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Sraffa v. Hayek
Published September 9, 2011 Uncategorized 36 Comments
While writing up my post on the Keynes-Hayek debate at LSE, I visited a couple of blogs to gauge the reaction in the blogosphere to the debate. One of those was the very interesting Social Democracy for the 21st Century: A Post-Keynesian Perspective. In his post on the debate, the blogger, AKA Lord Keynes, had some interesting observations about the famous (well, maybe among Austrians and Keynesians – especially post-Keynesians — with an inordinate interest in the history of economic thought) exchange in the Economic Journal between Piero Sraffa, reviewing Hayek's Prices and Production, a short book containing his remarkably successful LSE lectures on the nascent Austrian theory of business cycles, Hayek's response and Sraffa's rejoinder. The general consensus about the debate is that Sraffa got the better of Hayek in the exchange, indeed, that the debate marked the peak in Hayek's influence, having risen steadily after Hayek's LSE lectures and his lengthy and damaging review of Keynes's Treatise on Money and Keynes's ill-tempered reply. Though Hayek continued working and writing tirelessly, the decline in his influence and reputation eventually led him away from technical economics into the more philosophical writings on which his lasting reputation was built, though he received some belated recognition for his early contributions when he was awarded the 1974 Nobel Memorial Prize in economics.
Sraffa attacked Hayek's exposition of the Austrian business cycle theory on two fronts. First, Hayek argued that monetary expansion necessarily produces a distorting and unsustainable effect on the capital structure of production, ultimately causing a costly readjustment back to the earlier capital structure. Sraffa observed that the distortion identified by Hayek was not caused by monetary expansion per se, but by a change in the distribution of money, but a distributionally neutral expansion would have no such distorting effect. Sraffa also observed that it was entirely possible that the addition to the capital structure induced by what Hayek called forced saving might actually turn out to be sustainable inasmuch as the augmented capital stock might itself imply a reduced natural rate of interest rate corresponding to the reduced money rate achieved through monetary expansion.
Sraffa's second, and perhaps more damaging, line of attack was on the very concept of a natural rate of interest, borrowed by Hayek from the Swedish economist Knut Wicksell, though transforming it in the process. According to Hayek, the natural rate corresponds to the interest rate in a pure barter equilibrium undisturbed by the influence of money. The goal of monetary policy should therefore be to ensure that the money rate of interest equaled the natural rate, thus neutralizing the effect of money and facilitating an intertemporal equilibrium in which money is not a distorting factor, i.e., in monetary expansion by banks to finance investments in excess of voluntary savings does not drive the money rate of interest below the natural rate, a state of affairs that could never obtain in a barter equilibrium.
Sraffa, however, argued that Hayek's use of the natural rate of interest as a benchmark for monetary policy was incoherent, because there would be no unique natural interest rate in a growing barter economy with net investment in capital goods of the kind Hayek wished to use as a benchmark for monetary policy in a growing, money-using, economy. In the barter economy, interest rates would correspond to the price ratios over time (own rates of interest, i.e., ratios of spot to forward prices) between durable or storable commodities. But these own rates would fluctuate in response to the changing demands characterizing a growing economy, implying that there is no single natural rate of interest, but a collection of natural own rates of interest. Only if Hayek were willing to follow Wicksell in defining a price level in terms of some average of prices would Hayek have been able to define a natural rate of interest as some average of own rates. But Hayek explicitly rejected the use of statistical price levels. Hayek's reply was ineffective, leaving Sraffa the clear winner in that exchange.
However, a quarter of a century later, Hayek's student Ludwig Lachmann in his book Capital and its Structure elegantly explained the critical point that neither Sraffa nor Hayek had quite comprehended. The natural interest rate in a barter economy has a perfectly clear meaning, independent of any statistical average, in an intertemporal equilibrium setting, because equilibrium requires that the expected return from holding all durable or storable assets be the same. The weakness of the natural-rate concept is not that it necessarily pertains to a monetary rather than to a barter economy, as Hayek supposed, but that it could only be given meaning in the context of a full intertemporal equilibrium.
In his discussion of Sraffa and Hayek on his blog, Lord Keynes insists that Sraffa got it right.
However, Piero Sraffa had already demonstrated in 1932 that outside of a static equilibrium there is no single natural rate of interest in a barter or money-using economy, and Hayek never really addressed this problem for his trade cycle theory.
Sraffa did demonstrated that there was no single natural rate of interest in a disequilibrium, but he did not do so for an intertemporal equilibrium in which price changes are correctly foreseen. Hayek actually had developed the concept of an intertemporal equilibrium in a paper originally published in German in 1929, eight years before providing a truly classic articulation of the concept in his wonderful 1937 paper "Economics and Knowledge," so it is odd that he was unable to respond effectively to Sraffa's critique of the natural rate in 1932.
Lord Keynes, who is aware of Lachmann's contribution on the Sraffa-Hayek exchange, cites as authority for dismissing Lachmann, a paper by another blogger, an ardent, but surprisingly reasonable, Austrian business cycle theory supporter Robert Murphy, who has written a paper that addresses the Sraffa-Hayek debate. Lord Keynes quotes the following passage from Murphy's paper.
Lachmann's demonstration—that once we pick a numéraire, entrepreneurship will tend to ensure that the rate of return must be equal no matter the commodity in which we invest—does not establish what Lachmann thinks it does. The rate of return (in intertemporal equilibrium) on all commodities must indeed be equal once we define a numéraire, but there is no reason to suppose that those rates will be equal regardless of the numéraire. As such, there is still no way to examine a barter economy, even one in intertemporal equilibrium, and point to 'the' real rate of interest."
Murphy is almost right in that Lachmann demonstrates that the rate of return is equalized across all investment opportunities (allowing for the usual sources of difference in rates of return) in an intertemporal equilibrium. It is not clear what he means by saying that the choice of a numeraire matters. It doesn't matter for any real property of the intertemporal equilibrium, i.e., a real quantity or a relative price; it matters only for nominal quantities and absolute prices. But nominal quantities, by definition, depend on the choice of a numeraire and even in a static equilibrium there is no unique nominal rate of return just as there is no unique level of absolute prices. The "real" rate of interest is determined in an intertemporal equilibrium; the nominal rate is not determined. This is precisely the distinction between the real rate and the nominal rate identified in the Fisher equation. And every kindergartener knows that the natural rate is a real rate not a nominal rate.
Perhaps Murphy is made uncomfortable by the fact that Lachmann's point shows that a Hayekian intertemporal equilibrium could be consistent with any rate of inflation as long as the nominal rate reflected the equilibrium expected rate of inflation and inflation would have no effect on relative prices. That indeed is a problem for a fundamentalist version of Austrian business cycle theory and would deny that as a matter of pure theory there cannot be an intertemporal equilibrium with inflation. But that form of Austrian fundamentalism is simply inconsistent with the basic properties of an intertemporal equilibrium and with the non-uniqueness of absolute prices in either a static or intertemporal equilibrium. So Austrians just need suck it up on that (not very important) point and move on.
Finally, to come back to Sraffa. It is worth noting that the real Keynes in the General Theory said this about the natural rate of interest.
In my Treatise on Money I defined what purported to be a unique rate of interest, which I called the natural rate of interest — namely, the rate of interest which . . . preserved equality between the rate of saving . . . and the rate of investment. . . .
