Production, Use and Fate of All Plastics Ever Made [feedly]

Production, Use and Fate of All Plastics Ever Made
A friend of mine with half a lifetime as a sales engineer for the machine tools that make plastics suggests two relatively simple fixes for the growing environmental damage inflicted by unrecycled plastics. ONE: ban non recyclable plastics, with prison sentences for violations [example: most grocery plastics]; TWO Fix criminal penalties for failure to recycle recyclable plastic [example: dudes that dumped tons of medical waste in Long Island Sound].

http://conversableeconomist.blogspot.com/2019/11/production-use-and-fate-of-all-plastics.html

Production, Use and Fate of All Plastics Ever Made

Back in 2005, the American Film Institute released a list of the 100 most memorable and lasting bits of film dialogue of all time. The first two, for example, were ""Frankly, my dear, I don't give a damn"
and "I'm gonna make him an offer he can't refuse." Number 41 on the list was "Plastics." from the 1967  film The Graduate, which won Oscars for Best Picture, Best Director, Best Actor (Dustin Hoffman) and Best Actress (Anne Bancroft).

In that movie, the dazed-and-confused soon-to-be college graduate Benjamin Braddock, played by Dustin Hoffman, is drifting through a dinner party full of his parents' friends. One of his father's well-meaning and clueless friends named Mr. Maguire, played by Walter Brooke, traps Benjamin into this conversation:

Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
Benjamin: Exactly how do you mean?
Mr. McGuire: There's a great future in plastics. Think about it. Will you think about it?

For those who are thinking about it, Roland Geyer, Jenna R. Jambeck, and Kara Lavender Law have written ""Production, use, and fate of all plastics ever made" (Science Advances, July 19, 2017,  3:7, e1700782). They write:

Although the first synthetic plastics, such as Bakelite, appeared in the early 20th century, widespread use of plastics outside of the military did not occur until after World War II. ... plastics' largest market is packaging, an application whose growth was accelerated by a global shift from reusable to single-use containers. As a result, the share of plastics in municipal solid waste (by mass) increased from less than 1% in 1960 to more than 10% by 2005 in middle- and high-income countries. ... By identifying and synthesizing dispersed data on production, use, and end-of-life management of polymer resins, synthetic fibers, and additives, we present the first global analysis of all mass-produced plastics ever manufactured. 

They look at all the purposes for which plastic is used, and then the periods of time these products are in use, from short-term uses like packaging to long-term uses like construction. They write: 

Global production of resins and fibers increased from 2 Mt in 1950 to 380 Mt in 2015, a compound annual growth rate (CAGR) of 8.4% (table S1), roughly 2.5 times the CAGR [compound annual growth rate] of the global gross domestic product during that period. The total amount of resins and fibers manufactured from 1950 through 2015 is 7800 Mt. Half of this—3900 Mt—was produced in just the past 13 years. Today, China alone accounts for 28% of global resin and 68% of global PP&A [polyester, polyamide, and acrylic] fiber production ...  

We estimate that 2500 Mt of plastics—or 30% of all plastics ever produced—are currently in use. Between 1950 and 2015, cumulative waste generation of primary and secondary (recycled) plastic waste amounted to 6300 Mt. Of this, approximately 800 Mt (12%) of plastics have been incinerated and 600 Mt (9%) have been recycled, only 10% of which have been recycled more than once. Around 4900 Mt—60% of all plastics ever produced—were discarded and are accumulating in landfills or in the natural environment

Here's a figure showing some their estimates of plastic waste generation and disposal since 1950 and projected up through 2050. The calculations suggest that even with a substantial rise in incineration and recycling of plastic, the cumulative amount of plastic discarded will rise substantially in the next few decades,

As the authors note, we are essentially carrying out an uncontrolled global experiment on how plastic waste may affect the environment:

Plastic waste is now so ubiquitous in the environment that it has been suggested as a geological indicator of the proposed Anthropocene era ... None of the mass-produced plastics biodegrade in any meaningful way; however, sunlight weakens the materials, causing fragmentation into particles known to reach millimeters or micrometers in size. Research into the environmental impacts of these "microplastics" in marine and freshwater environments has accelerated in recent years, but little is known about the impacts of plastic waste in land-based ecosystems. ...

