media, web 2.0

Flexible Price Economy

Dirk Engelhardt und Goetz Hamann worry in Die Zeit that outsourcing is threatening the quality of the German press. I’d say yes and no.

Yes, replacing permanent contracts with temporary contracts on a massive scale (what outsourcing actually is) does reduce the journalists independence and is likely to increase the worlkload for many of them. There are areas in which this could possibly lead to weaker journalism.

But on the other hand, it could well turn out that the public is quite content with the cheaper version in many cases and that some people were having a cheap lunch before. I mean, there are quality newspapers in this country which seem to rely to large extent on unpaid interns for their local pages – without a significant reduction in quality, it seems.

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Allgemein

So what? The FT reports

So what? The FT reports that the US government \”knew\” of the letter signed by eight prominent European politicians supporting US policy on Iraq and was even more involved in the copycat letter written by the \”Vilnius 10\” a week later. OH my, I am shaken to the core. So the US was actually playing \”divide et impera\” all along ;-). C’mon, guys – who did not expect that… I really don’t understand why the EUOberserver thinks this is a big deal.

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compulsory reading, US Politics, USA

Conspiracy theories in the FT?

Quite to the contrary argues Paul Krugman in today’s NY Times oped piece – the FT is just waking up to the cold and scary truth of how America is being turned into a “Banana Republic” by a semi-feudalist governmental gang –

“The Financial Times suggests this is deliberate (and I agree): ‘For them,’ it says of those extreme Republicans, ‘undermining the multilateral international order is not enough; long-held views on income distribution also require radical revision.’

How can this be happening? Most people, even most liberals, are complacent. They don’t realize how dire the fiscal outlook really is, and they don’t read what the ideologues write. They imagine that the Bush administration, like the Reagan administration, will modify our system only at the edges, that it won’t destroy the social safety net built up over the past 70 years.

But the people now running America aren’t conservatives: they’re radicals who want to do away with the social and economic system we have, and the fiscal crisis they are concocting may give them the excuse they need. The Financial Times, it seems, now understands what’s going on, but when will the public wake up?”

It is difficult to assess the level of truth in his claims. But his interpretation certainly fits my perception of what’s going on. And if “those extreme Republicans” believe John B. Judis and Ruy Teixeira that demographic trends, especially increasing ethnic diversity among the American electorate, would inevitably lead to an Emerging Democratic Majority it would explain the hurry with which they are trying to grab for their constituency whatever they can get hold of as long as they are in power.

In a way, this is a long-run version of my initial interpretation of the Bush economic stimulus programme as bottom-up redistribution that signalled insecurity about the political consequences of the looming conflict in the Middle East and the prospects for a second GWB presidency (can’t access my archives for the link – I wonder when Blogger is going to be working normally again… the service has really been unreliable lately…).

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cinema, compulsory reading

The Digital Dilemma Revisited

Quote 1: The BBC News Online today –

“Jack Valenti, president of the Motion Picture Association of America, told BBC News Online earlier this year that digital piracy could become “debilitating” for the industry.

‘Digital piracy has become a real menace,’ he said. Despite the availability of pirate copies, The Matrix Reloaded has made more than $363.5m at the box office worldwide so far.“

Quote 2: Brad DeLong, Speculative Microecomomics For Tomorrow’s Economy, draft, November 14, 1999 –

“The ongoing revolution in data processing and data communications technology may well be starting to undermine those basic features of property and exchange that make the invisible hand a powerful social mechanism for organizing production and distribution. The case for the market system has always rested on three implicit pillars, three features of the way that property rights and exchange worked.

Call the first feature excludability: the ability of sellers to force consumers to become buyers, and thus to pay for whatever goods and services they use.

Call the second feature rivalry: a structure of costs in which two cannot partake as cheaply as one, in which producing enough for two million people to use will cost at least twice as many of society’s resources as producing enough for one million people to use.

Call the third transparency: the ability of individuals to see clearly what they need and what is for sale, so that they truly know just what it is that they wish to buy.

All three of these pillars fit the economy of Adam Smith’s day relatively well. …

But digital data is cheap and easy to copy. … Without the relationship between producer and consumer becomes much more akin to a gift-exchange than a purchase-and-sale relationship. The appropriate paradigm then shifts in the direction of a fund-raising drive for a National Public Radio station. When commodities are not excludable then people simply help themselves. If the user feels like it he or she may make a “pledge” to support the producer. The user sends money to the producer not because it is the only way to gain the power to utilize the product, but out of gratitude and for the sake of reciprocity.

