David Hume i el pensament econòmic

A Philosopher's Economist: Hume and the Rise of Capitalism 

Resumit amb IA.

El llibre "A Philosopher's Economist: Hume and the Rise of Capitalism" de Margaret Schabas i Carl Wennerlind explora a fons la contribució de David Hume a l'economia, connectant-la amb la seva filosofia general. A continuació, es presenten els punts clau del llibre:

• Hume com a economista integral: El llibre argumenta que l'economia és un fil conductor unificador en l'obra de Hume. Hume no només va estudiar l'economia per si mateixa, sinó també com un mitjà per entendre i promoure el refinament moral, la pau i la prosperitat.
• Rellevància de "Political Discourses": Tot i que Hume és conegut principalment com a filòsof, el seu llibre "Political Discourses" (1752) va ser immensament influent en el seu temps, amb múltiples edicions i traduccions. El llibre busca reivindicar la importància d'aquesta obra i connectar-la amb el conjunt del pensament de Hume.
• Èmfasi en l'experiència pràctica: El llibre destaca com l'experiència de Hume en el món comercial, incloent el seu treball com a dependent d'un comerciant a Bristol i les seves funcions en missions diplomàtiques, va influir en el seu pensament econòmic.
• Metodologia econòmica: Hume va desenvolupar un enfocament sofisticat per a l'economia, explorant els mitjans pels quals es formen i legitimen els principis matemàtics i les teories científiques. El seu treball va iniciar una línia d'investigació coneguda com a metodologia econòmica.
• La "ciència del comerç": Hume va definir l'economia, o la "ciència del comerç", com un camp d'estudi amb fenòmens específics com el diner, el comerç i la balança comercial. Aquesta definició es va mantenir influent al llarg del segle XVIII.
• Hume i la classe mitjana: Hume creia que la classe mitjana era el principal públic per als discursos sobre moralitat, ja que tenien un coneixement més profund de la naturalesa humana a causa de la seva participació en el món comercial.
• Recepció a Europa: "Political Discourses" va ser traduït a diversos idiomes i va influir en el pensament econòmic a tot el continent. En particular, la traducció francesa d'Abbé Jean-Bernard Le Blanc va donar una interpretació francesa distintiva de l'economia de Hume.
• Llegat durador: El llibre argumenta que la influència de Hume en l'economia es va estendre molt més enllà del seu temps, influint en figures com Marx, Menger, Schumpeter i Hayek.

En resum, "A Philosopher's Economist" presenta una anàlisi exhaustiva de les idees econòmiques de David Hume, destacant la seva rellevància per a la seva filosofia i la seva influència duradora en el camp de l'economia.

PS. Resum del llibre "Discursos Polítics"

"Discursos polítics" de David Hume és una col·lecció d'assajos que aprofundeixen en una àmplia gamma de temes polítics i econòmics. Hume, conegut pel seu empirisme filosòfic, aplica el seu enfocament escèptic i basat en l'experiència a l'anàlisi de la política i l'economia.

A continuació, es presenta un resum detallat dels temes clau que Hume aborda als seus "Discursos polítics":

1. La naturalesa de la societat:

• Rebuig del contracte social: Hume rebutja la idea del contracte social com a fonament de la societat, argumentant que les societats evolucionen gradualment a partir dels hàbits i costums humans.
• Importància de la utilitat: Emfatitza la importància de la utilitat i l'interès propi en la formació de les institucions socials, destacant que les persones tendeixen a cooperar quan els beneficia.

2. El comerç i l'economia:

• Defensa del lliure comerç: Hume defensa el lliure comerç i argumenta que beneficia totes les nacions, refutant les doctrines mercantilistes que prevalien en la seva època.
• Relació entre riquesa i poder: Analitza la relació entre la riquesa, el comerç i el poder polític, destacant la importància de la innovació i la productivitat per a la prosperitat nacional.
• Teoria monetària: Hume fa una anàlisi exhaustiva de la importància de la moneda, i com aquesta, afecta a l'economia d'un país. Explora com les variacions en l'oferta monetària poden influir en els preus i l'activitat econòmica.

3. El govern i la política:

• Formes de govern: Hume explora les diferents formes de govern, incloent-hi la monarquia i la república, i analitza els seus avantatges i desavantatges.
• Importància de les lleis: Destaca la importància de les lleis i les institucions per mantenir l'ordre social i protegir els drets individuals.
• Llibertat: Hume, explora la importància de la llibertat, i com aquesta, afecta al desenvolupament d'un poble. Argumenta que la llibertat política i econòmica són essencials per a la prosperitat i l'estabilitat.

4. La naturalesa humana i la política:

• Passions i interessos: Hume argumenta que les passions i els interessos humans influeixen en gran manera en la política.
• Prudència i sentit comú: Destaca la importància de la prudència i el sentit comú en la presa de decisions polítiques.

Aspectes clau del pensament de Hume:

• Empirisme: Hume aplica el seu enfocament empirista a l'estudi de la política i l'economia, basant les seves conclusions en l'observació i l'experiència.
• Escepticisme: Mostra un escepticisme saludable cap a les teories abstractes i les ideologies rígides, preferint un enfocament pragmàtic i realista.
• Utilitarisme: Hume tendeix a valorar les institucions i les polítiques en funció de la seva utilitat per a la societat.

