the faux economist

8/9/2019 the faux economist

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Comparative Economics

for Volkhart Vincentz

Mid-term

Mary Eng

7-30-10

1. How were the Societal Institutions: The Rules of the Game (Gregory/Stuart Tab. 2.2 p.18)

applied in feudalism? Give examples for rules and their enforcement.

To understand the basic structure of feudalism, it is necessary to imagine a stratified structure of

command and control and fealty. The effects of the loyalty owed to ones class superiors was

a kind of human bondage making the otherwise potentially free person, partially enslaved.

As feudalism enacted a kind of sequestration of the forces of production under a dominance

heirarchy which subdivided the management of land resources, it was an efficient system of

control. As industrialization and newer ways of of conceiving of the human being emerged the

feudal model fell into disrepair and was no longer as useful as before. The emergent human

rights theory placed more primacy on the autonomy of the individual. In some ways it might be

seen that the deeply ingrained mentality of the serf was simply transmuted into the fealty due

the managerial class and or the new emergent political power structures and their leading figures.

As the serf, vassal, and lord participated in a system of rules, newer systems emerged which

implemented ingrained psychology but gave rise to newer ways of understanding.

In the text of Paul R. Gregory and Robert C. Stuarts Comparing Economic systems in the


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Twenty-First century, Seventh edition, 2004, an exploration of societal shifting patterns of power

is described.

Economics tries and pretends to be a system of predictable rules with outcomes and projections.

They are simple but must undergo revision as various factors emerge to undermine their validity

[in the new economies philosophized as cognitive capitalism in the early 2000s sorbonne or

as coyly named technocapitalism as that which is commerce becomes intangible, but digital].

For example, a predictable rule might invoke the classic observation that spending is dependent

on wages and consumer confidence. Excessive saving might spur recessive tendencies in an

economy. Offshoring can wreak temporary havoc on a labor market which must reconfigure as

service-economy oriented. Interest rates have a direct effect on investment. If the interest rates

are too high, capital investment in future enterprise will slow, halting job creation and product

growth and consumer demand and spending. Surplus will lower prices. Scarcity is a hospitable

climate for price hikes. Government modulation of these factors can have beneficial effects

for overall market stability, but can result in egregious errors when regulations are hijacked by

corporate interest and their powerful lobby forces.

Enforcement of treaties and embargo, tariff , and price control can all have stabilizing effects on

the new global economies, and bear some, though distant similitudes to the older feudal systems.

Whether it is OPECs price modualtion or the embargo against cuba, other economies emerge,

black economies or shadow economies, even as such as occurred on the internet with generation

Ys militant and IPRED-defiant p2p music socialism.

In feudalism the commerce was far more simple and stratified. Fealty, or loyalty to ones lord

or master was demonstrated by an effective form of taxation in which porttion of the products of

ones labor was handed over and up and consolidated in greater powers by the vassals, lord, and

the king. The commissioning of this commodity transfer was an effective way to keep the serfs

engaged in craft, situated on land, and subsistently fed and clothed. And then of course waves

of propaganda might inspire this lowly class to continue on this path of endless toil with low


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reward. The divine right of kings, or the promise of an afterlife might sustain the mechanism, for

a time.

2. What is the relation between static inefficiency and intensive growth

Inefficiency as stagnant involves failure to grow and perform. In an ecomomic evaluation,

efficiency is prized and can be manipulated through monetary policy, demand, the labor

force, and the implementation of a technological agenda. If an economy stagnates, the static

inefficiency will stall the growth and international competitivness of the economy. It will

become non-productive: a time of contraction preceding and leading to a burst of intensive

growth, which might be spawned by infrastructure development and technological investment.

An investigation into the theory which gives rise to this curious terminology might elucidate

ways of thinking about the terms as they apply to a longer tradition whithin the field of

economics and the various schools of thought that arose in response to Keynesianism.