This reciprocity-driven revenue stream may well be large enough that producers cover their costs and earn a healthy profit. Reciprocity is a basic mode of human behavior. People in the large do feel a moral obligation to tip cabdrivers and waiters. People do contribute to National Public Radio. But without excludability the belief that the market economy produces the optimal quantity of any commodity is hard to justify. Other forms of provision–public support funded by taxes that are not voluntary, for example–that had fatal disadvantages vis-a-vis the competitive market when excludability reigned may well deserve reexamination. …

[But t]he market system may well prove to be tougher than its traditional defenders have thought, and to have more subtle and powerful advantages than those that defenders of the invisible hand have usually listed.

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Allgemein

It’s the economy, stupid. USA

It’s the economy, stupid. USA today tells the world that respect for Clinton rebounds among Americans: \”As a candidate, Clinton was the Republican Party’s worst nightmare. He grabbed the political center, yet held on to most of his party’s liberal base. As president, he routinely outflanked Republicans’ legislative efforts and frustrated the GOP’s attempts to make his moral failing an impeachable offense. Now Americans put him in the top ranks of great presidents. This has to make conservatives squirm.\”

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German Politics

Even More Zeitenwende

Finally online. In this post, I try to address some of the points raised by the two discussants Markus and Hans ze Beeman with regard to my Zeitenwende entry below.

Is there really a “union demonisation game” going on, as Markus alleges? It would be a very interesting academic question to identify in detail the extent of “responsibility” the unions have to bear with respect to this econom’s problems to adjust to a changing economic climate. But that would be a question that would have to be addressed in a multitude of phd theses in economic history and political science. But that’s evidently a bit beyond the scope of this little blog. But to cut the long story short – here’s what I think.

The union’s involvement in the corporatist decision making process in Germany, directly in institutions like the Federal Employment Office (Bundesanstalt für Arbeit) as well as indirectly through political parties, in particular the SPD, in my opinion allows to assert that their organisational interests in combination with the specificites of the German social security system are indeed to a significant extent responsible for a the German economy’s problems to adjust to changing economic climate. In fact,

What I wanted to say in my first Zeitenwende entry was not that the Unions are the only ones responsible for the lack of flexibility in the German economy. But their sometimes healthy, but these days often unhealthy, class-warfare-reminiscent interventions are part of what I referred to as “failed leadership”.

I don’t see them as a victim of “neoliberal discourse hegemony” [neoliberal has become a rather empty label these days, if there ever was a real meaning to it]. But even if, I don’t think scapegoating them would have negative impacts on their functional role – it is not their wage bargaining function that being scapegoated but their claimed general social policy mandate. The latter is mainly a question of discourse hegemony, in my opinion. I agree that an analytical seperation is difficult – where should the line be drawn? In the end, it probably comes down to the question whether the unions can credibly claim to fill the term “social justice” with a meaning.

For a long time, they could. But now, I am sensing that the balance of power has shifted. This country has been debating these questions for ages. There hasn’t been fundamental growth since 1992. While some said back then what others are saying today, timing is very important in politics, especially, of course, when it comes to such a major social policy overhaul as we will be witnessing soon.

It is certainly difficult to separate signals from noise and echos in this debate, but I sense that the union’s constant opposition in the light of continuing economic gloom has led many people to conclude that they haven’t quite mastered the available figures. An example of what I am referring to is that Germany’s most popular satire programme mad fun of unions in its final episode. I can’t remember a single previous episode in which the unions were dealt with in a critical way. Actually, watching this was the original motivation to write an entry about “the end of an era”. In this respect, Hans ze Beeman has posted a link to some interesting ones generated by a huge internet survey carried out by the consultancy McKinsey & Company.

So I stand by my opinion: More and more people are willing to invest in the size of the pie rather than simply fight about their share.

In the end, as we all seem to agree on the necessity of deregulation, the question of union demonization comes down to one of processual ethics in politics. I would say that it is perfectly in order to use the unions as scapegoats, should that be necessary – others might disagree because they fear that this could be taked too far, thereby seriously damaging the fundamentals of corporatist coopration without any real alternative. This clearly is possible. But I don’t think so.

Sure, in an ideal world, I would prefer to have a Habermas’ ideal speech situation and have everyone agree on what’s necessary for everyone. But – Markus guessed rightly that I would say so – such a world does not exist. And in this world, in my opinion, careful union bashing is just what is necessary now.

