Socialdem. 21st Century

TheIllusionist challenges me in a cutting comment here, which deserves a response. First, what do I mean by the “Old Left”? I mean the pre-1960s Left dominated by trade unions, socialist organisations, and the labour-based political parties like the British Labour party, Continental Social Democrats or other Christian labour-based parties of the Left.I happen to think the historical role of Christian socialism has been grossly underestimated by the modern secular Left. For example, on the...

Things to ponder on:(1) Classical liberalism of the 19th century was a left-wing movement, when placed on the political spectrum of that era. It follows that a major strand of the left was strongly in favour of laissez faire capitalism in the 19th century. (2) 19th century Conservatism had a strong protectionist and anti-laissez faire capitalist strand: think of the British Tory Paternalists, Tory Radicals and High Tories, some of whom led the Parliamentary reforms that regulated working...

I include the odd useful and relevant neoclassical work too. I will update on a regular basis:Baiman, R. 2010. “The Infeasibility of Free Trade in Classical Theory: Ricardo’s Comparative Advantage Parable has No Solution,” Review of Political Economy 22.3: 419–437.Bairoch, Paul. 1993. Economics and World History: Myths and Paradoxes. Harvester Wheatsheaf, New York and London.Brewer, A. 1985. “Trade with Fixed Real Wages and Mobile Capital,” Journal of International Economics 18:...

Ha-Joon Chang in 23 Things they Don’t Tell you about Capitalism states something few heterodox economists are prepared to discuss:“Wages in rich countries are determined more by immigration control than anything else, including any minimum wage legislation. How is the immigration maximum determined? Not by the ‘free’ labour market, which, if left alone, will end up replacing 80–90 per cent of native workers with cheaper, and often more productive, immigrants. Immigration is largely settled...

What follows is based on Erik S. Reinert’s book How Rich Countries Got Rich, and Why Poor Countries Stay Poor (2007), pp. 301–304.Ricardo’s famous example of cloth and wine production in Portugal and England (Ricardo 1819: 144–148) can be set out in the following table: Ricardo’s argument is simple: Portugal can produce more wine by concentrating on the production of that, and import cloth from England, even if (as in Ricardo’s example) it takes fewer labourers to produce cloth in Portugal...

My purpose here is not to analyse it or refute it in detail, but merely to set it out.Here it is taken from Ricardo’s On the Principles of Political Economy and Taxation (2nd edn.; 1819), in full context:“It is quite as important to the happiness of mankind, that our enjoyments should be increased by the better distribution of labour, by each country producing those commodities for which by its situation, its climate, and its other natural or artificial advantages it is adapted, and by their...

The argument for unrestricted free trade by Ricardo’s principle of comparative advantage requires a number of stated or hidden fundamental assumptions to work properly, as follows:(1) domestic capital or factors of production like capital goods and skilled labour are not internationally mobile, and instead will be re-employed in the sector/sectors in which the country’s comparative advantage lies;(2) workers are fungible, and will be re-trained easily and moved to the new sectors where...

As explained by Dean Baker here.

In a manner of speaking. See this splendid piece here by Paul Embery:Paul Embery, “The Demonisation of the Working-Class Shames Our Nation,” HuffPost Politics, 1 July, 2016.Except the new class war is being waged against the working class by an arrogant, metropolitan, snobbish, middle-class leftist elite that rules the left at the moment, with hordes of young university-educated leftists in tow. The elite is, to a great extent, influenced by economic neoliberalism (think: New Labour).The...

This has been brewing for some time and the full effects of it are unclear, but see here:Aoife White, “EU Approves $166 Billion Liquidity Guarantee for Italy Banks,” Bloomberg.com, July 1, 2016.Valentina Pop, Gabriele Steinhauser and Giovanni Legorano, “European Commission Authorized Italian Government to support Banks,” Wall Street Journal, June 30, 2016.The Italian banks reportedly have €360 billion of non-performing loans on their books, and the European Commission – apparently shooting...