A third comment on Ricci’s strange argument on MELT …

“My God, Mike! This exchange is unequal!”

The subject of Andrea Ricci’s monograph, “Value and Unequal Exchange in International Trade”, is the apparent pattern of unequal exchange, alleged to be documented in the Penn World Table, between the countries of the center of the world market and the periphery.

Andrea Ricci explains the findings this way:

The picture that emerges from the empirical analysis is that of a world divided into two rigidly separated parts, with, on the one hand, the richer countries of the Centre, which continuously benefited from an unequal exchange over the entire period, and on the other hand, the poorer countries of the world’s Periphery, which constantly suffered an outflow of domestically produced value through trade. These latter countries, in turn, are divided into two groups of countries, those of the emerging Periphery, affected by a rapid process of industrialization that has brought their per capita income closer to the world average, and those of the poor Periphery, where more than half of the world’s population lives, with very low per capita income levels. Both the aggregated and detailed analysis by regions shows that in the period of globalization, although with alternating phases of expansion and contraction and with a geographical restructuring of flows, the dimension of unequal exchange has continued to grow, especially within [global value chains]. (pg.14)

I refer to an “apparent pattern of unequal exchange, alleged to be documented in the Penn World Table”, because it is not at all clear that what we are seeing is a pattern of unequal exchange between “two rigidly separated parts of the world market”, as Ricci alleges.

For instance, it is entirely possible that we are witnessing a transition to a single world market, beginning with the inevitable collapse of the national capitals of most poorer countries.

Ricci is like a young Marxist student, who, having read Capital for the first time, is so excited to discover that Marx has explained the secret of the worker’s exploitation that he fails to realize this is probably the least important of Marx’s revelations for us in 2020.

Likewise, having discovered that the reality of unequal exchange lies buried behind the age-old gospel of free trade between national economies in the Penn World Table, Ricci has been as horrified by this fact as “Patty”, (the character played by Susan Cumming) in the Twilight Zone episode, “To Serve Man”, when she finds that the book of that title is not a primer on how to be mankind’s vassal but a collection of delightful recipes to tease the palates of our alien foodie overlords.

More on this later.

Continue reading “A third comment on Ricci’s strange argument on MELT …”

A second comment on Ricci’s strange argument on MELT …

Consider this statement by Andrea Ricci in his monograph, “Value and Unequal Exchange in International Trade”:

Marxist debate has focused on the commodity nature of money, and in particular on whether Marx’s assumption of gold as money-commodity is essential to the labour theory of value. If so, the definitive demonetization of gold in the 1970s would make Marx’s original formulation obsolete.

Why would the alleged demonetization of gold in the 1970s make Marx’s original formulation obsolete if Marx’s assumption that a particular commodity (in this case gold) was the money-commodity is essential to his labor theory of value?

There are two questions buried here.

Continue reading “A second comment on Ricci’s strange argument on MELT …”

Who said the Constitution isn’t a suicide pact?

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In United States history, various statesmen, jurists, politicians and even charlatans have invoked the idea that the U.S. Constitution is not a suicide pact.

Which is to say, in the face of clear and overriding public interest, the state cannot let mere laws prevent it from taking steps that are necessary to ensure the survival of the state and the people.

The Supreme Court has, in its wisdom, chosen to ignore that advice today.

Apparently, in the face of pandemic that has taken almost one million lives, the Court held today that the Constitution is indeed a suicide pact. The state, who we all will soon learn can force a woman to carry a pregnancy to term against her will, cannot force her to get a vaccine.

Aren’t you glad you took Kliman’s advice and voted for Biden…

Covid-19 policy, 2020: One hundred fifty thousand people are dead and Trump wants schools open so parents can get back to work creating surplus value:

trump_skoolz

Covid-19 policy, 2022: Almost one million dead and two variants later, Biden wants the schools open so parents can get back to work creating surplus value:

biden_skoolz

Hell, I know I feel safer knowing a saner member of the ruling class is managing the pandemic now.

A comment on Ricci’s strange argument on MELT …

I am not sure I fully understand the argument in Andrea Ricci’s, “Value and Unequal Exchange in International Trade” in its entirety, so bear with me as I wade through it.

But, let me offer this first impression on his book as a whole.