Matthew McCartney describes the goal of his research in a paper for the university of london,

dynamic versus static inefficiency:

Neoclassical economics has no means to distinguish between these two processes,

if all returns are equalised at the margin it is perfectly possible for both to be

considered efficient. Dynamic efficiency is argued here to be an alternative paradigm

to neoclassical economics. The implications for economic analysis and policy making

are briefly considered. The principal conclusion of this paper is that the narrow view

of efficiency has restricted the relevance of neoclassical economics. A more realistic

interpretation of how economies function as dynamic not static entities is important in

properly evaluating the conflicting and complementary roles of government intervention

and the free-market. The most important implication of dynamic efficiency is in

setting a theoretical basis of for the economic analysis of the developmental state.


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http://www.paecon.net/PAEReview/issue26/McCartney26.htm

What is important to consider is the effect of intensive growth in terms of curvature of a graph

and plateaus and bubbles. As growth cannot be exponential and hyperactive continually, a

more moderated approach to growth might be a better response to the needs for economic

performance. As with the real estate hypermarket, a crash became inevitable. Intensive growth

would ideally involve a slow steady moderated rhizomatic pattern of growth, and not be

parced or promoted, promulgated into a hyperbubble bound to burst and as flimsy and facade-

like as the (now deflated) McMansions speckling the USA. What was an overvaluation of

poorly constructed homes in desolate suburbs was directly connected to the petrol industry

state sponsored highways which lobbied for the extinction of mass transit as a petrol-pushing

environmentally destructive exurban planning strategy. And further collaboration on the part of

lending institutions willing to extenuate the truth in loan applications, gave rise to the problem as

well. So while in the height of the real estate fervor, this pattern could be viewed as growth or

as intensive growth, now in retrospect, it was clearly an artificial boom, a bubble, if not fraud.

Or with the Silicon Valley hyper bubble, and effective globalization of the tech labor force,

initial capital outlays that gambled on the tech explosion, might have found extraordinary great

returns, or completely dismal return in the high risk arena posed by venturing into the unknowns

which have transpired in the last ten years of digital expansion.

If one could say that intensive growth must be moderated by infrastructure development,

and must be supported by diverse categories of support, from the nuts and bolts of the tech

innovation---all the way to the conceptual creativity of the developer intelligentsia, intensive

growth is complicated and rich and relies on a host of variables.

The Silicon bubble was carefully concocted by carefully offerred subsidies from state sources

and less covert state derived sources such as National Venture Capital Association or the many

projects funded by In-Q-tel or Narusinsight or the defense and prison technology industries. As

venture capital is privately profferred, so too might tech grow.


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3. Explain why increased savings in a depression might aggravate the slump of the economy

(according to Keynes).

Keynes might find that excessive saving could actually spur a recession or depression by keeping

money out of the flow of commerce. An increase in savings could aggravate the depression by

reducing expenditures. The reduction in consumer spending would keep available spending

power out of the economy. The reduction of investment capital in business might also enact

further harm to the economy as a whole. As modualtion of the interest rate might also affect

capital investment it could be said that economic stimulus is best put in the hands of the needy. if

the relatively affluent classes become tight with their discretionary spending, as is now broadly

occurring, line items like food and bare necessities remain stead, but the luxury market suffers.

Larger consumer purchases are deferred, air travel suffers, auto sales slump, etc. It would be

paramount to inspire spending through propaganda of fiscal optimism. It is very startling to me

to hear the ubitquities of fiscal complaining replicate across many medias. Is it the authenticity

of the problem responsible for the 24/7 bemoaning of the crisis or the dramtization/creation of

doom? or is there something else which has occurred int the collective mind of the many medias:

a new transparency and or dramatization of the ficticity of the monetary systems of the past. It

is as if global zeitgeist shift is having a collective look at the image of caesar as portrayed on the

geld of empire, and deconstructing itself in real time, on twitter, in the financial times, on NPR,

BBC, Le Monde, denfense-invested Le Figaro, FAZ etc.

If fiscal policy could put money in the hands of the very poor, who very clearly face extinction,

the global economy might receive a jolt. Whether fiscal policy shall be geared towards

genocide of africa and disaster torn regions, or whether it will reconfigure as a global

marketplace of the lliving for the living and pounce on the hyperidealism of the jeffrey sachsian


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millenium rhetoric, it is not clear.

if globalizations rhetoric of utopiansim in the development of emerging markets makes way

for a leveling of the playing fields and the expansion of the spending class, it might then

become clear that species extinction, while not without benefits, might be superceded by global

prosperity. And as the propagandization of fiscal uncertainty permeates the globe, a new

propaganda might be in order. that is, one geared towards spending, investments, optimism,

and sharing and development, all idealistic goals permeating the rhetorics of the simultaneously

loathed or controversial World Bank and ERBD.

