwirklichung ihrer Ziele verhelfen. In diesem Lager findet man auch (nicht-pragmatische) Gläubige, wie mich einst, die irgendwann. ohne dass ihre unmittelbaren Eigeninteressen davon profitierten, das neoliberale Glaubensbekenntnis angenommen haben - mir verhalf das Studium zum prägenden Erleuchtungserlebnis ( - die Wirtschaftswissenschaften spielen eine herausragende Rolle als Propagandainstrument, mehr dazu im Beitrag The Bad Conscience of an Economist).

(2) Linksreaktionärer Neoliberalismus

Inzwischen erfreut sich der Neoliberalismus neuen Zulaufs durch die sogenannte Linke, die ihre bis in die 1980er Jahre noch ausgeprägte Feindschaft gegenüber dieser Ideologie längst aufgegeben hat, nur um sich in ihre treusten Anhänger zu verwandeln.

Für die reaktionäre Linke bietet sich der Neoliberalismus als vortreffliches Hilfsmittel an, ihre zivilisationszerstörenden Wahnvorstellungen zu verwirklichen. Diese bedürfen der Schwächung des Nationalstaats, die Aushöhlung der volksvertretenden Demokratie, der Bildung nicht rechenschaftspflichtiger Machtnischen, kurzum: das Versanden der Wege, die vom Volk zur Macht führen.

Wie dem pragmatischen Pro-Kapitalismus dient der Neoliberalismus auch der demokratiefeindlichen reaktionären Linken dazu, Politik im großen Stile ohne das Volk zu machen und ihre teils laut schmetternden, teils schleichenden Bemühungen, die Politik auf ihre besonderen Ziele abwechselnd zu legitimieren und zu kaschieren.

(3) Neoliberalismus - die nützliche Magd

Der Neoliberale glaubt an eine Wirtschaftstheorie, derzufolge die freie Wirtschaft einen optimalen gesellschaftsbildenden Mechanismus darstellt, der von Staat und Nation nur behindert wird.

Das gegen den Nationalstaat gewendete Fazit des Neoliberalismus ist das gefundene Fressen für diese beiden Kräfte, die sich aus z. T. unterschiedlichen Beweggründen, von einem Staat befreien wollen, der für echten politischen Wettbewerb, für demokratische Einflussnahme gerade auch der wirtschaftlich weniger starken Gruppen einer Gesellschaft, für den Ausgleich unterschiedlich gewichtiger Gesellschaftskräfte (Kapital und Arbeit) steht, und in der Lage ist, Maßnahmen zu treffen, die die egoistischen Ambitionen von Sonderinteressen (mit Profitorientierung ohne Augenmaß oder totalitären Ansprüchen der grüner Weltrettung) zugunsten eines ausgewogenen Miteinanders der verschiedenen sozialen Kräfte einschränken.

Fasst man sie aber an, zeigt sich die neoliberale Brechstange ist aus Gummi. Denn das neoliberale Wirtschafts- und Gesellschaftsbild ist falsch. Es beruht auf einem Komplex an Einzeltheorien (über den Gleichgewichtscharakter einzelner Märkte, z. B. des Arbeitsmarktes) und einer Theorie des optimalen Zusammenwirkens dieser Einzeltheorien (im Sinne eines gesamtwirtschaftlichen Gleichgewichts, einer harmonischen Zusammenführung der in sich harmonischen Einzelmärkte). Im Zusammenspiel laufen diese Theorien auf ein verführerisches Eiapopeia hinaus: Bürgerinnen und Bürger, gebt auf, so die Hoffnung des Neoliberalen, was sich Generationen politisch hart erkämpft haben, überlasst euch einem Prozess, dem ihr weder überschauen, noch überwachen, noch steuern oder abändern könnt, willigt ein in neue Spielregeln, die Handlungsfreiheit für uns und gebundene Hände für euch bedeuten.

Was ich in künftigen Posts genauer aufschlüsseln möchte, ist, warum sowohl die theoretischen Einzelbestandteile des Neoliberalismus als auch sein sich aus ihnen ergebendes Gesamtbild der Wirtschaft (und deshalb angeblich auch der Gesellschaft) empirisch falsch sind: sich im Widerspruch zur Realität befinden.

Einen ersten Anlauf habe ich in diesen Posts gestartet: hier, hier, hier.