The growth of plastics production in the past 65 years has substantially outpaced any other manufactured material. The same properties that make plastics so versatile in innumerable applications—durability and resistance to degradation—make these materials difficult or impossible for nature to assimilate. Thus, without a well-designed and tailor-made management strategy for end-of-life plastics, humans are conducting a singular uncontrolled experiment on a global scale, in which billions of metric tons of material will accumulate across all major terrestrial and aquatic ecosystems on the planet. The relative advantages and disadvantages of dematerialization, substitution, reuse, material recycling, waste-to-energy, and conversion technologies must be carefully considered to design the best solutions to the environmental challenges posed by the enormous and sustained global growth in plastics production and use.

 -- via my feedly newsfeed

Hello

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Michael Roberts: The fantasy world continues [feedly]

A good rundown on the sluggish world economies by Michael Roberts, a very competent economist, and a "Marxist" -- a squishy term after 150 yrs, however. I do not publish his stuff very much, because his posts tend to be VERY wonky, and his politics are utterly sectarian. Nonetheless, he does not harangue in this one. 

The fantasy world continues
https://thenextrecession.wordpress.com/2019/11/28/the-fantasy-world-continues/

The fantasy world continues.  In the US and Europe, stock market index levels are hitting new all-time highs.  Bond prices are also near all-time highs.  Investment in both stocks and bonds are delivering massive profits for the financial institutions and companies.  Conversely, in the 'real' economy, particularly in the productive sectors of industry and transport, the story is dismal.  The world's auto industry is in serious decline.  Layoffs of workers are on the agenda in most auto companies.  The manufacturing sectors in most major economies are contracting.And as measured by the so-called purchasing managers indexes (PMIs), which are indexes of surveys of company managers about the state and prospects for their companies, even the large service sectors are slowing or stagnant.

The latest estimate of US real GDP growth was published yesterday. In the third quarter of this year (June-September), the US economy expanded in real terms (ie after inflation of prices is deducted) at an annual rate of 2.1%, down from 2.3% in the previous quarter.  Even though this is modest growth historically, the US economy is doing better than any other major economy.  Canada is growing at just 1.6% a year, Japan at just 1.3% a year, the Euro area at 1.2% a year; and the UK at just 1%.  The larger so-called 'emerging economies' like Brazil, South Africa, Russia, Mexico, Turkey and Argentina are growing at no more than 1% a year or are even in recession.  And China and India have recorded their lowest growth rates for decades.  Overall global growth is variously estimated around 2.5% a year, the lowest rate since the Great Recession in 2009.

And slowing capitalist economies can find little escape from weak domestic growth by exporting.  On the contrary, world trade is contracting.  According to data from the CPB World Trade Monitor, in September global trade was down by 1.1 per cent compared to the same month in 2018, marking the fourth consecutive year-on-year contraction and the longest period of falling trade since the financial crisis in 2009.

It's true that unemployment rates in the major economies have plunged to 20-year lows.  That has helped maintain consumer spending to some extent.

But it also means that productivity (measured as output divided by employees) is stagnating because employment growth is matching or even surpassing output growth.  Companies are taking on workers at unchanged wages rather than investing in labour-saving technology to boost productivity.

According the US Conference Board, globally, growth in output per worker was 1.9 percent in 2018, compared to 2 percent in 2017 and projected to return to 2 percent growth in 2019. The latest estimates extend the downward trend in global labour productivity growth from an average annual rate of 2.9 percent between 2000-2007 to 2.3 percent between 2010-2017. "The long-awaited productivity effects from digital transformation are still too small to see. A productivity recovery is much needed to prevent the economy from slipping towards a substantially slower growth than what has been experienced in recent years."

The Conference Board summarises: "Overall, we have arrived in a world of stagnating growth. While no widespread global recession has occurred in the last decade, global growth has now dropped below its long-term trend of around 2.7 percent. The fact that global GDP growth has not declined even more in recent years is mainly due to solid consumer spending and strong labor markets in most large economies around the world."

