Commentary on Political Economy

Saturday 28 August 2021


 Paul Krugman has a gem in the NYT... He does a valuable and admirable job on the scandalous nefarious mess the Republicans have become, but he is much better in this register. Unless the US can stop the abuse of the internet as a social 'medium', and redress the frightening rise of inequality, the West does not stand a chance against "Oriental despotism".

Of course, Krugman leaves out the essential point: there is NO "knowledge economy", other than sheer capitalist extortion of service labour through the naked theft of social information, for one, and skewed asset pricesfor another, owing to reckless financial conditions. Krugman forgets that housing crises are being experienced IN EVERY REGION OF THE CAPITALIST METROPOLE! from London to Hobart. Owners of capital have nowhere to invest due to, first, low rate of profit leading to, second, low interest rates, leading to, third, "rent-seeking extraction" by means of ownership of economically "strategic" assets such as land and utilities and primary resources.

How on earth did this guy get a Nobel? But then, most recipients in economics have never thought deeply about their 'science'. They are like radiographers in medicine: they read the images, yet know little or nothing of the pathologies...

A Latin saying: si monumentum requiris, circumspice!  If you require evidence, look around you! This story in the ABC this morning would tell Krugman where he can stick his "knowledge economy" - to which presumably he thinks he belongs!

Low profitability means low productive investment, which means government fiscal intervention and higher public debt, leading to higher asset prices, more debt, lower rates.... You get the drift.

Unfortunately, most people find it hard to see the big picture, as exemplified by this wholly admirable effort by Emili Schirmer in the NYT. I could never do this kind of research: too lazy, too weak, too much the theoretician. But i have learned to respect "researchers" . Without them, people like me could never come down from the clouds!

As "the knowledge economy" extort astronomic amounts of social resources from the rest of the working class, it is the workers in services who come under intense pressure - as anyone put on hold by a utility knows all too well...

Some laudable American researchers have called it "the emotional service economy" because workers spend more time calming irate customers down... it is yet another instance of how living standards have plummeted in the West... and why Taipei is still worth a thought, if you have the means...

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