Friday, December 10, 2010

China’s Consumerism and the Implications for Market Socialism » pa

China’s Consumerism and the Implications for Market Socialism » pa

David Leonhardt’s reporting on his trip to China and his numerous insightful interviews give important insights into development questions of great interest to progressives and socialists everywhere. While its not as long as a book – though I expect Leonhardt will turn it into one – I felt compelled to re-organize the material from the parts that reflect upon some important theoretical and practical questions of market socialism and Marxism. Consider this a review of his "new book," which opens:

When the Wuqi International Hotel was completed this spring, it immediately dominated the modest skyline of Wuqi, a small city in north central China. The hotel is part of an effort by local officials to reshape a city far from the fast-growing export oriented towns and cities on the coast.

But changes here are the kinds that a new breed of Reformers including many industrial workers, service providers and small business/enterprise producers have been recommending for China as a whole. In Leonhardt’s report, the government of Wuqi offers more generous health insurance to its citizens than many places. Its schools are free all the way through high school, rather than through only ninth grade, as is usual in China. Over the last decade, the city has embarked on ambitious tree-planting programs that have brought green to the yellow-brown hills of the Loess Plateau, where Wuqi is located, and where the famed Long March ended in those hills in 1935.

Read more: China’s Consumerism and the Implications for Market Socialism » pa

Marxists and Marmots

Thomas Riggins

How often do we hear that socialism sounds like a good idea but it doesn't work in practice because of human nature. This is an old refrain. People are by nature selfish and so competition is the natural outcome with the most talented and aggressive people reaching the top and the mediocre masses down on the bottom. But suppose it is really the opposite. Suppose those who engage in friendly cooperation really are closer to what nature intends. In a cooperative society maybe even the victims of aggressive actions still have a better chance to thrive than they would in a completely competitive environment. Maybe the Ayn Rand world is not the world for us and socialism is more natural after all.

A recent article in Science Daily (12-8-2010) may provide a clue to the answer to these speculations ("Social Relationships in Animals Have a Genetic Basis, New Research Reveals"). Scientists at UCLA have been studying marmots living in the Rocky Mountains of Colorado. Marmots are rodents who are a genus (Marmota) of the squirrel family (Sciuridae). Some marmots have a propensity, so we are told, to chuck wood and are known as woodchucks. Others can predict the weather (groundhogs) according to some.

The marmots I am linking to possible socialist ideas are the yellow-bellied marmots (M. flaviventris) studied by the scientists. The name refers to fur and not to their lack of valor.
The scientists found "that having many friendly interactions gave marmots fitness benefits--these marmots reproduced more," said Amanda Lea, one of the researchers and lead author of the paper. "Over a lifetime [about 15 yrs], a marmot that is very social will have more offspring than a less social one." Hmmmm. I wonder how much this applies to humans. This is one way of putting the "social" into socialism.

But the scientists also found out that some marmots are the victims of aggression from their fellow marmots. Those who do not respond in kind, that is those inclined to turn the other cheek pouch, also have a better survival rate. So it seems that "a marmot that is getting picked on frequently" also will have more offspring. It is the family unit as such that is really important. Tolerating aggression as well as strengthening friendly cooperation keeps marmot society functioning. "Those relationships are important for social stability and reproductive success. I believe these ideas are generalizable well beyond marmots," said the study's co-author Daniel T. Blumstein.

What is important is that these behaviors have a genetic basis and are passed on through the generations. If such behavior is common to mammals as such then humans also have these inborn tendencies for cooperation and tolerance. These genetic traits are, I think, much more in accord with the ideals of socialism than the ruthless free market world of Ayn Rand and other capitalist apologists.

Sunday, December 5, 2010

Arizona's Two Death Penalties

Thomas Riggins

First, I am not picking on Arizona, just using it as one example; it is standing in for any state that uses similar methods to try and balance its budget. Arizona currently has 126 felons on its death row awaiting execution. The national average cost for each prisoner from sentencing to execution is $2 million-- about 10 times the cost for life imprisonment.

