Friday, June 26, 2015

with rebellious joy: Birgitta Jónsdótti

I have seen signs
the end of the world
as we know it
has begun

Don't panic
it might look terrifying
on the surface

Yet inside every
human being
a choice
to be a catalyst

Earth is calling
Sky is calling
Science is calling
Creation is calling:

Wake up, wake up now

Transform your heart into
a compassion machine

Now is the time
to yield to the call of growth
to the call of action

You are the change makers

Sleepers of all ages


wake up: NOW

Iceland’s Pirate Party is the largest political party in Iceland, according to the latest MMR poll ... The party now enjoys the support of 32.4 percent of respondents (source)

Birgitta Jónsdótti blog (Poetician and activist in the Icelandic Parliament for the Pirate Party)

Aiming for the Stars: The Goal and Purpose of a New Pirate International by Ásta Helgadóttir

update (Sat June 27):


Pirates are free

Pirates are freedom-loving, independent, autonomous, and disapprove of blind obedience. They stand for informational self-determination and freedom of opinion. Pirates bear the responsibility entailed by freedom.

Pirates respect privacy

Pirates protect privacy. They fight against the increasing surveillance mania of state and economy because it prohibits the free development of the individual. A free and democratic society is impossible without private and unobserved free space.

Pirates are critical

Pirates are creative, curious, and do not acquiesce in the status quo. They challenge systems, search for weak spots and find ways to correct them. Pirates learn from their mistakes.

Pirates are fair-minded

They keep their word. Solidarity is important when it comes to collective aims. Pirates counteract the blind-eye-mentality of society and take action when moral courage is necessary.

Pirates respect life

Pirates are peaceful. Therefore they reject the death penalty and the destruction of our environment. Pirates stand for the sustainability of nature and its resources. We do not accept patents on life.

Pirates are eager for knowledge

The access to information, education, knowledge and scientific findings has to be unlimited. Pirates support free culture and free software.

Pirates are social

Pirates respect human dignity. They commit themselves to a society united in solidarity where the strong defend the weak. Pirates stand for a political culture of objectivity and fairness.

Pirates are international

Pirates are part of a global movement. They take advantage of the opportunities offered by the internet and are therefore enabled to think and act without borders.

update (Mon June 29):
A New Pirate International
pirate times
pirate party australia

Wednesday, June 24, 2015

Role of PPPs in Transition

Guest post by Arthur Dent
PPP = Public Private Partnerships

A scenario for transition from capitalism with socialized investment following another Great Depression and its (im)plausibility is discussed elsewhere.

For present purposes those assumptions are as arbitrary as the selection of some hypothetical specific PPP infrastructure project to pitch to some hypothetical target audience.

The need that has not been acted on is investment having become generally paralysed by world economic crisis. Not just traditional infrastructure but all kinds of large scale fixed capital construction projects are needed.

The essence of transition from capitalism under such a scenario is that it is partially public and partially private.

PPPs would be used for all major fixed capital construction projects that are significant for planning resumption of economic growth and ending mass unemployment. Buildings and plant that were previously (not) being privately financed, by single enterprises or project finance, not just the closely related “utilities”. Public institutions would also initially be largely untransformed, so public procurement of a traditional public utility infrastructure facility by a public agency would be subsumed under PPP arrangements as just another private participant that happens to be a public agency.

Public financial and economic planning and management organizations would be involved either as sponsors or minor participants in many types of build, own and operate projects, often taking substantial financial positions in both debt and equity based on the expropriated funds they are now able to invest as well as making ordinary commercial PPP arrangements with private participants.

The relatively small amount of economic and management expertise fully supportive of transition available to an inexperienced government would be heavily focused on the preparation, procurement and contract management/implementation of PPPs. They would have to structure the contracts so the private participants use their know how to maximize the public benefit in their own commercial interests. This would be very difficult and error prone, but not as implausible as simultaneously taking over all existing large economic institutions without enough skills to actually manage them in the public interest.

The much wider role of PPPs requires much better resourced public institutions responsible for PPPs. The relatively small numbers of government decision makers with adequate skills must supervise and structure appropriate incentives to motivate, much larger number of employees and consultants recruited from the private sector for their know how, despite their lack of support for transition.

