.
I read a bunch of "heavy" books during my sabbatical and the four books below all belong to this category even if the first two books are slim in terms of the number of pages (160 and 90 respectively). The books below will at first sight seem like strange choices for a computer scientist to read - as well as at second sight. I however have broad interests and the step from being interested in sustainability and in how the world works to reading the books below is not that great though.
This is a blog post about books I read during the spring term.
Here is the previous blog post in this series. The asterisks refer to the number of quotes from the book (further below).
******* I had initially planned to read Immanuel Wallerstein's four major works, but
after having read the first, I decided to forgo the other three and instead read two shorter books of his that summarise and gives an overview of the ideas he has developed over the last decades instead. I thus started by reading
Immanuel Wallerstein's "
Historical capitalism" (1983). My copy of the book is a reprint from 2011 and it took some time before I understood that the second part of the book, "
Capitalist civilization" was written in 2011 rather then 1983. Those last 50 pages are some of the strongest and most coherent critique of capitalism that I have ever read. I was literally floored when I read it as the text is exceedingly succinct and powerful.
Wallerstein's critique of capitalism does not mean that he necessarily dislikes it. As a historian, he views the inner dynamics of capitalism clinically and over periods spanning centuries and then relatively dispassionately concludes that some of the driving forces behind capitalism has reached the end of their run, and, that capitalism now is threatened both by inner contradictions as well as by biophysical limitations. Also, while capitalism did create a lot of wealth, that wealth has been very unevenly distributed, so while the capitalist system has been great for some (us!), it has been less great or even quite crappy for others who live in squalor (probably spanning the majority of humanity).
"
Capitalist civilization has reached the autumn of its existence. ... If we want to understand how a system approaches its end, we must look at its contradictions, since all historical systems ... have inbuilt contradictions, which is why they all have limited lives. I shall discuss three basic contradictions whose increasing strain determine the future prospects of historical capitalism."
********* Despite being slim (90 pages),
Immanuel Wallerstein's "
World-systems analysis: An introduction" (2004) is dense and requires concentration to get through. Still, reading this introduction is a shortcut compared to reading the four non-introductory tomes of Wallerstein's.
The world-systems analysis is also quite something else compared more well-know historical accounts of the history of the world. There is an underlying zero-sum-gameness to Wallerstein's account of the history of the world because not everyone can be on top and while a few jockey for position, the usual suspects have the odds stacked against them and always come out at the bottom. The poor of the world will never "leapfrog" or "catch up". In fact, the difference is only getting bigger over time. I know this will be counterintuitive to many but Wallerstein's basic arguments are very convincing...
***********************
David Graeber's (2011) "
Debt: The first 5000 years" is a masterful book that I can't praise enough. The 400 pages (plus 50 pages of notes) do not represent an easy read though. It's not that Graeber's ideas are complicated in and of themselves, but they contradict so much of the "common wisdom" of (neo-classical) economics and the beliefs of the average man on the street. Graeber attempts to rewrite large parts of modern history, of economics and of our ideas about how money and debt work. He is for the most part successful at least in making anyone doubt much of what we (think we) know about these and other matters. I won't write a lot about the book here as there are plenty of quotes from the book below (no less then 23 to be exact) to give you a flavour of some of Graeber's ideas.
Graeber has been involved in activism for a long time and he is one of the "ideological thinkers" behind the Occupy Wall Street" movement. Apparently it's Graber who came up with the slogan "we are the 99%". Perhaps it's a too large commitment to read Graeber's book (but it has been translated to other languages
including Swedish)? If so I can recommend an article of his that I just read: "
On the phenomenon of bullshit jobs" (published in the online magazine Strike!).
************* It was a little strange to read
Paul Seabright's (2000) edited book "
The vanishing rouble: Barter networks and non-monetary transactions in post-Soviet societies" after just having read Graeber's "Debt". You immediately realise how little economists really know and how little they can predict in terms of economic and social effects of economic "reforms". Because of and as an effect of brusque economic "reforms" in the post-Soviet economy, things went haywire for just about anyone in the former Soviet union (companies, citizens). The economists who thought everything would improve for everyone as soon as the economy was "liberated" and deregulated were baffled and this book is a testament to that bafflement. The focus of this sense of bafflement is the emergence of and the explosive growth of barter and barter networks (between post-Soviet companies) when the monetary and legal system imploded under hurried economic "reforms". Barter is a well-know phenomenon from pre-modern societies but is an exotic phenomenon in mature industrial societies (like Russia).
"One of the most remarkable aspects of the transition process in the former Soviet Union has been the extent to which the economy has effectively become demonetized in recent years. At the time of Russia’s financial crisis of 1998 it was estimated that up to 70% of industrial output was being exchanged for barter. This book provides an accessible and authoritative analysis of barter in the former Soviet Union."
Most of the authors in this edited book are economists (some come from sociology, anthropology, history). Some of the authors work for the very organisations that pushed for a quick deregulation of the post-Soviet economy (i.e. The World Bank, The International Monetary Fund, The European Bank for Reconstruction and Development). The book gives the reader plenty of unintended insights into the hubris of economics as a discipline and economists in general, and more specifically to them believing that it can be relatively easy to reshape an economic system. The explosive growth of barter in Russia (and Ukraine and Belarus) as a survival mechanism in the (especially) second half of the 1990's came as a huge surprise. Most authors at least have the decency to understand that barter was a suitable response and a survival mechanism for keeping companies afloat. The alternative would have been a wholesale dismantling of the Soviet industrial economy and a rapid shift to the 3rd division in the order of things. It's easy to understand that many Russians were pissed of at the economic "cure" that brought so much turmoil and hardship to ordinary Russians as well as the emergence of a revanchism that in time brought Putin to power. I can understand that many Russians think the reorganisation of their economic system was a plot (or a revenge) aimed at creating wreak havoc in Russia and dispatch the country to a weak position in the international arena.
The book is for the most part not a very exciting read and right when I thought that my esteem for mainstream economics could not get any lower, these economists were (once more) successful in further lowering it. The folly! The hubris! This is followed by a (in the book) recently awakened realisation that things were a bit more complicated than they originally thought (but more seldom by examining their own assumptions and the tenants of their pseudo-scientific discipline).
---------- QUOTES: ----------
-----
On the perils of becoming more "resilient"? -----
"We refer ... to the persons who sell their labour as proletarians.
...
Where a proletarian household depended primarily upon wage-income, then that had to cover the minimal costs of survival and reproduction. However, when wages formed a less important segment of total household income, it would often be rational for an individual to accept employment at a rate of remuneration which contributed less than its proportionate share (in terms of hours worked) of real income - whilst nevertheless resulting in the earning of necessary liquid cash (the necessity frequently being legally imposed)
...
semi-proletarian households ... who were producing other forms of real income ... were creating surpluses which lowered the minimum-acceptable-wage threshold."
Comment: If people were better at satisfying their "needs" by making do, by working less, by cooperating with neighbours (carpools etc.), by reducing their consumption - would salaries then go down(?).
Wallerstein (1983). "Historical capitalism".
-----
On the error of the Occupy Wall Street movement referring to themselves as "the 99%" -----
"our historical and social science analyses have concentrated on what has been happening within the 'middle classes' - that is, to that ten of fifteen per cent of the population of the world-economy who consumed more surplus than they themselves produced. *Within this sector* there really has been a relatively dramatic flattening of the curve between the very top (less than one per cent of the total population) and the truly 'middle' segments, or cadres (the rest of the ten to fifteen per cent). A good deal of the 'progressive' politics of the past several hundred years of historical capitalism has resulted in the steady diminution of the unequal distribution of world surplus-value among that small group who have shared in it. The shouts of triumph of this 'middle' sector over the reduction of their gap with the upper one per cent have masked the realities of the growing gap between them and the other eight-five per cent.
Wallerstein (1983). "Historical capitalism" (p.104-105).
----- On the pros and cons of capitalism -----
"[Under the capitalist world-economy] total material wealth has grown immensely ... And this surplus-value has been distributed among a far larger percentage of the population than in any previous historical system. ... This is the group referred to as the middle class.
...
But worldwide ... Perhaps as much as 85 per cent of the people who live within the structures of the capitalist world-economy are clearly not living at standards higher than the world's working populations of 500 to 1,000 years ago. Indeed, it could be argued that many, even most, of them are materially worse off. In any case, they certainly work much harder in order merely to scrape by; they may eat less, but they surely buy more.
Has then capitalist civilization defeated the Four Horsemen of the Apocalypse? At most, only partially and even then very unevenly."
Comment: The Four Horsemen of the Apocalypse are Disease (pestilence, plague), War, Famine and Death (strife, violence, riots, civil war, genocide, perhaps terrorism(?)).
Wallerstein (1983). "Historical capitalism" (p.123-124).
----- On how strange the concept of tourism is -----
"one of the most remarkable inventions of capitalist civilization [is] tourism. In no previous historical system did there exist the concept that people, even wealthy and powerful people, would spend a part of their lifetime exempt from income-producing work in order to travel, observe, and enjoy pleasures that were not part of their ordinary ongoing life pattern. What originated in early modern times as the sport of a handful of aristocrats has become in the late twentieth century the normal expectation of the world's middle strata. ... But ... At the very most, 5 to 10 per cent of the world's population can engage even once in a tourist expedition."
Wallerstein (1983). "Historical capitalism" (p.125).
----- On economists' and scientists' blind spots -----
"The basic question [is] what scientific questions have not been asked for 500 years, which scientific risks have not been pursued. It raises the question of who has decided what scientific risks were worth taking, and what have been the consequences in terms of the power structure of the world. One wonders, for example, if our present ecological dilemmas, the direct result of the externalisation of costs by capitalist entrepreneurs, would not have been at least lessened, if not altogether avoided, by a more holistic scientific approach that would have made the study of dissipative structures and inevitable bifurcations central to its analysis, rather than by one that relegated such systemic dilemmas to the category of external obstacles inherently capable of a technical solution, while presuming that the linear trends in place would simply continue."
Comment: Wallerstein has, on the whole, a blind spot for the environment, energy etc though. He sees (only) economical and political dimensions.
Wallerstein (1983). "Historical capitalism" (p.130).
----- On meritocracy and the allocation of high-status jobs in society -----
"What is probably the most that can be said for meritocratic scoring is that it can easily distinguish the small group of quite exceptional persons and that of quite incompetent persons, leaving a very large group in between among whom the scoring process does not allow us to choose in reliable ways. In terms however of a job structure that needs at most a quarter of the 80 per cent in the middle competency group in higher paying positions, choices must be made, and there is clear evidence that here the criterion of family social position intrudes in a major way. The institutionalized meritocratic system helps a few to gain access to positions they merit and from which they might otherwise be barred. But it allows many more to gain access to positions on the basis of ascribed status under the cover of having gained this access by achievement."
Comment: To say it in plain language, those with affluent and/or well-educated parents get the "top jobs" even though there are others who are more deserving (but who didn't have the same opportunities). Why do *you* think you have the job you have? Because you deserve it or because you were privileged/lucky?
Wallerstein (1983). "Historical capitalism" (p.133).
----- On zero-sum characteristics of the *global* economic system -----
"The more effective way to lower costs of production is to lower the costs of labour - by further mechanization, by changing law or custom causing lower real wages, or by geographical displacement of production to zones of lower labour costs. ... However, these tactics contradict the other mode of increasing profits ... which is that of increasing effective demand.
...
How can these two needs be reconciled? Historically, there has been only one way - by geographical disjuncture. Whenever, in more favoured regions of the world-system, political steps are taken to raise in some way effective demand (increases in wage levels, and in the social wage or state-controlled redistribution), steps have been taken in other parts of the world-system to increase the number of producers at low wage levels."
Comment: If the capitalist system both "needs" a relatively affluent middle class who can buy all the goods it produces, but at the same time "can only bear" that 10-20% of the global population belongs to that class, it is possible to link developments in western labour markets (increased unemployment and uncertainty, downward mobility, decreased life prospects for the younger generation) to the rise of a *global* middle class (with new entrants from China and India exerting pressure on wanna-be Western members of the global middle class). Just as there can only be one "king of the hill", only, say, 1/7 (Wallerstein's estimate) of the global population can belong to the "middle class". I haven't thought about it in that particular way before. Intriguing.
Wallerstein (1983). "Historical capitalism" (p.146).
----- On the 19th century genesis of the social sciences
-----
"Initially what one saw is that the social sciences
tended to place themselves in the middle between the "pure sciences"
and the "humanities." ... The oldest of the social sciences is of
course history, an activity and a label that go back thousands of years.
...
it followed from the historians' practice of restricting
themselves to studying the past that they had little to say about the
contemporary situation facing their countries. And political leaders felt in
need of more information about the present. New disciplines therefore grew up
for this purpose. There were mainly three: economics, political science, and
sociology. Why, however, would there be *three* disciplines to study the
present but only one to study the past? Because the dominant liberal ideology
of the nineteenth century insisted that *modernity* was defined by the
differentiation of three social spheres: the market, the state, and the civil
society. The three spheres operated, it was asserted, according to different
logics, and it was good to keep them separated from each other - in social life
and therefore in intellectual life. They needed to be studied in different
ways, appropriate to each sphere - the market by economists, the state by
political scientists, and the civil society by sociologists."
Wallerstein (2004). "World-systems analysis: An
introduction" (p.4-6).
----- On the 19th century genesis of the social sciences -
the case of anthropology -----
"[19th century] Social scientists ... studied in effect
only a small portion of the world. ... the rest of the world seemed somehow
different, and it seemed inappropriate to use four West-oriented disciplines to
study parts of the world that were not considered "modern." As a
result, two additional disciplines arose. One of these disciplines was called
anthropology. The early anthropologists studied peoples who were under ...
colonial rule. ... they were considered "primitive" peoples.
...
Ethnographers served in many ways as the primary
interpreters of their peoples to the modern outsiders who governed them. They
recast in language understandable to these outsiders the rationale behind the
customary ways. They were thus useful to the colonial rulers by offering
information that could make the governors more cognizant of what they could and
could not do (or should not do) in their administration."
Wallerstein (2004). "World-systems analysis: An
introduction" (p.7-8).
----- On the 19th century genesis of the social sciences -
the case of orientalism -----
"The world was however made up of more than just the
"modern" states and these co-alled primitive peoples. There were also
regions outside the pan-European zone which had what was called in nineteenth
century a "high civilization" - for example, China, India, Persia,
the Arab world.
...
All these zones had been in the past, and sometimes
continued to be even in the present, the location of bureaucratic
"world-empires" that had embraced large areas, and therefore
developed a common language, a common religion, and many common customs. This
is what was meant when they were called "high civilizations.". These
regions all shared another feature in the nineteenth century. They were no
longer as strong militarily or technologically as the pan-European world.
...
The persistent question that was in the back of
[orientalists'] minds was how to explain that these "high
civilizations" were not "modern" like the pan-European world.
The answer the Orientalists seemed to put forth was that there was something in
the composite culture of these civilizations which had "frozen" their
history, and had made it impossible for them to move forward, as had the
Western Christian word, to "modernity." It followed that these
countries thus required assistance from the pan-European world if they were to
move forward to modernity."
Wallerstein (2004). "World-systems analysis: An
introduction" (p.8-9).
----- On "development" -----
"Development, as the term came to be used after 1945,
was based on a familiar explanatory mechanism, a theory of stages. Those who
used this concept were assuming that the separate units - "national
societies" - all developed in the same fundamental way ... but at distinct
paces ... Presto! One would then be able to [argue] that eventually, all states
would turn out more or less the same. This sleight of hand had a practical side
as well. It meant that the "most developed" state [the US] could offer
itself as a model for the "less developed" states, urging the latter
to engage in a sort of mimicry, and promising a higher standard of living and
more liberal governmental structure ("political development") at the
end of the rainbow."
Wallerstein (2004). "World-systems analysis: An
introduction" (p.10).
----- On racism, sexism and anti-universalism -----
"Universalism means in general the priority to general
rules applying equally to all persons, and therefore the rejection of
particularistic preferences in most spheres. ... The expressions of
universalism are manifold. If we translate universalism to the level of the
firm or the school, it means for example the assigning of persons to positions
on the basis of their training and capacities (a practice otherwise know as
meritocracy). ... If we translate it to the level of the state, it means such
rules as universal suffrage and equality before the law.
...
Racism and sexism ... too are norms. ... Racism and sexism
are instances of a far wider phenomenon that has no convenient name, but that
might be thought of as anti-universalism, or the active institutional
discrimination against all the persons in a given status-group or identity. ...
These rankings are both wordwide and more local. ... We are all quite familiar
with the worldwide rankings with the modern world-system: men over women,
Whites over Blacks (or non-Whites), adults over children (or the aged),
educated over less educated, heterosexuals over gays and lesbians, the
bourgeois and professionals over workers, urbanites over rural dwellers."
Wallerstein (2004). "World-systems analysis: An
introduction" (p.38-39).
----- On taxation -----
"No one, it is said, likes taxes. In fact the opposite
is true, although few avow it. Everyone - firms and workers allike - wants the
things that states can offer them with the money that the states have obtained
through taxation.
...
In point of fact, most people and most firms are willing to
be taxed in order to provide the minimum services that each person and each firm
thinks will serve its interests. But no one is willing, or ready, to be taxed
more than that. ... Since persons and firms have different interests, they draw
the line differently. And since, in addition to the amounts of taxes, the state
can and does choose among a vast array of modes of taxation, persons and firms
prefer those modes which affect them the least and other the most."
Wallerstein (2004). "World-systems analysis: An
introduction" (p.49).
----- On the relation between strong and weak states -----
"Strong states relate to weak states by pressuring them
to keep their frontiers open to those flows of factors of production that are
useful and profitable to firms located in the strong states, while resisting
any demands for reciprocity in this regard. In the debates on world trade, the
United States and the European Union are constantly demanding that states in
the rest of the world open their frontiers to flows of manufactures and
services from them. They however quite strongly resist opening fully their own
frontiers to flows of agricultural products or textiles that compete with their
own products from states in peripheral zones. Strong states relate to weak
states by pressuring them to install and keep in power persons whom the strong
states find acceptable ... Strong states relate to weak states by pressuring
them to accept cultural practices ... that will reinforce the long-term linkage
between them. Strong states relate to weak states by pressuring them to follow
their lead in international areans (treaties, international organizations). ...
Of course, the weakest states are those we call colonies."
Wallerstein (2004). "World-systems analysis: An
introduction" (p.55).
----- On the primary functions of schools in the 19th century (and today?) -----
"How does one create a nation? By underlining how citizenship excludes the others out there. One creates a nation by preaching nationalism. Nationalism was taught in the nineteenth century through three main institutions: the primary school, the army, and the national celebrations.
The primary schools ... turned workers and peasants into citizens who possessed the minimum capacities needed to perform national duties: ... reading, writing, and arithmetic. ... And above all, they taught the national language. At the beginning of the nineteenth century, few European countries had in practice a single national language. By the end, most of them did."
Comment: Forget "hard facts" and PISA tests - how successful are Swedish (Armenian, Argentinian, American) schools in creating (shaping, moulding) Swedes (Armenians, Argentinians, Americans)? After having succeeded in moulding people from both sexes, all social classes and all parts of the country into "Swedes" more than 100 years ago, how are they faring in making Swedes out of different racial, religious, linguistic and ethnic groups today? Do note the implicit alternative option in the beginning of the quote: exclusion.
Wallerstein (2004). "
World-systems analysis: An introduction" (p66).