While several people asked me about my opinion on chapter 4 of the book, which concerns his particular take on Marx’s theory of money, I found this difficult to do without actually delving into his complete discussion from the beginning.

In my opinion, this is not a problem with Ricci’s book, but arises from the fact that he may be breaking new ground in his effort. The essay as a whole  proposes to demonstrate the necessity of unequal exchange as a fact in the world economy at a level of detail not understood previously.

This, I find very interesting, but I do have a problem with Ricci’s approach.

Ricci believes his study contradicts the prevailing dogma within the field of political-economy that,

“trade liberalization would be the optimal policy for every country at all times regardless of the level of economic development because international trade enriches, and never impoverishes, the country under all possible circumstances by maximizing the static and dynamic allocative efficiency.” (Ricci, pg. 20)

Note the terms above:

Every country?

Regardless of the level of development?

At all times?

Never impoverishes?

Under all possible circumstances?

Straw man arguments composed of absolute statements like this are clearly posed for purposes of being easily disproved. (The bar for Marx’s labor theory of value should be set so low by these academics.)

In this sense, Ricci appears to have written a disappointing monograph, however pathbreaking.

So, let’s assume, instead, the very opposite of this dogma: namely, that trade liberalization is never the optimal policy for any country, no matter its level of economic development, because it mostly tends to impoverish and immiserate its citizens.

Yet, communists have long advocated for free trade — or what is today called trade liberalization.

And why?

Perhaps, because, as Margaret Thatcher put it so indelicately, there is no alternative.

Hence, we arrive at this statement by Marx:

But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade.

According to Marx, then, if you want a social revolution, you want trade liberalization, no matter the consequences.

No matter the consequences.

Because there is no alternative.

There is nothing to be gained by protectionism in any form for the proletarians; there is nothing for them to lose by trade liberalization … but their chains.

NEXT: A second comment

Stick a fork in it, Joe…

 

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Imagine this: It’s one year into your administration where, allegedly, you won by the largest majority in American history and what are you doing?

You and the entire Washington establishment are doing what no previous administration has ever attempted in American history: devoting an entire day trying to discredit the guy you, allegedly, handily beat almost a year and a half ago and sent packing to Florida for an early retirement.

I’m sorry, but that just makes no sense to me in any world where Joe Biden is not already toast.

Researchers say governments could have contained Covid-19 with a two day work week


Simulations of epidemic spread show decline of infection with a schedule of 5 day lockdown and 2 work days every week. blue regions indicate periods of lockdown. parameters for the sir model are r_f=2.4 and r_l=0.3, infection lifetime 1/gamma=7 days.

In 2020, at the outbreak of the pandemic, four researchers, Omer Karin, Yael Korem, Boaz Dudovich and Uri Alon, came forward with a bold suggestion:

A weekly cycle of 2 work days and 5 lockdown days can provide a good tradeoff between minimising health impact and maximising economic activity. It can keep the infection load low while allowing a sustainable, albeit reduced, economy. It can eradicate the virus without reaching herd immunity, thus preventing a large number of deaths.

The researchers’ suggestion was ignored and we know how that turned out. In the United States alone, almost one million people are now dead.

In addition to solving the problem of climate change, reducing hours of labor seems to solve this never-ending pandemic as well.

Rate versus Mass…

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Bloomberg is pretty giddy over the fantastic share of GDP falling to the coffers of the US national capital:

“U.S. corporations pulled in more profits in the three months ended in September than ever before. Not just in dollar terms—something that happens frequently—but as a share of the economy. According to initial estimates from the U.S. Bureau of Economic Analysis, third-quarter after-tax corporate profits from current production amounted to 11% of gross domestic product. The previous record of 10.7% was set in the second quarter of this year; before that the all-time high was 10.6%, in the first quarter of 2012.”

Awesome, right?

I mean, just look at this chart porn:

RoP_BEA_(rate)

By historical standards the rate of profit is … well, almost off the chart.

RoP_BEA_(current)

And the mass of profits — literally obscene:

*****

You would think that with all of this surplus value streaming to the bottom line, it might be time for the fascists to ease up a bit on all the fiscal and monetary stimulus they have been pouring on the so-called economy.

Continue reading “Rate versus Mass…”