I had, however, overlooked the fact that in any given society there is, on this definition, a different natural rate of interest for each hypothetical level of employment. And, similarly, for every rate of interest there is a level of employment for which that rate is the "natural" rate, in the sense that the system will be in equilibrium with that rate of interest and that level of employment. Thus it was a mistake to speak of the natural rate of interest or to suggest that the above definition would yield a unique value fo rthe rate of interest irrespective of the level of employment.
So Keynes, like Sraffa, clearly had rejected the notion of a unique natural rate of interest. But Keynes's reasons for doing so are very different from Sraffa's. Keynes' makes no mention of multiple natural rates corresponding to the different commodity own rates of interest that Sraffa had introduced in his attack on Hayek's use of the natural rate. (Keynes, of course, as editor of the Economic Journal, had selected Sraffa to write a review of Prices and Production, presumably knowing what to expect, so he knew exactly what Sraffa had said about the natural rate of interest.)
Indeed Keynes goes through Sraffa's analysis in chapter 17 of the General Theory, "The Essential Properties of Interest and Money." It is one of my favorite chapters, especially because its analysis of portfolio choice is so acute. I just quote one long paragraph (pp. 227-28).
To determine the relationships between the expected returns on different types of assets which are consistent with equilibrium, we must also know what the changes in relative values during the year are expected to be. Taking money (which need only be a money of account for this purpose, and we could equally well take wheat) as our standard of measurement, let the expected percentage appreciation (or depreciation) of houses be a1 and of wheat a2. q1, –c2 and l3 we have called own-rates of interest of houses, wheat and money in terms of themselves as the standard of value; i.e., q1 is the house-rate of interest in terms of houses, –c2 is the wheat-rate of interest in terms of wheat, and l3 is the money rate of interest in terms of money. It will also be useful to call a1 + q1, a2 – c2 and l3, which stand for the same quantities reduced to money as the standard of value, the house-rate of money-interest, the wheat-rate of money-interest and the money-rate of money-interest respectively. With this notation it is easy to see that the demand of wealth-owners will be directed to houses, to wheat or to money, according as a1 + q1 or a2 – c2 or l3 is greatest. Thus in equilibrium the demand-prices of houses and wheat in terms of money will be such that there is nothing to choose in the way of advantage between alternatives; i.e, a1 + q1, a2 – c2 and l3 will be equal. The choice of the standard of value will make no difference to this result because a shift from one standard to another will change all the terms equally, i.e. by an amount equal to the expected rate of appreciation (or depreciation) of the new standard in terms of the old.
In this particular post, I am happy to give Keynes the last word.
36 Responses to "Sraffa v. Hayek"
1 Bill Woolsey September 9, 2011 at 2:09 pm
Very informative. Thank you.
2 Lord Keynes September 9, 2011 at 2:36 pm
This is a very good post.
"Sraffa did demonstrate that there was no single natural rate of interest in a disequilibrium, but he did not do so for an intertemporal equilibrium in which price changes are correctly foreseen. "
Your operative words are "correctly foreseen".
But such a "intertemporal equilibrium" seems to be a condition that will never exist in the real world (just like Mises's ERE) when you face fundamental uncertainty – uncertainty in the sense of Frank Knight and Keynes in his 1937 article:
Keynes, "The General Theory of Employment," Quarterly Journal of Economics 51 (1937): 209–223.
You say above in your "About Me" section:
"In my book Free Banking and Monetary Reform, I argued for a non-Monetarist non-Keynesian approach to monetary policy, based on a theory of a competitive supply of money"
Out of interest, does this mean that you support Hayek's notion of competing private currencies?
One final point, I think I have covered some points here relevant to your discussion:
http://socialdemocracy21stcentury.blogspot.com/2011/06/hayek-on-flaws-and-irrelevance-of-his.html
Nice blog and thoughtful posts, though I will have to read more.
5 John Hawkins September 9, 2011 at 7:15 pm
I was very impressed by Murphy's paper but after this post I think I need to give it another look. It did seem odd to me at the time of reading it but he had me convinced (I had been wondering about Austrian insights into the predictive power of the yield curve for some time so I was quite ready to accept anything I read, and I have often admired much of Murphy's work). Arguing in terms of intertemporal equilibrium and ERE (as Lord Keynes points out) are always disconnected from reality, though often necessarily though. I'm wondering (as I guess our royal commenter is as well) what your comments are about the effects "Knightian" uncertainty and things for which risk is impossible to measure.
6 Nick Rowe September 9, 2011 at 11:28 pm
That post cleared up a number of things I have been wondering about. In particular, you have confirmed my interpretation of what Sraffa was saying about the natural rate on wheat being different from the natural rate on barley. And you and Lachmann are right. It's no biggie.
7 Prakash Sapkota September 10, 2011 at 12:06 am
Can you relate this discussion with the intertemporal equilibrium in general equilibrium and Ramsey pricing!
8 amv September 10, 2011 at 1:14 am
You: "Sraffa did demonstrated that there was no single natural rate of interest in a disequilibrium, but he did not do so for an intertemporal equilibrium in which price changes are correctly foreseen."
That's not true (and I'm no Sraffa-fan)! In a barter economy with perfect foresight, intertemporal equilibrium characterized by diverging own rates of interest are the norm; stationarity is just a special case. Christopher Bliss is the literature you should consult.
9 knapp September 10, 2011 at 9:41 am
John Hawkins is wondering about Knightian uncertainty, I am too. But more generally I'm wondering where you think Frank Knight's views on capital and interest fit into this debate, if at all. It seems to me that Knight's 'perpetual fund' of capital implies a stable Wicksellian natural or real rate of interest, contra both Hayek and Sraffa/Keynes.
10 JR September 10, 2011 at 11:52 am
It is pretty obvious why Hayek never used the argument of a general intertemporal equilibrium to defend his natural rate, equilibrium in the sense of correctly foreseen price changes. In his noble speech he makes it clear that he believes "imperfect knowledge" and the utter, irreducible uncertainty it both reflects and creates is indispensable to understanding the purpose and functioning of markets. Rational expectations/ assuming omnipotence on the part of market participants is a cope out to the real vision of economics Hayek, Keynes and Knight all discussed.
11 gregransom September 10, 2011 at 2:03 pm
"History is bunk. History of economic thought is bunk on stilts." — greg ransom
Hayek in 1931-1932 was still caught between 2 worlds — an attempt to extend marginalist and relative price thinking across time & into production across time, and an attempt to use the aggregated "average period of production" as a Ricardo-type aggregate measure in trade cycle theory. Hayek was aware early on that this was not a satisfactory blend — but in the 1931-1934 period Hayek came to see it was a complete failure as a short-cut make-shift.
The interchange with Sraffa was only one small bit in the transformation of Hayek's who approach — leading up to what he did in his 1941 book _The Pure Theory of Capital_, which utterly rejected the Bohm-Bawerk / Ricardio tradition shortcut of aggregate measuring of the "average period of production".
Note well — Sraffa's critique come out of the Ricardian frame, Hayek's seminal effort in the history of economic science in this period is to pioneer the extension of marginalism into the real of time & production thru time, abandoning the category of measured "capital" as an aggregated class entity.