En resum, "Discursos polítics" de Hume ofereix una perspectiva profunda i matisada sobre la política i l'economia, basada en una comprensió sòlida de la naturalesa humana i l'experiència històrica.

Podem reimaginar-nos un nou capitalisme? (8)

 The Price Is Wrong. Why Capitalism Won’t Save the Planet

El mecanisme de preus no ha nascut per a capgirar les prioritats energètiques i conservacionistes. El capitalisme no salvarà el planeta, i ningú li ha dit que ho faci. Més aviat fa el contrari. I el socialisme tampoc el salvarà, això ja ho sabem de fa dies.

Today's consensus is that the key to curbing climate change is to produce green electricity and electrify everything possible. The main economic barrier in that project has seemingly been removed. But while prices of solar and wind power have tumbled, the golden era of renewables has yet to materialize.

The problem is that investment is driven by profit, not price, and operating solar and wind farms remains a marginal business, dependent everywhere on the state's financial support.

We cannot expect markets and the private sector to solve the climate crisis while the profits that are their lifeblood remain unappetizing. But there is an alternative to providing surrogate green profits through subsidies: to take energy out of the private sector's hands.

I el llibre proposa una energètica pública? No sé pas on anirem a parar.

Podem reimaginar-nos un nou capitalisme? (6)

 Crack-Up Capitalism. Market Radicals and the Dream of a World Without Democracy

Els fonaments del leviatan farmacèutic

 El passat 12 de març sense que gaire gent se n'adonés va passar un fet singular. En un consell de ministres es va aprovar la creació d'una empresa farmacèutica "pública", Terafront Farmatech. Dic "pública" perquè qui acorda el seu naixement és el govern. Ho va fer per la porta del darrera, sense fer soroll. La fórmula és: el CDTI té una empresa anomenada Innvierte Economía Sostenible SICC S.M.E, i aquesta empresa ha de fer una pacte negociat per a constituir una societat amb participació privada dedicada a teràpies avançades. Per descomptat, aprofitant que es pot amanir amb fons europeus i PERTE i el que calgui. El capital serà de 74 milions € i decideixen el la participació privada serà per part de dues empreses decidides digitalment ( a dit, fórmula democràtica i transparent): ROVI i Insud  Pharma. I curiosament, aquestes dues empreses tindran el 51% del capital, serà doncs empresa privada (!). I ja hem tancat el cercle. Aquests són els fonaments del leviatan farmacèutic. 

El leviatan (en hebreu: לִוְיָתָן, Livyatan, Liwyāṯān, "cargolat") és un monstre marí bíblic al qual es fa referència a l'Antic Testament, es fa servir sovint per designar forces incontrolables o criatures de grans proporcions. L'empresa "pública" ja s'ha dissenyat privada, incontrolable, i el sector públic no té els drets de decisió. Ara bé, les dues empreses privades tenen accés a fons europeus  i PERTE sense necessitat d'aplicar a un concurs, en la mesura que el CDTI els aportarà. Accés a recursos financers fàcils i barats, baratíssims. Magnífic. Endavant les atxes.

Això té un nom i se'n diu capitalisme clientelar, "crony capitalism", "capitalismo de amiguetes" executat des del socialisme. Això ha passat davant els ulls de tothom sense que ningú en digués absolutament res.

Ara no és moment de debatre si cal o no una empresa farmacèutica pública o si aquestes empreses estan qualificades per a teràpies cel·lulars. Senzillament és moment de dir prou i fer marxa enrera a aquest tipus d'enginyeria clientelar opaca. Tant sols afegiré una dada addicional, totes dues empreses són de MADRID, "com no podia ser d'una altra manera".

Antoni Rosal al KBR

Talment podrien il·lustrar perfectament la teranyina del capitalisme clientelar

Els que mouen els fils (sense que la gent se n'adoni)

 Our Lives in Their Portfolios: Why Asset Managers Own the World

Els bancs han passat a un segon pla des de la crisi financera mundial de fa més d'una dècada. Avui, els nostres nous mestres financers són gestors d'actius, com Blackstone i BlackRock. I no només posseeixen actius financers.

Les carreteres per les quals conduïm; les canonades que subministren la nostra aigua potable; les terres de conreu que ens proporcionen els aliments; sistemes energètics per a electricitat i calor; hospitals, escoles i fins i tot les llars on molts de nosaltres vivim, ara tots augmenten la gran cartera d'inversió dels gestors d'actius.

Com a propietaris de cada cop més els elements bàsics de la vida quotidiana, els gestors d'actius configuren la vida de tots i cadascun de nosaltres de manera profunda i inquietant. En aquest seguiment revelador de Rentier Capitalism, Brett Christophers treu el vel a la ""societat de gestor d'actius".

Els gestors d'actius, mostra, són diferents dels propietaris tradicionals d'habitatges i altres infraestructures essencials. Comprant i venent aquests actius vitals a un ritme vertiginós, el quid del seu model de negoci no és la inversió a llarg termini i la custòdia acurada, sinó obtenir beneficis ràpids per a ells mateixos i els inversors que els donen suport.

En la societat gestora d'actius, els entorns naturals i construïts que ens sostenen es converteixen en un vehicle més per desviar diners de molts a pocs.

