Mazzucato’s The entrepreneurial state

Mazzucato’s “The Entrepreneurial State,” in which Mazzucato questions the neoliberal orthodoxy on public spending–that the state must be cut back to make room for entrepreneurship and innovation, to prevent the public sector ‘crowding out’ the private sector. Mazzucato argues that the neoliberal policy program draws on a belief that the private sector is dynamic, innovative and competitive, in contrast to a presumably sluggish and bureaucratic public sector.

The Entrepreneurial State challenges the “minimalist view” of economic policy. It finds that successful economies result from government doing more than just creating the right conditions for growth.

Instead, government has a key role to play in developing new technologies whose potential is not yet understood by the business community. State-funded organisations can be nimble and innovative, transforming economies forever — the algorithm behind Google was funded by a public sector National Science Foundation grant.

 This pamphlet forces the debate to go beyond the role of the state in stimulating demand, or crudely ‘picking winners’ in industrial policy. Instead, it argues for a proactive, entrepreneurial state: a state that is able to take risks and harness the best of the private sector. It imagines the state as a catalyst, sparking the initial reaction that will cause innovation to spread.

–From the abstract

“The Entrepreneurial State” sounds super Peter Evans-derivative (Hello? “Embedded Autonomy” isn’t that old, people). It sounds a little dumber than Evans, actually, since it seems, from the abstract, not to include Evan’s key observation that when a state fosters innovation, capital, being capital, will turn around and try to destroy the conditions of innovation, the state.

I think the argument has to advance. The neoliberal myth about private innovation/public stagnation is designed not to promote minimalist economic policy. There’s no evidence for that. Rather, it’s designed to promote primitive accumulation.

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Keynes: Manage Capitalists Like Domestic Animals

After a tepid political response (overly accommodating to US capital’s corrosive sense of entitlement) and an initial partial recovery from the early 20th century Depression, the US slumped back into economic crisis. In this 1938 letter, Keynes advised FDR on how to more emphatically direct social wealth to the working class in order to get the US out of economic collapse. (David Cay Johnston calls this the ‘circulatory’ understanding of money–If social wealth, like blood, is blocked from getting to the working class, money pools up and rots the system.)

In this advice, Keynes urged FDR to have the confidence to understand and manage capitalists as a species of domestic animals.

There is indication in FDR’s response to Keynes that the capitalist US President understood US prosperity simply as a good in service of outcompeting communism–or at least non-Anglo-centric economies–around the globe. Again this is evidence that, for capitalists (obviously with human lifespans and thereby very time-delimited strategic horizons), economic decline is not perceived as a direct threat to their self-interest–so long as they maintain ownership of a society’s accumulated wealth. That is, capitalists appear to be systematically incapable of understanding economics beyond their own relative advantage. I think that economic inequality (produced by the normal, alienating functioning of capitalism) regularly produces this solipsistic capitalist conceptual error, ensuring economic crisis.

(Thanks to Doug Henwood for posting this link.)

The US govt: Sold to the highest bidder

Edited from the following article:

November 1, 2005. Greenhouse, Steven. Labor Dept. Is Rebuked Over Pact With Wal-Mart. The New York Times.

In January the Department of Labor found 85 child labor violations at Wal-Mart stores in Connecticut, New Hampshire, and Arkansas alone, involving workers under 18 who operated dangerous machinery, including cardboard balers and chain saws. Wal-Mart stopped the investigation by agreeing to pay a $135,540 fine. Then, without its own lawyers, the Bush-staffed Labor Department worked with Walmart Lawyers to find a way to prevent future regulation of the top American profit-maker and Republican Party contributor.

Yesterday, the Labor Department’s Inspector General strongly criticized department officials for “serious breakdowns” in procedures involving this agreement promising Wal-Mart Stores 15 days’ notice before labor investigators would inspect its stores for child labor violations.

The report by the inspector general faulted department officials for making “significant concessions” to Wal-Mart, the nation’s largest retailer, without obtaining anything to protect workers in return. The report also criticized department officials for letting Wal-Mart lawyers write substantial parts of the settlement and for leaving the department’s own legal division out of the settlement process. The pact between WalMart and the Labor Department was intended to be kept secret from the public. The Labor Department took the unusual action of announcing the agreement a month after it was signed, doing so only after some details were leaked to a newspaper.