The OECD reaches a similar conclusion: "Global trade is stagnating and is dragging down economic activity in almost all major economies.  Policy uncertainty is undermining investment and future jobs and incomes. Risks of even weaker growth remain high, including from an escalation of trade conflicts, geopolitical tensions, the possibility of a sharper-than-expected slowdown in China and climate change."

The reason for low real GDP and productivity growth lies with weak investment in productive sectors compared to investment or speculation in financial assets (what Marx called 'fictitious capital' because stocks and bonds are really just titles of ownership to any profits (dividends) or interest appropriated from productive investment in 'real' capital).  Business investment everywhere is weak.  As a share of GDP, investment in the major economies is some 25-30% lower than before the Great Recession.

Why is business investment so weak?  Well, first it is clear the huge injection of cash/credit by central banks and driving of interest rates down to zero – so-called unconventional monetary policies- has failed to boost investment in productive activities.  In the US, the demand for credit to invest is falling, not rising.

And for that matter, so far, Trump's cutting of corporate taxes, boosting fiscal spending and running higher budget deficits has failed to restore investment.

In the US, capital spending by S&P 500 companies rose in the third quarter by just 0.8%, or a combined $1.38 billion, from the second quarter, according to data from S&P Dow.  But even that modest increase can be chalked up to a few big spenders: Amazon.com Inc. and Apple Inc. alone raised capital spending by $1.9 billion during the quarter. Without them, total spending by the 438 other companies that have reported so far this quarter would have shrunk slightly. And overall spending would have shrunk by 2.2% absent increases from three others: Intel Corp. , Berkshire Hathaway Inc. and NextEra Energy Inc. Together, the five companies increased their capital budgets by $4.7 billion, or 30%, from the second quarter to the third, the SPDJI data show.

The mainstream/Keynesian explanation for low investment was expressed again in a recent blog in the UK Financial Times: "why is fixed investment declining?  One answer, dare we suggest it, is a dearth of demand. With no incremental demand for increased supply, why would a business invest in a new plant, shop or regional headquarters when the returns from buying back shares, or distributing dividends, is both known and higher?"

But this explanation is a tautology at best and wrong at worst.  First, in what area of demand is there a 'dearth'?  Consumer demand and spending is holding up in most major capitalist economies, given fuller employment and even some rise in wages in the last year.  It is investment 'demand' that is floundering.  But to say that investment is weak because investment 'demand' is weak is just a tautology signifying nothing.

The more explanatory answer offered by Keynesian theory then comes forward.  The reason that central bank monetary policies and tax cuts have failed to boost investment "just boils down to risk appetite."  This is the classic 'animal spirits' explanation of Keynes.  Capitalists have just lost 'confidence' in investing in productive activities.  But why? The previous quote above from the FT piece gives it away; "why would a business invest in a new plant, shop or regional headquarters when the returns from buying back shares, or distributing dividends, is both known and higher?" But the returns (profitability) of investing in fictitious capital are higher because the profitability of investing in productive assets is too low. I have explained this ad nauseam in previous posts and papers, along with empirical evidence in support.

In Q3 2019, US corporate profits were down 0.8% from last year while margins (profits per unit of output) remain compressed at 9.7% of GDP – having declined nearly continuously for nearly five years.

But, of course, the failure to recognise or admit the role of profitability in the health of a capitalist economy is common to both mainstream neoclassical and Keynesian theory and arguments.

Low profitability in productive sectors of the most economies has stimulated the switch of profits and cash by companies into financial speculation. The main method used by companies to invest in this fictitious capital has been by buying back their own shares. Indeed, buybacks have become the biggest category of financial asset investment in the US and to some extent in Europe.  US buybacks reached nearly $1trn in 2018.  That's only about 3% of the total market value of US top 500 stocks, but by boosting the price of their own shares, companies have attracted other investors to push stock market indexes to record highs.

But all good things must come to an end. Returns on fictitious capital investment ultimately depend on the earnings that companies report.  And they have been falling in the last two quarters.  So in the latter part of this year, corporate buyback spending started to plunge. According to Goldman Sachs, buyback spending slowed 18% to $161 billion during the second quarter, and the firm anticipates that the slowdown will continue. For 2019, total buybacks will drop 15% to $710 billion, and in 2020 GS sees a further 5% decline to $675 billion. "During full-year 2019, we expect S&P 500 cash spending will decline by 6%, the sharpest annual decline since 2009," the firm says.