Hayek was abandoning the last vestiges of Ricardian objectively measured and physically characterized aggregated values when he abandoned the average period of production linked to the "natural rate of interest".
Sraffa, famously, went in a different direction.
Hayek takes up some of these "own rate of interest" issues again in his 1941 book .. I may add more later.
12 Dave September 10, 2011 at 4:44 pm
[closing the italic tag left open above…
Bill, You're welcome. I'm glad that you found what I wrote to be helpful.
LK, Thanks. I agree that the natural rate of interest is neither directly observable nor operational. But I think Sraffa went further and argued that the very notion of a natural rate, at least for Hayek owing to his aversion to index number, was incoherent. Lachmann showed that Sraffa was wrong because in an intertemporal equilibrium the net rate of return on every asset held over time must be equalized. But Lachmann himself was only applying the analysis of Keynes in chapter 17 of the GT. So it was Keynes, who got Sraffa to write the review of Hayek, in the end rejected Sraffa's point about the natural rate of interest. Even though Keynes also rejected the idea of a natural rate of interest as unworkable, he clearly says that there is a natural rate in equilibrium (i.e., full employment), but that there may be different natural rates corresponding to non-equilibrium (i.e., less than full employment) levels of income. I haven't looked at the paper you cite, at least not for a long, long time, but I think chapter 17 settles the point. But I would welcome hearing your take.
About my view of Hayek and competing currencies, in my book I criticized Hayek's argument that competing currencies would engage in competitive discovery process in selecting the standard most preferred by the public. I pointed out that his argument completely neglected the network externality (though I didn't use that term which was not yet familiar when I was writing my book) associated with a monetary standard, so that there could be no presumption that the standard emerging from a competitive process would be optimal and that, in any case, competing suppliers of currency would choose to link their currencies to an already existing standard to internalize those externalities. I therefore argued that the government should create a standard through a form of indirect convertibility aimed at stabilizing the expected money wage level, thus cushioning employment from adverse supply shocks.
I agree that Hayek's discussion of monetary policy was not always on target, and I don't think his argument that inflation would necessarily lead to a crisis is historically or theoretically correct. That is not to say that inflation may not be destabilizing, just that Hayek's theoretical account was highly problematic. I have learned more from Hayek than I think anyone else, I had the utmost admiration, and personal affection (though we were never really close) for him. What I liked best about him was his amazing tolerance and open-mindedness and consideration. He never tried to create a school and cultivate disciples. And I believe that his political and philosophical ideas could potentially be adapted to a more center-left orientation than is usually recognized.
John, I liked Murphy's paper as well, and my criticism is not that he adopts the perspective of intertemporal equilibrium, but doesn't quite get it right, otherwise he wouldn't have criticized Lachmann. On Knightian uncertainty, I don't think that we have a systematic way of dealing with it, or, if we do, it doesn't fit in with the kinds of modeling strategies that people are used to. Lachmann and G.L.S. Shackle both tried to carry through some kind of revision of economic theory to take into account uncertainty with very interesting but very unoperational results. But it is at least worthwhile to remember that our models generally just pretend that we can reduce all uncertainty to a normal distribution and then apply the methods of DSGE.
Nick, It's good to know that you think my discussion was on target. It's always nice to have authority on your side. But see amv's comment and my response below.
Prakash, I'm not sure that I can. At any rate, you would have to give me a much more focused question before I could even try.
amv, Sorry to be demanding, but it would really be nice if you gave me a specific citation that you think contradicts my argument rather than just invoke the name of Christopher Bliss.
knapp, See my response to John above about Knightian uncertainty. I don't know that much about Knight's capital and interest theory. My vague impression is that he viewed capital as just a single undifferentiated commodity. That would tend to imply a flat yield curve in simple one or two good intertemporal GE model, but if you introduce money and expectations I think that you can derive fluctuating short-term interest rates and a rising or falling yield curve. My view is that in these matters it is not a question of whether one model is right or wrong; it is whether the model is appropriate for the particular problem that you are trying to solve or explain.
JR, Your premise is incorrect. Hayek's early work was totally situated in the context of intertemporal equilibrium analysis. Even his last important piece of theoretical analysis The Pure Theory of Capital was intertemporal equilibrium analysis from start to finish. It is true that he later became increasingly skeptical of whether equilibrium analysis was capable of yielding useful insights but that skepticism was part of the reason that he gave up high economic theory for broader more philosophical research. I am sure that he would have been unhappy with the way in which rational expectations models have developed, but in 1932 he was still working in the context of intertemporal equilibrium models.
Greg, I look forward to seeing your citations of further points of inconsistency between Ricardo and Hayek in the Pure Theory of Capital. But as a general matter, I don't see the relevance of these issues to the particular interchange between Sraffa and Hayek.that I am discussing.
14 amv September 12, 2011 at 12:39 am
You argue that diverging own rates indicate disequilibrium in barter models that predict intertemporal equilibrium. But this is not the case. Hayek introduced the notion of intertemporal equilibrium (in 1928, not 1929) to expand the equilibrium notion beyond the case of stationarity, and even beyond the case of steady state. Own rates of interest are equal, iff all goods grow at the same rate. If relative scarcities vary over time, his barter model (or rather numeraire model) predicts an intertemporal equilibrium that takes account of this change. Some rates are higher than others. Some are even negative, indicating an increase of relative scarcities over time. No disequilibrium here. Just standard equilibrium reasoning by means of dated commodities. Equal own rates are just a special case. In general, there is no single natural rate that could be compared with the own rate of money. Sraffa is right.
Lachmann confuses the logic described above with the Smithian logic of profit equalization. Bliss has a short New Palgrave entry on "equal rates of profits" that clarifies this point. The no-arbitrage opportunity you are referring to applies to sequence economies, where financial asset(s) reduce(s) the number of open markets necessary to implement intertemporal equilibrium allocations (# dynamically complete markets < # complete markets in static notions of equilibrium). But this is not Hayek!
15 amv September 12, 2011 at 3:04 am
ah, the evidence … you can find it in almost all of Hayek works up to and including the Pure Theory of Capital where he talks about equilibrium notions that do not specify constant relative prices and utility levels, including his 1928 paper. See also Utility Analysis and Interest (1936), and his Copenhagen lecture (first held in 1933). He was well aware of the fact that perfect foresight in non-stationary equilibrium can by no means be an legitimate individual restriction (as many forerunners still believed because stationary equilibria are learnable). This led him to his famous statements in 'Economics and Knowledge' (1937) that perfect foresight is no individual characteristic but a general equilibrium condition.
16 Bob Murphy September 13, 2011 at 12:47 pm
This is a weird situation, where you guys are prepared to give the Austrian (Lachmann) a pass in his argument against Sraffa, and I'm going to dig in my heels and say no, Sraffa's objection has yet to be met.
Glasner wrote:
Murphy is almost right in that Lachmann demonstrates that the rate of return is equalized across all investment opportunities (allowing for the usual sources of difference in rates of return) in an intertemporal equilibrium. It is not clear what he means by saying that the choice of a numeraire matters….
In the Hayek/Sraffa debate–with the relevant sections quoted in my paper linked above–Sraffa basically said, "Hayek is an idiot. He says the central bank needs to set the money rate of interest equal to the natural rate. But there's no such thing as a unique natural rate of interest in an economy."
