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Capitalism, democracy & taxation: McDonnell & Varoufakis January 26, 2016

Posted by larry in Abuse of power, Bill Mitchell, democracy, economic inequality, economics, Varoufakis.
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I believe the current UK Tory government to be the most dangerous in living memory, at least for its own citizens and residents. This is why.

John McDonnell, the Labour shadow Chancellor, was interviewed on Channel 4 News last night and on Newsnight later on, Monday evening, 25 January. Even though the Channel 4interview raised the same old chestnuts, he showed he really doesn’t “get” the functions of taxation. He made a big point about how taxes are needed in order to pay for schools, hospitals, &c. And he made an even ghastlier mistake at the end of Osborne’s autumn statement last year, sounding like Balls, how the Corbyn Labour Party would bring down the deficit but slower and in a fairer way. Ye gods!!! Don’t just believe me. Have a look at Beardsley Ruml in 1946 – “Taxes for Revenue are Obsolete”: http://home.hiwaay.net/~becraft/RUMLTAXES.html. McDonnell doesn’t “get it”.

McDonnell may have been listening to Varoufakis, possibly on taxation, too much, methinks. The only things V cares about are Greece and his European democracy project, which are good things to care about. But Varoufakis has bad reasons for counting Osborne as one of his “friends”. I think McDonnell has also talked to Wren-Lewis, a neo-Keynesian, which won’t help. V contends that there hasn’t been much austerity in the UK; compared to Greece, I think he means. Well, Osborne I think has applied his austerity mostly in ways that usually do not affect GDP. The people he usually attacks make no appreciable impact on GDP and therefore would not show up in the overall statistics. So, when GDP drops, he realizes that he may have made a mistake and attacked the “wrong people”, and he adjusts. A tad. No reason Varoufakis should know about this, but then to make the statements he does seems to me to be irresponsible.

What this shows is that GDP in itself is insufficient for assessing the degree of austerity being imposed on a citizenry. You need to know where the cuts are being implemented. So, if where they are being implemented will not affect GDP very much, you will not see much change there and could conclude that not much austerity has been implemented. Which would be a grave error. Welfare payments constitute only about 0.7% of the UK’s GDP, which is not much. In addition, if you believe that taxes pay for this, you will undoubtedly think that money that could be used otherwise has been lost. However, once you grasp that taxation, and thereby taxpayers, do not fund government spending, then you can see that there is no Peter-Paul situation at all. And that spending on welfare does not affect anyone else at all.

As for the European project, Varoufakis has some fascinating and possibly controversial things to say about the relationship between capitalism and democracy. It is only the UK’s singular position he seems to be misled about.

When Varoufakis gets to the relationship between capitalism and democracy, he gets into interesting territory. In the early part of the 20th century, it was often felt that democracy was a consequence of capitalism. The evidence for this was that they arose in tandem and seemed to develop together. Bertrand Russell among others put the view forward that it was capitalism that made democracy possible. Max Weber, a little earlier, put forward a somewhat different argument. He contended that capitalism was the inevitable consequence of Calvinism. Both confused correlation with causation.

Varoufakis does not make that mistake. Although Varoufakis develops his argument in the context of Europe, it applies as well to the UK, virtually without modification. To show by example what I mean, let me go by way of a recent work by Nick Davies, an investigative journalist, published in 2014, Hack Attack: How the Truth Caught Up with Rupert Murdoch. It did, and nothing seems to have changed. Murdoch wants to further invade the UK communications network and, I would contend, further destroy it. Cameron has met with Murdoch a number of times. One would have thought this could not or should not have been happening.

The explanation Varoufakis would provide for this is that the political sphere has been swallowed up by the economic sphere, a scenario in which corporations rule the world in a democracy-free zone. Though he doesn’t say this, one could conclude from this perspective that democracy, if not a complete sham, is for the “little people”, while the rich and the multinational corporations can do whatever they want (an example of which is TTIP) with politicians as their servants rather than their regulators. In such an environment, could one be forgiven for wanting to be rich, even thoughtlessly so?

For Varoufakis, there is no inherent connection between capitalism and democracy. They are independent developments. And the evidence for this lies in Singapore and China, which have successful capitalistic economies devoid of democratic elements. For a good discussion of what democracy is, have a look at Robert Dahl’s How Democratic is the American Constitution? (2nd ed. 2003). Or view Varoufakis’s TED talk from last December: http://yanisvaroufakis.eu/2016/01/26/capitalism-vs-democracy-vs-capitalism-my-ted-global-talk/. Varoufakis believes Europe is on the cusp of becoming undemocratic, which would have the most drastic consequences. The ultimate cause of this is the structure of the Eurozone, a currency structure that is completely unworkable. It has only appeared to be workable because it had not faced any volatile stressors until 2008, the GFC, when the world’s banking systems collapsed. Varoufakis’s argument is not very deep but he had only about 20 minutes to put his case, hence my recommendation to look at Dahl’s analysis.

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Varoufakis on corrupt statistics in respect of Greece debt April 24, 2014

Posted by larry in Abuse of power, economics, Jefferson Airplane, Statistics.
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TruthFromLies

Varoufakis begins his post with this graphic, which reminds me of a song by Jefferson Airplane. Here they are appearing on The Smothers Brothers show. A hilarious TV program. It begins with White Rabbit but continues with (Do You Want) Somebody to Love whose first line is “When the truth is found to be lies”. The following line: “All the joy within you dies”. Sometimes I wonder whether members of the elite and their economic lackeys have been taking some of Alice’s pills.