Anyway, buybacks are an arena dominated by major companies, many of them long-established tech titans. The top 20 buybacks accounted for 51.2% of the total for the 12 months ending in March, S&P Dow Jones Indices states. And more than half of all buybacks are now funded by debt. – "sort of like mortgaging your house to the hilt, then using it to throw a lavish party." But once a recession inevitably arrives, the result may not be pretty for companies with lots of leverage, in no small part due to buybacks.

The market value of tradable U.S. dollar (USD) corporate debt has ballooned to close to $8 trillion – over three times the size it was at the end of 2008. Similarly in Europe, the corporate bond market has tripled to 2.5 trillion euros ($2.8 trillion) since 2008. From 2015-2018, over $800bn of non-financial high grade corporate bonds were issued to fund M&A. This accounted for 29% of all non-financial bond issuance, contributing to credit rating deterioration. And the 'credit quality' of corporate debt is deteriorating with low rated bonds now 61% of non-financial debt, up from 49% in 2011.  And the share of BBB-rated bonds in European investment grade has also risen from 25% to 48%.

And then are what are called zombie companies which earn less than the costs of servicing their existing debt and survive because they are borrowing more. These are mainly small companies.  About 28% of US companies with market cap <$1bn earn less than their interest payments, way up from the period before the crisis and this is with historically low interest rates. Bank of America Merrill Lynch estimates that there are 548 of these zombies in the OECD against a peak of 626 during the financial crash of 2008.

With corporate debt now higher than its peak in scary late-2008, Dallas Fed President Robert Kaplan has warned, overly leveraged companies "could amplify the severity of a recession."

Nevertheless, the talk among many mainstream economists is that the worst may be over.  A trade deal between the US and China is imminent. And there are signs that the contraction in the manufacturing sectors of the major economies is beginning to stop.  If so, then any 'spillover' into the more buoyant and larger so-called 'service' sectors may be avoided.  Global economic growth may be at its slowest since the Great Recession; business investment is sluggish at best; productivity growth is falling; and global profits are flat, but employment is still strong in many economies, and wages are even picking up.

So, far from descending into an outright global recession in 2020, there may be just another year of depressed growth in the longest but weakestglobal recovery for capitalism. And the fantasy world may continue.  We shall see.

 -- via my feedly newsfeed

Trump Gives U.S. Business the Ukraine Treatment [feedly]

Trump Gives U.S. Business the Ukraine Treatment
https://www.nytimes.com/2019/11/25/opinion/trump-apple.html

Text only

The story that has emerged in the impeachment hearings is one of extortion and bribery. Donald Trump withheld crucial aid — aid Ukraine needed to defend itself against Russian aggression — and refused to release it unless Ukraine publicly said it was investigating one of his political rivals. Even Republicans understand this; they just think it's O.K.

And remember, the Ukraine scandal made it into the public eye only because a single whistle-blower set an investigation in motion. I know I'm not alone in wondering how many other comparable scandals haven't come to light.

Nor need these scandals involve foreign governments. What I haven't seen pointed out is that Trump is quietly applying a Ukraine-type extortion-and-bribery strategy to U.S. corporations. Many businesses are being threatened with policies that would hurt their bottom lines — especially, but not only, tariffs on imported goods crucial to their operations. But they are also being offered the possibility of exemptions from these policies.

And the implicit quid pro quo for such exemptions is that corporations support Donald Trump, or at least refrain from criticizing his actions.


Consider, for example, what happened last week, when Trump toured an Apple manufacturing plant together with Tim Cook, Apple's C.E.O. Trump used the occasion to make a political speech, attacking impeachment proceedings and falsely claiming that Nancy Pelosi has "closed Congress." He also asserted that the plant, which has been operating since 2013, had just opened.

And Cook, far from correcting these falsehoods, expressed support, declaring that America has the "strongest economy in the world."


Cook's incentive to play along was obvious. Apple assembles many of its products in China; it's seeking exemptions from Trump's China tariffs. And there's every reason to believe that the allocation of such exemptions is driven by politics, not the national interest.

