The productivity dividend for dummies: Raising pay while working less

from David Rosnick

I am greatly pleased to see such interest in CEPR’s recent report on work hours and climate change.  All evidence points to the idea that gradually reducing annual labor hours per worker will reduce the amount of climate change with which the world will have to cope.  But this does not mean that ordinary workers will have to make a sacrifice.  Rather, this is about how workers may choose to enjoy the fruits of increased productivity—if only they are given the chance to share fully in economic progress.

Throughout the 1950s, workers in the United States enjoyed fewer hours of labor than almost every country in Western Europe.  On average, an employed American worked 1,909 hours in 1950.  Only Sweden—at 1,871 hours—worked less.  By contrast, Greeks averaged 2,712 hours that year; the Irish put in 2,753.

Today, workers in Greece are second only to Poland for the longest working hours in all Europe and labored 330 hours longer in 2012 than their American counterparts.  However, productivities of these countries have climbed dramatically since 1950 as hours have fallen.  In each hour of work in 2012, each American produced 3.2 times as much as in 1950.  This allowed workers to build 2.9 times as much in each year— and do so in 200 fewer hours than in 1950.  In this way, American workers labored a bit less and still prospered materially.

These same Americans might have enjoyed a little more time off and still produced far more than did workers in 1950.  Over those same 62 years, the average French work-year fell by 684 hours and still workers produce 4.7 times as much in a year.

Saving the Planet or ‘Fixing’ the Debt

from Dean Baker

Imagine Japan attacked at Pearl Harbor in December of 1941 and our political leaders responded by debating the best way to deal with the deficits projected for 1960. This is pretty much the way that Washington works these days.

The political leadership, including the Washington press corps and punditry, were already intently ignoring the economic downturn that is wreaking havoc on the lives of tens of millions of people across the country. Now, in the wake of the destruction from Hurricane Sandy, they will intensify their efforts to ignore global warming. After all, they want the country to focus on the debt, an issue that no one other than the elites view as a problem. 

The D.C. Blackouts and Global Warming

from Dean Baker

Millions of people across the East Coast are sweltering in near-record temperatures. In the Washington area, tens of thousands are dealing with the heat without air conditioning or power due to a storm the prior weekend. The remarkable part of this story is that almost no one is talking about global warming.

Of course no specific weather event can be directly tied to global warming, just as any individual person’s heart attack cannot be directly attributed to the fact that they don’t exercise and are 50 pounds overweight. In both cases it is a question of probabilities. And the fact that greenhouse gas emissions are raising the planet’s temperature substantially increases the probability that we will get long stretches of extraordinary heat like the one that hit the Midwest and Northeast over the last 10 days.

In short, this is what global warming looks like, or least what it looks like in the United States. If there were an environmental movement in the United States, they would be screaming at the top of their lungs about the harm to life and property from this heat wave and power outage.

These costs are likely to be considerable. Hundreds of thousands of people had to discard food in their refrigerators and freezers as a result of the power outages. Many gathered their family together and went to stay with friends or spend time in a hotel. There were likely hundreds of thousands of days of lost work. 

Proletarianisation under neoliberalism in the Arab world*

from Ali Kadri

Between 1980 and 2010 the share of the rural to total population in the Arab world dropped significantly from about 60 percent to around 40 percent. In absolute terms, an estimated seventy million people left the countryside to urban centres at home.[1] This conservative estimate is nearly equivalent to the total number of rural-urban migrants since the beginning of the twentieth century until 1980. While this exodus was occurring, the regional rate of unemployment was rising and the share of labour in the form of wages fell to around a quarter of national income.[2] By 2007, the Arab League declared that more than half the Arab population was living at less than the two-dollar per day benchmark.[3] Basic food production was decreasing and food imports were rising in this high per capita food dependent and scarcest-water area globally. Around half the population in the Arab world was spending more than half of its income on purchasing food.[4] When speculation reached the commodity market and basic food prices rose, scuffles before bakeries in Egypt resulted in several fatalities.[5] The agricultural sector was shrinking relative to the economy. The productive economy, in turn, was de-industrialising and retreating relative to oil and geopolitical rents.[6] The deconstruction sustained by the agricultural sector, in particular, led to massive dislocation throughout the neoliberal age.

The explanation of this phenomenon afforded by the class of neoclassical economy models known as dual-economy models are unfitting tools for understanding why and how this process could undergo unchecked for three decades.

Do Environmentalists Have An Interest In Who Controls Oil Resources?

from Mark Weisbrot

Environmentalists seem to realize that they have some stake in a fight such as the Ecuador-Chevron lawsuit. In that case, which Chevron has recently moved to an international arbitration panel in an attempt to avoid a multi-billion penalty handed down by Ecuadorian courts, it is about whether a multinational oil corporation will have to pay damages for pollution, for which it is responsible. Most environmentalists figure that would be a good thing.

But what about fights between multinational oil giants and the governments of oil-producing states, over control of resources? Do people who care about the environment and climate change have a stake in these battles? It appears that they do, but most have not yet noticed it.

Australian Government Agency Admits Ban on Heterodox Economic Analysis

from Peter Earl

In some of the first posts on this blog I reported on  how Australia’s Commonwealth Scientific Research Organization (CSIRO) was attempting to censor and ban from publication Clive Spash’s peer-reviewed paper ‘The Brave New World of Carbon Trading”. Though Spash eventually resigned from CSIRO and the paper was published in New Political Economy in 2010 (vol. 15, no. 2), CSIRO’s attitude towards dissenting views has recently become even clearer and more disturbing.