----- On what strategies to choose to change society -----
"[one important debate from the first half to the end of the 19th century] involved whether it was more important for oppressed groups to change themselves or to change the institutions that were oppressing them. ... For example, for a nationalist group, is it more important to revive a dying national language or to elect persons from the group to the legislature?
...
many felt that [these different priorities] led in quite different strategic directions. The case for the cultural option ... was always that political changes were in the end superficial and co-optative. ... Those arguing for the political option always emphasized the realities of power, and insisted that transforming the relations of power ... was the prerequisite to any real change.
What happened historically is that after thirty to fifty years of both friendly and unfriendly debate, the proponents of the political option won the internal battles in all the antisystemic movements. ... By the end of the twentieth century ... the antisystemic movements had agreed ... on a two-step agenda of action: first obtain power in the state; then transform the world/the state/the society.
Comment: Oppressed groups and antisystemic movements are for example women (womens' movement), worker (workers' movement), different ethnic and linguistic minorities etc.
Comment. Should people with "green" inclinations primarily spend their time trying to change the political system (the green party) or "just do it" (start a garden in their back yard, found a transition town initiative or an ecovillage etc.)?
Wallerstein (2004). "
World-systems analysis: An introduction" (p.68).
----- On colonialism and lingering debts -----
"In 1895 ... France invaded Madagascar, disbanded the government ... and declared the country a French colony. One of the first things General Gallieni did after "pacification," as they liked to call it then, was to impose heavy taxes on the Malagasy population, in part so they could reimburse the costs of having been invaded, but also, since French colonies were supposed to be fiscally self-supporting, to defray the costs of building the railroads, highways, bridges, plantations, and so forth the French regime wished to build. Malagasy taxpayers were never asked whether they wanted these railroads, highways, bridges, and plantations, or allowed much input into where and how they were built†. To the contrary: over the next half century, the French army and police slaughtered quite a number of Malagasy who objected too strongly to the arrangement (upwards of half a million, by some reports, during on revolt in 1947). It's not as if Madagascar has ever done any comparable damage to France. Despite this, from the beginning, the Malagasy people were told they owed France money, and to this day, the Malagasy people are still held to owe France money, and the rest of the world accepts the justice of this arrangement. When the "international community" does perceive a moral issues, it's usually when they feel he Malagasy government is slow to pay their debts."
† With the predictable results that they weren't actually built to make it easier for Malagasy people to get around in their own country, but mainly to get products from the plantations to ports to earn foreign exchange to pay for building the roads and railways to begin with.
Graeber (2011). "
Debt: The first 5,000 years" (p.5-6).
----- On us foreign debt as tribute to the empire -----
"So what is the status of all this money continually being funnelled into the U.S. treasury? Are these loans? Or is it tribute? In the past, military powers that maintained hundreds of military bases outside of their own home territory were ordinarily referred to as "empires," and empires regularly demanded tribute from subject peoples.
...
What is the difference between a gangster pulling out a gun and demanding you give him a thousand dollars of "protection money," and that same gangster pulling out a gun and demanding you provide him with a thousand-dollar "loan"? In most ways, obviously, there is no difference. But in certain ways there is. As in the U.S. debt to Korea or Japan, were the balance of power at any point to shift, were America to lose its military supremacy, were the gangster to lose his henchmen, that "loan" might start being treated very differently. ... There's an old vaudeville gag that makes the same point even more elegantly ...
'I was walking down the street with a friend the other day and a guy with a gun jumps out of an alley and says "Stick 'em up." As I pull out my wallet ... I pull out some money, turn to my friend and say, "Hey, Fred, here's that fifty bucks I owe you." The robber was so offended he took out a thousand dollars of his own money, forced Fred to lend it to me at gunpoint, and then took it back again.'"
Graeber (2011). "
Debt: The first 5,000 years" (p.6-7).
----- On barter -----
Comment: modern economics is based on the idea that first there was barter, but since it was so ineffective, people spontaneously invented money since it was more convenient. This story helps to justify our current monetary and economic system.
"For centuries now, explorers have been trying to find this fabled land of barter - none with success. ... this hardly means that barter does not exist ... It just means that it's almost never employed, as [Adam] Smith [the founder of modern economics] imagined, between fellow villagers. Ordinarily, [barter] was carried out between people who might otherwise be enemies and hovered about an inch away form outright warfare
...
What all such cases of trade through barter have in common is that they are meetings with strangers who will, likely as not, never meet again, and with whom one certainly will not enter into any ongoing relations.
...
Economics assumes a division between different spheres of human behavior that ... simply does not exist. ... This in turn allows us to assume that life is neatly divided between the marketplace, where we do our shopping , and the "sphere of consumption," where we concern ourselves with music, feasts, and seduction."
Graeber (2011). "
Debt: The first 5,000 years" (p.29-33).
-----
on the creation of money and exchange values in society -----
"the first steps toward creating real money comes when we start calculating much more specific debts to society, systems of fines, fees, and penalties, or even debts we owe to specific individual who we have wronged in some way
...
the English word "to pay" is originally derived from a word for "to pacify, appease" - as in, to give someone something precious, for instance, to express just how badly you feel about having just killed his brother in a drunken brawl, and how much you would really like to avoid this becoming the basis for an ongoing blood-feud.
...
I've always remarked how difficult it is to imagine how a system of precise equivalences - one young healthy milk cow is equivalent to exactly thirty-six chickens - could arise from most forms of gift exchange [but] the levying of penalties must have constantly required the calculation of equivalences. Say the fine is in marten pelts but the culprit's clan doesn't have any martens. How many squirrel skinns will do? Or pieces of silver jewelry? Such problems must have come up all time and led to at least a rough-and-ready set of rules of thumb over what sorts of valuable were equivalent to others."
Graeber (2011). "
Debt: The first 5,000 years" (p.60-62).
-----
on the position of economics as an academic discipline -----
"economics ... is treated as a kind of master discipline. Just about anyone who runs anything important in America is expected to have some training in economic theory, or at least to be familiar with its basic tenets. As a result, those tenets have come to be treated as received wisdom, as basically beyond question (one know one is in the presence of received wisdom when, if one challenges it, the first reaction is to treat one as simply ignorant - "You obviously have never heard of the Laffer Curve"; "Clearly you need course in Economics 101" - the theory is seen as so obviously true that no one who understands it could possibly disagree)."
Graeber (2011). "
Debt: The first 5,000 years" (p.90).
----- on shopkeepers' ethnicity in poor neighborhoods -----
"If one is on sociable term with someone, it's hard to completely ignore their situation. Merchants often reduce prices for the needy. This is one of the main reasons why shopkeepers in poor neighborhoods are almost never of the same ethnic group as their customers; it would be almost impossible for a merchant who grew up in the neighborhood to make money, as they would be under constant pressure to give financial breaks, or at least easy credit terms, to their impoverished relatives and school chums."
Graeber (2011). "
Debt: The first 5,000 years" (p.102).
----- on all of us being "communists" -----
"We are all communists with our closest friends, and feudal lords when dealing with small children. It is very hard to imagine a society where people wouldn't be both."
Graeber (2011). "
Debt: The first 5,000 years" (p.113-114).
-----
on debt and etiquette -----
"In fact, the English "please" is short for "if you please," "if it pleases you to do this" ... Its literal meaning is "You are under no obligation to do this." ... etiquette largely consists of the exchange of polite fictions (to use less polite language, lies). When you ask someone to pass the salt, you are also giving them an order; by attaching the word "please," you are saying that it is not an order. But, in fact, it is.
...
the Portuguese obrigado ... actually does mean, "I am in your debt." ... Saying "you're welcome" or "it's nothing" (French de rien, Spanish de nada) ... is a way of reassuring the one to whom one has passed the salt that you are not actually inscribing a debit in your imaginary moral account book.
...
Those at the very top of society often still feel that deference is owed primarily to hierarchical superiors and find it slightly idiotic to watch postmen and pastry cooks taking turns pretending to treat each other like little feudal lords. ... middle-class etiquette insists that we are all equals"
Graeber (2011). "
Debt: The first 5,000 years" (p.123-124).
-----
on causality and culpability -----
"It is common understanding among many traditional African peoples that human being do not simply die without a reason. If someone dies, someone must have killed them. If a Lele woman died in childbirth, for example, this was assumed to be because she had committed adultery. The adulterer was thus responsible for the death. Sometimes she would confess on her deathbed, otherwise the facts of the matter would have to be established through divination. It was the same if a baby died. If someone became sick, or slipped and fell while climbing a tree, one would check to see if they had been involved in any quarrel that could be said to have caused the misfortune. If all else failed, one could employ magical means to identify the sorcerer. Once the village was satisfied that a culprit had been identified, that person owed a blood-debt"
Graeber (2011). "
Debt: The first 5,000 years" (p.
138-139).
----- on the slave trade and on blaming the victims -----
"The slave trade, of course represented violence on an entirely different scale. We are speaking here of destruction of genocidal proportions, in world-historic terms, comparable only to events like the destruction of New World civilizations or the Holocaust. Neither do I mean in any way to blame the victims: we need only imagine what would be likely to happen in our own society if a group of space aliens suddenly appeared, armed with undefeatable military technology, infinite wealth, and no recognizable morality - and announce that they were willing to pay a million dollars each for human workers, no questions asked. There will always be at least a handful of people unscrupulous enough to take advantage of such a situation - and a handful is all it takes."
Graeber (2011). "
Debt: The first 5,000 years" (p.
162-163).
-----
on slavery, death and zombies -----
"So what is slavery? ... Slavery is the ultimate form of being ripped from one's context, and thus from all the social relationshops that make one a human being. Another way to put this is that the slave is, in a very real sense, dead."
[Comment: At this point, I began to speculate about the possible connection between slaves, the walking dead and zombies. I jumped the gun prematurely, because Graeber is totally on to it:]
"one becomes a slave in situations where one would otherwise have died. This is obvious in the case of war: in the ancient world, the victor was assumed to have total power over the vanquished, including their women and children; all of them could be simply massacred. Similarly ... criminals were condemned to slavery only for capital crimes, and those who sold themselves, or their children, normally faced starvation.
...
a slave could not owe debts, because in almost every important sense, a slave *was* dead. In Roman law, this was quite explicit. If a Roman soldier was captured and lost his liberty, his family was expected to read his will and dispose of his possession. Should he later regain his freedom, he would have to start over, even to the point of remarrying the woman who was now considered his widow.
...
Tiv horror stories about men who are dead but do not know it or who are brought back from the grave to serve their murderers, and Haitian zombie stories, all seem to play on this essential horror of slavery: the fact that it's a kind of living death."
Graeber (2011). "
Debt: The first 5,000 years" (p.
168-170).
----- on patriarchy as a reaction to early/ancient commercialization/commoditization -----
"'Patriarchy' originated, first and foremost, in a rejection of the great urban civilizations in the name of a kind of purity, a reassertion of paternal control against great cities like Uruk, Lagash, and Babylon, seen as places of bureaucrats, traders, and whores. The pastoral fringes, the deserts and steppes away from the river valleys, were the places which displaced, indebted farmers fled [from debt and slavery].
...
the absolute authority of fathers ... was made possible by, but at the same time was a protest against, this very commoditization of people in the cities that they fled. The world's Holy Books ... echo this voice of rebellion, combining contempt for the corrupt urban life, suspicion of the merchant, and often, intense misogyny. One need only think of the image of Babylon itself, which has become permanently lodged in the collective imagination as not only the cradle of civilization, but also the Place of Whores."
Comment: See further http://www.amazon.com/Occidentalism-The-West-Eyes-Enemies/dp/0143034871
Graeber (2011). "
Debt: The first 5,000 years" (p.
187).
----- Is creativity built on abundant leisure = an infrastructure of slavery? -----
"One of the first effects of the arrival of a commercial economy [to ancient Greece] was a series of debt crises, of the sort long familiar from Mesopotamia and Israel. ... Rather than institutionalize periodic amnesties, Greek cities ... would turn to a policy of expansion, shipping off the children of the poor to found military colonies overseas. Before long, the entire coast from Crimea to Marseille was dotted with Greek cities, which served, in turn, as conduits for a lively trade in slaves. The sudden abundance of chattel slaves, in turn, completely transformed the nature of Greek society. First and most famously, it allowed even citizens of modest means to take part in the political and cultural life of the city and have a genuine sense of citizenship."
Comment: This is DY-NA-mite. Are the wonders of Greek thought and Greek civilization 500-400 BC built on the backs of slaves and the free time they enabled the "free citizens" [men] of Greece? Is the agora as a communal meeting place and a place for debates built on top of an infrastructure of slavery? Such a hypothesis even fits chronologically with the arrival of money one or two centuries earlier ["by about 600 BC, just about every Greek city-state was producing its own coins as a mark of civic independence"].
Graeber (2011). "
Debt: The first 5,000 years" (p.187).
----- on gold, silver, violence and unrest -----
"Bullion predominates, above all, in periods of generalized violence. There's a very simple reason for that. ... In a world where war and the threat of violence are everywhere ... there are obvious advantages to making one's transactions simple. This is all the more true when dealing with soldiers.