But the 126 people on death row are not the only people the state of Arizona has sentenced to death. Arizona has cut its medicaid budget due to the on going collapse of the world capitalist system. To reduce its budget deficit low income people in Arizona will no longer receive organ transplants that had been paid for by the state.

The New York Times (12-3-10) refers to this as "Death by budget cut." The deaths of poor people due to the cut in medicaid is every bit as premeditated as those of prisoners given lethal injections by the state. The NYT reports that Francisco Felix, 32, will not get the liver transplant that would have saved his life. He is in the process of dying. The cost of the transplant was $200,000. It was his turn on the list but he was refused after the state ended this part of medicaid for the poor. If the governor commuted just one of the 126 people condemned to death he could have sentenced Francisco Felix to Life with his family and had $1,600,000 left over to save 9 more people as well; that what's left after the cost of transplant plus the $200,000 that the prisoner's life sentence will cost the state.

There are many other cases like that of Francisco Felix. These new rules took effect in October and no one has died yet. But the poor sick and needy are sitting on their own death row just as real as the 126 people legally under the sentence of death. They two have been legally given a death sentence. Sentenced to death not for murder but for being poor. A capital offense in Arizona.

If Arizona really wanted to save money the state would commute all 126 death sentences to life imprisonment. With the savings they could help save the lives of all their sick and poor citizens and residents who are in need of life saving medical procedures such as organ transplants. It is the only thing a civilized state can do.

Thursday, December 2, 2010

Obama on the Fence?

Thomas Riggins

Matt Bai has an article in the Wednesday New York Times "Debt-Busting Issue May Force Obama Off Fence." Bai says that Obama's fiscal commission has given him the choice of ruling for the next two years either from the center left [allied with "traditional liberals" who want the rich to pay their fair share of the taxes and cuts in the military budget] or from the center right [both Democratic and Republican centrists who want to reform "entitlement" programs and taxes].

Bai indicates he has to choose between a "liberal renaissance" or continue his attempts to work with the Republicans in a "postpartisan" alliance. The choice he makes will shape the political landscape for years to come-- for better or worse.

Although many think that Obama is the opium of the Left we can still work with him for progressive causes on whichever side of the fence he falls. Who would have wanted a McCain-Palin administration-- we wouldn't even have a fence, just a ditch.

Bai doesn't know which side Obama will choose. His recent two year pay freeze for federal workers (who did not cause the economic collapse) while bankers and CEOs (who did) are raking the money in is not a good sign of things to come.

Bai gives us some hints which side Obama will choose. I will give three major ones he points out. 1. Obama's books and writings indicate he is a "whatever works" pragmatist with no particular ideological commitment-- a political chameleon perhaps. 2. Bai reports that in private Obama has sometimes called himself "essentially a Blue Dog Democrat." He didn't mention this during the primaries! 3. Although he voted against confirming John Roberts as Chief Justice he "castigated" Democratic activists who criticized those Democratic senators who did saying they threatened "thoughtfulness and openness to new ideas." Well, the "thoughtfulness and new ideas" of John Roberts are not leading us down the road to a more democratic country.

In any event Bai says Obama is "loath to publicly disown his base on any specific issue." I'm not sure I like the adverbial phrase. The proof will be in the pudding. Obama must decide, according to Bai, either for the left or the right once the Bowles-Simpson committee gives him its report. Social Security is the acid test. Bai says that if he accepts the commission's recommendations on Social Security the outrage from his base will be so great he could face a primary challenge in 2012.

The Republicans would love that: something like a Feingold-Obama fight (suggested in The Nation by Cockburn) to cover themselves while they self destruct over a Palin-Romney brouhaha. Obama has come to the Rubicon-- how will the die be cast?

