Parecon Optimism

Robin Hahnel is one of the goto guys for the whole parecon thing, probably the most developed form of post-Marxist socialist economic theory. (So post, in fact, they don't even use the word 'socialism' very often; I'm never clear how far this is a purely tactical choice or something deeper). Part of me is strongly attracted to this green, semi-anarchist vision, but another part is more than little skeptical about the viability of any schema depending on such a remorselessly high level of popular participation. But I'd recommend his ABC of Political Economy book to anyone as a fine, 'A Level-ish'* introduction to thinking about economic issues from a critical perspective.

All this is by way of clearing my throat before pointing to a very clear article he's written explaining the motivations behind the G20 protests. I particularly like this bit - its optimism cheered me up:

"....we reject the economics of competition and greed as a human necessity and embrace the possibility of an economics of equitable co-operation. These approaches to solving our economic problems are fundamentally different. One way motivates people through fear and greed and pretends that market competition can be relied on to bend egotistical behavior to serve the social interest, when too often it does not. The other way organizes people to arrange their own division of labor and negotiate how to share the efficiency gains from having done so equitably. This way motivates people to work at tasks that are not always pleasant, and to consume less than they sometimes wish, because they agreed to do so, secure in the knowledge that others are doing likewise. The driving force behind our economic world is participation and fairness, no longer fear and greed.

There is agreement among us that economic decisions should be made democratically, not by an elite or left to market forces. We would also give workers, consumers and localities more decision-making autonomy than traditional approaches to economic planning have allowed.

But, not surprisingly, there are different ideas on how best to do this. Given that before the demise of the communist economies most anti-capitalists simply looked to those economies for answers, and that after the fall of the Berlin wall many people stopped thinking about alternatives to capitalism altogether, it is surprising how much progress has been made. Much work in fleshing out visions into rigorous models, comparing similarities and differences, and evaluating strengths and weaknesses of different procedures to guide equitable co-operation has occurred already, and the pace of this work will surely increase in light of renewed interest. "

*Well, ‘A Level-ish’ if you ignore the equations, the way I do...

Via

Toxic Assets: An Ingenious Solution

Just say they're not toxic. No one will be able to challenge you. You could re-build your balance sheet without any legal qualms then.

No, really. It would be perfectly proper accounting practice.

Still don't believe me? OK, try this guy or these folk.

G'Day Mate: the Future of Internet Argument

Observing a blogger I link to, and quite enjoy, getting into a very personalised row with a unpleasant Tory made me think. Is there an alternative to walking away or getting into the kind of deadly, endless feud of mutual insult and retort for which the net is famous?

Well, I think I've found the answer: just discreetly post a link to Aussie band TISM's finest hour and dedicate the lyrics to the one you're having the problem with. More fun than Rick-rolling.....

American Auto Bailout

Should Obama even be doing this, never mind the conditions, given global warming? But what about the workers? This is the problem of forging a Red-Green alliance in miniature.

My answer? Wot this bloke says.

Pensions & Ownership

Tom P of Labour and Capital has done a kindly meant but unkind thing by tagging me with an internet meme on a subject where he is far better informed than I am. He wants to know how to improve the shareholder connection with ownership, and how pension funds should be reformed and run.

Tom’s a pension expert and I’m not. I’ve spent my working life in the voluntary sector, not the City. So my views are going to be some way short of water-tight and well-informed, to put it mildly. But I do think we on the Left have to think practically - as well as in a utopian way - if we are going to get any kind of traction on this crisis, so I'm willing to give it go.

First, two very simple minded points:

• I’m not 100% convinced of the idea that pension funds as we know them should continue to exist anyway. It’s not just that (many) funds currently behave in a narrow minded, profit maximising way – the thought behind Tom’s question – but that I essentially see a pension as a social insurance function, best done on the widest basis possible to spread the risk for the individuals involved and, in all probability, funded out of either tax or some compulsory levy akin to NI. This doesn’t mean that there couldn’t be a plethora of specific pension funds offering different products – merely that they would have to have a much more developed system of cross organisational risk sharing , more like the way travel companies are obliged to fly their competitors holidaymakers home if the competitor goes bust. No more Equitable Lifes.