...
a heavily armed itinerant soldier is the very definition of a poor credit risk. The economists' barter scenario might be absurd when applied to transactions between neighbours in the same small rural community, but when dealing with a transaction between the resident of such a community and a passing mercenary, it suddenly begins to make a great deal of sense.
For much of human history, then, an ingot of gold or silver, stamped or not, has served the same role as the contemporary drug dealer's suitcase full of unmarked bills: an object without a history, valuable because one knows it will be accepted in exchange for other goods just about anywhere, no questions asked."
Graeber (2011). "
Debt: The first 5,000 years" (p.213).
-----
On the ultimate way to protest -----
"Popular uprisings in the ancient world usually ended in the massacre of the rebels. As I've already observed, physical escape, such as via exodus or defection, has always been the most effective response to oppressive conditions since the earliest times we know about. Where physical escape is not possible ... otherworldly religions ... allowed people to create other worlds within this one, liberated spaces of one sort or another."
Comment: What is the most effective way to protest against an unfair system? Revolution or demonstrations on the streets, or, protesting by just slipping away and living in the interstices or the outskirts of society?
Graeber (2011). "
Debt: The first 5,000 years" (p.250).
-----
The thing that is so great about the collapse of empires is... -----
"the Middle Ages ... began with the collapse of empires. ... For most of us, "medieval" remains a synonym for superstition, intolerance, and oppression. Yet for most of the earth's inhabitants, it could only be seen as an extraordinary improvement over the terrors of the Axial Age [the age of empires 800 BC - 600 AD]"
...
cities shrivelled, and many were abandoned, but even this was something of a mixed blessing. Certainly, it had a terrible effect on literacy, but one must also bear in mind that ancient cities could only be maintained by extracting resources from the countryside. Roman Gaul, for instance, had been a network of cities, connected by the famous Roman roads to an endless succession of slave plantations, which were owned by the urban grandees. ... However oppressed medieval serfs might have been, their plight was nothing compared with that of the Axial Age equivalents. Still, the Middle Ages proper are best seen as having begun not in Europe but in India and China.
Comment: The Roman empire collapse in the Europe and other empires collapsed elsewhere (China, India, Middle East)
Graeber (2011). "
Debt: The first 5,000 years" (p.
251-252).
-----
On soldiers and merchants as bad (but useful) -----
"Confucian orthodoxy [was] pro-market but anti-capitalist. ... From this perspective, China was for most of its history the ultimate anti-capitalist market state. Unlike later European princes, Chinese rulers systematically refused to team up with would-be Chinese capitalists (who always existed) . Instead ... they saw them as destructive parasites - though ... ones whose fundamentally selfish and antisocial motivations could still be put to use in certain ways. In Confucian terms, merchants were like soldiers. Those drawn to a career in the military were assumed to be driven largely by a love of violence. As individuals, they were not good people, but they were also necessary to defend the frontiers. Similarly, merchants were driven by greed and basically immoral; yet if kept under careful administrative supervision, they could be made to serve the public good. Whatever one might think of the principles, the results are hard to deny. For most of its history, China maintained the highest standard of living in the world - even England only really overtook it in perhaps the 1820s, well past the time of the Industrial Revolution."
Graeber (2011). "
Debt: The first 5,000 years" (p.
260-261).
-----
On the ruthless conquistador mindset at the core of the modern corporation -----
"In "The Conquest of America", Tzvetan Todorov offers a compendium of some of the most chilling reports, mostly from Spanish priests and friars who ... could not disguise their horror at scenes of Spanish soldiers testing the blades of their weapons by eviscerating random passers-by and tearing babies off their mother's backs to be eaten by dogs. (p.314)
...
Similar scenes [or systematic genocide] were reported in Peru, where whole regions were depopulated by forced service in the mines, and Hispaniola [Haiti and Dominican Republic] where the indigenous population was eradicated entirely. When dealing with conquistadors, we are speaking not just of simple greed, but greed raised to mythic proportions. (p.315)
...
We are not dealing with a psychology of cold, calculating greed, but in a much more complicated mix of shame and righteous indignation, and of the frantic urgency of debts that would only compound and accumulate (p.318
...
All of this helps explain why the Church had been so uncompromising in its attitude toward usury ... it was a matter of moral rivalry. Money always has the potential to become a moral imperative unto itself. ... For the debtor, the world is reduced to a collection of potential dangers, potential tools, and potential merchandise. Even human relations become a matter of cost-benefit calculation. Clearly, this is the way the conquistadors viewed the worlds that they set out to conquer.
It is a peculiar feature of modern capitalism to create social arrangements that essentially force us to think this way. The structure of the corporation is a telling case in point - and it is no coincidence that the first major joint-stock corporations in the world were the English and Dutch East India companies, ones that pursued that very same combination of exploration, conquest, and extraction as did the conquistadors. It is a structure designed to eliminate all moral imperatives but profit. The executives ... are mere employees whose only responsibility is to provide the maximum return on investment for the company's stockholders." (p.319-320)
Comments: The "successful" conquistadors were always just one step ahead of their creditors, ruthless and desperate for new conquests - no matter what the costs in terms of misery for others.
Graeber (2011). "
Debt: The first 5,000 years".
-----
On the emerging strong state as the enemy of the people -----
"The story of the origins of capitalism [is] the story of ... the gradual transformation of moral networks by the intrusion of the impersonal - and often vindictive - power of the state. English villagers in Elizabethan or Stuart times did not like to appeal to the justice system, even when the law was in their favor - partly on the principle that neighbors should work things out with one another, but mainly, because the law was so extraordinarily harsh. Under Elizabeth, for example, the punishment for vagrancy (unemployment) was, for the first offence, to have one's ears nailed to a pillory; for repeat offenders, death. ... decent people tended to avoid the courts entirely."
Graeber (2011). "
Debt: The first 5,000 years" (p.
332-333).
----- On the belief that 5% growth/year is a universal principle -----
"everyone agrees, however, that capitalism is a system that demands constant, endless growth. Enterprises have to grow in order to remain viable. The same is true of nations. Just as five percent per annum was widely accepted, at the dawn of capitalism, as the legitimate commercial rate of interest ... so is five percent now the annual rate at which any nation's GDP really ought to grow. What was once an impersonal mechanism that compelled people to look at everything around them as a potential source of profit has come to be considered the only objective measure of the health of the human community itself."
Graeber (2011). "
Debt: The first 5,000 years" (p.346).
-----
On the capitalism, gambling and the apocalypse -----
"there may be a deeper, more profound relation between gambling and apocalypse. Capitalism is a system that enshrines the gambler as an essential part of its operation ... yet at the same time, capitalism seems to be uniquely incapable of conceiving of its own eternity. Could these two facts be linked?