Currently known “best practices” for PPPs would be generally applicable. There is no point in listing them. But the assumption of quite different circumstances imply many new lessons could only be learned from experience with at least the following differences from the usual circumstances.
  1. Much greater transparency and much less corruption would be imposed on both the public and private participants as part of the broader social changes involved in transition.
  2. Greater flexibility for detailed renegotiations would be necessitated by the circumstances of economic crisis and the more dynamic situations arising from transition.
  3. Political, foreign exchange and national macroeconomic risks (interest rates etc) would be exclusively borne by the public participants and corresponding contingent liabilities and hedging or insurance costs appear openly on the central balance sheets. The public institutions responsible for exchange rates and macroeconomic stability would be closely involved in understanding the financial flows and risks they are assuming and the prices they require for asuming those risks and any hedging arrangements they may be able to make separately. Both international and local private participants would not need to make separate judgments or their own hedging arrangements for particular projects but only apply the sovereign risk ratings assessed uniformly by their own trusted ratings agencies.
  4. Land use and resource management public agencies would likewise manage and appropriately price the responsibilities for land acquisition, site and regulatory risks.
  5. Design, operations, construction, completion and maintenance performance risks would be exclusively borne by the private parties directly responsible for each aspect with detailed incentives tailored to reward overperformance and penalize underperformance. They would be carefully separated according to the expected and actual costs and risks borne by the participants engaged in each aspect and related global, national and sectoral statistical indexes.
  6. Allocation of upside and downside market risks for supply of inputs and sale of outputs would be significantly more complex since the expropriation of private wealth for public investment in PPPs was made necessary by lack of profitable investment outlets in the prevailing market conditions of economic crisis. The aspect for which each private participant is responsible must be commercially viable to that participant at the low competitive rates of return prevailing under crisis conditions. But the overall project need only be value for money to the public participants based on accepting an even lower (or even negative) return on their investment in order to achieve planned economic growth and rapid recovery from mass unemployment.

Transition from Capitalism

Guest post by Arthur Dent

This article is a placeholder for an introduction to a series of articles on various aspects of economic policy to be advocated before, and implemented during, the early stages of, a transition from capitalism in advanced capitalist countries under various different possible scenarios.

I am nowhere near ready to write any such articles, even as tentative drafts, so I cannot write an actual introduction.

Meanwhile one of the courses I am studying to become able to write such tentative drafts is a MOOC on “Public Private Partnerships” by the World Bank. 

This requires as a final project for the policy and procedures track, publication of a “digital artefact” plus a description of the target audience in one hundred words.

I have published as my “digital artefact” the eight hundred word article on “Role of PPPs in Transition”:

The key requirement is:
Topic: Identify an infrastructure need that could be developed as a PPP. This could be a project that is in process of development, one on a country’s PPP project lists, or a need that has not been acted on. Think about the key facts or ideas you wish to convey by answering the following questions:
  • What is the infrastructure problem that the PPP is trying to solve?
  • What services are to be provided and are these services affordable?
  • What are the reasons that the private sector would want to participate?
  • How should these risks be allocated? Consider the country context in judging the risks and who should take them.”
I have identified as a “need that has not been acted on” the general paralysis of investment resulting in prolonged mass unemployment in another Great Depression worse than the 1930s following a financial crisis worse than 2008.

Such a worse financial crisis than 2008 does not seem to be entirely implausible since the last one seems to have been merely postponed rather than resolved by the extraordinary measures taken. Nor does another Great Depression worse than the 1930s seem entirely implausible following such a worse financial crisis.

The need is for all the infrastructure required to resume economic growth, not just traditional infrastructure like existing public utilities. The problem that has to be solved is that there are no profitable outlets for private investment in crisis conditions so investment must be socialized rather than left up to private investors.

This would require some form of state capitalism either as a transition back to “normal” private capitalism or as a transition away from capitalism.

The absence of any significant left in advanced capitalist countries, at least in the english speaking ones I am familiar with, makes any transition away from capitalism seem completely implausible. But then the continued absence of any significant left under the conditions of prolonged mass unemployment and economic paralysis seems even more implausible.

There are already important changes in the political climate of countries like Greece, Spain and Iceland that could become precursors of something much bigger. These countries are peripheral rather than central to the advanced capitalist world, but they are part of it and they are already facing serious economic and political crisis situations.