For example, in 2018 a company owned by Oleg Deripaska — an oligarch close to Vladimir Putin, who is supposed to be under U.S. sanctions for activities that include interference in foreign elections — received a waiver from aluminum tariffs. The waiver was withdrawn only after Democrats in Congress noticed it, with the Commerce Department claiming that it had been granted as a result of a "clerical error." Uh-huh.

By the way, if you're wondering why the Trump administration has the power to play favorites, it's because U.S. trade law gives the president a lot of discretion in setting tariffs. The purpose of that discretion was to diminish the power of special interests in Congress, based on the assumption that the president would be better at serving the national interest. But then came Trump.



And tariff policy isn't the only area in which the administration seems to be using its power to punish corporations if they don't show proper political fealty.

Recently the Pentagon granted the huge Joint Enterprise Defense Infrastructure contract for cloud computing (yes, JEDI) to Microsoft, shocking observers who expected it to go to Amazon. Amazon is challenging the decision, claiming that it was punishment for critical reporting in The Washington Post, now owned by Jeff Bezos — a claim that is entirely plausible, given Trump's own repeated declarations that he was going to give Bezos "problems."

Trump officials claim, of course, that the decision process was squeaky-clean, based on expert judgment untainted by any political influence. But seriously, is anything clean in this administration? Are we really supposed to accept on faith that people who are willing to politicize weather forecasts were totally hands-off when it came to awarding a huge, lucrative contract to a company Trump considers an enemy?

When I and others point out the ways in which Trump is using crony capitalism to lock in political advantage, we tend to get two kinds of pushback. First, we're told that we shouldn't feel sympathy for wealthy corporations. Second, we're told that progressive Democrats also criticize some corporations, like Facebook, and have proposed a crackdown on some kinds of corporate behavior. So what's the difference?

Well, these critiques (willfully, one suspects) miss the point. What progressives are proposing are rules for corporate behavior that would apply equally to all companies, not be imposed selectively on corporations depending on their political orientation.

And the trouble with Trump's selective doling out of punishment isn't the harm it inflicts on corporations, it's the incentives this regime creates for political sycophancy. American voters and American democracy, not Apple and Amazon — which are, as it happens, notorious examples of tax avoidance — are the victims we care about.

Put it this way: By using his political power to punish businesses that don't support him while rewarding those that do, Trump is taking us along the same path already followed by countries like Hungary, which remains a democracy on paper but has become a one-party authoritarian state in practice. And we're already much further down that road than many people realize.
 -- via my feedly newsfeed

Meet the Leftish Economist With a New Story About Capitalism [feedly]

In many respects, this controversial economist reconciles (at least in economic theory) the socialisms of Lenin in the NEP period, and Deng Chou Peng in the Chinese renaissance  with advanced social democratic ideas of "interventionism" on behalf of innovation by the state in Prof. Mazzucato's work (Wiki ref:  https://en.wikipedia.org/wiki/Mariana_Mazzucato#Awards_and_nominations   ). The focus on the public roles of development and supply side stimulus and investments  is very Schumpeter and Marx like.

Meet the Leftish Economist With a New Story About Capitalism
https://www.nytimes.com/2019/11/26/business/mariana-mazzucato.html

Mariana Mazzucato was freezing. Outside, it was a humid late-September day in Manhattan, but inside — in a Columbia University conference space full of scientists, academics and businesspeople advising the United Nations on sustainability — the air conditioning was on full blast.

For a room full of experts discussing the world's most urgent social and environmental problems, this was not just uncomfortable but off-message. Whatever their dress — suit, sari, head scarf — people looked huddled and hunkered down. At a break, Dr. Mazzucato dispatched an assistant to get the A.C. turned off. How will we change anything, she wondered aloud, "if we don't rebel in the everyday?"

Dr. Mazzucato, an economist based at University College London, is trying to change something fundamental: the way society thinks about economic value. While many of her colleagues have been scolding capitalism lately, she has been reimagining its basic premises. Where does growth come from? What is the source of innovation? How can the state and private sector work together to create the dynamic economies we want? She asks questions about capitalism we long ago stopped asking. Her answers might rise to the most difficult challenges of our time.