So Lachmann chimes in and says, "There is too a unique natural rate of interest in the economy! Arbitrage ensures that the rate of return, measured in reference to a commodity, is equalized across all investments."
Right, but that hasn't answered Sraffa's challenge. Suppose the own-rate of interest on apples is 10%, and the own-rate of interest on oranges is 5%. So should the central bank set the money rate of interest at 5% or 10%?
(You can introduce another layer of complexity by talking about a general price inflation level, but that just pushes back the problem one step. There isn't a unique way of defining what the change in the purchasing power of money is; it depends on how we define the commodity basket.)
17 John Hawkins September 13, 2011 at 11:47 pm
Bob, so is the idea that since the rate of interest is constantly changing among commodities, entrepreneurs haven't had time to reallocate in a way that would equalize the interest rates (basically: oh, apples are doing better, and I believe this trend will continue. Let me sell my orange-futures and buy some apple-futures, or some scenario like that). If this is not your point, I may need to re-read your paper to remember why it made sense then. I have a feeling this is not your point, and the intuitive problem I'm having is: why would the orange owners continue to tolerate the lower rate of return?
18 Bob Murphy September 14, 2011 at 9:27 am
John, no that's not the point. There's nothing about uncertainty here. For example, if the output of apples rises at 10% per year (for whatever reason), while the output of oil steadily declines at 10% per year (because there's only so much to go around), even if everybody at time=1 can forecast perfectly for the next 100 years, then you are not going to get a unique "real" rate of interest in this economy. It depends how you define the commodity basket to determine the "price level" in a given time period.
The choice of price basket won't affect entrepreneurial decisions; this is the germ of truth in Lachmann's argument. If you earn x% per year, when using apples as the standard of value, or you earn y% when using oil, you don't care. Alternate investments will be correspondingly affected by the change of numeraire. Whatever it makes sense for you to do, using apples as the numeraire, it will also make sense for you to do if you switch your accounting and reckon in barrels of crude oil.
But that's not the issue here. Hayek said that the banks must set the money rate of interest to the natural rate, to avoid a boom-bust cycle. So Sraffa said, "How do we compute 'the' natural rate? There is no such thing."
Lachmann hasn't answered that problem.
amv, I think that I understand Hayek's concept of intertemporal equilibrium. Own rates in an intertemporal equilibrium don't have to be equal, but differences in own rates must reflect some compensating advantage such as a real service provided by an commodity held or a cost of storing a commodity held. The net return from holding assets must be equal in equilibrium otherwise prices would have adjusted to eliminate the difference in the net return. Otherwise, we are not working with the same equilibrium concept. This is straight out of chapter 17 of the General Theory. I haven't had a chance to look up Bliss in the New Palgrave yet, but I will try to do so. There is no single own rate of interest that can be compared to the money rate of interest only if you mean that there is no own rate that uniquely corresponds to the money rate of interest, but in a barter equilibrium, no matter which own rate is used, there will be a unique optimum length of time which the owner of a bottle of wine will allow that bottle to age. That is the unique natural real rate of interest for that barter equilibrium.
Obviously I do not understand your point about sequence economies versus Hayek's intertemporal equilibrium. If you can explain it to me, I would of course be greatly indebted to you, but as of now, I don't understand your point.
Bob, You said:
Well, obviously that what makes you the charming guy that you are.
Bob, the rate of return from holding all assets net of their storage costs and their current service flows must be equal in equilibrium. If not, you're not in equilibrium. So all you have to do is find an asset with no storage cost and no current service flow and calculate its expected rate of appreciation and you have the real natural rate of interest. That is independent of your choice of numeraire. If you don't believe me, read chapter 17 of the General Theory and you will be amazed to learn something from Keynes that you never learned from any Austrian economist. Of course, that is subject to amv explaining to us why Keynes was wrong.
John and Bob, Just to reiterate the point. If, in equilibrium, apples are appreciating relative to oranges, say because it is more costly to store apples than to store oranges, so apples must appreciate relative to oranges otherwise no one would be willing to store the apples, if we declare apples to be the numeraire we can compute the pure real rate of interest by finding whatever asset provides no current yield and has no current storage cost and finding its rate of appreciation. We can do the same with oranges as numeraire and we will come up with the same answer.
David Glasner wrote:
OK this is really a dangerous situation, because one of us is making a really dumb mistake here. Fortunately for me, if I turn out to be the one who's wrong, then at least it makes the Austrians right all these decades. (It's sort of like I bet against my favorite team in the Superbowl. I'm hedged emotionally.)
OK so the own-rate of interest on apples is 1% and the own-rate of interest on oranges is 10%. First let's use apples as the numeraire. That means the rate of return on any investment, measured in apple prices, has to be 1%. So we look at bars of gold, which have no current yield and no appreciable storage cost. The spot price of gold, measured as pounds of apples per ounce of gold, changes over time such that the rate of return on holding gold is 1%.
Now we switch our numeraire to oranges. The spot exchange rates of all goods against oranges change over time such that the rate of return in any investment is 10%. In particular, if I buy and hold gold, the orange-price of gold rises at 10%.
So now I ask you: What is the natural, real, rate of interest in this economy? When Hayek says the central bank must set the money-rate of interest equal to the natural rate, what number should the central bankers use?
Welcome back from Japan!
ad "Own rates in an intertemporal equilibrium don't have to be equal, but differences in own rates must reflect some compensating advantage such as a real service provided by an commodity held or a cost of storing a commodity held."
I disagree. Even at zero storage costs and zero convenience yields, own rates may differ in a barter economy due to changing relative scarcities over time. An intertemporal market economy with equal primitives displays the same result by changing relative prices over time. A positive own rate of commodity X in the barter model corresponds to decreasing decreasing relative prices over time in the market model (and vice versa). Hayek innovated the notion of intertemporal equilibrium to escape Böhm-Bawerk's stationary equilibrium, which equates stationary primitives with stationary outcomes (constant utility, constant prices, …). Instead, he wants a broader equilibrium notion that can predict different prices at different dates. In fact, Hayek innovates a proto Arrow-Debreu model. Different prices at different dates for each commodities corresponds to diverging own rates in a barter model.
ad "The net return from holding assets must be equal in equilibrium otherwise prices would have adjusted to eliminate the difference in the net return. Otherwise, we are not working with the same equilibrium concept."
Where is your asset coming from. The clue of an intertemporal equilibrium notion is that it incorporates time in a purely static framework by means of dated commodities. If, however, you argue with dated commodities, there is no rationale to introduce assets (or financial markets). We are not working with the same equilibrium concept indeed.
ad "Obviously I do not understand your point about sequence economies versus Hayek's intertemporal equilibrium. If you can explain it to me, I would of course be greatly indebted to you, but as of now, I don't understand your point."
It is widely acknowledged that the number of markets required by intertemporal equilibrium analysis is far too large to be realistic. Even in Hayek's deterministic variant, an infinite time horizon suggests infinitely many markets. Assets are means to reduce the number of markets necessary to implement efficient allocations. Instead of dated commodities – traded in an initial period before the physical history of the economy -, we have a sequence of open spot markets, including financial markets. This is called a sequence economy: http://www.newschool.edu/nssr/het/essays/sequence/sequence.htm .
