International Journal of Anarchism
Reprints from ifa-Solidaritet - folkebladet - © ISSN 0800-0220 no 1(25) and 1(26). No 1 (32). Editor H. Fagerhus - Contact IJA
Bulletin of the Anarchist International
TO EURO! FULL EMPLOYMENT!
TWO CLASSICAL NOTES ON ANARCHIST ECONOMICS
FOLLOWING UP RAGNAR FRISCH AND TRYGVE HAAVELMO'S WORKS ON ECOCIRC AND DEMAND MANAGEMENT
VS BUREAUCRACY ECONOMICS
from IJ@ 1(25) 1995
I. The Superiors - political/administrative (rank) and/or economically (income), in public and private sectors - are for simplicity called the Bureaucracy. The People, i.e the Total Population minus the Bureaucracy! Anarchist Economic Accounting for Employment: The percentage change of employment is determined by the change in 1. total demand minus 2. inflation and the rise in 3. productivity a.s.o. The critical question is to rise total demand sufficient more than the minusfactors, to achieve full employment. To rise employment, say 7%, it is necessary to change demand 13% if the minusfactors are 3 + 3 = 6%. This relation is practically always valid.
A. Demand is investment in production, environment included, plus consumption and trade surplus. Bureaucracy consumption is not value for money to the People. And trade surplus, say in Norway, is the same trade deficit to the rest of the world. The only sound welfare ground and pension fund is real investment. You can't eat money, and inflation and fraud may more easy do away with net finance investment abroad. Domestic net finance investments are all together zero. If the bureaucracy borrows from the people - or vice versa - is less important. Monetary pension funds and balanced budgets (pari politics) are mainly the economics of illusions... The most important, is to build the country by real investment in private and public sectors. The public sector is of course responsible for the public investments, and also the ramifications and framework for the private investments. We don't think the PM Gro H. Brundtland & Co have done enough to promote investment in this way since the EU-referendum. Demand management, including joint public and private ventures, information on desired rise in private demand, etc, via the press and other channels, is important.
B. Inflation and productivity: Today the OECD economies, Norway included, are probably far from their capacity barriers. In Norway, it was about 7% registered unemployment in january 1995 - some of it may be due to seasonal fluctuations. Besides, the labor force has diminished artificially since 1987, with perhaps another 7%, so it is plenty vacant labor in a dynamic perspective. If bottlenecks should occur in some industries, there is always a helping hand from the unemployed in the bureaucratic chaos of EU, or domestic, in related professions, by bottleneck solving policy. No firm will have an employe doing nothing. How come the employers organization (Karl Glad and NHO) think it is impossible to have full employment in general...
Rising prices connected to increased demand (Phillips curve, stagflation etc) may be due to increasing market power created by a greedy bureaucracy in public and private sectors, when the opportunity knocks. This may also trigger off a price and wage spiral... When the bureaucracy costs BC and controls even more, the People are left with the national income minus BC, and manage even less... Cut back in BC, both the numbers of ranks and their remuneration, are important to control inflation, rise productivity and create welfare etc. for the People. The Rambjør case and the NSB strike (state railways), the Tormod Hermansen case at Telenor, and the "incomedukes" in the financial markets are typical examples. There are lots of cases, and they are only the top of the iceberg. In the EU its even worse, much worse...
This dynamic market power problem is not a necessary relation between demand and inflation, it can be fought by tough customers, supply side competition, public price and wage control, and industrial economic policy in general. The public labor market policy - say the work line from the PM Gro, Berge and Hanisch, is not working, unless combined with the necessary demand minus inflation and productivity policy. Job creating in one firm will just mean less jobs in other firms, if the factors in the anarchist economic accounting for employment are unchanged. This is the whole truth - and nothing but the truth ... on this matter.
II. Stabile currency, interest rates, wages, money supply, taxes, balanced public budget, etc., are secondary factors of economic policy, and will not have any effect on employment unless it changes demand minus inflation and productivity. Generally, to concentrate on the secondary means, instead of the ends in the anarchist economic accounting for employment, is the economics and politics of illusions, typically for the EU bureaucracy. EU will never solve their problems through Maastricht and a Superstate. Especially, one single currency, with so many different economies, is giving away the most powerful means to reach efficient production, unless you wish to move people around as goods. The people do not want that. One of the major problems in the big countries such as Russia, China and USA, is the evil of a common money unit and currency monopoly, and the necessary lot of cross subsidies and taxation, i.e. bureaucratic chaos. Today and in the future - with electronic money and different types of local economic political systems - the optimal number of currencies is probably larger than before...
ALTERNATIVE TO MAASTRICHT
from IJ@ 01(26) 1996
The municipality 'Stordal' in Norway had 0,0% unemployment in the autumn 1995. An anarchist alternative to EU's Maastricht criteria is about full employment, 2-3 percent productivity growth per year, and trade deficit less than net real investment. Unemployment is real income forgone. To reduce private and public bureaucracy and its costs may be important to increase productivity (a), cut inflation, promote more real investments and increase production and demand (= Gross domestic product, GDP, nominally), to create more employment (N). The employment growth is equal to the growth in total demand, minus inflation and productivity hike (ln)¹. Say, to create 10% more employment, if the minus factors totalling 4 or 8 per cent, the demand must increase 14 and 18 per cent respectively.
Germany, the so called economic superpower of EU, had about 11% and increasing unemployment in 1995. May a high unemployment rate, as in EU, really be democratic, or is it a kind of majority dictatorship? A not unusual tendency: The more bureaucracy and power, the more corrupt. The ultimate corruption is to repress and crush mass unemployment by antifeminism, consentration camps and holocaust etc., i.e. left, right or ultra (nazi) fascism. State communism and conservatism may be strongly related to fascism in this matter. 'Gulag' and 'steinrøys sveltihjel' are typically found at more than 67% authoritarian degree (see EP maps at System theory ). The lessons of the relations between mass unemployment, chaos and authoritarian systems until 1945 should not be forgotten. And the authoritarian tactic of creating chaos, falsely rename it anarchy, and (later) call for the strong man, "people power" etc., is well known. Don't forget the Oslo convention about anarchy vs chaos and authoritarian tendencies (Click on: The Oslo Convention).
Norway has averagely about half the unemployment compared to the more bureaucratic and chaotic European Union. However, compared to the other EFTA countries, the situation is different: In 1994 Norway had 5,4% unemployment, Switzerland 4,7% and Iceland 4,7% (source: UN-ILO statistics). Taking into account the large export of oil from the North Sea, the Brundtlandadministration seems not so clever with the labor market politics after all. They should concentrate more on their self declared "job number one", i.e. full employment in general.
¹) Inflation is growth in price level (p); lnN=lnGDP-lnp-lna; ln is corresponding to ca % growth.