Editor’s Picks

Sraffa’s Contributions to Economics: A Crash Course

Over at Naked Keynesianism, Matias Vernengo has compiled a list of resources to help you wrap your head around Sraffa – particularly his out of print book Production of Commodities by Means of Commodities. Vernengo’s resources take you through how Sraffa formalized his own labor theory of value, his critique of the Marshallian system, as well as his role in the Capital Controversy.

Problems that Prompted Willacy County Prison Riots Were Well-Known

In protest of terrible medical care and sanitation, thousands of prisoners began a strike on Saturday, refusing to show up for breakfast or work. As the strike wore on, the prisoners – mostly undocumented immigrants being held on low-level offenses – converged on the recreation yard and set fire to three tents, rendering the for-profit detention facility more uninhabitable than it had been. This follows at least two other protest incidents at the facility in recent years, and for now it appears to be the last.

Knowledge Isn’t Power

Paul Krugman presents yet another take-down of the skills gap argument in his all-too recent about-face on human capital theory. In particular, Krugman highlights the interplay between technological advancement and productivity as well as the apparent lack a relationship between education and wages.

Conversation on Al Jazeera about the massive wave of evictions in Spain

PAH and Marea Granate on Al Jazeera: Spanish tenants take on Wall Street landlords. 02/10/15 from MareaGranate NYC on Vimeo

Last Wednesday I had the opportunity to participate in a conversation on Al Jazeera to talk about the current massive wave of evictions in Spain, with Michele Ducher, a Spanish citizen under the threat of eviction, Santi Mas de Xaxàs, activist of the Plataforma de Afectados de la Hipoteca (PAH, Anti-Eviction Platform) and Sebastien Gay, real estate economist (University of Chicago). Since the outburst of the bubble in 2007, 500,000 evictions have taken place in Spain. Everyday families with children are kicked out of their homes and thrown to the streets by police in riot gear and left with no job, no shelter and a huge debt to be re-paid – since Spanish mortgage law allows banks to demand full re-payment of the debt (contracted at the height of the bubble) while seizing the home at a 40-50% discount. Psychologists have been diagnosing post-traumatic stress disorder to many evictees.

This is the full effect of austerity on Spanish society: foreign debt in 2011 was 284% of the GDP, of which only 67% was public. During the mis-management of the Euro-zone crisis, the debt burden was transferred to public hands through extensive bailouts of the financial system. Thus in Spain one has many banks that have been nationalized with taxpayers’ money evicting these very taxpayers from homes that, in fact, they now own. In economic jargon one would call this  a “smooth and efficient cleaning of the balance sheets”, conveniently forgetting that housing is a human right according to the UN.

Why southern European political elites are inflicting such degree of economic pain in their populations may seem perplexing (for blatantly undemocratic) to the outsider – and even to many locals. However, one must understand that the current corrupt and clientelar regimes ruling in southern Europe are the historical outcomes of the logic of the Cold War, when Nazi collaborationists suddenly became the allies of the West while the fighters for democracy were totalitarian Communists to be despised, persecuted, exiled or ostracized. Following the Truman doctrine, the US and the UK would support the fascists in the Greek civil war and consented to the Greek military dictatorship of 1967-74. In Italy, the NATO would engage in stay-behind terror operations that killed 400 people in order to blame the left and prop up Andreotti’s corrupt Christian Democracy. In Spain, the staunchly anti-communist stance of the fascist regime would easily compensate for its ruthless crimes against humanity.

In Spain, the housing market was institutionally constructed by the reactionary Francoist regime as an effective tool to manufacture political consensus over a majorly red society. A professional class of constructors/developers was created ad hoc through generous subsidies of the state and would eventually integrate within the financial system (and the political regime) during the sixties. In 1957, José Luis de Arrese, fascist minister of Housing, stated: Queremos un país de propietarios, no de proletarios [We want a country of homeowners, not of proletarians]. After the transition to democracy, financialization would only replace the state with the market as a source of capital for constructors and developers.

In a financialized world, national elites compete at a global level to capture the volatile flows of international capital through a variety of laissez-faire policies: financial deregulation, inflation control, currency stability, trade liberalization, wage repression, privatization… In such an asset-price Keynesianism (Brenner), the spatial-temporal fix of capital (in Harvey’s words) allows political elites, the mediators of these inflows, to lead and rule a trickle-down gift economy, effectively postponing class conflict until an eventual crash. This was the case of Greece, Portugal and Italy -through public debt- and Spain and Ireland -through private debt. In other words, southern European political elites are among the most enthusiastic implementers of austerity because their actual power lies critically in their intermediation of the constant inflow of European money.