PS: The comments are not gone. I just don’t know why Reblogger does not display them. I hope I can fix that later. In the meantime, please find the two “lost” comments below. All others are in the comment section to the first entry.

markus(www) said at 12:20 25/5/2003:

the missing part of your post may make this comment stupid, but I’ll risk it nonetheless: why do we need a scapegoat? why can’t we go about this in a rational way?

as far as I can tell, there are some suggestions from the unions which make sense. For instance, downsizing the about 80.000 tax rules Germany currently has (I got the number from a recent documentary). on the other side, there are restrictions, which hinder the economy, which the unions try to keep and in which the unions truly represent the workers in the electorate. job security for instance. so why is this issue tackled by bashing the unions, instead of entering into a dialogue with the electorate and explaining slowly and carefully, without spin and hype, why this step is necessary. You might say, politics don’t work that way, to which I’d respond we can’t afford the traditional ways of politics any more. To me, the purely party-san style of politics we have now, where each side cries “murder” whenever opposing an unpopular but necessary measure might gain some votes is far more damaging to the economy (basically because I believe it adversely affects the psychological requirements for growth) than the unions. They are of course part of it, playing along, just as e.g. the “Bundesaerztekammer”.

If we agree, that the problem is the electorate’s unwillingness to change the status-quo, bashing a scapegoat won’t help. Sure, those doing the bashing may feel better afterwards, for venting some righteous anger but IMHO it’s just a further distraction from the real problem.

That said, I’d like to add I don’t wholly agree with your distinction between the wage bargaining function of the unions and their claimed genral social policy mandate. Please elaborate, why representatives of a sizeable percentage of the employees cannot adress other issues than wages, like for instance job security, working conditions etc. We certainly both have a gut feeling for the point at which the unions are no longer doing their real job, but I can’t think of an analytical solution to this. Ceterum censeo, your input windows are too small, please change width from 122px to a percentage.

hans ze beeman(www) said at 23:33 25/5/2003:

why is this issue tackled by bashing the unions, instead of entering into a dialogue with the electorate and explaining slowly and carefully, without spin and hype, why this step is necessary

because this has been done ad nauseam. It is not time to ponder, ruminate, explain or discuss anymore, it is TIME TO ACT. And the trade unions today showed what they thought about Agenda 2010, which is NOTHING compared to the necessary future changes: they protested in a fully rational way. I predict there will be a grand coalition at the end of the year, and Schr�der will be gone. This would end the immobility and solipsism of the big parties.

If we agree, that the problem is the electorate’s unwillingness to change the status-quo, bashing a scapegoat won’t help.

Errrm, 75% of Germans according to Emnid want changes. And look at http://www.perspektive-deutschland.de for an intersting picture of public opinion. Personally, I bash the unions because they represent socialism and etatism, which is the contrary to freedom. They hide their socialism under the label of “social justice”, which is even more appaling (the representants of the trade unions are either incompetent or cynical and sardonic concerning the people they claim to “represent”). Just look at the renoveling of the “Betriebsverfassungsgesetz”, which produced larger unemployment because those companies having more than 200 employees must now put up with a “Betriebsrat”. See here: Many companies with 20x employees put some out of job or did not hire new ones to stay beneath the 200 border.

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Allgemein

Trapped In Liquidity? Paul Krugman

Trapped In Liquidity? Paul Krugman seems to share the IMF’s assessment that Germany is on the brink of deflation. That is a scary thought. And there is probably something to it – although I don’t think the recently reported inflation numbers accurately reflect what’s happening to prices in Germany right now, just as they weren’t accurately reflecting the price jump that occurred in the beginning of 2002. But before being able to assess the damage being done, here’s Paul Krugman’s NY Times edition of his lecture on the liquidity trap.

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Allgemein

The Sun on the British

The Sun on the British Eurovision debacle. Insulted – yes, a little. How dare they, these bloody EU-lings … sulking, even more – claiming that the Eurovision song contest doesn’t produce real music anyway. They are quite right here, but we all knew *that* before. And it did not keep Britain from scoring quite well most of the times. But political explanations don’t quite cut it, as I mentioned on Saturday, and as Lillimarleen points out again. The Spanish government was even more enthusiastic (albeit far less important) than the British with respect to the Iraq question and Spain fare quite well last Saturday. I guess it may come down to bad luck…

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