CSIRO, a government funded public research agency that employs about 6,500 people, was required to answer a series of questions

The re-colonisation of the Arab world

from Ali Kadri

Despite vast financial wealth, natural and human resources, the Arab World remains underdeveloped and more than half the population is condemned to a life of poverty. Instead of underdevelopment, a more fitting concept that would capture the recent historical phase would be that of reverse development or de-development. De-development represents a combination of retrogression in the build-up of physical capital and a denial of the right of people to struggle to build a better life by repression and absolute authoritarianism. Although capital accumulation entails a blend of expansion of market driven forces (commodity realisation) and development by encroachment and dispossession (control by violent means including imperial plunder of third world resources), in the Arab world, the latter pattern of accumulation held primacy, hence, determining the pace of development altogether.

Political economy and the outlook for capitalism

Call for papers

The collapse of Lehman Brothers on 16 September 2008 has opened a new stage of economic history, ushering in the world’s worst recession since WWII. The trajectory of global capitalism has been diverse but, after three years of deep crisis, protracted economic problems persist and are even intensifying, notwithstanding accelerated growth in a number of large developing countries. 

Steady-state

from Edward Fullbrook

There is a letter of mine in the current issue of the London Review of Books.  It is as follows.

Old Blue Banger

In 1963 I backpacked through Southern Sudan. So, naturally, reading Jonathan Littell’s ‘A Journey in South Sudan’, I tried to make connections between there then and there now (LRB, 30 June). I wasn’t very successful. Place and tribe names remain the same, but today’s referents seem to belong to a different anthropological period from the ones I knew. Littell writes:

How long will it last? — 4 graphs

from Edward Fullbrook

If you have time, I recommend reading “The three crises: oil prices, climate change and international debt” on feasta.org.  But here are four graphs regarding oil and natural gas from the article that illustrate some  of the difficulties that we face.

Graph of the week: World’s Liquid Fuels Supply

This alarming graph comes from a report titled: 

Chart of the week: Peak oil in 2005?

Global average annunal crude oil production 2001 – 2010 

Debate: Should GNP growth no longer be a goal in advanced economies? – Phase 2

from Edward Fullbrook

Climate scientists are divided over whether “the tipping point”, the point at which positive feedbacks make climate change accelerate and irreversible, thereby endangering the survival of the human species, has been reached.  But the pessimists do not claim to know for sure and so agree that humankind should act to diminish the possibility of civilization’s point of no return ever being passed.  True, some elements of the general public do not regard the possibility of future generations beyond the next one or two as a matter of much importance. But people idealistically inclined do.  

Debate: Should GNP growth no longer be a goal in advanced economies? – Phase 1

Debate: Should GNP growth no longer be a goal in advanced economies?

US should exercise green power

from Kevin P. Gallagher

To kick off 2011, the Obama administration has had the audacity to file suit at the World Trade Organisation (WTO) against China’s policies to build green technologies.

This action is deeply flawed. The US should not try to beat China down, but should pursue its own green jobs policy and reform the WTO, so the rules allow countries to combat climate change. 

Cancún and the new economics of climate change

from Frank Ackerman and Kevin P. Gallagher

The failure of US climate legislation, following last year’s disappointing negotiations at Copenhagen, casts a pall over the round of climate talks in Cancún this week. And the global recession and budget-cutting crisis makes this seem like the worst time for new climate initiatives. Unfortunately, we don’t have the luxury of delaying action: the laws of physics don’t need 60 votes in the US Senate to continue making the world’s climate less and less liveable.

There are two battles over climate change.

Dear National Science Foundation . . .

from Julie Nelson

The Directorate for the Social, Behavioral, and Economic Sciences of the National Science Foundation recently issued a call for white papers about “next-generation research challenges.” They invited submitters to outline “grand challenge questions” that “reflect deep issues that engage fundamental assumptions behind disciplinary research traditions and are transformative.” The following are lightly edited excerpts from the white paper I submitted along with Dr. Evelyn Fox Keller of the Program in Science, Technology and Society at MIT.

            How can we integrate the role of values and ethics in economic analysis of climate change without sacrificing the positive aspirations of that science? 

The relation between oil prices and economic activity

From Lewis L Smith

Recently a longtime Internet correspondent of international repute requested my opinion on the relation between oil prices and economic activity. I was both honored [since he is better known than I am] and somewhat take aback, since the subject is neither an easy one nor one on which I have done any research.

Fortunately I have tried to keep up with the work done by others and also have written quite a bit on closely related matters such as peak oil, “wild cards in the oil deck” and such like. So I was able to piece together the answer which follows, with a few revisions here and there.

Oil spill numbers

from David Ruccio

The numbers just keep climbing, now making the BP oil spill in the Gulf of Mexico by far the largest in U.S. history and perhaps the largest in world history.

According to the Washington Post, the blown-out Macondo well released oil and natural gas at a rate 12 times faster than the government and BP estimated in the early weeks of the crisis and has spilled a whopping 4.9 million barrels, or 205.8 million gallons, to date. 

The high cost of high profits

from David Ruccio

The oil and gas industry knowingly endanger its own workers, the environment, wildlife, and communities in states across the United States—all in pursuit of high profits.

The National Wildlife Federation has just issued a report, “Assault on America: A Decade of Petroleum Company Disaster, Pollution, and Profit,” in which it explains that major oil spills (such as the ongoing BP spill) are really only a small part of the real story.

From 2000 to 2010, the oil and gas industry accounted for hundreds of deaths, explosions, fires, seeps, and spills as well as habitat and wildlife destruction in the United States. These disasters demonstrate a pattern of feeding the addiction to oil leaving in their wake sacrifice zones that affect communities, local economies, and our landscapes.

Here’s a map of accidents and spills in the past decade: