From: glevy@PRATT.EDU
Date: Fri Jan 13 2006 - 06:07:41 EST
Another 2 items from the Heterodox Economics Newsletter-21
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Paolo Sylos Labini
Dear friends,
I am writing to give you the sad news that Paolo Sylos Labini passed
away yesterday in Rome, after a short illness.
I am sure you remember him as a great economist, a fighter of many
causes and a kind and generous person.
With kind regards,
Cristina
Prof. Maria Cristina Marcuzzo
Direttore del Dipartimento di Scienze Economiche
Paolo Sylos Labini: un economista eretico?
La notizia della morte di Paolo Sylos Labini non può che rattristare
tutti coloro che ne apprezzavano le capacità teoriche, scientifiche,
espositive e la grandissima verve polemica, negli ultimi anni
rivolta particolarmente contro Berlusconi (si veda ad esempio
l'interessante e per certi aspetti divertente, "Un paese a civiltà
limitata", libro-intervista pubblicato nel 2001 per i tipi di
Laterza).
Del resto sono ancora oggi molto importanti i suoi studi sulle
tendenze oligopolistiche del capitalismo, sui rapporti tra sviluppo
e progresso tecnico, sui ceti medi; volumi ricchi di osservazioni
interessanti e di senso storico e sociologico. Si può ritenere che
Sylos Labini sia stato dopo Pareto il primo economista italiano a
occuparsi seriamente dell' evoluzione delle classi medie.
Quel che però non convince, e basta dare un'occhiata ai
"coccodrilli" apparsi ieri sui giornali, è la pretesa di
considerarlo un eretico. Su questo giudizio non si può essere
d'accordo. Perché?
In primo luogo, Sylos Labini fu allievo negli Stati Uniti di
Schumpeter, grande e tragico profeta (ma anche apologeta) del
capitalismo. Un'esperienza che lasciò su di lui segni indelebili.
Infatti, fin dai primi suoi lavori (cfr. la voce "investimenti", nel
"Dizionario di economia" a cura di Napoleoni - 1956, pp. 765-793),
Sylos Labini, sulla scia di Schumpeter, non si è mai stancato di
ripetere che il capitalismo, pur con le sue manchevolezze
(burocratizzazioni, oligopoli, rendite parassitarie) resta sempre il
migliore dei mondi possibili: l'unico scenario economico capace di
favorire gli investimenti e dunque di promuovere lo sviluppo umano
nella democrazia.
In secondo luogo, anche l'importanza che nella sua opera ha assunto
l'innovazione teconologica "creatrice" in rapporto allo sviluppo non
solo sociale ma produttivo, testimonia quanto l'interpretazione
schumpeteriana del capitalismo, come forza creatrice e distruttrice
al tempo stesso, abbia pesato sullo sviluppo del suo pensiero.
In terzo luogo, il problema dell' innovazione resta in lui legato,
come del resto anche in Schumpeter, a quello della funzione
imprenditoriale. Di qui la sua critica alle forme di imprenditoria
semipubblica, parassitarie e nemiche delle regole di mercato, che
secondo l'economista italiano, sono splendidamente illustrate, e per
sempre racchiuse, nella "Ricchezza delle Nazioni" di Adam Smith.
In quarto luogo, il rapporto Sylos Labini-Marx è piuttosto
controverso. L'economista italiano ne sempre ammirato più la
sociologia che l'economia (il collegamento tra economia capitalista
e classi sociali), ma di Marx non ha mai condiviso due tesi: quella
sulla caduta del saggio di profitto e quella sull' impoverimento
bipolare delle classi sociali.
Ora, proprio per queste ragioni (sostanzialmente: il muoversi
teoricamente all'interno della visione schumpeteriana del
capitalismo), Paolo Sylos Labini non può essere considerato un
eretico. O comunque non nel senso che oggi viene dato a questo
termine. Detto in breve Sylos Labini è per la "crescita" e non per
la "decrescita". Tutta la sua opera è un elogio dell' innovazione
produttiva e dello sviluppo economico indefinto, come solo strumento
per redistribuire la ricchezza.
Questo spiega, ma è solo una curiosità, perché la bibbia
dell'economia eterodossa il "Biographical Dictionary of Dissenting
Economists" (Elgar 1992, 2000 www.e-elgar.com) non gli abbia
dedicato alcuna voce.
Dispiace ma è così.
By Carlo Gambescia
On behalf of ESHET, I send an obituary of Paolo Sylos Labini,
elected as Honorary Member of the society. Daniele Besomi
Paolo Sylos Labini passed away on December 7th, 2005, aged 85.
Emeritus Professor at the University La Sapienza (Rome) and one of
the most eminent economists in the world, he was known for his
seminal theory of oligopoly and many other contributions. His book
Oligopolio e progresso tecnico (1956) is a milestone in the history
of economics. He has left us many important studies about economic
development and its determinants, nearly all of them translated into
English. His last book, published a few months ago, goes back to his
preferred theme of development and technical progress and to his
preferred approach: the history of economics as a way to understand
present problems. Its title is: Torniamo ai classici. Produttivite
del lavoro, progresso tecnico e sviluppo economico, Roma-Bari:
Laterza, 2005 (Let's go back to the Classics. Labour productivity,
technical progress and economic development).
After graduation, Sylos Labini studied at Harvard, with Joseph
Schumpeter, and in Cambridge (UK); he was member of some of the most
prestigious academies and scientific associations, in Italy (among
which the Accademia dei Lincei ) and in the world (among which the
American Economic Association). He also was awarded many prestigious
scientific prizes, and was repeatedly called to advise the Italian
government and other policy institutions.
At the last ESHET Conference, in Stirling, the Council awarded him
the title of Honorary Member, with the following motivation:"Sylos
Labini is an eminent scholar of economics always interested in the
history of economics. His studies on oligopolistic markets, on
development and underdevelopment, and on social classes cannot be
really detached from his interests in the Classical school, in the
value theory, in the economics of underdevelopment and especially in
Adam Smith�s thought. Beside giving us a deep insight in these
problems, Sylos Labini has thought us a scientific approach free
from ideologies, independent but also socially engaged."
When I officially informed him of the award, his reaction was:"I am
really pleased about this title of Honorary Member of ESHET. Please
convey to the Council and the Executive Committee my feelings of
real happiness. It will be a great pleasure for me to attend the
Dinner in Porto, provided that I am still around!" (my translation
from Italian).
Probably he felt his end near, but hinted at it with much sobriety.
He was disenchanted with human nature and social injustice, and
nevertheless passionately fought for social development and justice
at a scientific and a civic level. In times dominated by ideologies,
even in economics, he stood for an empirical approach, looking for
rational ways to promote economic development and defending the
often neglected role of technical progress. He did not like grand
theories about human nature. He preferred to "measure" factors of
production and cultural attitudes, without losing sight of the
social and moral values. This is how he repeatedly approached issues
like social classes in Italy, underdevelopment, industrial relations
and the development of Southern Italy.
The language of his research was simple and straightforward; the
concepts were neat and clear, free from any rhetoric. Thanks to his
disinterested commitment to science and to society, Paolo Sylos
Labini was exceptionally able to stir human sympathy. His life is a
remarkable example of how scientific engagement and civic commitment
can be combined without prejudicing their reciprocal independence.
Cosimo Perrotta
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Rudolf Meidner, 1914 - 2005: A Visonary Pragmatist
By ROBIN BLACKBURN
Rudolf Meidner, chief economist of the LO, Sweden's largest trade
union federation, and an immensely practical socialist visionary,
died in December. If Meidner had not been a Swedish citizen, and
still a controversial figure at the age of 91, he would very likely
have been awarded the Nobel Prize for economics. Meidner was, after
all, the co-architect -- with Gosta Rehn -- of the Swedish welfare
state, an achievement which, by itself, would have merited such a
nomination.
Those responsible for this prize tend to prefer theory to policy but
it should be clear to everyone that the Rehn/Meidner model was based
on its own distinctive theoretical insights and that policy-oriented
economics is anyway deserving of recognition.
Building on Keynes and James Meade, the two men understood that
welfare and corporate finance needed to be thought through together
if high employment levels were to be maintained and inflation
avoided.
Remarkably enough, their model did for long succeed in delivering on
both fronts -- something which, sadly, cannot be said about other
European welfare states, where monetary stability was achieved at
the expense of a long and debilitating toleration of high levels of
unemployment, with younger workers, older workers and ethnic
minorities the worst affected.
From the time of the introduction of the second pension system, the
ATP, in 1959 the 'Swedish home' could accumulate a trust fund so
that in future asset income as well as current taxes could be drawn
on to pay ATP entitlements. Continental European pension systems
were more purely reliant on pay-as-you-go. The famous
wage-bargaining round was another device which Rehn and Meidner
integrated into their model, helping it to avoid the twin perils of
hyperinflation and persistent, high joblessness. Meidner's position
as the chief economist of the LO, the main trade union federation,
must have been important in promoting a species of solidaristic
wage-bargaining in which the fruits of productivity advances were
widely shared. In recent years the Netherlands has had good results
with a similar approach.
Another crucial mechanism for maintaining macro-economic balance in
the Rehn/Meidner model was the investment reserve. Whereas
Anglo-Saxon companies are encouraged to take 'contribution holidays'
-- and put nothing into their pension and health-care funds during
upswings of the business cycle -- Swedish corporations were
encouraged to stow operating profits in special tax-exempt reserves.
More generally the Swedish welfare state guaranteed secondary
pensions and health care to all citizens, instead of offering
private corporations tax incentives to take on the task of supplying
social insurance to their own workers. The latter formula --
Anglo-Saxon style corporate welfare -- has proved to be a trap for
employees, depriving them of their promised benefits and threatening
their jobs as once-famous companies plunge into bankruptcy and
entire industries -- steel, airlines, auto and telecoms -- are
ravaged by the burden of pension and health entitlements. The
corporate pensions crunch destroys good jobs and their replacement
by low-wage, insecure service employment -- MacJobs-- is scant
compensation.
I am aware that Sweden's welfare state and social market economy
faced its own near-collapse in the early 1990s and that the
Rehn/Meidner model did not emerge unscathed. This crisis was deemed
to reflect badly on the model though both Rehn and Meidner had
stepped down long before, and their advice had anyway not been
heeded. Looking back over three or four decades, there remains
something very distinctive about the Swedish achievement, something
which owes much to the original model. Swedish welfare remains
comparatively generous and Swedish unemployment only a little over a
half of the core EU rate. Swedish parents have access to better
child-care, and Swedish women have better-paying and more flexible
jobs than are to be found in other advanced countries.
Meidner's achievement goes beyond his role, important as that was,
in helping to set up the 'Swedish home'. He saw that an ageing and
learning society would require social expenditure on a scale
unprecedented in peacetime (one could easily add such challenges as
ecological degradation and climate change). Meidner came to believe
in the need to establish strategic social funds -- 'wage-earner
funds' - to be financed by a share levy. The huge controversy which
was provoked by this proposal generated more heat than light.
The Social Democratic party leadership did not share Meidner's
vision and did a poor job of presenting it to the Swedish people.
Meidner's plan was very radical and they were not. With hindsight
there were aspects of the plan that needed adjustment but those made
by the SAPD went in the wrong direction. Having, as they saw it,
burnt their fingers, the Social Democratic leaders began to see
Meidner as an embarrassment, or as a relic of a by-gone age. He was
consigned to the shadows and no part of his thinking was more
disdained than the 'wage-earner funds'.
Yet financing pensions, research and education becomes increasingly
difficult throughout the OECD countries. Does it really make sense
to pay for public programmes only out of current tax revenues and
not to pre-fund them, or to introduce even the most modest tax on
shareholding wealth. It is a striking fact that while most
governments are happy to tax the homes people live in, they all
refuse to have any direct levy on share-holding wealth or to allow
-- as Meidner boldly imagined -- social funds to exercise control
over the large corporations.
