October 11, 2010
A Critique of ‘Human Capital’ theory
One of the staples of contemporary neoclassical theory is the use of the concept of ‘human capital’, by which it broadly means all investment into skills and education as applied to individuals or an entire population. In particular in popular neoclassical growth theories, such as those developed by Robert Solow and refined by the likes of Elhanan Helpman, human capital plays a key role. It often appears as an essential component in those theories because they tend to see growth as reliant primarily on increases in productivity, which in turn are based on the interaction between the quantities of the ‘factors of production’ (capital, land and labor, though usually just capital and labor) and the state of technology. The virtue of human capital as a concept within these theories is that they allow the technological level to be determined endogenously to a greater or lesser degree, that is, that they enable the theory to take non-given and non-constant levels of technological increase into account, and model variations in technological improvement between countries. Read the rest of this entry »
October 3, 2010
The Schizophrenia of Mr Duncan-Smith
The Conservative-Liberal Democrat coalition government has at long last unveiled their ‘welfare reform’ plans, which are already touted as being “the “most significant reform” of the coalition so far”.(1) As expected, the reforms are mainly centered around the Work and Pensions Secretary Duncan-Smith’s pet project, the implementation of a single benefits system. Under this system, all benefits would be put essentially into one ‘package’, the universal credit – with the notable exception of disability benefits – and be immediately linked to the payroll deductions tax database. The advantage would be that doing so would allow the government to no longer have to rely on the old ‘all or nothing’ approach to benefits, and thereby eliminate the possibility of part-time or short-term work causing an actual decrease in overall annual income compared to unemployment. Instead, people under such partial contracts would be allowed to keep part of their universal credit so they would not lose out on the move towards regular work. Read the rest of this entry »
October 1, 2010
Boycotting Israel: What Is To Be Done
Electronic Intifada has run an excellent article outlining the historical background of the divestment and boycott campaign against Israel. When the regime of the NP in South Africa implemented the ‘apartheid’ policy of racial segregation, total disenfranchisement of non-whites and open and concealed warfare against left wing forces, the head of the African National Congress openly called for a campaign to boycott South Africa. This campaign was extraordinarily succesful on the part of the common people as well as intellectuals in Europe and America, despite ongoing support for the reactionary dictatorship in South Africa by the US government and some right-wing European parties. From the early 1960s on, the boycott first and foremost took the form of a campaign to ‘divest’ from South Africa, that is to say to withdraw any capitalist investment in that country on the part of pension funds, city boards, and individual corporations in order to economically undermine the basis of the South African regime. The United Nations General Assembly passed a resolution in 1961 to the effect of calling for economic sanctions against South Africa for the apartheid crime, but predictably, rather than taking economic action against a ‘friendly country’, the Western countries decided to boycott the GA meeting instead. Because of the persistent refusal to implement divestment or sanctions on the part of Western governments, whether of the right or ‘left’ (such as Harold Wilson), it took until the early 1980s for the international campaign for boycotting South Africa to reach the necessary critical mass. Eventually the strength of the anti-apartheid movement was so great that a Republican US Congress passed the Comprehensive Anti-Apartheid Act in 1986, overriding their own President Reagan’s veto. Read the rest of this entry »
