Contest of Viktors

I've been in the Donbass for a week, doing a bit of research.

Ostensibly, political tensions are rising in the run up to the vital parliamentary election, set for the end of September.

The picture shows the campaign poster backing the Ukrainian president, Viktor Yushchenko. This is on Artema Street, the main road through the middle of Donetsk, which is the centre of power of the president's rival, Viktor Yanukovych, and his vehicle, the Party of Regions: that is, at the centre of a region said to be inimical to the "Orange Revolution" of 2004. The quote from Mr Yushchenko at the top of the poster says: "MPs have to create laws, but they cannot hide from them." For an apparently liberal grouping, the backdrop of the raised clenched fist—the universal symbol of workers' power—seems to me a little incongruous.

Interestingly, in Yenakivo, the sign that I saw for the Party of Regions—which preys on the fears of Ukraine's ethnic Russian minority of domination by their former ethnic subordinates—was written in Ukrainian, and made use of the yellow and light-blue of the Ukrainian national flag. The sign boasted of the region's industrial prowess and, to me, had about it a strong whiff of "political technology".

Although some of the fears of a previously paramount group are undoubtedly real, much of the split between Ukrainians and Russian looks a bit artificial, fomented, stoked. For instance, some of the pro-Russian graffiti (eg "The Donbass is Russian land", sprayed on a corrugated fence along Kuybysheva Street, on the way up to the rather grand-looking railway station) was suspiciously neat and prominent. The posters of the "red-brown" Natalya Vitrenko—the leader of some left-wing-sounding Russian chauvinists masquerading as pan-Slavists—said "No to NATO" and "Ukraine, Russia, Belarus: together we are strong".

Новая кухня

I've been busy for over a month installing a new kitchen in my house—which, I can tell you, was hard work, although you can "learn from anything, if you're not too proud".

However, I intend to get back soon to the study of economics, history and Russian. First, I must finish my novel (I'm going to Donetsk for a week for some last-minute research). It would also be good to write some poems, if there's time.

Whipping a deceased steed

On the uses of political violence
Mr Younge's worthy if unexceptional take on many contemporary political issues would not put him at the top of my list of radical political journalists—even supposing that the compilation of such a list was possible. In fact, whenever I read one of his rather plodding pieces (for sociological research, so I tell myself, to sample the waters of mainstream leftish opinion), I am usually reminded of a phrase from Attila József's eponymous poem: "Some people will remain pedestrian no matter what form of transport they travel on". And so here is Mr Younge, once more riding his rudimentary cart along a well worn path, flogging a dead horse.

Executive summary: Individual terrorism isn't right, because it works against the terrorist's cause. But if you have some community support for killing your opponents' civilians, and are able to do so in a reasonably well-organised manner—in this way bringing the opponent to the negotiating table—all well and good.

A hyperbolic paraphrase? Perhaps, but not by much.

In short, much of the mainstream left doesn't appear to have advanced a single centimetre beyond the narodnik "means and ends" debates of late 19th century Russia, or, at best, Trotsky's Their Morals and Ours—which is not his best book (that would be The History of the Russian Revolution), but is rather an exceptionally clear exposition and defence of what we would nowadays call "moral relativism", then a daring subversive position, but today the unthinking stock-in-trade of soft-left establishments everywhere. Of this work Viktor Serge memorably says:

"Trotsky thinks that his party, formerly in power and now in opposition, has always represented the true proletariat, and himself the true morality.

From this he concludes the following: executing hostages takes on a different meaning according to whether the order is given by Stalin or by Trotsky or by the bourgeoisie."

(Note to myself: the contradiction between cultural-relativism-eliding-into-moral-relativism, on the one hand, as against the aspiration to universal human values, is one of the contradictions at the heart of Marxism.)

There is much else that I would like to say here, as I think attitude towards political violence is one of the crucial issues dividing today's fairly popular, if also fairly populist and reactionary, left from the tiny humanist fringe that remains. But anyone who waffles on this issue could not be relied upon in a fix—that's my guess.

An empire tries to strike back

Two articles on the fate and aspirations of contemporary Russia, here and here.