The Inspector General’s report said that in granting Wal-Mart the 15-day notice, the Wage and Hour Division violated its own handbook. It added that agreeing to let Wal-Mart jointly develop news releases about the settlement with the department violated Labor Department policies.

In addition to allowing the 15-day notice, the agreement lets Wal-Mart avoid civil citations and fines if it brings a store into compliance within 10 days of when the department notifies it of a violation.

In exchange for these favors, the inspector general wrote, there was “little commitment from the employer beyond what it was already doing.”

“In our view,” the inspector general’s office wrote about the Wage and Hour Division, “the Wal-Mart agreement may adversely impact W.H.D.’s authority to conduct future investigations and issue citations or penalty assessments, and potentially restrict information to the public.”

Responding to its inspector general, the Labor Department said it “strongly disagrees with the report’s overall characterization of the effectiveness of the Wal-Mart child labor settlement agreement.” Even though department officials tried to claim that the agreement was much like the pacts other companies’ lawyers have drafted for the Labor Department to sign, Inspector General Heddell found that the agreement between Wal-Mart and the Wage and Hour Division “was significantly different from other agreements entered into by W.H.D.” and “had the most far-reaching restriction on W.H.D.’s authority to conduct investigations and assess” fines.

Representative George Miller, the California Democrat who asked the inspector general to investigate the settlement, said the report showed that the Bush administration was seeking to do favors for a powerful friend and a major Republican contributor in Wal-Mart. “The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws, including child labor laws,” Mr. Miller said. “The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness, and further undermined public confidence that the government is acting on its behalf.”

Even though the sweetheart deal further decimates the Labor Department’s official function of protecting the public interest, Martin Heires, a Wal-Mart spokesman, said, “We think it’s important to note that the inspector general’s office found that the agreement is in compliance with federal law.”

The inspector general recommended that the Wage and Hour Division develop procedures for developing and approving agreements and require that all future settlements be developed in coordination with the Labor Department’s legal division.

The Labor Department said that the advance notification provisions applied only to child labor matters. But the inspector general voiced concern that “the plain language of the advance notification clause applies to any potential violations, not just child labor violations.”

The Inspector General’s report said: “The inspector general has specific concerns with the Wal-Mart agreement because it contained significant provisions that were principally authored by Wal-Mart attorneys and never challenged by W.H.D., and because it did not receive adequate W.H.D. review and approval.”

capitalist corruption: the NIH doesn’t work for the public

Original reporting by DONALD G. McNEIL Jr. “Review Finds Scientists With Ties to Companies.” Published in The New York Times: July 15, 2005.

Following disclosures that some government researchers were paid thousands of dollars by drug makers, in February NIH agency director Dr. Elias A. Zerhouni banned all consulting deals between agency researchers and drug or biotechnology companies. For the agency’s top scientists, he also forbade owning shares in such companies, accepting gifts worth more than $200 and accepting many research prizes. The rules are not final because Dr. Zerhouni has been concerned that the NIH could lose scientists for not allowing them to profit by drug connections. House Energy and Commerce Committee leaders are urging him to make the rules final.

Since the ban, the government-paid scientists’ conduct has been investigated. Forty-four government scientists have violated ethics rules on collaborating with pharmaceutical companies, a preliminary review by the National Institutes of Health shows. The institutes’ review found that the 44 scientists had either failed to disclose income from outside work, had failed to get permission to consult or had done the work on government time rather than their own.

Nine of the scientists may have violated criminal laws, the report said. The review did not describe what criminal laws might have been violated in the nine cases that were turned over to the inspector general of the Department of Health and Human Services. No researchers were named.

The review was outlined in a July 8 letter Dr. Zerhouni sent to the House Energy and Commerce Committee, which is investigating conflicts of interest by government researchers. Because the NIH is investigating 103 people who have been accused of ethics violations, Dr. Zerhouni had asked the committee to keep his letter confidential. But the Committee’s leaders – Representatives Joe L. Barton, Republican of Texas and John D. Dingell, Democrat of Michigan – said in a statement yesterday that they were releasing it because of “the compelling public interest.”