An increase in labor force would infuse more money into circulation. This biofeedback cycle

graphs with precedence to the consumer in need of immediate neccesaries and emerging

needs expansion. As the immediately poor develops new needs in the confidence inspired by

steady employment, the pattern of restrictive parsimonious savings, as might inflict damage

on the economy as a whole can be halted. So the pattern of wealth consolidation as it has

gone on is actually quite deleterious to the emergent economy. And as the rich carry on with

the propaganda of fear, they further consolidate their wealth, and are failing to spend at their

previous rates leading to more decline. They hurt themselves with their fiscal conservatism and

then the currency devalues as they hoard it. In very crass simple terms, we will have no money

to buy your junk. As americans cannot afford education, health care, cars, and increasingly

bare necessities like food, the credit crunch has destroyed the artificial spending power which

stabilized the slagging buying power of stagnating wages and inflating prices, or stagflation.

4. a) An empirical study shows that wicked men have no songs. Could that be an argument to

subsidize the consumption of music?

If wicked men have no songs, it would be necessary to contract that out, in a sense outsourcing

the creative role. In the sense that the passive uncreative class purchases the music, and that they


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in that sense have a music deficit or deficiency, it would then be paramount for them to find it

elsewhere. As music is a function of creative state or the artist as shaman, or priest, or avatar, or

intermediary with the divine----the wicked would need to have the spiritual assistance to reach

these liminal states.

Swedish fiscal policy holds high accord for the production of music and the arts as a value

commodity with exportable value. Very clearly and in plain language the state claims that the

arts receive sizable state subsidy for that reason. As even rock and roll music is deemed worth

state investment, artists then become the beneficiary of state sponsorship, and the international

music consumer also reaps the rewards of a heavily financed arts programme.

The consumption of music treads not so lightly on the subject of political control and the

swaying of ideology, as demonstrated as the USA sought to control the communism rooted out

through the vigilant sequestration and blacklisting of unamerican activities in film and music and

art. A deliberate state infiltration of the visual arts allegedly sought to root out communism even

in the visual arts, discouraging the pictoral proletariat realism as so vibrantly mastered by artists

Diego Rivera. State art policy favored abstraction and was created through the era of the red

scare policy geared against proletariat art forms that might inspire revolt or ideology change.

Internationally artists suffered the backlash of state ideology repression. Shostakovitch wrote

in the face of steady state critique and repression and was heavily criticized for subversion or

submerged satirical state critique, an amazing feat for one operating in mere tonality. If tonality

might convey revolution, rebellion, or pessimism about state policy, so then the state might

decide to sponsor art forms which enhance and support regime.

Another notable composer whose tonal patterns and progressive attitudes towards composition

and tone was Hindemith who was able to remain in Germany for part of the Reich, put

eventually fled for the USA where his creativity could better flourish. The Goebbelsian control

and restriction of information economies was essential to maintaining a masterful control over

the mental state of the populace. The organization of degenerate art --enartete kunst--shows to


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highlight the purported moral corruption of art deemed unreichlich, further affirmed the states

power to enact social control through arts subsidy and or restriction. And so with burnt books.

The courage of satirical sentiment of new objectivity which mocked the burgerlich new

industrialists 1920s and 1930s might perish under censure or control!

In the avenue of political visual arts permissible arts gave eloquence to the ideals of empire:

loyalty, nationalism, sacrifice for the good of the ideal. As Maoist poster design is now the

subject of satire, or the study of international propaganda design a subject of concern as the

various state-sponsored ad campaigns styled the image or branding of an identity, so it becomes

clear that state-funded arts campaigns have a heavy dose of ideology encapsulated in the

permissible fundable arts.

if Brechtian theater were enabled to spur the transformation of society into an artistic vision of a

political necessity, state sponsorship would have far wider benefits than numerical transactions

as denoted by ticket or record sales. The transmissions would serve a larger sphere.