The first, by George Schöpflin on openDemocracy, argues that, domestically, Russia is a "consensual authoritarian" system, "ruled by a rent-seeking elite", and glued together with xenophobia and support from eastern Orthodoxy; internationally, the author spies emergence of neo-imperialism the country's power plays with it hydrocarbons resources and infrastructure.

Though there might be a case for seeing this as neo-imperialism—if that means exercising control through economic strength rather than directly by force—I'm not sure that there's anything wrong per se in charging market prices for your oil. (If it is possible to see oil subsidies as a means of maintaining influence in post-Soviet countries, can raising prices also be? You would have to look at the specific political conditions in each case.) Nor does there necessarily seem much of a territorial claim implicit in the phrase "near abroad".

Also: the definition of "European" as somehow synonymous with democracy seems a little strange, given that half of Europe has only established (or re-established) democratic institutions in the recent past.

The second article, by Perry Anderson in the London Review of Books, is a more wide-ranging and historically well-informed piece. It starts off with the Russian authorities' touchy relocation of the funeral of the assassinated investigative journalist, Anna Politkovskaya, to an obscure cemetery on outskirts of Moscow, which is portrayed as both shabby and fearful, then moves quickly on to a speculative, though broadly plausible, account of the basis of Putin's appeal and high ratings in the opinion polls (basic answer: he's not Yeltsin); the intimate connections, despite differences, between the Yeltsin and Putin regimes; the re-merging of political and economic power under the latter, in parallel with the fusion of the state and security apparatus; the resubordination of the media; the lamentable fate of the liberal intelligentsia (but: they shouldn't have backed Yeltsin); the widespread indifference to the horrors of Stalinism; the demographic catastrophe that looms on the horizon; and the symptoms of ongoing cultural degradation and decline (symbolised by the decadent cult of "retro-Tsarism").

Mr Anderson lays into various commentators over for their benign assessment of the state of contemporary Russia: Andrei Schleifer (neo-liberal crook) and Andrew Jack (neo-liberal dupe/ colonial apologist). Richard Pipes gets a grudging thumbs up for his theory that Russians, hemmed in by a political culture that predisposes them to favour order over freedom, don't necessarily rate democracy that highly.

In addition, the author points to a number of interesting-sounding theorists of contemporary Russia more approvingly, such as Anna Ledvna's study of the informal practices that characterise Russian political and economic life (whenever this topic comes up, I think, for some reason, of the phrase "what you call corruption, we call culture", intoned in a rasping Mafioso baritone), and gives an outline of Dmitry Fruman's idea of Russia's present-day "managed democracy" as the phase of a process that broadly mimics the phases of the Soviet era (but this time heading towards real democracy?). This looks a bit like a regurgitation of the ever-popular "cycles" theory of civilisational ascendancy and decline—a recycling, in fact.

Yet, for all its astuteness in places (on the possible factors behind Putin's appeal, which often looks like a bit a mystery to outsiders), as well as for its obvious erudition and breadth, the essay leaves a certain teenage, "not as bad as Bush and Blair" impression behind it. This impression, while perfectly characteristic of the rather degraded political discourse of the day, still seems to me a bit unseemly in a Marxist historian fast approaching 70.

Considering good and evil

Death had just polished off the last sponge-finger
when he had an idea for a verse: chewing the dirt beneath
his nails he scribbled the words down lazily—or spontaneously,
whichever way you prefer it—as he looked out
over the clean imagined fields of Hampstead Heath.

Death, of course, had absorbed the pacifist lessons
from the poems of World War One; some of the lines
he’d even memorised, and the one about coughing up blood
in a green sea of gas he liked so much that he’d do it
at birthdays and weddings, at Christmas, on Valentine's.

Leafing through the paper’s pages wearily,
the Sunday news wasn’t all that he’d hoped
in the first days of a fresh campaign. No elitist,
it wasn’t for nothing that they called Death the Great Leveller.
But nor did he think himself unpatriotic, or a defeatist,

for though he’d violently opposed the war of liberation,
he’d supported it too, wishing the troops well: all views
to him were an equally valid expression of subjective
experience. (Later, behind the gauze of a confessional,
he’d earwig a soldier’s session for strategies or clues.)

So if Death is a tank commander, he’s also at home
in jeans and slippers, or propped up on a study chair.
That’s why, when he entered the ancient city, it was no surprise
as he removed his goggles and dusted himself off
that it was his own strong hand that shook his welcome there.

After all, wasn’t he born here, where mum and dad
first pinched the fruit from the master’s private trees?
That landed them in no end of trouble—ie with sex
and death (a "mixed blessing"), an eternity of hard labour;
but also little naughty Cain, and Abel, so eager to please.

How shabby Eden was looking now—
and a lot less lush than he remembered; for all that,
he noted the hilltop palace he’d somehow managed to wangle,
complete with Olympic-size pool and good views
over the arid southern plains, the ascetic Ziggurat.

Now Death stands up, scratches his bony behind,
looks in the mirror. Sensing he’s lost some weight
he adds vitamins to a mental post-it. Into the absence
where moments before had been the last sponge-finger
he conjures up a new last piece on a simple stoneware plate

and, scoffing the cake down greedily, he sweeps
the crumbs to the floor so his wife won’t see them;
returns to the papers, where the problem of good
and evil just makes his eyes glaze over into two marbles:
these roll off down Skull Hill, looking out for a stratagem.

(April 2005)

Political arithmetic

Maths allows economists a greater degree of precision in the description and handling of economic relationships than would otherwise be the case. It also allows them to state their theoretical assumptions neatly and succinctly, and to show clearly the steps in their reasoning so that, for example, any faulty connections can be more easily spotted.

The section on introductory maths for economists of the WinEcon economics program that deals with the basics (chapter 22) explains the contrast between variables (which can be different values) and constants (which have fixed values), and distinguishes between the dependent, or determined, variable on the one hand, and the independent, or autonomous, variable on the other (the one doing the determining). If a change in the one variable always produces the same, unique change in the other, a functional relationship is said to exist between them. The user's grasp of all this is checked and reinforced by means of some simple quizzes.

The basic rules for fractional and algebraic operations, as well as those involving powers, are described, and we are taken step by step through simple illustrative examples.

For fractions, addition and subtraction are easy: multiply the fractions' denominators to find the common denominator, scale up each numerator proportionately, and then add or subtract the numerators as normal; for multiplication of fractions, multiply the numerator and divide the result by the product of the denominators; for division, the second fraction is turned on its head and we proceed as for multiplication.

On the rules for basic algebra, the importance of the order in which subtractions and division are performed is stressed, as is the necessity of performing the same mathematical operations on each side of the "equals" sign (transposition).

A power (otherwise known as an exponent or an index) shows the number of times a variable is to be multiplied by itself and, in algebra, is represented by a letter. For example, if a "b", representing any number, can be multiplied by itself an unspecified number of times (n times), then the number, b, is said to be raised to its power, n, with the power superscripted, so that a positive power is represented in its most general form as bⁿ.

The definitions of powers are as follows:

• for a positive power: bⁿ
• for a fractional power: any number raised to the power of a fraction is equal to the root of that fraction, with the denominator of the fraction indicating the degree of the root (ie whether it is the square or cubed root, or whether it the 4th, 5th or 6th root): b^1/n = ⁿ√b
• for a negative power: any number raised to a negative power is the same as the number raised to that power positively, divided into one: b^-n = 1/bⁿ (eg 16^-3/2 = 1/√16³)
• for a zero power: any number raised to the power of zero equals one: b⁰ = 1

For performing mathematical operations, the rules for powers are as follows:

• to multiply, add the powers: b^m * bⁿ = b^m+n
• to divide, subtract the powers: b^m/bⁿ = b^m-n
• to take exponents of numbers that already have exponents: (a^m)ⁿ = a^mn; eg (2²)³ = 2²*³ = 2⁶ = 64
• the product of any two numbers raised to a power is equal to the same two numbers when the power is a factor: numbers raised to the same power separately and then multiplied together: (a*b)ⁿ = aⁿ * bⁿ; (2*3)² = 2²*3² = 4*9 = 36
• powers cannot be added

The (very) basic principles for plotting co-ordinates on a graph—to show visually how the variable on the vertical axis (y) changes as the horizontal axis (x) does—are given.

Memorising these relationships and rules gives the student a few handy tips when the equations get more complex a little further down the line—as all of this is a way of providing the student with the tools necessary for handling functions and equations. Specifically, we look first at linear, quadratic and simultaneous equations, and then at the special properties of exponents and logarithms, which are useful for modeling more complex economic phenomena. Problems analysed using these equations are usually solved either by graph, or by algebra or by formula.

Linear equations of the type y = ax + b describe the simplest functions, where the relationship between variables is straight and unchanging; "a" gives the slope of the line and "b" the intercept on the axis of the independent variable (the y axis). The slope is a ratio of the degree of change in the (dependent) y variable—how much it goes up—to the (independent) x variable (how much it goes across). Slopes can be positive or negative.

Quadratic equations of the type y = ax² + bx + c are used for modeling non-linear relationships and are the simplest of the polynomials. Graphically, they have characteristic "u" or "hill" shapes, and often have many-to-one relationships: that is, there can be two values of the independent x variable that correspond to a y value of zero. The programme takes us through the manipulations necessary to arrive at the formula needed to calculate these two x values, which is:

± x = −b ± √ b²−4ac/ 2a

So it goes

This is what I remember of Kurt Vonnegut: in Mother Night, the main protagonist is a Lord Haw-Haw type character, propagandising for the Nazis—although, all the time, he is really an undercover agent working for the democratic side. Later, he comes to wonder whether he hasn't been a better propagandist than a spy.

In Bluebeard, Rabo Karabekian, an abstract expressionist and escapee of the Armenian genocide, paints his greatest works using some cheap industrial paint that soon falls apart.

Cat's Cradle—the invention of a religion and a dictatorship, so that the eternally poor have something to live for and to fight against: ie so that they have a meaning.

In Slaughterhouse Five: Billy Pilgrim falling backwards through time and seeing the bomber plane on TV extract the shrapnel out of the dead, as if by magic, as it flies backwards over the battlefield.

Refresher course

A review of the WinEcon economics learning software, part one

With the eventual aim of undertaking some modest empirical descriptions of the economic transition in eastern Europe and the former Soviet Union over the past 15 years or so, concentrating—though not exclusively—on the topics of economic growth and the economics of labour markets, about a month ago, I took a week off work to study economics again from scratch.

The course I chose was the WinEcon software (version 7.1), which can only be bought and downloaded over the Internet. This process was quite straightforward. By right-clicking on the desktop shortcut icon so installed (a little red-blue-green bar chart), I was able to enlarge the display to fill the whole screen (640 x 460 screen resolution), making on-screen reading easier (mind you, this disables the program's calculator, I think). By right-clicking the “start” button in Windows desktop and then “properties”, it is also possible to prevent the Windows taskbar from intruding over the top of the WinEcon software.

During my study week, I completed about a quarter of an undergraduate economics course—that is, six out of 25 chapters: two on microeconomics (chapters 1 ands 2), two on macroeconomics (chapters 9 ands 10), and two on maths and statistics (chapters 22 ands 24). Later, I read chapters 11 (the circular income-expenditure economic model), 12 (theories of money supply and demand) and 13 (mostly Keynesian short-term macroeconomics).

Although quite standard in terms of content, chapters 1, 2 and 10 were reasonably thorough and lucid, and the bit-by-bit interactive presentational style helped to sustain interest.

Chapter 1 presents definitions of basic economic “oppositional” terms (macro vs micro, nominal vs real, positive vs normative, command vs the market) and develops a familiar definition of economics as the study of rational agents forced to choose between competing resource uses in conditions of scarcity. Some of the rather abstract ideas involved are usefully conveyed by means of concrete examples and game-like illustrations. The most interesting section, however, was the exposition of economic modelling, in which the process is broken down into the following stages:

• statement of the problem;
• whittling down of influences to leave us with a set of simplifying assumptions;
• development of a theory to answer the question(s) posed at the "problem" stage;
• testing the theory against evidence; and
• provisional acceptance of the theory, if it comes through the test.

These stages are then illustrated using two well-known economic theories: the Keynesian consumption function (household consumption is mainly influenced by changing levels of income) and the Fisher hypothesis (interest rates rise and fall with inflation).