My point is that you attempt to discuss Sraffa's critique of Hayek, who attempts to discuss monetary policy issues by means of the ill-suited intertemporal equilibrium notion, by switching to sequence economies. Thus, your conclusions do not apply to the debate.
Bob, OK I'm going to make your day. My previous response was not as clear as it should have been. I should have known better than to try to write a response at 1:30 AM. It's only 12AM now, so I should be OK. At any rate the idea is simple. If we have an intertemporal equilibrium, we can calculate, for any numeraire, the own-interest rate for any commodity in terms of that numeraire. Given the own-interest rate in terms of a numeraire, we can derive the natural rate in terms of the numeraire by subtracting the cost, if any, of holding the commodity in terms of the numeraire and adding the service yield, if any, from holding the commodity in terms of the numeraire to the own interest rate of that commodity in terms of the numeraire. The natural own-interest rate for each commodity is equal to the natural own-interest rate for every other commodity in terms of a given numeraire, because the rate of price appreciation in intertemporal equilibrium is equal to the natural interest rate plus holding cost minus yield or service flow. The natural own-interest rate in terms of every other numeraire can be found by the standard equation for covered interest arbitrage. Thus for whatever commodity we choose as numeraire, we can immediately calculate through the covered interest arbitrage equation the corresponding natural interest rate in terms of every other choice of numeraire. You ask which natural interest rate is the central bank supposed to set? You might as well ask which temperature are you supposed to set your thermostat, celcius or farenheit? The answer is it doesn't matter. Setting the thermostat at 72 degrees farenheit is the same as setting the thermostat as 22.22 degrees celcius. The interest rate is the same, the only difference is whether you are quoting the interest rate in terms of apples or oranges, but for any interest rate quoted in terms of apples, you get the same interest rate quoted in terms of oranges. There will be a different numerical structure of interest rates for every choice of numeraire, but they all reduce to the same structure after adjusting for the choice of numeraire just as you can measure the same distance in terms of feet, inches, yards and miles, and meters, centimeters and kilometers. The actual distance is the same whichever way it is measured.
Consider a model with apples, oranges which are costly to hold and a third commodity which is costless to hold. No commodity provides any yield until it is finally consumed. If apples and oranges are being held from one period to the next, then the net yield on both must be the same. Suppose that pples are more costly to store than oranges, so apples must be appreciating faster than oranges otherwise it wouldn't pay to incur the extra cost of storing the apples. So if apples increase in price by say 10% in terms of some arbitrary unit of account and oranges increase by 5% in terms of that unit of account, then if apples were the numeraire, then the own-apple interest rate would be zero, and the own-orange interest rate quoted in apples would be approximately -5%. If oranges were the numeraire, then the own-orange interest rate would be zero and the own-apple interest rate quoted in oranges would be approximately 5%. Now if there is an asset, say gold (or aging wine), that is costless to hold, and provides no real yield — in this model gold does not glitter — then gold is appreciating more slowly than apples or oranges, so the own-gold interest rate quoted in apples would be -7.5% and the own-gold interest rate quoted in oranges would be 2.5%. But the natural rates adjusting for holding cost and yield would all be equivalent, and you, or anyone else, would be indifferent between contracting in terms of any of these rates, because the rates are equalized by the formula for covered interest arbitrage.
amv, Thanks, it's really good to be back.
Again I am sorry to admit that I am really having trouble following your explanations, and it could very well be my fault because I seem to be missing some relevant background knowledge. But I just don't seem to be following your argument. Let me just try it this way. Are you saying that there is no restriction in intertemporal equilibrium on the variation of prices of commodities through time because prices in each period are determined by the demand and supply for the commodity in that period? If so, how do you distinguish that case from the restriction on the variation on prices between different locations as a result of transportation costs? The analysis is completely symmetric except that commodities can only be transported from the present to the future not from the future to the present (except insofar as there is intertemporal substitution in demand). So why wouldn't intertemporal arbitrage should eliminate any price differences? Maybe we can get somewhere working through the analysis this way.
I think part of what's going on here, is that you and I might be using different terminology. By "own-rate of interest" I mean the real rate of exchange between units of a given commodity at time T and time T+1.
So for example, if I hold an orange at time T, I can sell it for some money, then use the money to buy a claim on an orange to be delivered at time T+1. (For concreteness, you can picture me buying a call option on 1 orange with expiration in T+1 with a strike price of zero.)
So in my approach, I actually think about the (gross) own-rate of interest as the ratio of two different prices *in time T*: Namely, spot price divided by the price of the above-mentioned call option. It shows how many future oranges you can buy right now, if you sell 1 present orange.
Is that the same definition you are using? Obviously with perfect foresight, we can get the same number by (say) selling the orange in period 1 for money, investing the money into some asset (which could be a bond), and then using the accumulated money in period T+1 to then buy orange(s) at their new spot price.
24 David Glasner September 25, 2011 at 8:35 am
Bob, Perhaps we are using different definitions, amv was suggesting a different definition of equilibrium, but I couldn't figure it out. I'm sorry to admit this, but I have absolutely no intuition when it comes to option pricing, so it doesn't help me to translate into that language so I am going to stick to the ratio of spot prices. In intertemporal equilibrium, the today's forward equals tomorrow's spot price. Are we on the same page?
25 TC January 17, 2012 at 7:16 pm
This is a classic post and…well, it helped me think through a problem I've been working on for a long time. It's not done yet, and I would like to have something like a real model.
26 pilkingtonphil May 7, 2012 at 4:07 am
The key point here is that of uncertainty, I think — which Lord Keynes sharply pointed out in his first post. David then admitted that, if uncertainty is accepted "the natural rate of interest is neither directly observable nor operational." And went on to say:
"But I think Sraffa went further and argued that the very notion of a natural rate, at least for Hayek owing to his aversion to index number, was incoherent."
But that's NOT what Sraffa was saying. His point was more humble. It was the same one as Bob made below, namely: show me the rate!
Bob asked David to point out an observable natural interest rate that the central bank could use for regulatory purpose — David did so, but in the process ignored the dimension of fundamental uncertainty.
My reading is that David did this by exploring the idea of 'inter-temporal equilibrium', but this seems means something very specific which Lord Keynes pointed out in his first post. Quoting directly from the original piece, Lord Keynes points out that David's inter-temporal equilibrium is a situation "in which price changes are correctly foreseen". But this is no good for Hayek. Quoting from the blog post Lord Keynes linked to, Caldwell says:
"by the middle of the 1930s, problems with [Hayek's] static equilibrium theory had become ever more evident, as questions of the role of expectations came to the fore and, and, with them, the recognition that earlier models had assumed perfect foresight"
Done and dusted, if you ask me. Sneaking in the 'perfect foresight' circumstance of inter-temporal equilibrium is, at a deeply theoretical level, doing precisely the same thing as taking up a 'God's Eye' view of a statistical price level ala Wicksell — something Hayek explicitly rejected due to his realism (and dislike of planners, perhaps?).