The French film maker Godard spoke of the excessive state control ever present in restricting

cinema industry. He could not film on the metro, and faced numerous restrictions. As we

are now catapulted into the era of omnipresent media, with massive waves of multimedia

participatory surveillance, agenda has become even more complex to manage when it comes to

arts funding---or arts as the conduit of ideology.

As messages lie under contradictory messages and might lie encoded and indetectible from

censors, films such as Moscow does not Believe in Tears might both critique regime and

support regime. If it were the Anarchists cookbook, or Abbie Hoffmans Steal This Book, or

the grandeur of shoplifting as exalted in FassbindersLove is Colder than Death, critique or

endorsement of economic systems might take on many forms, even while maintaining generous

governmental arts subsidy.

b) Several countries subsidize their opera houses? In which cases would that be economically


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justified?

Arts funding has been slashed globally in the last five years of decline. Whether dating to the

Medici family history of patronage, or modern day grant programs, or the USAs National

Endownment for the Arts, art cannot survive without financial backing. Venture capital for the

arts can be privatized, or semi-privatized, but when VC under state sponsorship occurs, it

undergoes rigorous critique, especially in the face of imminencies less frivolous than

entertainment, or more immanent: propaganda control. Currently the Los Angeles opera runs the

risk of bankruptcy with their production of the Ring Cycle, in a time when the budget is so

strained and homelessness is at an all time high. The infrastructure is a point of collapse and the

citizens lack health care. Schools and hospitals are victimized by the budget crisis, yet the opera

budget has remained somewhat intact. As art budgets suffer attack nationally, the long term

viability of ignoring basic infrastructure while supporting what is now considered by some to be

an elite art form for the upper classes holds less and less allure. In a more classical context the

opera houses might operate as the purveyor of political propaganda, and in that sense would hold

such a valuable role in society as to be entirely defensible. If the transmission of valuable state

ideology were transmissible to many classes, opera as a method of political control would be

entirely defensible. Inasmuch as the people generally are more submissive and happy and

exploitable when entertained, opera houses function as the criticalpanem et circenses, the bread

and circuses necessary to keep citizens, preoccupied, entertained, and amused and less interested

in regime change or critique. But this was more true, centuries ago, as more true now would be

video games, or even still the television, and then also the Youtube culture. And quite

fascinatingly a press release in the last weeks has announced that Youtube will be granting arts

grants to inspired heretofore pro bono homespun film makers. In that sense and egalitarian social

policy subsidizing the opera as an entertainment venue might keep the populace narcotized and

defer any intervention into policy. In that sense the investment by the state would be entirely


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worthwhile.

5. Explain the policy instruments that can be used in state-guided capitalism. What problems

might arise from their use?

Price fixing on basic commodities is not the only method necessary to stabilize the state-guided

market. As globalization internationalizes many markets, the benefits of free trade zones create

new problems such as dumping of commodities offshore. If the price of local wheat is undercut

by shipments of excessively cheap foreign wheat, it might be necessary to enact protective fiscal

measures such as tariffs to add competitive viabbility to the local price stabilization. While

the embargo is an extreme measure employed primarily for political reasons, it would enact

significant isolation on a local state market protection, while perhaps isolating that market from

goods not necessarily in adequate production levels.

The tax system can protect and regulate and affect the growth of a market and the development

of production. If the taxation were excessive, such as taxation of alcohol in Sweden, it could

reduce or limit the market sales, as an intentional consequence for moral motives.

The dangers of surplus must be carefully analyzed. As the market might promote irregularities

and occasional surplus which induces a drastic devaluational effect, in order to protect the price

of the good, it might be helpful for the state to keep the market safe from excess surplus flooding

the market. This could be done through withholding the excess. In the USA farmers are paid

not to grow, to protect the price of the goods. In this sense, price value is subsidized by paid

inactivity. In other instances, grain in kept off the market and forcibly allowed to rot in silos,

in deliberate state action to protect the price of basic commodity in the state-guided capitalism

schema.