What quantity of a good will buyers and sellers purchase and supply at each price? Chapter 2 familiarises the student with the basic tools of supply and demand analysis: how to construct supply and demand curves, and an account of the factors that affect each (for demand: product price, household income, prices of complements and substitutes, consumer tastes, the number of outlets and advertising; for supply: the product price, the price of inputs, the scale of taxes and subsidies, technology, the weather and the number of outlets); the difference between movements along the curves and shifts in the curves; the interaction of the two to produce equilibrium product prices and quantities, and how tools of this kind can be used to predict likely changes in price and quantity under changed market conditions ("comparative statics"; the examples used are polices for the support of domestic agricultural prices and other kinds of government intervention). Lastly, the concept of elasticity is introduced.

At this point, I switched to the macroeconomic sections of the program.

The second of the macro section, Chapter 10 runs through the main conceptual problems of measuring output in a national economy—seen as the level of productive activity overall, or as the total product of that activity. The first pitfall to avoid is to exclude transactions, such as transfer payments to pensioners or the unemployed, that do not represent payments for productive activity, as well as those that denote only changes in ownership of an item, since no new production is implied; the second is to count only new value added at each stage of the production process, from the extraction of raw materials to the sale of final goods—ie to avoid double counting.

The picture of the circular flow of income between households, firms, the government and external actors is built up gradually as the basis for the three alternative measures of national income accounting. (In this model, injections into the economy exactly match withdrawals from it, by definition.) The expenditure method measures the spending of households, government, investors and foreign buyers on goods and services in the domestic economy, to arrive at gross domestic product (GDP) at market prices. The output method measures what firms actually get for their production (and therefore have available to spend on factor services), and differs from the expenditure measure by subtracting indirect takes (those levied on the prices of goods and services themselves, rather than on factor incomes) and adding any production subsidies, to arrive at the gross value added (GVA) at basic prices. The income method aims to total up the payments received for the various factors of production (land, labour and capital); summing together the factor payments from firms to household, subtracting direct taxes on this income—which are siphoned off to the government—but then adding the redistribution to households of some of this tax via transfer payments, we arrive at the measure for personal disposable income (PDI). One of the advantages of having three measures of national income, each gauging monetary flows at different points in the cycle, is that they act as “checks” on one another, helping to reduce errors.

Next, the module details some of the practical problems of data collection and estimation for each of accounting method. Simplified layouts of the tables that are the end result of the data-collection process for each of the methods look something like this:

Expenditure	Output	Income
Consumption	Agriculture	Salaries, wages
households	Production	Firms' profits
non-profit institutions	utilities	non-financial
Government consumption	manufacturing	public firms
Fixed investment	Total production industry	private firms
Change in inventories	Construction	financial firms & other
Acquisitions less disposals	Service industries	Mixed income
Total domestic expenditure	distribution, hotels, repairs	GVA at factor cost
Plus exports	transport & communications	Net product taxes
Total final expenditure	business & finance	GDP at market prices
Minus imports	government & other	-
Statistical discrepancy	Total services	-
GDP at market prices	GVA at basic prices	-

Moving snapshot
Presented sequentially, these structural snapshots of the economy allow us to glimpse something of its changing character over time, to describe broad changes within it—for instance, many Western economies once dominated by manufacturing now predominantly specialise in services. From the information so compiled it is possible to get a picture of the structural features of the national income in the UK in the post-war period, as follows:

• nominal GDP had reached £1.7trn by 2004 (from £1.1trn in 1996);
• close to 60% of national income takes the form of wages (compensation to employees);
• exports make up a growing share of expenditure (19% in 2004)
• investment makes up a falling share (13% in 2004);
• aside from the government, business and distribution services are now the dominant sectors and their share of output is rising; and
• manufacturing, utilities and agriculture accounted between them for only a fifth of the UK productive activity in 2004 and the share of all of them was on a trend of long-term contraction or decline.

The reason that any of this is useful is that an accurate description of a country's economic structure, as well as the changes to its economic structure over time, is an essential basis for sound analysis, as well as for meaningful international comparisons.

Other useful topics in the chapter include instruction in two methods for calculating real output changes from nominal data (the first values output in later years at base-year prices, whereas the second multiplies the change in quantity of goods in later years, compared with the base year, by product weights established in the base year), as well as a brief look at alternative methods of national income calculation—gross national income (GNI; GDP plus net income from abroad) and net national income (NNI; GNI less depreciation)—and the possible grounds for the inadequacies of these measures for capturing accurately economic welfare more broadly.

That’s enough for one day.