So I am writing for the target audience described at the end of this introduction, in the conceivable scenario described below.

The services to be provided are not traditional public utilities but the ending of prolonged mass unemployment through resumption of economic growth.

These services are affordable because prolonged mass unemployment is not affordable and both labor and capital are cheap in depression conditions. What is missing is profitability, not affordability.

The private sector would not particularly want to participate, but would not have better options available. Corporations would still want whatever contracts are available at the best returns they can competitively get for the benefit of their shareholders, whether or not some of their shares that used to belong to wealthy private individuals now belong to public institutions. Board members and senior managers who no longer wanted to participate because their incentives had been expropriated would be replaced by board members and managers willing to work for the owners, old and new, under the incentives currently being offered.

But the social system would not yet have been changed and risks and incentives would still have to be allocated in the context of an advanced capitalist country in crisis that is merely beginning a transition from capitalism, not one that has completed such a transition. So many of the same principles would have to still apply and new ones could only be understood and evolved over time.


Any transition from capitalism in advanced capitalist countries as a result of another Great Depression would involve:
  1. Inexperienced left governments required to urgently get the economy moving again and end mass unemployment because previous governments, whether claiming to be left or right, had been unable to do so.
  2. Some level of rapid expropriation of privately owned wealth that was immobilized by the crisis now made available for socialized investment in new fixed capital construction projects to get the economy moving again and absorb unemployment.
  3. The day after a change in government would be similar to the day before. The same social relations based on money, wage labor and capital, the same social institutions such as globalized large corporations, and national and local large, medium and small enterprises and bureaucratic government departments and agencies, and the same economic paralysis.

    To simplify things I further assume a “simple” scenario with:

  4. Expropriation narrowly targeted to take all and only the excess wealth of the top 1% of nationals.
  5. This results in substantial investment funds becoming available to governments starting transition but most of the capital in each such country would still be held privately and by foreigners.
  6. The most important capitalist countries such as the USA, China, Japan, and Germany would not be the first to start making the transition. But international financial and investment flows as well as trade continues.
  7. Many top layers of management in most social institutions would be quite hostile to transition but there are enough supporters capable of supervising or replacing them.
Some of these assumptions may not look very plausible. But advocating measures based on such a “simple” case, would place the responsibility for different policies firmly with those who might prevent the policies discussed for this scenario by resorting to the breakup of international financial investment and trade flows, and civil and international wars.

Target Audience

I am studying economics, finance and other subjects to understand how capitalism works and become able to propose economic policies for transition from capitalism in advanced capitalist countries. Currently there is no significant left movement in such countries, but I am drafting tentative ideas for a wider future audience of prospective government policy makers expected when a financial crisis like 2008 eventually becomes another Great Depression like the 1930s. They are not concerned with some specific PPP project. I am conveying one possible policy option for managing partially socialized and partially still private investment projects using PPPs.

Tuesday, June 23, 2015

it's too soon to bury Marx

In April last year I published a critique of Marxism, on this blog (The Core Problem With Marxism) and also on reddit, which made sense to me. There was some worthwhile discussion on the reddit thread.

My views were based on a combination of ideas, that marxism was:
  • based on an overblown idea of what science, as in "scientific socialism", could achieve, that marxism was a form of historical or dialectical determinism
  • monist (one True Way) rather than pluralist
  • based on the idea of freedom that recognised necessity
  • based on a belief that Marx / Marxists supported a fact-value dichotomy in their analysis, that facts are objective and values subjective
I went on to argue that these ideas in combination (scientism or scientific determinism + monism + necessity + fact-value dichotomy) opened the door to a deterministic-totalitarian politics in which ethics and democracy were sidelined. I acknowledged that Marx had made important (magnificent) contributions such as his analysis of Political Economy in Capital, but that the combination of the above concepts had led to an overly deterministic trend in analysing how the world worked.