Political Economy of the Spanish Housing Bubble, 1998-2008
Political Economy of the Spanish Housing Bubble, 1998-2008 (or the Pentagon of Sin, in Varoufakis’ terms)

NSER Volume 7: Past Present Future

We’re very pleased to deliver to you our tenth anniversary seventh volume Past Present Future.

Download Full Issue

Contents:
Front Matter

Papers in Celebration of Anwar Shaikh: Laws of Production 40 Years On

Proceedings of the Colloquium Titled The State Of Worldly Philosophy at the New School held on February 20, 2014

Back Matter

Write it Like You Mean it

At a time of grave economic consternation, John Maynard Keynes distractedly found himself defending his own trade proposal to staunchly neoclassical economists who were, naturally, in direct opposition.

Keynes was well aware of the reasoning which supported the free-trade fundamentalists— to a certain extent, he used to be one of them. He was trying to save the economy, but as much as he needed to convince people he was correct in his assessments, he needed to convince people that he fully understood theirs.
Continue reading Write it Like You Mean it

Another Response to the Kick It Over Campaign

Rishabh Kumar, our colleague and friend at The New School’s economics department has written a fascinating take on Adbusters’ Kick It Over campaign. You can read his full response here.

To me, the response is interesting in that it is titled “Why I disagree with the ‘Kick It Over’ Campaign” but goes in a completely different direction than previous critiques of the campaign. Below is a sample:

Continue reading Another Response to the Kick It Over Campaign

No, The Problem Isn’t Mathematical Formalism

Much to my amusement, the Kick It Over campaign at the Allied Social Science Association (ASSA) put on by the American Economic Association (AEA) actually managed to ruffle some feathers. Although it hasn’t managed to capture the attention of the Twitterati (when will economics finally be cool?!), parts of the economics blogosphere are livid.

Those economists – primarily those leaning to the right of whatever the center of economics might be – are trying desperately to stake out a territory that presents them as open to critique, but dismissive of anything that might pass for substantive reevaluation of the discipline’s theoretical underpinnings.

Continue reading No, The Problem Isn’t Mathematical Formalism

NSER Celebration!

After over a year of work and months of planning, the 7th edition of the New School Economic Review (NSER) is ready to be launched! As the 10th anniversary of the NSER was in 2014 we have decided to have a large launch event this time around. This grand event will take place on  February 10th, 4-6pm at the Albert and Vera List Academic Center (the 6 East 16th Street building). Look here for event details.

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5 Annoying Things Economists Write During the Holidays

Call me a Grinch, but I can’t stand when economists get in the holiday spirit. Suffice it to say that the dismal science makes everything dismal with it. Like the exploitation of seasonal labor or the bell-ringing agents of a homophobic army of God, economists roll out the same tired tropes re-gifted from the ideologues of ruling class past.

Continue reading 5 Annoying Things Economists Write During the Holidays

No Longer Up For Debate

Over at Joe Francis’ blog the independent scholar has compiled data from JStor demonstrating the death of direct debates within economics journals.

Graph of economics papers on JStor containing the words 'comment', 'rejoinder', or 'reply' from 1920-2013 with a distinct peak in the early 1970s

Although there has been a distinct decline in direct debate on papers since the Cambridge-Cambridge debates, I would argue that some of that debate has been relegated to working papers and blogs. For example, the recent debate around Modern Money Theory has happened almost exclusively in working papers from PERI and the Levy Institute as well as associated blogs.

What this data might indicate is not so much the death of debate with in the discipline so much as journals no longer being the primary venue for this debate.

10 Riots That Challenged Injustice and Changed US History

By Mike Isaacson, Ian, Oriol Vallès Codina, and Erjola Zotkaj

There has been a lot of word vomit on social media denouncing property destruction and looting that happened after the very public string of murders of black folks by police this year. Most comments have centered on the lack of productivity of riots in obtaining justice. For the most part, the argumentation goes something like “destroying your own community will do nothing to bring justice or positive change.” However, if history is any precedent, these arguments are entirely unjustified. The United States has a long history of riots bringing change that no amount of kumbaya hand-holding or “working within the system” was ever able to accomplish.

This list is by no means complete, so feel free to add to the list in the comments section below.

Continue reading 10 Riots That Challenged Injustice and Changed US History