So, we can take Hayek together with his realism and then the theory falls apart. Or we can turn Hayek into something different entirely and allow some central banker to guess at some highly theoretical inter-temporal natural rate of interest. I don't think I need to say that Hayek would loath the latter option. Indeed, it would, in many ways, be similar to what happens today when central bankers try to set a 'perfect' rate of interest to stop inflation. Pure technocracy, to Hayek's mind, I should think!
1 Glasner on Hayek v. Sraffa « Increasing Marginal Utility Trackback on September 10, 2011 at 6:39 pm
2 Both Sraffa and Hayek Were Right and Wrong About the Natural Rate of Interest « Uneasy Money Trackback on June 28, 2012 at 7:51 pm
3 Anna Schwartz, RIP « Uneasy Money Trackback on July 3, 2012 at 7:47 am
4 On the Unsustainability of Austrian Business-Cycle Theory, Or How I Discovered that Ludwig von Mises Actually Rejected His Own Theory « Uneasy Money Trackback on October 10, 2012 at 9:57 pm
5 My Paper (co-authored with Paul Zimmerman) on Hayek and Sraffa « Uneasy Money Trackback on February 20, 2013 at 9:17 pm
6 My Paper (co-authored with Paul Zimmerman) on Hayek and Sraffa | Fifth Estate Trackback on February 21, 2013 at 9:46 am
7 A New Version of my Paper (with Paul Zimmerman) on the Hayek-Sraffa Debate Is Available on SSRN | Uneasy Money Trackback on July 7, 2014 at 7:15 pm
8 How to Think about Own Rates of Interest | Uneasy Money Trackback on July 27, 2014 at 8:05 pm
9 Friedrich Hayek, ¿el Jekyll austríaco? – Revista John Galt Trackback on September 11, 2017 at 8:19 am
10 Friedrich Hayek, ¿el Jekyll austríaco? – La Ventana Rota Trackback on January 26, 2021 at 3:17 pm


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Canada's apparel industry IT recruitment activity drops 3.8% in September 2021
Canada's apparel industry registered a 3.8% drop in IT hiring activity in September 2021 when compared with the previous month, according to GlobalData's Job Analytics database.
The industry's overall hiring is decreased by 15.69% in September 2021 when compared with August 2021.
Out of the apparel industry's total hiring activity, IT jobs claimed a 9.13% share in September 2021, recording an increase of 1.01% over the last three-month average share.
IT hiring in global auto industry rises 4.9% in November 2021
IT hiring in global apparel industry rises 1.1% in November 2021
IT hiring in global aerospace, defence & security industry drops 3.8% in November 2021
Top five job classifications in Canada's apparel industry's IT recruitment activity in September 2021
Out of the total job titles, the top five roles commanded a 99.58% share in the overall IT recruitment activity of Canada's apparel industry in September 2021.
1) Software and Web Developers, Programmers, and Testers recorded a share of 79.75% in September 2021, registering a 13.3% decline over the previous month.
2) Database and Network Administrators and Architects claimed a 7.59% share, an increase of 80% over the previous month.
3) Miscellaneous Computer Occupations held a share of 4.22%, registering a 41.18% decline from August 2021.
4) Computer Support Specialists captured a share of 4.22%, up 233.33% over the previous month.
Top five apparel companies in Canada's IT recruitment activity in September 2021
The top five companies, in terms of number of jobs as tracked by GlobalData, have accounted for a combined average decline of 8.47% share in the overall IT recruitment activity of Canada's apparel industry during September 2021 over August 2021.
Amazon posted 157 IT jobs in September 2021 and registered a drop of 17.37% over the previous month, followed by Canadian Tire with 26 jobs and a 7.14% drop. Loblaw Companies with 20 IT jobs and Lululemon Athletica with 8 jobs, recorded a 122.22% flat growth and a 100% flat growth, respectively, while Danaher recorded a flat growth with 5 job postings during September 2021.
Entry Level job postings dominate in September 2021
Entry Level jobs held a share of 49.37%, up by 31.46% from August 2021. Junior Level positions with a 37.97% share, registered a decline of 34.31% compared with the previous month.
In the third place was Mid Level job ads with a 12.66% share, flat growth over August 2021.
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An Asteroids clone with authentic features.
In 1998 I wrote my first Java program, 'Authentic Asteroids' which was a clone of the classic Atari Asteroids arcade game of 1979. This is a Python / Pygame port of my Java game. To run the game go to the src directory and type: python asteroids.py Keys: Z,X rotate, N,B thrust & fire, H hyperspace or Cursor keys rotate and thrust, Space fire Enter start P pause O frame advance whilst paused F toggle full screen moode Features: Intersecting line geometry used for collision detection. Authentic asteroids shapes Damped ship handling Small and large saucers Full screen Fading explosion debris Engine thrust jet Extra life at 10,000 Hyperspace My original Java clone of this game used simple bounding collision detection. I wanted to improve on that in this Python version. If a bounding box collision occurs between the ship and a rock extra checks are made using the code in the geometry.py to determine if any of the line segments intersect. All the code is Open Source GPL This is my first game with Pygame. The code is pretty rough around the edges and is probably not very Pythonic. Any feedback welcome. Turn down the lights, turn up the volume and travel back to 1979!


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Why I am NOT a Christian Zionist. Pt 3.
December 15, 2013 in Christian Zionism, Human Rights, Israel, Palestine, Zionism | Tags: Alan Boesak, Apartheid in Israel, Colonialism, Israeli Violations of International Law, Nelson Mandela, Political Power of Arabs in Israel | 3 comments
Following on from my objections in part one and two, I reject Christian Zionism because of its unconditional support for the current Zionist State of Israel. I find this to be objectionable on political grounds as I firmly believe Zionist Israel to be an Apartheid state which is involved in a colonialist mission in the West Bank and Gaza. This colonialist project is fundamentally at odds with International Law and ethically bankrupt, as it is a clear violation of any reasonable concept of human rights. As an occupying force in the West Bank, and the ultimate authority over the "open air prison" that is Gaza, the Zionists have violated every law governing the behaviour of occupying forces as laid out by the United Nations.
Objections to my position usually start with the fact that anyone who believes in democracy should support Israel, as it a democracy: the only democracy in the Middle East. One should note that at the writing of this post, the western world is celebrating the life of Nelson Mandela. Mandela fought against apartheid in South Africa in the name of freedom and democracy for all South Africans. As noted in previous posts, Mandela fundamentally supported the cause of the Palestinian people and identified his struggle with that of the Palestinians. Mandela declared the policies of Israel regarding the Palestinian people as definitely being a form of apartheid. Alan Boesak, a long time South African opponent of apartheid said that the system of oppression in the West Bank and Gaza was worse than the system in South Africa.
The claim that Israel is a democracy needs to be looked at carefully, but even if Israel is a democracy, why does that mean that its treatment of Palestinians is ethically sound? I do not remotely believe that Israel's violations of International Law and human rights are the worst of any country in the world. But that hardly means that I should therefore support them and not be critical of them! I believe that during World War 2, Italy was not as guilty of human rights violations as Nazi Germany, but that hardly means that I support Mussolini!
As a school teacher, I routinely hear the objection, to my rebuke of a student caught off task, that, "I should be picking on other students, that are involved in greater wrong doing". This is not an argument from the student that he/she is innocent, but, in 99.9% of cases, is an attempt to evade responsibility by shifting attention away from the issue of the student's behaviour in the first place. I believe the Zionist state of Israel makes very similar claims. When caught doing what is universally recognised as being against the law, simply finding someone else who is doing something worse and allegedly getting away with it, is not an ethically sound response. Certainly I think it will hold no weight in God's eyes.