[In case the video is not shown, here is the link: https://www.youtube.com/watch?v=hnP72uUt_pU]

Varoufakis argues that the statistics from Eurostat that show that Greek debt isn’t as great as it was thought to be is little more than a political ploy by the Euro elite in order not to upset the upcoming European elections in May. It is a short piece. You can read his argument for yourself.

http://yanisvaroufakis.eu/2014/04/24/greek-statistics-are-back-primary-deficit-presented-as-surplus-with-eurostats-seal-of-approval/

Happy listening and reading.

What do the elites think they are doing? Or are they thinking at all? February 13, 2014

Posted by larry in Abuse of power, economics, Justice, social justice.
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If aggression and nastiness have been the drivers of natural selection that put humans at the top of the food chain, then maybe it is time we became extinct. Keanu Reeves made a great mistake in the film The Day the Earth Stood Still. He probably should have allowed the machine to do what it was brought here to do, exterminate the earth’s primary predator in order to save the planet itself.

When people look around and think about what is happening, some of them no doubt wonder what is wrong with the picture they see. There is something deeply awry. But only a perfect cataclysm will alter how the system currently works. That it used to work a little better was probably just an accident. The past thirty years was spent, more or less, working up to now, only of course it wasn’t supposed to go to shit. Which just shows you how stupid many members of  the élite (I’m lumping them all together.) actually are. And the funny thing is, if there is anything funny in this madness,  is that small government means that there won’t be the resources to bail out some of the asses the next time. And by next time, I don’t mean the housing bubble that will burst one of these days. I mean that they’ll do something so monumentally stupid that this past crash will look like a bit of a blip.

So far, the assholes are winning. And those who see that the economic system is in bad shape, fails to reflect actual economic reality, and needs to be reformed hardly get any air time on the mainstream media. Last week’s Question Time had George Galloway, MP for Bradford, a notoriously poor city, on the program. Galloway is a “deserter” from the Labour Party, which for the past 20 years hasn’t done much for its constituency, the average person including the working person. Galloway is someone the main parties love to hate. But last week, he uttered something quite profound and I doubt most people realized how profound it was. In response to some Tory on the panel saying that there weren’t funds for something involving poor people, Galloway pointed out that the government has found money for Trident, high-speed rail, the banks, and their friends in general. In other words, it is complete bullshit that the government is spending constrained.

In the US, it is almost the same. The governments of the US and the UK, which are quite large, can fund whatever they need to fund in their own currency. A related issue was being discussed on the program when Galloway’s comment was made. Neither of these governments can go broke. Of course, if they are much smaller than they are now, they won’t be able to go broke either, but they won’t have the internal resources, which the UK government is slowly dismantling, to be able to do much for anyone, even the rich. The ONS now admits that there are statistical data that it no longer has the resources to collect and analyze. And this is only one example. So, the élite is now cutting off its nose to spite its face, as it were. Except for the .1% and a few others who think they don’t need government anyway. They think they can buy whatever they need. And under the present regime, they can. But are they going to fund the education system or the various research systems that allow them to be able to do this when government becomes too small to support these activities? No matter how rich they are, they won’t have the resources to do it. They are marching spiritedly, and ignorantly, into the past.

The current elites are parasites destroying their own host.

Another twist in the WikiLeaks tale February 10, 2011

Posted by larry in Abuse of power, economics.
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You might not believe this, but read it for yourself and decide.  I won’t summarize.  It is from emptywheel, part of firedoglake.

Security Firms Pitching Bank of America on WikiLeaks Response Proposed Targeting Glenn Greenwald

A new twist in the Assange case February 10, 2011

Posted by larry in Abuse of power, Justice.
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It now appears that rumors that had been circulating about the two women in the Assange rape case, to the effect that they had conspired to accuse Assange of rape for purposes of revenge and financial remuneration.  The Swedish authorities led by a right-wing prosecutor have recent “located” email between the two women that substantiate the rumors.  However, the same Swedish authorities have yet to allow a British court to see this evidence and still insist that the UK extradite him to Sweden, from where he may be extradited to the US where he will probably be tried for espionage, although they have allowed Assange’s lawyer to see the material while refusing to allow him to copy it.

Now allowing the material out of Sweden means that the information can not be presented to a British court.  It seems more than reasonable that if Sweden wish the British court system to extradite Assange to Sweden, it would behoove them to follow British law.  That they are quite clearly not doing this and, moreover, are refusing to have anyone show up in the UK to testify on their behalf suggests a hidden agenda on their part, whatever it might be.

Here is Assange speaking after his court appearance yesterday.

http://www.guardian.co.uk/media/video/2011/feb/09/julian-assange-statement-court-video.

He is in court again tomorrow, Friday, 11 February.

After some remarks by Assange, his lawyer challenged Marianne Ny, the Swedish prosecutor, to come and be cross-examined by Geoffrey Robertson QC.  For those unfamiliar with the British legal system, legal representation is comprised of two parts, solicitors and barristers.  The latter argue the case in the Crown court while solicitors carry out other legal representation of their clients.  Robertson is well-known for his stand on human rights.  I doubt that Ny or her case would look very substantial once Robertson got his hooks into her on the stand. Perhaps she and her colleagues think this as well.

Here is a brief comment on the “new evidence” from the Independent.

http://www.independent.co.uk/news/uk/crime/secret-texts-key-to-julian-assange-case-2208008.html.

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