PS. Fonamental llegir aquest comentari.

 

Podem reimaginar-nos un nou capitalisme? (6)

The crisis of democratic capitalism 

En aquest blog he escrit anteriorment sobre reimaginar el capitalisme i realment fa molts anys que se'n parla però qui dia passa any empeny. Ara en Martin Wolf, cap d'opinió de FT acaba de publicar un llibre il·lustrador. Ho és perquè explica amb tot detall com hem arribat fins aquí, i què caldria fer per avançar en les institucions democràtiques i econòmiques, i evitar així més d'un ensurt.

Aquest llibre argumenta que quan la gent no veu cap esperança i perd la confiança en les institucions democràtiques, tant la democràcia com els mercats poden fallar i fallaran. En resum, cal una reforma radical i valenta de l'economia capitalista i hem d'enfortir els vincles econòmics de la ciutadania alhora que s'aprofundeix la cooperació internacional.

El llibre es llegeix magníficament, està molt ben escrit. Destaco alguns paràgrafs clau:

A market economy that operates under trustworthy rules, rather than the whims of the powerful, underpins prosperity and lowers the stakes of politics. In turn, a competitive democracy induces politicians to offer policies that will improve the performance of the economy and so the welfare of the people. Beyond these practical reasons for the marriage of liberal democracy and market economy, there is also a moral one: both are founded on a belief in the value of human agency—people have a right to do the best they can for themselves; people have a similar right to exercise a voice in public decisions. At bottom, both are complementary aspects of human freedom and dignity.

Els objectius de reforma del capitalisme democràtic haurien de ser:

• Un nivell de vida creixent, àmpliament compartit i sostenible
• Bona feina per a aquells que poden treballar i estan preparats per fer-ho
• Igualtat d'oportunitats
• Seguretat per a qui ho necessiti
• Acabar amb privilegis especials per a uns pocs

Removing harms, not universal happiness, is the objective. The approach to reform is that of “piecemeal social engineering,” as recommended by Karl Popper, not the revolutionary overreach that has so often brought calamity.

Behind these specific proposals is a wider perspective. A universal suffrage democracy will insist on a citizenship that is both economic and political. This means that business cannot be free to do whatever it wishes. It means that taxes must be paid, including by the economically powerful. It means that the state must be competent and active, yet also law-governed and accountable. All of this was the clear lesson of the twentieth century.

I sobre el concepte de ciutadania, el que no és i el que és:

Here are things this does not mean.

It does not mean that democratic states should have no concern for the welfare of noncitizens. Nor does it mean that it sees the success of its own citizens as a mirror image of the failures of others. On the contrary, it must seek mutually beneficial relations with other states.

It does not mean that states should cut themselves off from free and fruitful exchange with outsiders. Trade, movement of ideas, movement of people, and movement of capital, properly regulated, can be highly beneficial.

It does not mean that states should avoid cooperating closely with one another to achieve shared goals. This applies above all to actions designed to protect the global environment.

Yet there are things it clearly does mean.

It means that the first concern of democratic states is the welfare of their citizens. If this is to be real, certain things must follow.

Every citizen should have the reasonable possibility of acquiring an education that would allow them to participate as fully as possible in the life of a high-skilled modern economy.

Every citizen should also have the security needed to thrive, even if burdened by the ill luck of illness, disability, and other misfortunes.

Every citizen should have the protections needed to be free from abuse, physical and mental.

Every citizen should be able to cooperate with other workers in order to protect their collective rights.

Every citizen, and especially successful ones, should expect to pay taxes sufficient to sustain such a society.

Those who manage corporations should understand that they have obligations to the societies that make their existence possible.

Citizens are entitled to decide who is allowed to come and work in their countries and who is entitled to share the obligations and rights of citizenship with them.

Politics must be susceptible to the influence of all citizens, not just the wealthiest.

Policy should seek to create and sustain a vigorous middle class, while ensuring a safety net for everybody.

All citizens, whatever their race, ethnicity, religion, or gender are entitled to equality of treatment by the state and the law.

The West cannot go back to the 1960s. It cannot go back to a world of mass industrialization, where most educated women did not work, where there were clear ethnic and racial hierarchies, and where the Western countries still dominated the globe.

Missatge contundent pels qui el vulguin sentir, no podem tornar als 60s, i de vegades penso que hi anem de camí.

I per aquells que no els agrada el capitalisme i el voldrien fer desaparèixer, unes paraules de recordança: 

There are, it is true, alternative ways to seek power under democratic capitalism. All will fail. One extreme is to offer a fully socialized economy. But the economy will founder, and the rulers will be forced out of power or seize it undemocratically, as happened most recently in Venezuela. An opposite extreme is to marry laissez-faire economics to a populism founded on anti-intellectualism, racism, and cultural conservatism. Such pluto-populism is also likely to end in an autocracy in which even plutocrats are insecure. A still faster route to autocracy is via a blending of the two extremes in nationalist socialism (or national socialism). This combines a welfare state with arbitrary rule by demagogues. This, too, will ultimately ruin both the economy and democracy, as the unaccountable gangster in charge rewards cronies and punishes opponents.

 Human beings must act collectively as well as individually. Acting together, within a democracy, means acting and thinking as citizens.

If we do not do so, democracy will fail, and our freedoms will evaporate.