But is Israel a democracy? The answer is yes and no. Mainly no, I believe. The reason for this is that being a democracy goes beyond the simple idea of giving everyone a vote. Democracy is about real power sharing. It's true that Arabs inside the Zionist State do have the right to vote. The problem is that the state of Israel has been put together in such a way so that it is impossible for Arabs in Israel ever to have real power at the ballet box. Israel accomplished this by firstly expelling hundreds of thousands of Arabs from their homes within the borders of the newly formed state of Israel in 1948. This made sure that Israel now had a majority of Jews within their borders. They now made this majority permanent by enacting laws that basically forbade anyone but Jewish people to migrate to Israel. Hence the Zionists had created their dream of a majority Jewish state that would be owned by Jews in a way that non-Jews could never hope to attain no matter how many generations of their ancestors had lived in the land. The Zionist State is not a state for all its citizens. It is a Jewish state. It conveys rights and privileges to Jews that non-Jews can never have.
It is worth noting that other nations, like Iran for example, have Jewish people as members of their parliament, yet I doubt that anyone would claim that Iran is a democracy.
If Arabs had real political power in Israel to change their situation, I doubt that they would ever need to resort to violent resistance. They would not need to. But with a Zionist State with a permanent majority of Jewish people (at the very least 80%) no real change can ever be made at the ballot box. Israel is a Zionist State and this Zionist ideology is not up for grabs at polling booths in Israel on voting day, it never can be, the type of "democracy" that exists in Israel has seen to that.
Mandela and Israel
December 7, 2013 in Human Rights, Israel, Palestine, Zionism | Tags: Alan Boesak, Armed struggle against Apartheid in Israel and South Africa, Cuba, Desmond Tutu, Gideon Levi, Israel and South Africa, Israeli Apartheid, Nelson Mandela | 1 comment
I wonder who the Zionist State of Israel will send to South Africa for the ceremonies surrounding the funeral of Nelson Mandela? The following article was written by a friend of mine, Kim Bullimore and posted on her blog, Live from Occupied Palestine,http://livefromoccupiedpalestine.blogspot.com.au.
Nelson Mandela, Palestine and the fight against apartheid
By Kim Bullimore: 6 December 2013: Live from Occupied Palestine.
Nelson Mandela 1918 -2013
Nelson Mandela, a courageous resistance fighter is dead. Mandela died on December 5, aged 95. He devoted his entire life to the struggle for his people's freedom, spending 27 years in prison for both his unarmed and armed resistance to South Africa's brutal and racist apartheid regime.
With the death of this courageous resistance fighter, we are now greeted with a sickening spectacle which whitewashes his history, the history of the South African anti-apartheid struggle and the fact that Mandela was first and foremost a freedom fighter. In the last 36 hours, politicians and commentators in Australia, the USA, the UK, Israel, Europe and elsewhere, many of whom who had previously labelled him a terrorist and supported his incarceration, are now pretending they did no such thing and are falling over themselves to laud him as a hero, a great man and a man of peace.
Their eulogies whitewash the South African anti-apartheid struggle and Mandela's actions as a freedom fighter. They have rinsed clean, from their histories of him, that Mandela was a radical, who worked with and was inspired by communists both in South Africa and Latin America (Today, in the wake of Mandela's death, the African National Congress (ANC) and the South African Communist Party (SACP) have issued a statement confirming that Mandela was a member of the SACP in 1962 when he was arrested and imprisoned – something which had been previously denied for political reasons). In order to create a whitewashed caricature of Mandela, these revisionists are attempting to rewrite history and the fact that Mandela's resistance and struggle against apartheid encompassed all forms of disobedience and defiance, both violent and non-violent.
As a leader of the ANC Youth, which he help found with Oliver Tambo and Walter Sisulu in 1944, Mandela helped convince the ANC to adopt mass militant non-violent tactics, which included boycotts and strikes. In the wake of the brutality of the 1960 Sharpville massacre which saw 69 unarmed Black South African's gunned down by the regime, Mandela co-founded (with Walter Sisulu and Joe Slovo) the Umkhonto we Sizwe or Spear of the Nation which carried out sabotage against both military and civilian infrastructure in South Africa. In founding Umkhonto we Sizwe in 1961, Mandela took inspiration from the revolutionary struggle taking place in Cuba, in particular from Fidel Castro and Che Guevara's 26th of July Movement.
Mandela recognised the importance of all forms of struggle against the violent oppression being imposed on his people. In 1980, as the non-violent mass struggle once again began to flourish, both inside South Africa and internationally in the form of the boycott and sanctions anti-apartheid solidarity movement, he wrote in a smuggled message from his prison cell that "between the hammer of armed struggle and the anvil of united mass action, the enemy will be crushed."
"our freedom is incomplete without the freedom of the Palestinians"
And today, as these hypocritical revisionist politicians and commentators eulogise Mandela, they also seek to scrub from Mandela's history his lifelong and steadfast support for the Palestinian people and their struggle. Just as they were complicit in supporting South Africa's apartheid regime, many of these same revisionist politicians and commentators are today complicit in supporting Israel's apartheid regime.
In 1948, the same year as the Palestinian Nakba which saw Zionist militia ethnically cleanse more 750,000 Palestinians from their homeland and destroy more than 500 Palestinian villages, South Africa formally adopted the apartheid regime. Throughout the long years of Apartheid in South African, as Sasha Polakow-Suransky's notes in The Unspoken Alliance: Israel's Secret Relationship with Apartheid South Africa (2010), there were close military and trade ties between these two colonial oppressors. It is unsurprising therefore that there would be a close comradeship between the two struggles, viewing their struggles as one and the same: a struggle against colonialism, oppression and racism. For Mandela and the ANC, Yasser Arafat and the Palestinians were "comrades in arms" and they supported their struggle against the Israeli state – both armed and unarmed.
The comradeship between the two struggles was highlighted by Mandela, just sixteen days after he was released from 27 long years in prison in 1990. In February 1990, Mandela met with Yasser Arafat in Lusaka in Zambia. At Lusaka airport, Mandela embraced Arafat and reiterated his support for the Palestine Liberation Organisation and the Palestinian struggle telling the media that Arafat was "fighting against a unique form of colonialism and we wish him success in his struggle". He went on to say, "I I believe that there are many similarities between our struggle and that of the PLO" stating "We live under a unique form of colonialism in South Africa, as well as in Israel, and a lot flows from that."
Eight months later, during his three day visit to Australia in October1990, Mandela reiterated his support for the Palestinian struggle and the PLO saying, "We identify with them [the Palestinians] because we do not believe it is right for the Israeli government to suppress basic human rights in the conquered territories."
Mandela told the Australian media, "We agree with the United Nations that international disputes should be settled by peaceful means. The belligerent attitude which is adopted by the Israeli government is to us unacceptable."
He went on to tell the Australia media that the ANC did not consider the PLO a terrorist group, stating "If one has to refer to any of the parties as a terrorist state, one might refer to the Israeli government, because they are the people who are slaughtering defenceless and innocent Arabs in the occupied territories, and we don't regard that as acceptable."