In two books of modern political economic theory — "The Entrepreneurial State" (2013) and "The Value of Everything" (2018) — Dr. Mazzucato argues against the long-accepted binary of an agile private sector and a lumbering, inefficient state. Citing markets and technologies like the internet, the iPhone and clean energy — all of which were funded at crucial stages by public dollars — she says the state has been an underappreciated driver of growth and innovation. "Personally, I think the left is losing around the world," she said in an interview, "because they focus too much on redistribution and not enough on the creation of wealth."

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Her message has appealed to an array of American politicians. Senator Elizabeth Warren, Democrat of Massachusetts and a presidential contender, has incorporated Dr. Mazzucato's thinking into several policy rollouts, including one that would use "federal R & D to create domestic jobs and sustainable investments in the future" and another that would authorize the government to receive a return on its investments in the pharmaceutical industry. Dr. Mazzucato has also consulted with Representative Alexandria Ocasio-Cortez, Democrat of New York, and her team on the ways a more active industrial policy might catalyze a Green New Deal.

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Senator Warren has incorporated Dr. Mazzucato's thinking into several policy rolloutsCredit...Joe Buglewicz for The New York Times

Even Republicans have found something to like. In May, Senator Marco Rubio of Florida credited Dr. Mazzucato's work several times in "American Investment in the 21st Century," his proposal to jump-start economic growth. "We need to build an economy that can see past the pressure to understand value-creation in narrow and short-run financial terms," he wrote in the introduction, "and instead envision a future worth investing in for the long-term."

Formally, the United Nations event in September was a meeting of the leadership council of the Sustainable Development Solutions Network, or S.D.S.N. It's a body of about 90 experts who advise on topics like gender equality, poverty and global warming. Most of the attendees had specific technical expertise — Dr. Mazzucato greeted a contact at one point with, "You're the ocean guy!" — but she offers something both broad and scarce: a compelling new story about how to create a desirable future.

'Investor of first resort'

Originally from Italy — her family left when she was 5 — Dr. Mazzucato is the daughter of a Princeton nuclear physicist and a stay-at-home mother who couldn't speak English when she moved to the United States. She got her Ph.D. in 1999 from the New School for Social Research and began working on "The Entrepreneurial State" after the 2008 financial crisis. Governments across Europe began to institute austerity policies in the name of fostering innovation — a rationale she found not only dubious but economically destructive.

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"There's a whole neoliberal agenda," she said, referencing the received free-market wisdom that cutting public budgets spurs economic growth. "And then the way that traditional theory has fomented it or not contested it — there's been kind of a strange symbiosis between mainstream economic thinking and stupid policies."

Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory taught in most academic departments: its assumption that the forces of supply and demand lead to market equilibrium, its equation of price with value and — perhaps most of all — its relegation of the state to the investor of last resort, tasked with fixing market failure. She has originated and popularized the description of the state as an "investor of first resort," envisioning new markets and providing long-term, or "patient," capital at early stages of development.

In important ways, Dr. Mazzucato's work resembles that of a literary critic or rhetorician as much as an economist. She has written of waging what the historian Tony Judt called a "discursive battle," and scrutinizes descriptive terms — words like "fix" or "spend" as opposed to "create" and "invest" — that have been used to undermine the state's appeal as a dynamic economic actor. "If we continue to depict the state as only a facilitator and administrator, and tell it to stop dreaming," she writes, "in the end that is what we get."

As a charismatic figure in a contentious field that does not generate many stars — she was recently profiled in Wired magazine's United Kingdom edition — Dr. Mazzucato has her critics. She is a regular guest on nightly news shows in Britain, where she is pitted against proponents of Brexit or skeptics of a market-savvy state.

Alberto Mingardi, an adjunct scholar at the libertarian Cato Institute and director general of Istituto Bruno Leoni, a free-market think tank, has repeatedly criticized Dr. Mazzucato for, in his view, cherry-picking her case studies, underestimating economic trade-offs and defining industrial policy too broadly. In January, in an academic piece written with one of his Cato colleagues, Terence Kealey, he called her "the world's greatest exponent today of public prodigality."