Increasingly, it seems, we live in a society like the French Ancièn
Regime before 1789. Then the wealth of the feudal aristocracy was
largely exempt from tax; now it is the holdings of the corporate
millionaires and billionaires that escape taxation. Other signs
reminiscent of the age of Louis XVI include the spirit of 'après
nous le deluge', the reliance on lotteries, and the emergence of
modern variants of 'tax farming' -- for example, laws which oblige
citizens to pay their taxes (pension contributions) to commercial
fund managers rather than to an accountable public body. But the
taboo on effective taxation of corporate wealth is the most crucial
sign of the reign of privilege.
Rudolf Meidner's share levy, unlike so many modern taxes, was
extraordinarily difficult to evade. On the other hand it was not at
all punitive. Unlike traditional corporate taxation, it did not
subtract from the cash-flow or resources which the enterprise needed
for investment. It diluted shareholder wealth without weakening the
corporation as a productive concern. According to the original plan
every company with more than fifty employees was obliged to issue
new shares every year equivalent to 20 per cent of its profits. The
newly issued shares -- which could not be sold -- were to be given
to the network of 'wage earner funds', representing workplaces and
local authorities. The latter would hold the shares, and reinvest
the income they yielded from dividends, in order to finance future
social expenditure. As the wage earner funds grew they would be able
to play an increasing part in directing policy in the corporations
which they owned.
The idea that workers ands citizens should tame the corporations by
establishing control of financial instruments was an echo of ideas
that Meidner imbibed in his youth from the debates of German and
Austrian Marxian economists like Rudolf Hilferding and Karl Polanyi.
For Meidner was not born in Sweden but arrived there as a refugee in
1938.
Meidner's visionary scheme was warmly welcomed by many trade unions
and by members of the Social Democratic party but strongly opposed
by the press and by the '20 families' who then dominated the
country's large corporations. It was adopted by the LO in 1976 and,
much more cautiously, by the Social Democrats a couple of years
later.
Opponents of the scheme, claimed that it would aggrandize the trade
unions who would dominate the 'wage-earner funds'. It was also
alleged that the scheme unfairly favoured employees in the private
sector since they were to be the first to receive shares from the
levy. Scare campaigns persuaded the governing Social Democratic not
simply to reduce the size of the levy -- 10 per cent of profits
would have been a perfectly good starting point -- but to abandon
the principle of the levy itself. Likewise they did not improve the
funds' accountability but instead prevented them from having any say
in corporate policy. By
1992 even the scaled-down social funds owned 7 per cent of the
Swedish stock market but, to prevent them getting any larger, were
wound up by the Conservatives in 1992 and the proceeds used to
finance a string of scientific research institutes. So Meidner's
plan has yet to be properly tried, though even in its diluted form
the social funds helped to propel Sweden to the forefront of the
knowledge-based economy.
Rudolph Meidner, as a radical social democrat, an egalitarian and an
organic intellectual of the labour movement was committed to a
'third way' that was actually the antithesis of the doctrine of that
name subsequently espoused by Tony Blair. Were Blair is vague and
rhetorical, Meidner was precise and institutionally specific. Where
Blair encourages the privatization and commodification of
everything, Meidner was dedicated to the 'de-commodification' of
welfare, education and research. And his proposal for a network of
regional funds broke with the traditional socialist practice of
concentrating more power in the central state.
It is now a long time since governments of the Left have dared to
tried to tame the corporations and ask whether the owners of the
large corporations might be obliged to contribute more to the wider
society, without which their own profits would be impossible. The
most far-sighted attempt to think through the types of new finance
that would be needed to guarantee generous social provision remains
that of Rudolf Meidner and this will be his legacy to the 21st
century.
Robin Blackburn is Visiting Distinguished Professor at the New
School for Social Resaerch in New York and professor of sociology at
the University of Essex, UK. He is the author of Banking on Death:
the History and Future of Pensions
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