It is our generation’s duty to ensure it does not. It took too long to see the danger. Now it is a moment of great fear and faint hope. We must recognize the danger and fight now if we are to turn the hope into reality. If we fail, the light of political and personal freedom might once again disappear from the world.

L'alerta és clara per qui la vulgui sentir, és el deure de la nostra generació, ens hi juguem la llibertat. Ho diu ben clar. Actuar depèn de cadascú de nosaltres i de tots nosaltres col·lectivament. 

Per tant, si que és possible reimaginar el capitalisme i en Martin Wolf dona algunes pistes. Molt recomanable la lectura i relectura pausada. Malauradament em temo que a molts dirigents els passarà per alt i ni se'n adonaran que s'ha publicat.

 

Can capitalism be reimagined? (6)

Capitalism: The Story behind the Word 

Can capitalism be reimagined ?(5)

 Woke Capitalism. How Corporate Morality is Sabotaging Democracy

The Oxford dictionary’s definition woke refers to being ‘well informed’ or ‘alert to racial or social discrimination and injustice’.

Essentially, we have two opposing positions. One, from a liberal left position such as Elizabeth Warren’s, agrees that corporations should genuinely and authentically support the broad interests of society rather than just focusing on shareholders. Another, from a traditional right-wing perspective, believes that corporations should be purely economic entities and not interfere directly in social or political matters. This book has taken a third position. That is, despite how it looks on the surface, corporate engagement with progressive politics is harming democracy and preventing actual progress. What this means is that being critical of woke capitalism does have to necessitate a dismissal of  progressive politics. Waking up to the realities of woke capitalism means not being fooled into thinking that it represents any genuine underlying change to the primary interests that capitalist corporations are willing or able to pursue.

The real effects of woke capitalism are not about the success of left activism in gaining support from big business. They are about ensuring that there is no fundamental reform of the dominant neoliberal world order that has exacerbated inequality, fuelled fascist populism, and stood by as the climate crisis escalates. Dismissing woke capitalism as just another example of virtue signalling is counterproductive in that it fails to take seriously the real damage that woke capitalism can do. Laughing at corporate progressiveness as a superficial and inauthentic business practice entirely underestimates its real power. This is not simply about the short-term profitability assumed by the ‘go woke, or go broke’ credo. Going woke is about ensuring that market capitalism can continue on the trajectory that it has been on for the past 40 years. Woke capitalism is a strategy for maintaining the economic and political status quo and for quelling criticism.

Anthropocene, green arithmetic and capitalocene

 Anthropocene or Capitalocene? Nature, History, and the Crisis of Capitalism

Formulated by Paul Crutzen and Eugene Stoermer in 2000, the Anthropocene concept proceeds from an eminently reasonable position: the biosphere and geological time has been fundamentally transformed by human activity. A new conceptualization of geological time—one that includes “mankind” as a “major geological force”—is necessary. This was a surely a courageous proposal. For to propose humanity as a geological agent is to transgress one of modernity’s fundamental intellectual boundaries. Scholars call this the “Two Cultures,” of the “natural” and “human” sciences (Snow 1957). At its best, the Anthropocene concept entwines human history and natural history—even if the “why” and the “how” remain unclear, and hotly debated. 

 Green Arithmetic. It is a curious term, but I can think none better to describe the basic procedure of environmental studies over the past few decades: Society plus Nature = History. Today it is Humanity, or Society, or Capitalism plus Nature = Catastrophe. I do not wish to disparage this model. It has been a powerful one. It has provided the philosophical basis for studies that have delivered a wealth of knowledge about environmental change. These studies, in turn, have allowed a deeper understanding of the what of the biosphere’s unfolding “state shift.” But they have not facilitated—indeed they have stymied—our understanding of how the present crisis will unfold in a world-system that is a world-ecology, joining power, nature, and accumulation in a dialectical and unstable unity.

 The Capitalocene. As I think the contributions to this volume clarify, the Capitalocene does not stand for capitalism as an economic and social system. It is not a radical inflection of Green Arithmetic. Rather, the Capitalocene signifies capitalism as a way of organizing nature—as a multispecies, situated, capitalist world-ecology. I will try to use the word sparingly. There have been many other wordplays—Anthrobscene (Parikka 2014), econocene (Norgaard 2013), technocene (Hornborg 2015), misanthropocene (Patel 2013), and perhaps most delightfully, manthropocene (Raworth 2014). All are useful. But none captures the basic historical pattern modern of world history as the “Age of Capital”—and the era of capitalism as a world-ecology of power, capital, and nature.

Planetary health

 Safeguarding human health in the Anthropocene epoch: report of The Rockefeller Foundation–Lancet Commission on planetary health

The Anthropocene is functionally and stratigraphically distinct from the Holocene

The Conservation Revolution. Radical Ideas for Saving Nature beyond the Anthropocene

Two key articles and a book on the topic of planetary health.

Our more grounded goal was to distil the main issues at stake in these complex debates, which we argue revolve around two main axes: the human–nature dichotomy and the ecological merits or perils of contemporary capitalism. Both issues are not straightforward, and there can be no straightforward, black-and-white arguments for or against them. Indeed, there is a distinct danger in presenting them this way, as it does not correspond to empirical reality and the nuances of the debate. We therefore need to do justice to the potentially radical natures of these alternative proposals by discussing them in more depth to show in greater detail how and why they are radical and important, yet contain several untenable contradictions.