...
Almost none of the great theorists of capitalism, from anywhere on the political spectrum, from Marx to Weber, to Schumpeter, to von Mises, felt that capitalism was likely to be around for more than another genration or two at the most.
...
The period leading up to 2008 was one in which many began to believer that capitalism really was going to be around forever; at the very least, no one seemed any longer to be able to imagine an alternative. The immediate effect was a series of increasingly reckless bubbles that brought the whole apparatus crashing down."
Graeber (2011). "
Debt: The first 5,000 years" (p.
357-360).
----- On everyone becoming a tiny capitalist (hooray! - or not...?) -----
"One of the guiding principles of Thatcherism and Reaganism alike was that economic reforms would never gain widespread support unless ordinary working people could at least aspire to owning their own homes; to this was added, byt the 1990s and 2000s, endless mortgage-refinancing schemes that treated houses, whose value it was assumed would only rise, "like ATMs," ... though it turns out, in retrospect, it was really more like credit cards. Then there was the proliferation of actual credit cards, juggled against one another. Here, for many, "buying a piece of capitalism" slithered undetectably into something indistinguishable from those familiar scourges of the working poor: the loan shark and the pawnbroker.
...
Just as the United States had managed to largely get rid of the problem of political corruption by making the bribery of legislators effectively legal (it was redefined as "lobbying"), so the problem of loan-sharing was brushed aside by making real interest rates of 25 percent 50 percent, or even in some cases (for instance, for payday loans) 120 percent annually, once typical only of organized crime, perfectly legal - and therefore, enforceable no longer by just hired goons and the sort of people who place mutilated animals on their victims' doorsteps, but by judges, lawyers, bailiffs, and police." ... Outside the United States, it came to be known as "neoliberalism."
...
We were all to think of ourselves as tiny corporations, organised around that same relationship of investor and executive: between the cold, calculating math of the banker, and the warrior who, indebted, has abandoned any sense of personal honor"
Graeber (2011). "
Debt: The first 5,000 years" (p.
376-377).
----- On the problem with micro-credit loans -----
"By the 1990s ... the older penchant for loaning money for grandiose, state-directed projects like the Aswan Dam gave way to an emphasis on microcredit. Inspired by the success of the Grameen Bank in Bangladesh, the new model was to identify budding entrepreneurs in poor communities and provide them with small low-interst loans. "Credit," the Grameen Bank insisted, "is a human right".
...
Within another decade, the entire project ... began to appear suspiciously similar to the U.S. sub-prime mortgage crisis: all sorts of unscrupulous lenders piled in, all sorts of deceptive financial appraisals were passed off to investors, interest accumulated, borrowers tried to collectively refuse payment, lenders began sending in goons to seize what little wealth they had (corrugated tin roofs, for example), and the end result has been an epidemic of suicides by poor farmers caught in traps from which their families could never possible escape."
Comment: I have heard only a little about the downside of micro-credit loans before. Graeber delivers a broadside against the whole project; in the end it becomes/has become yet another way to monetise something new - in this case "the "social capital" - the knowledge, networks, connections, and ingenuity that the poor people of the world are already using to get by in difficult circumstance - and convert it into a way of generating even more ... capital".
Graeber (2011). "
Debt: The first 5,000 years" (p.
379-381).
-----
On barter in post-Soviet societies -----
"What emerges most strikingly from the detailed accounts in part II [of the book] is the remarkable ingenuity that participants bring to the process of barter exchange. Barter involves a continual *reinvention of the processes of social interaction*.
...
simply seeking to ban [barter] or make it more difficult to undertake will be entirely counter-productive. Barter is often a rational response of participants to very difficult economic and social conditions, and it is the conditions rather than the respons to them that represent the challenge for public policy.
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
10-11).
----- On networks becoming more discriminating and dense in collapsing societies where trust replaces money -----
"when money is absent, it induces individuals to have concentrated networks, rather than relying on many producers who may be able to produce at lower cost. ... individuals will sometimes forgo the benefits of comparative advantage in order to keep a relationship going. The reason for such a policy of "putting all your eggs in one basket" is that it tends to increase incentives for trustworthy dealings compared to situations where one's partner is of little importance."
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
38-39).
----- On barter in a collapsing modern society (ex-Soviet union in the 1990's) -----
"The accustomed Soviet-era flows of goods according to centrally derived plans have evaporated. Massive inflation, unprecedented imports, breakdowns of transport, lack of legally sanctioned security and sudden impoverishment all discourage investment and promote the pursuit of *immediate gains*; and this, in a society accustomed to future-oriented values (the five-year plans) creates an atmosphere of anger and incomprehension. So barter is conducted amid prevailing mistrust. ... it evokes constant fears of default or cheating or theft. ... Russian barter has something in common with the precarious trade between warring tribes described by anthropologists"
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
79).
-----
A concrete example of a complicated (corporate) barter deal in the volatile 1990's ex-Soviet union economic environment -----
"Case 1 Payment of local taxes
The deputy director of a Kurgan oil and gas equipment enterprise reports that his firm owes taxes to the local budget. Oil and gas equipment is supplied to Urengoi, one of the Gazprom deposits, which pays gas to the Chelyabinsk metal complex (ChMK). ChMK supplies metal to Nizhnii Novgorod automobile plant (GAZ), which supplies chassis for buses to the Kurgan bus plant (KAZ). The latter now has a debt to the former, but instead they agree that the product of KAZ - buses - is accepted by the city budget in payment of local tax from the Kurgan oil and gas equipment enterprise."
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
102).
-----
On participation in corporate barter networks as an "insurance policy" in the upside-down 1990's ex-Soviet union economic environment -----
"The fact that transactions occur in chains means that the *financial* performance of any individual firm ... depends less ... on the real productivity of the firm itself. It depends correspondingly more on the overall performance of the firms that are parties to the chain. A chain transaction is like an insurance contract: it protects individual firms against the shocks of their economic environment, but like all insurance contracts is subject to moral hazard - namely a weakening of the incentive for each firm to improve its own productivity. ... it simply links the probability of bankruptcy to the *profitability of the chain* rather than the profitability of the individual firm"
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.103).
----- On the ingenuity of Russian firms acting in the volatile 1990's ex-Soviet union economic environment -----
"The private costs of barter transaction to the firms undertaking them are fairly evident, though their magnitude is rather startling. ... substantial investment resources may be diverted into stocking, protecting, transporting and using the products that are bartered. More subtly, there may be a large diversion of management time, effort and ingenuity into solving the problem ... Anyone who doubts whether former command economies have adequate entrepreneurial talent to make the transition to capitalism cannot but marvel at the the ingenuity and resourcefulness deployed in putting together barter deals.