“The ethical problems are more systemic and severe than previously known,” Mr. Barton said.

recommended reproduction reading

I have been through a hell of a lot of pregnancy and childbirth books. If you have already gotten pregnant, I recommend the following books:

1) England, Pam and Rob Horowitz. 1998. Birthing from within. Albuquerque: Partera Press.
2) Greenberg, Gary and Jeannie Hayden. 2004. Be prepared: A practical handbook for new dads. New York: Simon & Schuster.

I recommend these two books for both parents. The England book is good for birth preparation, but I would skip the end parenting chapter, where the author gets crusty and mean all of a sudden. England’s a midwife and her strength is preparing for and giving birth. The second book’s more about parenting. Even though the Greenberg book says it’s for dads, if you’re female and it’s been decades since you’ve last babysat, it’ll be helpful. I’ll update this entry when I find a good guide to breastfeeding. However, there are a million classes on breastfeeding.

If you are an American considering getting pregnant, I strongly recommend you read Naomi Wolf’s myth-busting Misconceptions: Truth, Lies, and the Unexpected on the Journey to Motherhood (2001). It’s essential reading for improving your ability to make thoughtful, informed decisions, and to recognize masked structural imperatives in the American system of reproduction that lead to hidden experiential and behavioral patterns.

The caveats to this recommendation are three. (1) Some sections of Wolf’s book are bound by a heavy uppermiddleclass persepctive, such as where women get isolated out in suburbs while the husbands are ensconced in upper-management tracks. It’s not that similar dynamics don’t operate for other classes, but you get a feeling that the circumstances are different, and they’re not really explored here. Many of us are not uppermiddleclass, and we’re still concerned about how American motherhood inexorably ends up slaving away for patriarchy and capital. But Wolf does at least work to explicitly point out class and race dynamics.

(2) A few of Wolf’s experiences are the result of her being an author, and more inclined toward neurotic, artistic, highly imaginative reveries than you might be, such as where she falls into obsessing on misogyny and death in a swimming pool aerobics session.

(3) In the end, Wolf has some social movement suggestions for improving health care and mothers’ and childrens’ welfare. But here Wolf is missing a big gaping problem in her proposed social movement program. She clearly possesses an insufficient understanding of American society, history, and politics. There have been Mother’s Movements in American history. These impassioned, organized movements resulted in weak and temporary social improvements, and thus fail to catch Wolf’s eye. But Ian Gough trenchantly observed in 1979: Social movements through history and around the world “have sought to substitute conscious allocation of resources to meet social needs for the unplanned operation of unregulated market forces. Behind these social movements, in turn, lies the strength of the organized labor movement. The example of the United States shows how powerful organizations of blacks, women, welfare clients and so on will fail to achieve lasting improvements in social policies in the absence of this bulwark against the power of the dominant classes”–a labor movement.

It is crucial that we remember that it is not just rational actor men or the state or human resources departments that need to be won over or overcome. There is a more salient force behind American society formation that we can never overlook. We need to study history to come to terms with capitalism.

What Wolf can’t see clearly enough from her study of contemporary uppermiddleclass women’s painful experiences in a suburb is that capital has for centuries fought viciously in the U.S. to destroy any institutions that threaten its tools of division and control.

Short of a profound social movement that incorporates an understanding not just of patriarchy and racism, but of class conflict and capitalism, and short of a structural weakening of capital’s class and state institutions of coordination, there will be no further improvements in the welfare of women, children, and families, there will be no development of the American welfare state, and corporations will not sponsor practices that give working people more control over their lives–even if these practices are only described as improving health care or women’s careers.

Capital is highly organized and employs legions of analysts, strategists, managers, publicists, lawyers, and a whole range of militarized police. It is only once in a blue moon that capital is temporarily fooled on the margins by a partial movement of reformists, and relying on that ephemeral improbability is not a social movement strategy. It’s been fairly futile for working people to stump for better working and living conditions in fractured, pro-capitalist bands of interest. Even when the elites give us a nice, compensatory library or museum, they do it for the tax break and only after an alarming bout of labor agitation.