 

Creative destruction or how to save capitalism from the capitalists

The Power of Creative Destruction. Economic Upheaval and the Wealth of Nations

This book is an invitation to a journey: a journey through economic history, more specifically a journey to explore the enigmas of economic growth through the lens of creative destruction.

Creative destruction is the process by which new innovations continually emerge and render existing technologies obsolete, new firms continually arrive to compete with existing firms, and new jobs and activities arise and replace existing jobs and activities. Creative destruction is the driving force of capitalism, ensuring its perpetual renewal and reproduction, but at the same time generating risks and upheaval that must be managed and regulated.

This is precisely what this book explains. And behind the driving force of capitalism, you'll find ideas, as Deirdre McCloskey dixit. 

From Shumpeter:

The first idea is that innovation and the diffusion of knowledge are at the heart of the growth process.

The second idea is that innovation relies on incentives and protection of property rights

The third idea is creative destruction: new innovations render former innovationsobsolete. In other words, growth by creative destruction sets the stage for apermanent conflict between the old and the new: it is the story of all incumbent firms, all the conglomerates, that perpetually attempt to block or delay the entryof new competitors in their sectors.

Creative destruction thus creates a dilemma or a contradiction at the very heart of the growth process. On the one hand, rents are necessary to reward innovation and thereby motivate innovators; on the other hand, yesterday’s innovators must not use their rents to impede new innovations. As we mentioned above, Schumpeter’s answer to this dilemma was that capitalism was condemned to fail precisely because it was impossible to prevent incumbent firms from obstructing new innovations. Our response is that it is indeed possible to overcome this contradiction, in other words to regulate capitalism or, to take the title of Raghuram Rajan’s and Luigi Zingales’ 2004 book, to “save capitalism from the capitalists.”

PS. Shelling on the strategy of conflict.

Mazzucato as a supplier of a flattering narrative for politicians (2)

Mission Economy. A Moonshot Guide to Changing Capitalism

My former post on a recent book by Mazzucato was based on a comment by McCloskey. Now, she has published a new one, and the best comment has been made by John Kay, clear message, I don't have anything to add.

Ever since 1969, people have asked themselves why if humans can land on the moon, can’t they solve pressing problems here on Earth, such as poverty, dementia and climate change. Mariana Mazzucato offers an answer: if only governments would apply the mission-driven methods of the Apollo project, they could.

Mission Economy, the new book from the high-profile economist noted for her advocacy of a more active state, contains many screenshots of the whiteboards beloved of brainstorming meetings, each with an ambitious goal at the top: secure the future of mobility, clean oceans, defeat cancer; below is a jumble of boxes and circles linked by multidirectional arrows.

We need a “solutions based economy”, driven and co-ordinated by more powerful governments engaged in every stage of the process of innovation.

But Apollo was a success because the objective was specific and limited; the basic science was well understood, even if many subsidiary technological developments were needed to make the mission feasible; and the political commitment to the project was sufficiently strong to make budget overruns almost irrelevant. Centrally directed missions have sometimes succeeded when these conditions are in place; Apollo was a response to the Soviet Union’s pioneering launch of a human into space, and the greatest achievement of the USSR was the mobilisation of resources to defeat Nazi Germany.

Nixon’s war on cancer, explicitly modelled on the Apollo programme, was a failure because cancer is not a single illness and too little was then — or now — understood about the science of cell mutation. Mao’s Great Leap Forward, a vain bid to create an industrial society within five years, proved to be one of the greatest economic and humanitarian disasters in human history. At least 30m people died.

Democratic societies have more checks and balances to protect them from visionary leaders driven by missions and enthused by moonshots, but the characteristics which made the Great Leap Forward a catastrophe are nevertheless still evident in attenuated version.

With political direction of innovation we regularly encounter grandiosity of ambition and scale; the belief that strength of commitment overcomes practical problems; an absence of honest feedback; the suppression of sceptical comment and marginalisation of sceptical commentators. All these were seen in Britain’s experience with Concorde, the Channel Tunnel and the AGR nuclear reactor programme, some of the worst commercial projects in history. More recently, there is the £12bn wasted on the NHS computerisation programme — a project that Mazzucato mentions, though only to blame private contractors for their failure to deliver on the political imperative.

On a smaller scale, Britain has suffered in the last year from the delays resulting from Public Health England’s insistence on central control of the coronavirus testing programme and the predictable fiasco of the attempt to sideline the expertise of Apple and Google in order to develop a uniquely advanced NHS test and trace app. And in September there was prime minister Boris Johnson’s “operation moonshot”, designed to control the coronavirus by testing 10m people daily in early 2021.

In contrast to these failures, the rapid development of vaccines is, at least provisionally, a success story. That development is not the product of visionary central direction but is the result of a competitive process with many different teams around the world attempting to be among the first across the finishing line.

Their work has drawn on a combination of existing academic science with the expertise in development and testing and the manufacturing and logistics capabilities of the global pharmaceutical industry. The role of government, appropriately, has primarily been in funding basic research and assuring that there will be a rewarding market for successful products.