...
The fact that there are large private costs to bater does not in any sense imply that firms are foolish to undertake it. Indeed, all of the explanations we have discussed imply bater to be a privately rational response to a very distorted economic environment."
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
110).
----- On the peculiar ways that barter skewed the economy in the post-Soviet economies -----
"The natural monopolies - Gazprom (the natural gas monopoly), RAO UES (the electricity monopoly) and MPS (the railways) - known as the "three fat boys" ... are heavily engaged in barter transactions. (p.160)
...
"In several of the enterprises we studied ... we say a growth in production not of ... [output that could be sold for cash] but of output that enjoyed demand in the barter schemes." The task of finding products that would be acceptable to the power companies became paramount. It compelled many enterprises to shift the structure of their output not towards the real market, but in the attempt to satisfy directly or indirectly the rather specific needs of the natural monopolies. This created the conditions for the exact opposite of market restructuring - an adjustment away from the market."
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
169).
----- On (not) growing food as a response to post-Soviet poverty -----
"The depth of the Russian economic crisis [in the 1990's] and the demonetisation of the economy may provide a powerful incentive for households to grow their own food, but an incentive is not enough. It is obvious that the household must have land, but it must also have the monetary resources required to buy agricultural inputs and to travel to the dacha, and its members must have the physical capability and the free time to devote to agricultural production. Thus, the domestic production of food ... does not provide a means of survival for those households which are short of money. it would seem more plausible to argue that rather than being the last resort of those on the brink of starvation, domestic agricultural production provides an additional form of security for those who are already quite well place to weather the storm.
...
Those who have neither wage income nor payment in kind and who have exhausted their savings have little choice but to withdraw from the market economy and meet their needs by other means.
...
at the end of 1998 ... 65 per cent of the rural population and 44 per cent of the urban population lived in households with money incomes below the subsistence minimum."
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
194-203).
-----
On the painful transition from a command to a market economy; quote from the Vice-Director of commercial affairs at the NIIRP The rubber-products factory -----
'Earlier, everything was clear. The plan just came down from above. You were told how much, from what, what kinds to make, where to send it. If someone did what he was ordered for thirty years, he didn't think whether it was good or bad, he just hear "Make 5,000 pieces", never thought why. But now you have to think, what to make, what quality, who might want them. Of course the psychology of a change from a command to a market economy is difficult for the human being. The main mass of directors are people in their 50s and 60s; they are used to socialism, used to not deciding. They can't think, and this is why we cannot go out and compete'
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.269).
----- On the chaos of barter replacing a command economy in the post-Soviet 1990's -----
"In the Buriat Republic [in eastern Siberia] barter forms over 80 per cent of economic transactions according to official estimates in August 1998. However, local businessmen say informally that around 90 per cent of transactions are carried out by barter, while farm managers claim not to have used 'living money' for five years. ... The manufacturing landscape is dominated by a few large, unprofitable and declining factories of Soviet vintage ... (I call these 'dinosaurs', for brevity) (p.262)
...
The rubber-products factory NIIRP near Zagorsk was founded in the 1940s, is still half state-owned, and continues to support a large workforce. It is not exactly a dinosaur, as its rubber transmission belts are in demand, but they are over-proced and cannot be sold in Russia for money. (p.268)
...
Even with long-standing partners, NIIRP sometimes has to use sweeteners to get a deal through. To this end the factory has started up a new vodka sector, which makes the Roma (Gypsy) brand. To get industrial soot used in making rubber from a factory in Komi province, it has to pay in vodka as well as belts.
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
.270).
----- On a dysfunctional economic system and having to dwell in the world of shadowy business deals in 1990's post-Soviet times -----
"The turnover of the firm is not large, especially if judged by its bank account, which accounts for about 10 per cent of the actual turnover; 90 per cent takes place in barter. In order to protect the firm from draconian taxes, all main means of production have been taken off the balance sheet. (p.300)
...
changes in the tax code may considerably influence the 'paper' level of transactions ... but they will not necessarily reach the level of the real agents of the shadow structures. ... Clearly, such methods will work only until an investigation by the tax police. But because of their fairly ubiquitous character, the chances of being caught are small unless there is a tip-off or unless the scale of operations become significant. (p.303)
...
The director ... is very ambitious about his product and is proud if it, as it was invented and patented with his help. He is driven by the dream of making every enterprise work with his equipment and respect and recognise his work. Yet he greatly resents the fact that his entrepreneurial skills and energy are wasted in such activities as tax evasion and anxiety about the future:
'I'm so fed up with it. It's bad for my sleep. I'd like to work normally. Instead I keep thinking that I have to formally divorce my wife and transfer all the property to her, to prepare a speech for the court that in fact we've been doing a great job...' "
Seabright, P. (Ed.) (2000). "The vanishing rouble" (p.316).
----- On the availability/lack of money and stuff to buy in post-Soviet Russia -----
"The post-Soviet story of Katonga, a Central Siberian collective farm ... is in many way typical for rural areas in the Russian north. Katonga's economy was heavily subsidised during the Soviet period, and these subsidies quickly evaporated in the early 1990s when Russia entered the economic crisis (alsoeuphemistically known as the 'transition'). In sharp contract to the late Soviet situation when collective farmers had money but very few commodities were on the store shelves, money started to disappear in daily transaction at the same time - and almost at the same rate - as goods became available for purchase."
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
345).
-----
On the rise of 1990s barter in post-Soviet Russia and Ukraine -----
"In the years 1995-9 barter and demonetisation in the former planned economies moved from being considered minor, somewhat exotic, phenomena to being taken seriously as symptoms of major economic dislocation, and potentially as a barrier to successful transition towards a market economy. (p.362)
...
the state itself, which has failed to develop either tax collection or bankruptcy procedures in a credible and workable form, has clearly chosen barter as the path of least resistance. Indeed, the involvement of government is critical to understating why barter ... has dominated. (p.364)"
...
The size of the new *formal* private sector in Russia and Ukraine still remains small and probably accounts - at most - for 20 per cent of the labour force. This partly reflects firms' incentives to go into the informal sector in order to evade the prohibitive, and often unpredictable, tax burden imposed upon them by the current tax system. But it also reflects the fact that the entry of new business has also been highly discouraged by discrimination regarding business registration, access to distribution channels, storage facilities and access to real estate, as well as an unpredictable regulatory environment, limited access to bank credit and pervasive corruption and organised crime."
Seabright, P. (Ed.) (2000). "
The vanishing rouble" (p.
369).
.