Wednesday, December 1, 2010

RED PLENTY- Book Review

[This looks like an interesting book-- can anyone point out the economic flaws in the story?--tr]
RED PLENTY by Francis Spufford (2010) reviewed by Phil Ebersole [Phil Ebersole's Blog]
This quirky, fascinating book is a docu-drama about the efforts of idealistic reformers in the Soviet Union in the 1960s to overcome the inherent flaws of central planning and make the promises of Communism come true. I can remember than era, and can see why it would not have seemed impossible. The Soviet Union launched the Sputnik in 1957, its economy was reported to be growing faster than ours, and many Americans had much the same feeling as they had toward Japan in the 1980s or China and India today.

This story is told as a series of vignettes about characters both historical and fictional involved in the workings or the attempted reform of the Soviet economy, told in a style that is sardonic, poignant and highly readable. The second chapter is told from the viewpoint of an exuberant Nikita Khrushchev, visiting the United States in 1959 and challenging the capitalist world to peaceful economic competition. The last chapter returns to Khrushchev in forced retirement in 1968, sitting in his garden and brooding on what went wrong. Spufford conveys a sense of Soviet life during that period that is so convincing I would have thought he experienced it; in fact, he is a Briton who doesn't speak Russian.

Along the way he does an excellent job of explaining Soviet and Western economics in both theory and practice. The flaw of Soviet economics is that no system of central planning has been found that can substitute for supply and demand as a means of coordinating an economy. In a market economy, the price of a product reflects everything that is known about its value and scarcity, without the need for omniscient masterminds at the top.
The book's hero, to the extent that there is one, is Leonid Vitalevich Kantorovich, the only Soviet winner of the Nobel Memorial Price for Economics. Kantorovich hoped that sufficiently sophisticated mathematics and computer processing would allow the Soviet planners to optimize their system, and accomplish what a market system would do without creating a wealthy capitalist class. His theories inspired Khrushchev to create the city of Academgorodok, where the best minds of the Soviet Union were allowed to work in relative freedom to create a better future. Some of the scenes are set in Academgorodok; others depict the nitty-gritty of making the Soviet system work in practice.

Kantorovich's reforms were introduced in a partial and self-defeating way. In one chapter, the managers of a textile mill realize that with, with their obsolete machinery, they won't achieve their production quota, and their careers will thereby be ruined. Risking being shot as saboteurs, they fake an accident that destroys their machine, expecting they will get a newer, more advanced model as a replacement that will enable them to meet their target. Instead, they get a copy of the old obsolete machine. The new machine is both better and cheaper to make, but the machine tool manufacturers keep on with the old machines. Under the new plan, the manufacturer is expected to make a profit, and the profit is higher on the old machines. Why? The price was based on the machine's weight.

Spufford's account makes the resistance and sabotage of the reforms seem inevitable. Managers were asked to give up control to an impersonal system, but they still had responsibility for results. The temptation to do what W. Edwards Deming called "tinkering" was irresistible. In fact, the whole story reminds me, in many ways, of American industry's partial adoption and then abandonment of Deming's total quality management system.

Spufford identifies the moment when capitalist defeated Communism. It was when Soviet economic planners decided to forego development of a new generation of computers, and instead reverse-engineer the IBM 360. (The Soviet military had their own advanced computers, but these were never shared with the civilian economy.) By so doing, the economic planners in effect admitted that the Soviet Union would always be a second-rate industrial power and the dream of a socialist paradise was an illusion.

The Soviet Union later made an economic comeback not as an industrial power, but as an oil and gas exporter. Some of the discoveries in western Siberia were guided by Academgorodok geologists. The reforms later attempted by Mikhail Gorbachev were not a revival of Kantorovich's ideas. Kantorvich sought to optimize the Soviet economy while leaving the structure of Soviet power intact; Gorbachev sought to democratize Soviet government while leaving central economic planning intact.

The book's end notes explain what in the book is fiction, what is the result of research and the sources for the research. It is almost as interesting as the main body of the book. There is no U.S. edition of Red Plenty; I ordered my copy from a distributor of British books.