Mazzucato lists “twenty things we wouldn’t have without space travel”. Athletic shoes, CAT scanners, home insulation, baby formula, artificial limbs. Yes, really. But beyond the ridiculous headline, we see the reality of productive innovation: a decentralised process in which developers draw on and help create the collective intelligence that leads to constant incremental improvement in so many fields — including better running shoes.

When historians of technology review the past 50 years, they may conclude that Neil Armstrong exaggerated when he announced “one giant leap for mankind”. The “new frontier” of the late 1960s turned out to be, not space, but information technology. And the development of IT was characterised by a striking absence of centralised vision and direction.

No moonshots; but piecemeal innovation through disciplined pluralism in which temporary winners were almost always displaced as they failed to anticipate the next step of the journey. Do you remember Digital Equipment, Word Perfect, Wang Laboratories, CompuServe, Netscape, AOL, BlackBerry? Each once a leader, now forgotten. Even Apple suffered more than one near-death experience, Microsoft failed to anticipate mobile computing or the cloud, IBM was swept out of the industry it had created.

Mazzucato has correctly emphasised the contribution of state funded basic research to Silicon Valley, but thank goodness the development was in the hands of Steve Jobs, Travis Kalanick and Elon Musk rather than a committee in the department of commerce.

No one has, or could have, the knowledge of present or future required to create or implement successfully the strategies that Mazzucato recommends. Take her modern signature example — Germany’s Energiewende, or energy transition to renewables. You will not learn from Mission Economy that this highly political, much publicised and wildly expensive project has brought about significantly smaller reductions in carbon emissions than Britain’s quiet, economically and socially beneficial substitution of gas for coal.

The failure of the Energiewende illustrates the dangers of moonshots and the mission economy. As talk of a “Green New Deal” becomes more frequent on both sides of the Atlantic, the prospect of more large, costly and ineffectual visionary projects grows.

Politicians readily fall in love with such proposals, and Mazzucato is not shy in reminding us how anxious they are to engage with her in discussing them. But the vision that propelled China’s economic development was not Mao’s Great Leap Forward or Cultural Revolution, but Deng’s “it doesn’t matter whether a cat is black or white if it catches mice”. It is more rewarding and effective to build better mousetraps than to shoot for a mice-free world.

John Kay is an economist, author and fellow of St John’s College, Oxford

 

What is the alternative to Friedman’s capitalism?

 Milton Friedman 50 Years Later

Angus Deaton says:

“Milton Friedman was one of the foremost thinkers who challenged the post-war Keynesian consensus. He was immensely successful in arguing the pro-market case, and questioning the ability of government to improve on market outcomes. Today, we need to reopen these questions, using new economic thinking and new evidence; is the market bringing the unalloyed benefits that Friedman thought it would? This book is an important contribution to that reevaluation,”

And this is the capitalism that Martin Wolf expects:

“in which companies would not promote junk science on climate and the environment; it is one in which companies would not kill hundreds of thousands of people, by promoting addiction to opiates; it is one in which companies would not lobby for tax systems that let them park vast proportions of their profits in tax havens; it is one in which the financial sector would not lobby for the inadequate capitalisation that causes huge crises; it is one in which copyright would not be extended and extended and extended; it is one in which companies would not seek to neuter an effective competition policy; it is one in which companies would not lobby hard against efforts to limit the adverse social consequences of precarious work; and so on and so forth.”   

 

Prophets and self-fulfilling prophecies

 The Corona Crash. How the Pandemic Will Change Capitalism

Always you may find a prophet around the corner. Fukuyama predicted the end of history, the triumph of liberal democracy and the arrival of post-ideological world. Recently Y. N. Harari predicted the end of liberalism and the arrival of a post-humanism and nothing happened. The history goes on and some of them only may expect that their predictions transform into self-fulfilling prophecies. This is the case of today's book. It distorts reality to adjust to the ideology and desires of the author. I must say that some parts may be true, but on the whole, reading it is a waste of time in my opinion. Just some pieces, and you may judge:

In this context, the suggestion that governments must refrain from ‘interfering’ in the forces of free market competition to create jobs, reduce inequality and increase environmental sustainability is laughable. We do not live in a competitive economy – we live in a planned economy. But the planning is not democratic – it is being undertaken by central bankers, senior politicians and their advisors in big business and finance.

For the rich world, the lesson of the coronavirus crisis is that states can spend to meet the needs of their populations without limit. For the vast majority of the world’s population, this crisis will simply reinforce what they already knew: that the poorer, less powerful members of the international ‘community’ most certainly can’t. Socialists in the Global North must learn the right lesson: that the limits of fiscal policy are determined by political power. International solidarity requires us to return to the issue of debt forgiveness and push for relief for Global South states when this crisis is over.

The free market ideology which serves to legitimise forms of government intervention that support the interests of capital and prohibit state interventions that might increase the power of workers has been placed under significant strain in the period since the financial crisis. As we have seen, the foundation of this ideology is the separation between politics and economics.

You may remember that with the great recession there were voices saying that capitalism was in crisis and there was a need to rebuild it. And?. Any system lives in continous unstability. This is not the end, it needs an urgent fine tuning right now but absolutely different from the book proposal.

 

The claims of reason and the imperative of power

The Professor and the Politician. For Max Weber, only the most heroic figures could generate meaning in the world. Does his theory hold up today?