What was I really on about? My thinking was that marxism wasn't doing any better than some form of pragmatic realism with a human face as developed by philosophers such as Hilary Putnam. And that other authors, moral philosophers such as Martha Nussbaum or Iris Murdoch, had done a better job of developing ethical theory than anything in Marx's writings. Marx's alleged neglect of ethics was central to my thinking here. In the reddit thread I said:
"I think we have to turn to authors who have delved deeply into ethical issues to get a handle on these questions. Not Marx but John Rawls, Hilary Putnam, Iris Murdoch, Amartya Sen, Martha Nussbaum would be my recommendations here"
I now think my critique was inadequate, as applied to Marx. I would now say that my critique may well be valid when applied to the "average marxist", the typical communist party / grouplet or to the practice of marxism in Stalin's Soviet Union but not valid to an understanding of Marx himself. The problem is not Marx but the average Marxist and in this particular case me being an average Marxist.

I'm interested and have been influenced by critiques of marxism by very smart people who have tried it out and had bad experiences. This includes the reflections by Hilary Putnam, Hannah Arendt and Iris Murdoch in particular. See the reference list below. I still think these authors are very smart but perhaps they are reacting more to their experiences with the average Marxist or average communist party rather than a deep understanding of Marx himself. That is the best explanation I can come up with at the moment. Marx in his own lifetime said that he was not a marxist after witnessing a dialogue between some of his supporters.

When I study other pro marxist authors such as Bertell Ollman, Patrick Murray and Terry Eagleton they argue for an interpretation of Marx which refutes my critique.

In looking back now I think it was healthy to challenge marxism in the way I did since it did apply to some of the practice and thinking, including my own at times, of those who describe themselves as marxist. But the subsequent challenge to justify my critique led me to further study of more of Marx's original writings as well as the above mentioned interpreters. In turn, this led to the realisation that my critique was based on insufficient depth of understanding of what Marx was really on about.

  • Marxism is developed by Marx as a science but his idea of science is not anything like what we regard as science today. I think Bertell Ollman argues convincingly that Marx adhered to a philosophy of internal relations and makes other points about Marx's method which are new to my understanding.
  • A theory of possible and probable historical developments through contradiction (and other methods of analysis) is not the same thing as One True Way historical determinism. There remains a larger question of whether Marxism is a monist or pluralist outlook about which I remain uncertain. For now, I still go along with Hilary Putnam's comment that emergent properties of thought (mental states) such as loving, hating, desiring, believing, judging, perceiving, hoping can't be reduced to the physical. We are stuck with this dualism. (Brentano's problem).
    "I am, then, a dualist, or, better, a pluralist. Truth, reference, justification - these are emergent, non-reducible properties of terms and statements in certain contexts. I do not mean they are not supervenient on the physical; of course they are. My dualism is one not of minds and bodies, but of physical properties and intentional properties. It does not even yield an interesting metaphysics." (Three Kinds of Scientific Realism, In Word and Life, 493)
  • Freedom is the recognition of necessity. That principle remains valid but would not be interpreted in a mechanical fashion if we get the nature of Marx's science and history right.
  • Marx never supported a fact-value dichotomy. This was more an issue that developed from Hume and the British empiricists. With Marx facts and values were built into his descriptions of society from the beginning. His ethics develop along with those descriptions. It is true that Marx was impatient with utopian socialists who focused more on the power of argument and ideas than the real social clash of material interests, that is a different issue than my incorrect allegation that Marx supported a fact-value dichotomy.
Much more needs to be said on all of these issues (the nature of science, monism / pluralism, freedom and necessity, facts and values) and other related issues.

What are the practical implications? Simply that well intentioned reform movements as developed by such admirable people as Amartya Sen and Martha Nussbaum ought to be supported but nevertheless are quite limited in terms of the real task of developing a movement that can effectively challenge and overthrow the real problem: capitalism.

Kerr, Bill. The Core Problem with Marxism
Weissberg, Alex. Conspiracy of Silence (1952)
Putnam, Hilary. How Not to Solve Ethical Problems (essay 12). In: Realism with a Human Face (1990)
Putnam, Hilary. Words and Life (1994)
Arendt, Hannah. The Origins of Totalitarianism. (1951)
Arendt, Hannah. On Revolution (1963)
Murdoch, Iris. Existentialists and Mystics (1997)
Ollman, Bertell. Dance of the Dialectic: Steps in Marx's Method.
Ollman, Bertell. Alienation: Marx's Conception of Man in Capitalist Society (1971)
Patrick Murray. Marx's Theory of Scientific Knowledge (1988)
Terry Eagleton. Why Marx Was Right (2011)
Nussbaum, Martha. Creating Capabilities: The Human Development Approach (2011)