Mit zwei Gesichtspunkten möchte ich diesen Post beschließen: Erstens, der Neoliberalismus ermöglicht es dem pragmatischen Pro-Kapitalismus ebenso wie dem linksreaktionären Neoliberalismus, ihre Partikularinteressen am Staat, dem Garanten einer Gemeinwohlorientierung, die alle Bürger respektiert und zum Maßstab der Politik macht, vorbei zu verfolgen. Die einen eher, um ihre wirtschaftlichen Eigeninteressen, wiewohl auf Kosten gesellschaftspolitischer Weitsicht, umzusetzen. Die anderen sehen den gewaltigen Hebeleffekt einer den Nationalstaat ablehnenden Ideologie bei der Umsetzung eines politischen Projekts, dass die bestehende Gesellschaftsordnung zerstören will.

Es entbehrt nicht einer gewissen Ironie, das die sogenannte, in Wahrheit heillos reaktionäre Linke, sich ausgerechnet des Märchens der unsichtbaren Hand bedient, um ihr Zerstörungswerk zu vollziehen.

Der pragmatische Pro-Kapitalismus stiftet Schaden, indem er das Gleichgewicht zwischen Kapital und Arbeit unterminiert, was sich letztlich auch auf seine Vertreter negativ auswirkt oder auswirken wird, und beteiligt sich zunehmend unter der Führung de linksreaktionären Neoliberaslismus an der Zerstörung wichtiger gesellschaftlicher Traditionen und Institutionen. Das Kapital gerät immer mehr in das Fahrwasser und schließlich in den versenkenden Strudel der linken Reaktion, die letztlich auf die Zerstörung  des Kapitalismus abzielt. In Deutschland hat die Automobilindustrie längst angefangen, sich politisch korrekt selbst zu zerstören, weil sie nie in der Lage war, sich gegen den politischen Sexappeal grüner Spinnereien zu stellen.

Ähnlich wie die Autoindustrie, ihres Zeichen zugleich Speichellecker und Opfer der Grünen, ist inzwischen auch die Bevölkerung intellektuell dermaßen entwaffnet, dass sie sich vom Irrationalismus der linken Reaktion erziehen lässt.

Das Volk lässt sich in den Abgrund eines Wahns ziehen.

Natürlich ist der Neoliberalismus der linken Reaktion nur Mittel zum Zweck und nicht Bestandteil einer tiefen Überzeugung. Die regressive Linke ist zutiefst irrational, emotionsgetrieben und seit geraumer Zeit unangreifbar, weil sie durch eine Folklore abgesichert wird, die von allen Bürgern verinnerlicht worden ist. Solange nur die propagandistisch vorgeprägten, kulturell tief verankerten gefühlsmäßigen Reaktionsmuster des Durchschnittsbürgers mithilfe des politisch korrekten Vokabulars ausgelöst werden, genügt es  populäre Phrasen, am besten mit "grünem" Klang, (ohne Realitätssinn, Wahrheitsgehalt oder überprüfbare Bedeutung) beliebig zusammenzusetzen, um in des Volkes Augen riesigen Projekten zu Legitimität und Umsetzung zu verhelfen. Es genügt gegen jede Empirie aus der hohlen Hand zu erklären: "Diesel ist nicht öko, Diesel tötet" und schon ist eine der größten Errungenschaften des Landes zum Tabu geworden und dazu verurteilt, nicht mehr als entwicklungsfähig angesehen zu werden. "Diesel" interessiert nur noch insofern, als ein neues Stichwort gefunden ist, mit dem der politische Konsument darauf abgerichtet wird mit Angst und engagierter Ablehnung zu reagieren.  

Der linksreaktionäre Neoliberalismus ist insofern besonders gefährlich als er einem Hass- und Vernichtungsprojekt dient, dessen Irrationalismus ungerichtet ist; er weiß nicht genau, was er eigentlich will. So wenig wie der Nationalsozialismus wusste, welche Realität, welche erzielbaren Ergebnisse sich hinter seinen Phrasen ("Volk ohne Raum", "deutscher Herrenmensch", "heute Deutschland, morgen die ganze Welt") einst ergeben würden. Er musste vor allem wüten und toben, bis alles in Schutt und Asche lag. Das war seine Bestimmung, das war seine Lebensenergie. Wie der Nationalsozialismus will die regressive Linke vor allem, Hass zum Ausdruck bringen. Wie sich dieser Hass entlädt, welcher Projekte er dazu bedarf und welche ideologischen Attitüden zu diesem Zweck eingenommen werden - das sind äußerst veränderliche, unberechenbare Größen.

Zum Abschluss will ich es noch einmal sagen: En vogue ist nicht nur beim pragmatischen Kapitalismus sondern längst auch bei der linken Reaktion die unsichtbare Hand - ein Mythos, der geeignet ist, den breiten Massen den besten Schutz gegen gefährliche politische Alleingänge unkontrollierter Machteliten und das Instrument, das die Interessen der Schwachen gegenüber denen der Starken behauptet, zu entreißen: den demokratischen Nationalstaat.