While state guided control mechanisms could stabilize the markets and prices of commodities,

price controls could restrict growth. As the subsidized agriculture could lead to waste in the face


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of poverty, the ethical dilemas might become problematic upon review.

6. Give an example for the competition among national economies about government activities

which results in a race to the bottom. Did that competition become more or less fierce in the last

decades? Why?

The current globalizational effects have created a massive shift in economic forces of production.

As commonly described as outsourcing the shifting of the labor sourcing in the global context

can have tumultuous effects on the labor market. The production of goods, as suffering a

huge price fall, and the offshoring of work and increase in unemployment and class and labor

shifting to the developing world, can then reduce the possibility of consumer spending. The

price falling might intermediate the crisis as it levels the formerly dominant prosperity of the

hyperbubble first world as it merges with the other worlds and is eclipsed by the emerging

competitive force of the global markets.

The answer to the second part of the question, Did that competition become more or less fierce

in the last decades? is an emphatic yes! The reason why is complex and multifarous. The

drastically dramatic effects of globalization have effected many markets. Areas was without

internet permeation rely on cellular phones to conduit business deals and determine market

prices. The internet has globalized the English language to a certain extent, and drastically sped

up the communication systems as they effect every sector of every business. What is critically

called outsourcing or offshoring is really the fruit of global emergence into the economic arenas

of previously inconspicuous unconnected states.

To describe this effect as a race to the bottom might be a typical but unintelligent way to

approach the systems of growth as they unfold. While price-wise and affluent first world


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economic crisis-wise there is a toll taken by the emerging labor forces in India and China,

there is also a large benefit to be noted. The very internet explosion which is occurring to

facilitate the new renaissance of cognitive activity and transparent media revolutions and the

digital free culture is made possible by the production of increasingly more powerful and

affordable electronics, which spur industry. The cell phone revolution provided a spike in the

communicability of transaction and information. And now an inordinate shift has occurred in

the marketpalce of ideas which facilitate transmissions of every kind be they of international

law norms, war crimes, market prices, trends in currency policy, internet firewalls, corporate

irresponsibility, or environmental effects of resource exploitation.

While overproduction will lead to surplus, it must be noted that the price wars which spawn this

race to the bottom, of global competitive wage slavery and commodity devaluation---do have

their benefits. While the affluent americans may be foreclosing and tightening their budget, the

immense benefits for the formerly third world are expansive and optimistic. As workers in

China exploit factory suicides to rally for higher wages, or as tech development internationalizes,

it is actually quite optimistic to envision this future.

The question of deflation is an obvious corollary of this notion. The climate of devaluation

and boom and bust cycles, bubbles, and hyperbubbles, has led some to wonder if the pattern of

slight deflation as it has trended in consumer goods might increase. The NYT boldly promised

so a few weeks ago, for what reason, dont you wonder???? To further terrify the reluctant

consumer? As the internalization of a new anti-materialist philosophy which emerges from the

jaded appetites of the hyperconsumer?

An example of national competitive race to the bottom in banking also has a contradictorily

interesting effect. As FDIC only ensures a fixed sum, and the american banking panic

unflowered in 08-09, notably Ireland announced a total guarantee on all funds to lure investment.

Internationally governments lure the affluent to relocate to their sphere as alluring tax havens,

providing cash infusions to the economy. The loss in taxes might be regained in investment and


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property acquisition and lifestyle expenses.

This international competitive streak has become more fierce in the last decade, whether as

wage wars, offshoring, tax havens, looser labor law standards, or foreign accounts lure the

internationalization of all economic activity. Even the banking sector is becoming increasingly

cognizant of cultural prohibitions on interest and usurious money lending as described in the

cultural transmission of shariah---an increasingly relevant factor as the middle east becomes a

prosperous market worth coporatist seduction. Perhaps there might be a hybridization which

occurs that might offer an ethical check on the fantastical usury which tyrannizes the non-muslim

developed worlds working poor. And so as the credit crunch mitigates spending, would new

understandings of interest, or a move towards ethical transparent banking, free the consumer,

who will be plagued by the bankruptcy and foreclosure industries which are the increasingly

ubiquitous counterpart of the rampant credit splurge?


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artist Shepard Fairey

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