• Secondly, Tom’s question presupposes that pension funds can actively influence FTSE firms through their investment strategies and ‘activist’ management. I’m not entirely sure this is desirable if ownership and control issues around pension funds themselves aren’t first sorted out. I don’t understand why employers can legally take ‘pensions holidays’ under certain circumstances - in fact I don’t understand why employers should be able to nominate Trustees in many funds in the first place. I’d like to see pension funds run much more as co-operatives. But this would be an empty gesture unless there was a systematic programme of education on pension issues amongst the workforce - and a political push to get trades unionists and others engaged. On this point, I'm absolutely as one with Boffy's interesting musing on co-ops, despite not necessarily sharing his far left perspective.

Otherwise I'm basically with Robin Blackburn on all this. Quite apart from his call for a global pension, he has developed quite detailed reformist* views on how state backed social funds, including pension funds, might work differently,

"The Norwegian government showed in 1988-92 that radical measures of expropriation and the installation of a new management are needed if finance is to be restored to a healthy footing. Once this has been done – a process that takes years rather than months – then a choice presents itself. Either the government then sells the nationalised banks back to the private sector, or the state retains control. The Norwegian government finessed this choice by first privatising the banks and then using some of the proceeds to establish a public social fund. The latter, now known as the Norwegian State Pension Funds, was also made a beneficiary of the country’s oil revenues and is now worth around $230 billion...Resources for a regional social fund network could also be raised through some combination of a Tobin-style global financial transaction tax (FTT) or a Meidner-style share levy.......Regional social funds in receipt of share issues from the corporations would not sell the shares but hold them as sources of dividend income. While share prices can fluctuate wildly, dividends are less volatile. If each year’s share levy were set at, say, 10 per cent of profits, then it would divert a steadily growing share of dividend income to the social funds. The levy would not subtract from cash flow or the resources available for investment.

The funds could use their growing stake in corporate ownership to promote a limited but important set of objectives, including employee rights, sustainable production methods and appropriate levels of executive compensation. The funds would respond to steps that might be taken in a very unequal and crisis-prone world to stabilise markets and help build a framework for sustainable growth."

*I say reformist in a purely technical sense. I know his ideas would be considered revolutionary by many. But when I first read Blackburn he was a leading light of the International Marxist Group, so I do think there has been some movement...

4th Estate Fearlessly Report News of G20 Demo

Via the Guardian's Live Blog on the event. Just a normal, spontaneous event simply spotted by good photo-journalism? How blessed we are as a nation to have so many good photo journalists who knew exactly where to stand ..... but for such dedication we'd be denied this sort of top quality reporting at a moment when there have been precisely 20 arrests.

Financial Incentivisation: The Golden Years

Michael Osinski wrote the software that turned collateralized mortgage obligations (CMOs) into tradeable assets. CMOs seem to have been a softer, gentler precursor of the infamous collaterized debt obligations (CDOs) whose massive use blew the financial system apart. So what was life like as a humble programmer amongst the masters of the universe?

"I wondered why the men’s room always stank. Then one afternoon at three, when I was in there taking a leak, I discovered the hideous truth. Traders had a contest. Coming in at eight, they never left their desks all day, eating and drinking while working. Then, at three o’clock, they marched into the men’s room and stood at the wall opposite the urinals. Dropping their pants, they bet $100 on who could train his stream the longest on the urinals across the lavatory. As their hydraulic pressure waned, the three traders waddled, pants at their ankles, across the floor, desperately trying to keep their pee on target. This is what $2 million of bonus can do to grown men."

Well, not that grown as men go after all - at one point Osinski refers to '30-year-old megamillionaires '. Surely the silver haired old money of top management was cut from a very different jib? Well, yes, as they showed in the lean times of 1995,

"We had to lay off half of research. .After a day of bloodletting, one of the bosses cornered me in the hallway. Did I get a sexual thrill out of firing people, he wanted to know, because it had always worked for him, big time."