Her ideas, though, are finding a receptive audience around the world. In the United Kingdom, Dr. Mazzucato's work has influenced Jeremy Corbyn, leader of the Labour Party, and Theresa May, a former Prime Minister, and she has counseled the Scottish leader Nicola Sturgeon on designing and putting in place a national investment bank. She also advises government entities in Germany, South Africa and elsewhere. "In getting my hands dirty," she said, "I learn and I bring it back to the theory."

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The leader of Britain's Labour Party, Jeremy Corbyn, has been influenced by the work of Dr. Mazzucato.Credit...Phil Noble/Reuters

The 'Mission Muse'

During a break at the United Nations gathering, Dr. Mazzucato escaped the air conditioning to confer with two colleagues in Italian on a patio. Tall, with a muscular physique, she wore a brightly colored glass necklace that has become something of a trademark on the economics circuit. Having traveled to five countries in eight days, she was fighting off a cough.

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"In theory, I'm the 'Mission Muse,'" she joked, lapsing into English. Her signature reference is to the original mission to the moon — a state-spurred technological revolution consisting of hundreds of individual feeder projects, many of them collaborations between the public and private sectors. Some were successes, some failures, but the sum of them contributed to economic growth and explosive innovation.

Dr. Mazzucato's platform is more complex — and for some, controversial — than simply encouraging government investment, however. She has written that governments and state-backed investment entities should "socialize both the risks and rewards." She has suggested the state obtain a return on public investments through royalties or equity stakes, or by including conditions on reinvestment — for example, a mandate to limit share buybacks.

Emphasizing to policymakers not only the importance of investment, but also the direction of that investment — "What are we investing in?" she often asks — Dr. Mazzucato has influenced the way American politicians speak about the state's potential as an economic engine. In her vision, governments would do what so many traditional economists have long told them to avoid: create and shape new markets, embrace uncertainty and take big risks.

Inside the conference, the news was uniformly bleak. Pavel Kabat, the chief scientist of the World Meteorological Organization, lamented the breaking of global temperature records and said that countries would have to triple their current Paris-accord commitments by 2030 to have any hope of staying below a critical warming threshold. A panel on land use and food waste noted that nine species account for two-thirds of the world's crop production, a dangerous lack of agricultural diversity. All the experts appeared dismayed by what Jeffrey Sachs, the S.D.S.N.'s director, described as the "crude nationalism" and "aggressive anti-globalization" ascendant around the world.

"We absolutely need to change both the narrative, but also the theory and the practice on the ground," Dr. Mazzucato told the crowd when she spoke on the final expert panel of the day. "What does it mean, actually, to create markets where you create the demand, and really start directing the investment and the innovation in ways that can help us achieve these goals?"

Earlier in the day, she pointed at an announcement on her laptop. She had been nominated for the first Not the Nobel Prize, a commendation intended to promote "fresh economic thinking." "Governments have woken up to the fact the mainstream way of thinking isn't helping them," she said, explaining her appeal to politicians and policymakers. A few days later, she won.

 -- via my feedly newsfeed

Branko Milanovic: Revolution Number 9. Why the World is in Uproar Right Now [feedly]

Branko Milanovic (I call him the Eeyore of the Left) is always provocative, and often right. 

Revolution Number 9. Why the World is in Uproar Right Now
https://www.globalpolicyjournal.com/blog/25/11/2019/revolution-number-9-why-world-uproar-right-now

Branko Milanovic explores what connects the wave of protests sweeping the world.

 

"The specter is haunting [the world]. The specter of … [what?]". While Marx and other observers and participants knew in 1848 more or less exactly what was haunting Europe, in our 2019 revolutions we have no clue. Some people like Yascha Mounk and Thomas Friedman, the veterans of the dreams of the 1990s, hope to see in them the nationalist revolutions (which to them appeared democratic) that brought communism down. But so heterogeneous are today's revolts and the regimes they face that it is unclear what they could be bringing down. Others see the Arab Spring, but hopefully with a better final outcome, raising its head again.