Saturday 21 July 2018

Deficits Being a Welcome Means to Full Employment

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“I am less worried about the budget deficits than by the need for the state to create jobs where private industry fails”.

Bruno Kreisky, expressing the view of a true social democrat.

The above quote is from a lengthy but recommendable analysis by Bill Mitchell of how social democracy disappeared in the 1980s to become the maid of neoliberalism: The Abdication of the Left ...

Being a supporter of capitalism for pragmatic rather than romantic reasons, I would prefer an alleviated formulation replacing "where private industry fails" by "where this does not fall into the purview of private industry". 

Private enterprise creates a lot of employment enabling enormous productivity and wealth. But private enterprise is not the sovereign producer of the demand that is required to make it thrive. Macroeconomic demand is subject to factors that are not under the control of private enterprise and can be addressed more effectively by government and economic policy.

This is what neoliberals do not understand, for which reason they inadvertently support economic policies that cannot sustain full employment of all available resources, human and others. Arguably, there may be a trend among neoliberal partisans, especially among industry leaders, to (consciously) prefer the discipline of unemployment (creating an industrial reserve army and docile workers) to a business environment at its zenith which puts labour in a powerful position.

Making the Best of Trump

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I have offered the below comment here:
I am not an expert on Trump nor on his economics in particular. I am disgusted, though, by the way he is treated by German politicians, the media and a German public totally void of critical thinking and absolutely in thrall with the canon of political correctness dictated by politics and the media.

It is eery to experience the degree of Gleichschaltung (the bringing into line of all minds in the country) concerning Trump in Germany. Trump-bashing is a social convention in this country, like saying "good morning". It is frightful to live in a country that is incapable of seeing anything good in the top man of our most important ally, or apply a differentiating mode of perception instead of resorting at the mention of his name to foaming hatred.

The perception of Trump in Germany, like the perception of environmental (and many other) issues, being void of rationality is of a purely religious vein. The last sentence concludes a long preamble to the hypothesis that I had originally in mind when deciding to write this comment:

Trump seems to have remobilised the lower strata, who have long since been betrayed by the neoliberalised left. At the same time, Trump is putting a pronounced emphasis on the national interest, thereby restrengthening the importance of the nation state in the public mind, which is being deceived by the left's irresponsible flirt with a stateless world (the EU is a clear example that supranational constructions work as effectively as the national state only when the supranational becomes a fully fledged national state, which the EU is incapable of becoming, and hence chronically dysfunctional).

The social democratic paradigm is indispensably centred on the strong and sovereign nation state as the only means to guarantee full employment, a benign balance between capital and labour and the protection of society's vulnerable strata. Whatever one thinks of Trumps policies in particular, he could well be triggering impulses that add momentum to a resuscitated social democracy, much like he has given vital impulses to the role of government in protecting scientific freedom and establishing checks on a politicised, government-dominated "science".

Lastly, Trump has got balls, if you pardon my French. He is the only politician in the leading nations of the West who is not afraid to have an own opinion and defend it against the Zeitgeist, thus breaking the shackles of political correctness (that creeping form of ideological totalitarianism so loved by the post-social-democratic left).

Trumps courage and independence of mind has unleashed an intellectual civil war in the US, which I thoroughly welcome because it is reducing political apathy, reinvigorating pluralism and democracy. Political competition is the essence of freedom.

In Germany we have not seen genuine political competition between the major political forces and parties under the sorry reign of Merkel. I hope the impulses sent by Trump will reach our sleeping political order and the broad population and convince them that uncritical reliance on the political class is a bad idea, although it had seemed otherwise, when by a kind of political Minsky effect (stability creating instability) decades of responsible social democratic politics in post-war Germany had gradually enticed the people to turn into mere political consumers rather than critical participants in the political dialogue.

Always worth listening to:



See also Awakening from the Stony Sleep.

Thursday 12 July 2018

Substituting Social Democracy with a Neoliberal EU

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Continued from here.

I have replied to Nick Johnson here, writing:

I agree with your views expressed in the first two paragraphs of your reply, but I contest the proposition that there is free trade within Europe or between Europe and other parts of the world.

Also, I have no reason to look at EU-induced regulations as a net benefit, and to the extent that these regulations and European trade policy are of a benign and beneficial character, they can be achieved by other arrangements that do not presuppose a political nightmare that drains the continent of democracy and substitutes the age of social democracy (which sought to balance the power of capital and labour) with a neoliberal order that forces Europe into a procyclical and growth-inhibiting posture that causes great misery among Europeans, especially among the more vulnerable strata that the Left used to be concerned about before it shed its social democratic stance and turned neoliberal and regressive in many other ways.

Thursday 5 July 2018

Tesla — We Shall See


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Another case of Ökoverblödung, the dumbing down of intelligent people by unconditional faith in delusions triggered by green buzz words?

Tesla is a house of cards built to clean out "the greater green fool". It has never been oriented toward its shareholders, and even if it were financially more sound than I think the company is, it would not stand a chance in the face of similar but much better and more up-to-date products coming from experienced car makers, like Porsche.

We’ve already seen the mass exodus of senior Tesla executives. When they say they “want to spend time with their family,” it really means they “want to spend less time in prison.” Next, we have the first whistle-blowers—there will be MANY more. Currently there are at least 3 different ones feeding information to journalists. Using past frauds as a guide, once we get to this point of the media cycle, the fraud usually unravels pretty fast.  Given the perilous state of Tesla’s finances, they are in urgent need of new capital. The question is; who would want to invest new capital when Tesla is now admitting to knowingly selling cars without testing the brakes in order to hit some arbitrary one week production target? When a company admits that it will sacrifice vehicle quality and even risk killing its customers to win a twitter feud and start a short squeeze, regulators must step in. The question is; what else has Tesla done illegally to hit its targets? We know that Tesla long ago passed over the ethical threshold of selling faulty products that have killed people—what other allegations will soon come to light? Elon Musk demanded that Tesla stop testing brakes on June 26. Doug Field, chief engineer, resigned on June 27. Is this a coincidence? Of course not—Doug Field doesn’t want to be responsible for killing people. I think Tuesday’s article will speed up the pace of Tesla’s bankruptcy quite dramatically and I purchased some shorter dated puts after reading it.

Tesla is the fluke stock-promote that found a way to address society’s fascination with ‘green technology’ and the ‘next Steve Jobs.’ Elon Musk eagerly stepped into the role of mad scientist and investors gave him a free pass. It now increasingly seems that everything he’s done for the past few years was simply designed to keep the share price up, keep the dream alive and raise more capital - as opposed to creating shareholder value. Along the way, customer safety has been ignored in order to hit production targets and appease the stock market. In addition to not testing brakes, a recent whistle-blower has accused Tesla of installing over 700 dangerously defective batteries into Model 3 vehicles.

I suspect there will be many more allegations as whistle-blowers come out of the woodwork. It really is the Theranos of auto makers. I suspect it will all end soon. Theranos and Enron both collapsed within 90 days of the journalists getting up to speed. The reporters now know the right questions to ask and Tesla will be out of cash by the time they are all answered.

The source.

Wednesday 4 July 2018

Automated Home Construction

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I feel that home construction and road works are woefully unproductive, being among the laggards of our hugely efficient economies.




Ping Pong

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Enjoy.









Is There Such a Thing as Free Trade?

 
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This article in mind, I have responded with the below comment:


Thank you for this excellent synopsis. I am a newcomer to trade theory. My judgement is insecure. Bear this in mind when I blurt out these hypotheses: the notion of free trade is predicated on the assumption that the neoclassic/neoliberal model of the economy is useful — which perversely is what the so-called left has come to believe with ardour. For my part, I think the neoclassic model is not good enough to tell us much that is true of the economy from a macroeconomic perspective. 

So, theoretically, there may not be anything like free trade. Notably, the assumptions underlying Ricardo’s defence of free trade based on comparative advantage are simply not fulfilled in the real world. So, we seem to have a false theory about something that does not exist. For more see here:


Practically, there may also be no such thing as free trade. In reality, cross-border transactions are fraught with special arrangements, tariffs, quotas, discriminating specifications, you name it.

Many speak about free trade, including the economically ignorant public and the so-called left, but only few look at the concrete trade policies of countries. I have come across research that suggests the EU applies a grater number of tariffs and higher tariffs than the US. I am sure both countries place a good deal of bureaucratic barbed wire along their trading borders. Just recently I have professionally come across the fact that China has considerably higher tariffs in certain industrial sectors that I had been concerned with than Europe and the US.

If what I am saying is not complete nonsense, then the thrust of your post would appear even more significant. Trade is too important not to manage it properly. Whether looking at the issue from the point of view of a developed country or a LDC, we should discard ideological stereotypes of the pro- and contra-free trade kind and face the fact that trade is typically managed trade, not free trade, and try to understand what reasons — and what good reasons — countries have to manage their trade and how well they manage it in reality.

To that purpose it seems advisable to get as concrete in one’s research as possible. One ought to look at the exact tariffs and other trade policies of the EU, for instance. I guess, if we were to start with the EU’s agricultural trade policies, we should very quickly get a sense of the gap between the rhetoric of free trade and the reality of massive protectionism and intervention.

To sum up: both for theoretical as well as practical reasons “free trade” may be little more than an ideological chimera.

Once one gets practically involved in trade, it turns out that foreign trade like domestic trade and the simplest market interactions (like buying tomatoes at a farmer’s market) are permeated with regulations, hurdles, dos and don’ts, subsidies and other forms of preferential treatment etc.

Let us not look for free trade, let us look for the way in which people manage trade and discern how to do just that in an efficient and hopefully mutually agreeable way.

Just a Test

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Just testing my mobile hot spot. Seems to work well.

Tuesday 3 July 2018

Fair Trade?

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An interesting take from a man who as an executive of the automobile industry has been facing for decades unfair trade practices from countries that pretend to favour free trade. We have seen in previous posts (here and here and here) that in reality there is no such thing as free trade. Trade tends to be managed, with its terms hopefully negotiated in a mutually acceptable way.  It is, therefore, absolutely legitimate to try to make managed trade reflect considerations of substantial national interest. 

It seems more advisable to recognise that each country has specific interests it wants to see woven into the conditions under which trade takes place, rather than playing the untruthful game of "free trade".





Libertarians Against Liberty

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This article on historian Nancy MacLean's new book struck me as highly interesting as it addresses one of my major themes—liberty—, giving it a paradoxical spin. 

MacLean argues that policies advocated by libertarians actually destroy liberty.

Her argument goes like this: While looking at Public Choice (Buchanan, Tullock et al,) in particular, she contends more generally with regard to neoliberalism that its agenda of libertarian policy recommendations supports the interests of a minority of benefactors, enhances their share of benefits and extends their dominance in society at the expense of the larger population. 

Quite in tune with her claim that the libertarian-leaning attitude seeks ideological dominance over society, she observes efforts to extend 

the principles of the market rationality to areas outside conventional limits of the economy.

Notably Law. Public Choice then is a further initiative to couch all aspects of the public discourse in terms suggesting that the market mechanism is the motor that drives the Good Society.

Accordingly, the overall aim is to redefine all aspects of the social universe in a manner that is consistent with the idea that society's optimal shape is arrived at by giving free reign to market forces.

This is indeed the core message of libertarianism. If people can be convinced of its veracity, it will be the easier to implement the hidden agenda of those instrumentalising the libertarian paradigm for their egotistical and anti-social purposes.

MacLean views the radical right as a group of “true believers” in freedom, an idea they associate with market freedom, aiming to remove public services and replace them with privatized schools and prisons that respond [to] the market, not voters within a democracy. In doing so, MacLean argues that the radical right will eventually reduce freedom for the majority while privileging the propertied minority. The more power the propertied minority has, the less democratic society becomes. The ultimate target of the radical right, which has gained control of the modern Republican Party, is to change American society to privilege capitalism over democracy even more than it does now.

(My emphasis).

Interestingly, my flirt with libertarianism quickly collapsed when I was preparing a presentation on Public Choice. On studying the subject more deeply, I began to sense that the paradigm of a Good Society shaped by markets (a) descriptively left out and (b) prescriptively disallowed too many processes that effectively shape or should be allowed or encouraged to shape society.  

As for (a), I recognised that political action is involved in any transaction, process or institution associated with market activities; concerning (b), I realised that political competition and hence pluralism and democracy are the indispensable core of liberty. To restrict or weaken them is inimical to liberty.

So, in my way, I came to the author's conclusion that libertarian-leaning efforts


... to produce a society that was governed by the market, not by democracy ...

were destructive of liberty, and that the libertarian-leaning were undermining liberty by



... protecting capitalism from democracy ...

(All quotes are taken from the above article.)

Monday 2 July 2018

A Question of Linguistic Correctness


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I was not sure whether it is correct English to have an inanimate object or an abstraction "see" something, as in: 

The year 1952 saw the company decline.

I found it difficult to articulate my question and it took quite some time for me to chance on an example that seems to support my intuition: 

According to data from a United Nations report released this July, this year saw a historic decline in global poverty.

(Source.) 

In this case, my intuition was accurate. The problem remains however that a good intuition may miss a nuance that makes the difference, turning the word or phrase into an oddity and falsehood.

The phrase that made me research the issue was something like: "... his career ... saw him advance from engineer to executive ..."

The result of my search tends to support the thesis that for me it is important to be able to articulate clearly what my question is.