Charisma and Disenchantment: The Vocation Lectures

For Max Weber:

The professor and the politician are not figures to be joined. Each remains a lonely hero of heavy burden, sent to ride against his particular foe: the overly structured institution of the modern mind, the overly structured institution of the modern state.

 The politician needs to convert effort into effect, to “make an impression” on the world. But there’s a fine line between molding the world into a shape and needing to see one’s signature at the base of it. The politician is always at risk of swapping out “actual power”—power tethered to purpose—for “the brilliant appearance of power”—power untethered from purpose. The first is the aim of the true politician; the second, the temptation of vanity, which is “the deadly enemy of any commitment to one’s goals.” When a politician gives in to vanity, amending or adapting his aims in order to perform effectiveness, his power is drained of its design.

 The spectre haunting Weber is neither bureaucracy nor capitalism (although capitalism does play an under-remarked role in these lectures). Instead, it’s an ancient tension between hero and fate, transposed to modern life. Where classical tragedy sees the hero felled by a destiny that he resists, the nemesis of the Weberian actor is absorption in the institutions that he’s meant to oppose. Society is a siren, forever tempting us to forsake our tasks and seek the smaller goods of reputation and status. The scholar becomes a scribe; the politician, a hack. The danger is not defeat of the opposing self from without but corruption of the self from within, where the self’s diminishing desire to oppose comports all too well with society’s needs.

Great op-ed by Corey Robin at The New Yorker.

Joana Biarnés

 

Opioid crisis

Deaths of Despair and the Future of Capitalism

Beyond covid crisis there is still another one in US: the opioid crisis. The most relevant book on the topic is the Case-Deaton one.

We are telling the story in the way that we uncovered it, starting with midlife deaths of all kinds. We then focused on the immediate causes, which turned out to be deaths of despair among whites plus a slowdown and reversal in deaths from heart disease, which, until then, had been a main engine of mortality decline. Unfortunately, deaths of despair are not only afflicting middle-aged whites. While the elderly have been largely exempt, there have also been rapid increases in deaths of despair—particularly from overdoses and suicides—among younger whites. For whites between the ages of forty-five and fifty-four, deaths of despair tripled from 1990 to 2017. In 2017, this midlife age-group
had the highest rate of mortality from deaths of despair. But whites in younger age-groups were also doing badly and their deaths rose even more rapidly, accelerating in the last few years.

 Drug overdoses are the single largest category of deaths of despair. They are part of a broader epidemic that includes death from alcoholism and suicide, a reflection of the social failures that we have described in this book. Yet the behavior of the pharmaceutical companies caused more deaths than would otherwise have happened, showering gasoline on smoldering despair. Stopping the drug epidemic will not eliminate the root causes of deaths of despair, but it will save many lives and should be an immediate priority. Addiction is extremely hard to treat, even with the cooperation of the addict. There appears to be wide agreement that medication-assisted treatment can be effective, but it is not available to everyone, often because of cost.

Ps. Medicaments i risc de pneumònia

 Els analgèsics opiacis causen depressió respiratòria amb la hipoventilació pulmonar resultant;
alguns d’ells (codeïna, morfina, fentanil i metadona) també tenen efectes immunosupressors.
Incrementen el risc de pneumònia i la mortalitat respiratòria en un 40 a 75%.26,27,28
L’any 2018, uns 50 milions de persones als EUA (15% de la població adulta, 25% entre els més
grans de 65 anys) reberen una mitjana de 3,4 prescripcions d’analgèsics opiacis, i 10 milions de
persones reconeixien consum exagerat d’analgèsics de prescripció mèdica.29 A Europa en els
últims anys el consum d’opiacis suaus y forts ha augmentat, sobretot entre la gent gran.30,31
Fentanil i morfina son els opiacis forts més consumits, i més recentment oxicodona. El
tramadol, que és també inhibidor de la recaptació de serotonina, és l’opiaci suau més consumit.
En dos estudis observacionals de publicació recent, el consum de tramadol, comparat amb el
d’AINE, es va associar a una mortalitat 1,6 a 2,6 vegades més alta,32,33 sobretot en pacients
amb infecció i en pacients amb malaltia respiratòria.

Can capitalism be reimagined? (4)

Rethinking Capitalism lectures

From UCL Institute for Innovation and Public Purpose;

Western Capitalism is in crisis, with falling productivity, investment and living standards, widening inequality, financial instability and the growing threat of climate change. This undergraduate module provides students with a critical perspective on these ‘grand-challenges’ and introduces them to new approaches to economics and policy which challenge standard thinking.
The module draws on the book “Rethinking Capitalism”, edited by Mariana Mazzucato (Director of IIPP) and Michael Jacobs (Visiting fellow in the UCL School of Public Policy). It features guest academic lectures from some of the chapter authors which can be viewed below. These academic lectures are combined with presentations by policy makers working at the frontline of the issues under discussion

Can capitalism be reimagined? (3)

The future of capitalism

Martin Wolf said that this book was one of his main references. And I agree, it contains many well structured messages. Specially, it links economics with politics, quite a difficult issue:

 Our political systems are democratic, but the details of their architecture have increasingly inclined them to polarization. Most of our voting systems favour the two largest parties. So, the menu of choice facing voters depends upon what these two parties offer. The key dangerous step has been that, in the name of greater democracy, in many countries the major political parties have empowered their members to elect their leaders. This has replaced a system in which the leader of a party was drawn from among its most experienced people, and often chosen by its elected representatives.