 

These are the new worldwide revolts which have little in common with any of the older dates, whether 1848 or 1968, in which we artfully try to squeeze them. They are the first revolution of the globalization era. Since the revolts are spread over such a wide space, and affect different countries and continents, they cannot have, unlike the more geographically limited revolutions of 1968, much in common with each other. They share I think first, the ability to organize through social media, and second, political demands that can be perhaps summarized as the dislike of the politicians who rule them, and desire to be heard and be included in the political process.

 

Revolts of exclusion unite gilets jaunes and theBranko Milanovic Algerian protesters. Revolt against the corruption of political elites unites Lebanese and Colombian protesters. Revolt against higher prices, enacted with insouciance for the poor, unites Iranian and Chilean protesters. Desire for independence unites Catalan and Hong Kong manifestations. Hatred of the regimes that shoot protesters unites Bolivian and Venezuelan mass movements.

 

The attempts of finding ideological commonality between these revolts shows clearly its limits. Yascha Mounk sees in the Bolivian regime overthrow a desire for democracy. But in reality it was an old-fashioned military coup, very likely prepared months in advance, that brought back to power a racist oligarchic elite.  So, now the disenfranchised left will have to begin anew its fight for democracy.  But in Venezuela and Nicaragua, it is the opposite: the right is trying to overthrow the former left-wing revolutionaries that have decided never to leave the power and asphyxiate everybody else.

 

Protesters in Hong Kong are called by the mainstream media "democratic". But they are in realty secessionists who use democracy as a more convenient slogan  because demands for democracy, not likely to spread to the rest of China, can be realized only in an independent Hong Kong. They are thus similar to Catalan protesters who believe too that real democracy implies the right of self-determination. Both pose a question to which, since at least 1918, when Woodrow Wilson and Lenin tried to propose their solutions, the world has had no answer: who has the right to self-determination? Is it a fundamental democratic right or not? Can it be exercised if other members of a given state are against it?  We are just unable to answer it today in these two cases, as we are unable to say anything meaningful about Kurdish or Palestinian independence, or Kosovo and Abkhazia. Thus the world is full of "frozen" conflicts which flare up from time to time and represent so many points that potentially could lead to much larger wars. 

 

Then, consider Chilean and Iranian demonstrations. Both were triggered by a seemingly modest  economic changes: increase in the price of gasoline (which by the way was also at the origin of the gilets jaunes movement) and increase in the metro fare. Both regimes reacted back with unusual violence: apparently more than 100 people were killed in Iran and more than 20 in Chile. But these two regimes are very different: one is a neoliberal democracy with its constitutional roots in an extreme right-wing dictatorship; another is a quasi-democratic theocracy with its roots in a revolutionary movement against a right-wing dictatorship. Yet in both, people have not risen only because of higher prices; they seem to be driven by something more fundamental: regimes' contempt for citizens' rights, regimes' total ignorance of vast groups of peoples (the poor in Chile, the young unemployed in Iran).

 

The most violent suppression was in Iraq. But the world has become so inured to the violence and killings in Iraq since the "democratic regime change" arrived there in 2003 that the new round of mass violence attracts very little attention. Many of those who supported the invasion of Iraq, arguing that it will bring the second (after Israel) Middle Eastern democracy, say very little about these protests: so difficult are they to fit in any of their schemes. If they supported it, they would be indirectly indicting the "democratic regime" they helped bring about in 2003. So they say nothing.

 

Revolutions of 2019, I think, presage a new breed of globalist revolutions. They are not part of the same and easily recognizable ideological pattern. They respond to local causes, but have a global element in the ability of communicate with each other (Catalan protesters imitated blockade of public infrastructure started by the Hong Kong protesters).

 

Perhaps more importantly, they encourage each other: if Chileans are able to stand up, why not Colombians? If there is a single ideological glue to them, it is, I think, desire to have one's voice heard. At the time of tectonic political shifts where politicians and old ideologies have lost much of their credibility, a thing which has not lost its credibility is the desire and the right to be heard and counted. It is in a sense a democratic protest but since standard two-party democracies have lost much of their shine after 2008, the revolts have trouble defining themselves in an ideological and political sense.

We should expect more of such diverse, often inchoate revolts of globalization until more structured political forces appear on the scene and show themselves to be able to channel the grievances and use them to come to power.

 -- via my feedly newsfeed