Sunday, November 29, 2015

Quo Vadis, Labour/Labor?

Due to the backlash (intra-party and in the media) Jeremy Corbyn is confronting, thoughtful people in Britain are wondering about the future of the British Labour Party. Given that the Australian Labor Party shares many similarities with its British counterpart (and it's facing its own problems) perhaps Aussies should pay more attention to those wonderings, which may have something to say to lefties in general.

A quick and dirty summary of the proceedings, as I know of them:
  1. Colin Talbot ("Whither Labour?", Nov. 19) makes a compelling case for an upcoming Labour "civil war" between a centrist "social democratic" Labour Party faction, and a more leftist "reformist socialist" faction (which would include Corbyn); he doesn't, however, provide evidence in support of his claims.
  2. Simon Wren-Lewis ("Is this really social democracy versus socialism?", Nov. 22) finds Talbot's views "depressing" and tries to build a rosier scenario. Was he successful? You be the judge.
  3. Chris Dillow ("Two realities of Labour politics", Nov. 24) is "inclined to agree with Simon", and offers his own scenario. Is it plausible? That is not clear, to me. You tell me.
Me, I can't tell you what's going to happen: my crystal ball is in the repair shop.


I can tell you something, though. The way Talbot identifies misconceptions plaguing the "reformist socialists" faction of the UK Labour Party applies to much of the Left worldwide:
"New Labour and 'Blairism' was not, as many on Labour's socialist left now want to claim, an historical aberration in which the traditionally socialist Labour party was captured by neo-liberal infected right-wing social democrats. New Labour was merely a tilting back towards traditional social democracy, slightly revised, after the surge in reformist socialist support within Labour of the 80s (which did it so much electoral damage)."
I'd add two things to that. Firstly, that neo-liberalism isn't an "historical aberration" of capitalism, either. Shitty-capitalism (as I sometimes call "neo-liberalism") and New-Deal-capitalism are species within the same "capitalism" genus: what's different is the adjective, not the noun. Chances are the "historical aberration" was New-Deal-capitalism.

And, secondly, neo-liberal social-democrats are only "slightly revised" versions of New-Deal social-democrats. They aren't historical aberrations, either.

Like me mates say: "Both are shit, only from different piles".

30/11/2015. The dilemma of what Talbot calls social democrats, represented locally by the Labor Party, is that their sales pitch is that they are neither right, nor left. That worked fairly well for Bill Shorten, while the alternative was Tony Abbott. But since Malcolm Turnbull's coup, that's no longer the case. The result?

Thursday, November 26, 2015

The Paradoxical Kalecki (and part iii)

(From part ii)

The tables below may help in this discussion.

In principle, capitalists hold the frying pan by the handle: they decide (i) the payroll cut magnitude (D) and (ii), from what they get, capitalists decide how much to consume and invest (without loss of generality, in the examples following they consume as much as they invest).

Tuesday, November 24, 2015

The Paradoxical Kalecki (part ii)

(From part i)

For convenience, let's repeat the argument presented last, adding some emphasis:
"Answering the question 'Where do profits come from?' requires a macroeconomic perspective. Profits are produced by specific macroeconomic flows of funds. Unfortunately, the macro perspective necessary to investigate these flows can be elusive because of a logical trap: the tendency to assume wrongly that circumstances that apply to the familiar case of the single firm also apply to the entire business sector.
"To illustrate the problem of applying a microeconomic perspective to a macro situation, consider the following. As every entrepreneur knows, employee costs are a major influence on a firm's profits. Cutting payroll expenses means a more robust bottom line. Accordingly, it is commonly believed that when firms throughout the economy hold down wages, they improve aggregate profits. However, for the whole business sector, cutting employee compensation reduces revenue as well as expenses. Less worker pay means less personal income and, therefore, less personal spending on the goods and services sold by businesses. Therefore, cutting payrolls will not directly increase corporate profits".