Leaders can promote new narratives, but the decline of trust in political leaders has inverted authority; people pay more attention to those at the hub of their social networks than to the talking heads on the television. The networks, however, have become self-contained echo-chambers and so we even lack the common space in which to communicate. This is enormously damaging because participation in a common network constitutes the common knowledge that we all hear the same narratives.

 Reduced to a sentence, shared identity becomes the foundation for far-sighted reciprocity. Societies that succeed in building such belief systems work better than those based on either individualism or any of the revivalist ideologies. Individualist societies forfeit the vast potential of public goods. The revivalist ideologies are each based on hatred of some other part of society and are culs-de-sac to conflict. In a healthy society, those who become successful have been reared into acceptance of that web of reciprocal obligations.

 In contrast to the Utilitarian vision of autonomous individuals, each generating utility from their own consumption, and counting equally in the great moral arithmetic of total utility, the atoms of a real society are relationships. In contrast to the psychopathic selfishness of economic man restrained by the Platonic guardians of social paternalism, normal people recognize that relationships bring obligations, and that meeting them is central to our sense of purpose in life. The toxic combination of Platonic Guardians and economic man that has dominated public policy has inexorably stripped people of moral responsibility, shifting obligations to the paternalist state. In a bizarre parody of medieval religion, ordinary people are cast as sinners who need to be ruled by exceptional people – the moral meritocracy.

He is in favour of inclusive politics. Me too. Definitely, capitalism can be reimagined.

Can capitalism be reimagined? (2)

Capitalism at Risk: Rethinking the Role of Business

Ten years after its first release, a new and updated edition of this book is available. Let me say that the book by Rebecca Henderson is better than this one. Anyway, this is an additional reference to take into account.

WHAT, THEN, should be done about the challenges facing market capitalism? And what, specifically, is the role of business in this effort? In our conversations, we heard answers reflecting a spectrum of views. Although executives in our forums did not use our terminology, their positions clustered into four broad categories that we term business as bystander, business as activist, business as innovator, and business as usual.

Ten years after, the same views...(?)

Can capitalism be reimagined?

Reimagining Capitalism in a World on Fire

A new book says that reimagining is possible. Rebecca Henderson is a well known reference for her studies on pharmaceutical innovation for decades. Beyond pharma, she is recognised by her works on innovation in general. Now, she has released a book on Reimagining Capitalism and this may sound a huge goal. Rebecca provides clear hints about what can be done, and says:

I spend a good chunk of my time now working with business people who are thinking of doing things differently. They can see the need for change. They can even see a way forward. But they hesitate. They are busy. They don’t feel like doing it today. It sometimes seems as if I’m still at the bottom of that ladder, looking up, waiting for others to take the risk of acting in new and sometimes uncomfortable ways. But I am hopeful. I know three things.
First, I know that this is what change feels like. Challenging the status quo is difficult—and often cold and lonely. We shouldn’t be surprised that the interests that pushed climate denialism for many years are now pushing the idea that there’s nothing we can do. That’s how powerful incumbents always react to the prospect of change.
Second, I am sure it can be done. We have the technology and the resources to fix the problems we face. Humans are infinitely resourceful. If we decide to rebuild our institutions, build a completely circular economy, and halt the damage we are causing to the natural world, we can. In the course of World War II, the Russians moved their entire economy more than a thousand miles to the east—in less than a year. A hundred years ago, the idea that women or people with black or brown skin were just as valuable as white men would have seemed absurd. We’re still fighting that battle, but you can see that we’re going to win.
Last, I am convinced that we have a secret weapon. I spent twenty years of my life working with firms that were trying to transform themselves. I learned that having the right strategy was important, and that redesigning the organization was also critical. But mostly I learned that these were necessary but not sufficient conditions. The firms that mastered change were those that had a reason to do so: the ones that had a purpose greater than simply maximizing profits. People who believe that their work has a meaning beyond themselves can accomplish amazing things, and we have the opportunity to mobilize shared purpose at a global scale.

 The titles of the chapters speak by themselves. You'll get the flavour of a great book, and a personal message (in chapter 8). And don't miss chapter 4 on Aetna CEO and the purpose of the firm.

1 “WHEN THE FACTS CHANGE, I CHANGE MY MIND. WHAT DO YOU DO, SIR?”
Shareholder Value as Yesterday’s Idea
2 REIMAGINING CAPITALISM IN PRACTICE
Welcome to the World’s Most Important Conversation
3 THE BUSINESS CASE FOR REIMAGINING CAPITALISM
Reducing Risk, Increasing Demand, Cutting Costs
4 DEEPLY ROOTED COMMON VALUES
Revolutionizing the Purpose of the Firm
5 REWIRING FINANCE
Learning to Love the Long Term
6 BETWEEN A ROCK AND A HARD PLACE
 Learning to Cooperate
7 PROTECTING WHAT HAS MADE US RICH AND FREE
 Markets, Politics, and the Future of the Capitalist System
8 PEBBLES IN AN AVALANCHE OF CHANGE
 Finding Your Own Path Toward Changing the World