In 1997, in a speech on the International Day of Solidarity with the Palestinian People, Mandela once again spoke in support of the Palestinian struggle stating "it behoves all South Africans, themselves erstwhile beneficiaries of generous international support, to stand up and be counted among those contributing actively to the cause of freedom and justice". It was important, said Mandela, for South Africans "to add our own voice to the universal call for Palestinian self-determination and statehood" because "we know too well that our freedom is incomplete without the freedom of the Palestinians; without the resolution of conflicts in East Timor, the Sudan and other parts of the world".
Worse than Apartheid
Increasingly over the last decade, more and more South Africans who were active in the South African anti-Apartheid campaign have joined Mandela and have spoken out in support of the Palestinian struggle. In many cases, they have denounced Israel apartheid as being far worse than South African Apartheid.
Not only has Arch-Bishop Desmond Tutu equated Israel's policies and practices to Apartheid, in 2008 veteran South African anti-apartheid campaigners visited the Occupied West Bank and declared what they saw as worse than the apartheid they had experienced in their own country.
One of the participants who visited the West Bank as part of the trip, Mondli Makhanya, the editor-in-chief of the Sunday Times of South Africa, told veteran Israeli reporter, Gideon Levy, "When you observe from afar you know that things are bad, but you do not know how bad. Nothing can prepare you for the evil we have seen here. In a certain sense, it is worse, worse, worse than everything we endured. The level of the apartheid, the racism and the brutality are worse than the worst period of apartheid".
Another participant in the trip, Nozizwe Madlala-Routledge, a member of the South African parliament, who had been imprisoned during the apartheid era for her opposition to the South African apartheid regime told Levy, "It is hard for me to describe what I am feeling. What I see here is worse than what we experienced". When asked by Levy why she thought it was worse than South African apartheid, Madlala-Routledge explained, "The absolute control of people's lives, the lack of freedom of movement, the army presence everywhere, the total separation and the extensive destruction we saw".
In November 2011, the Reverend Allan Aubrey Boesak, a veteran of the South African anti-apartheid struggle reiterated the assertion that Israeli apartheid is far worse than South African apartheid. In an interview with Middle East Monitor, Boesak, explain that "It is worse, not in the sense that apartheid was not an absolutely terrifying system in South Africa, but in the ways in which the Israelis have taken the apartheid system and perfected it, so to speak; sharpened it". Boesak went onto explain:
"For instance, we had the Bantustans and we had the Group Areas Act and we had the separate schools and all of that but I don't think it ever even entered the mind of any apartheid planner to design a town in such a way that there is a physical wall that separates people and that that wall denotes your freedom of movement, your freedom of economic gain, of employment, and at the same time is a tool of intimidation and dehumanisation. We carried passes as the Palestinians have their ID documents but that did not mean that we could not go from one place in the city to another place in the city. The judicial system was absolutely skewed of course, all the judges in their judgments sought to protect white privilege and power and so forth, and we had a series of what they called "hanging judges" in those days, but they did not go far as to openly, blatantly have two separate justice systems as they do for Palestinians [who are tried in Israeli military courts] and Israelis [who are tried in civil, not military courts]. So in many ways the Israeli system is worse".
The ANC and South Africa's support for the Palestinian BDS campaign
In 2012, Mandela's party, the African National Congress (ANC) which is also the ruling party of South Africa, formally endorsed and adopted as part of its official policy, the Palestinian call for Boycott, Divestment and Sanctions (BDS) against Israel. In 2005 Palestinian civil society issued a call to the international community for a program and campaign of boycott, divestment and sanctions (BDS) to be applied against Israel as a way to pressure Israel to end its violations of international law, respect Palestinian human rights and engage in fair negotiations for a just peace.
The ANC Conference not only formally endorsed the Palestinian BDS campaign but also adopted a resolution which specifically called for "all South Africans to support the programmes and campaigns of the Palestinian civil society which seek to put pressure on Israel to engage with the Palestinian people to reach a just solution."
The ANC conference also adopted two other resolutions relating to Palestine and Israel. One of the resolutions reiterated the ANC's long held stance in support of the Palestinian struggle, stating "The ANC is unequivocal in its support for the Palestinian people in their struggle for self-determination, and unapologetic in its view that the Palestinians are the victims and the oppressed in the conflict with Israel."
In addition, the conference also adopted a resolution condemning Israel's treatment of African refugees stating "The ANC abhors the recent Israeli state-sponsored xenophobic attacks and deportation of Africans and request that this matter should be escalated to the African Union"
The adoption of the resolutions, formalised the position already held by the ANC and the South African government. Two months before the conference, South Africa's deputy foreign minister Ebrahim Ebrahim had noted that: "Because of the treatment and policies of Israel towards the Palestinian people, we strongly discourage South Africans from going there."
In April 2013, the South Africa's International Relations Minister, Maite Nkoana-Mashabane reiterated the ruling ANC's position, saying "the struggle of the people of Palestine is our struggle".
Mandela's legacy
Today, Mandela is honoured by both those in struggle and by those in power. Once, however, he and his struggle were demonised and hated by those in power, including many of those same people now praising him today. And while mealy mouthed politicians and hypocritical commentators sing Mandela's praise today, attempting to whitewash is legacy, they will not succeed in rewriting history.
For those in struggle, Mandela's legacy will always be one of a freedom fighter. It will always be one of a courageous resistance fighter who waged an uncompromising struggle against colonialism, racism and oppression. His legacy to those of us in struggle will be that he was an internationalist, who saw his people's freedom tied up with the freedom of others – who saw his people's struggle as being no different from the struggle of the Palestinian people and all those struggling against colonialism, oppression and tyranny.
KIM BULLIMORE
Israeli Apartheid worse than South African Apartheid: Allan Boesak
November 20, 2011 in Christian Zionism, Human Rights, Israel, Palestine, Zionism | Tags: Alan Boesak, Desmond Tutu, Dr Hanan Chehata, Israeli Apartheid and South African Apartheid, Middle East Monitor, Nelson Mandela | 6 comments
The following article was sent to me by Australians for Palestine http://australiansforpalestine.com
Editor's note: It is quite incredible how Western governments honour people like Nelson Mandela and Archbishop Tutu for their courage and determination in their monumental struggle to obtain freedom for their people in Apartheid South Africa, but when these same South Africans and many others call attention to Israel's apartheid policies and practices against the Palestinians, they are ignored as if they have nothing to add from all their bitter experiences. No doubt the words of Reverend Allan Boesak below, who was one of the many speaking out against Apartheid South Africa, will also fall on deaf ears. However, if his moving words and deep understanding of the issues fail, then it is not because he doesn't have the power to move, but that regrettably our politicians, "intellectuals", journalists, and sad to say, even ordinary hard-working people have all become hostage to self-interest and privileged lifestyles and ambitions that leave no room for the oppressed and downtrodden anywhere, let alone in Palestine. Those of you who call yourselves Christian ought to seriously pause and reflect on what that actually means for you – going to church and saying prayers will not redeem you from your neglect of other human beings – but really religion shouldn't be the issue at all. We are only what we are by an accident of birth: that is what should make us sensitive to every person on this planet regardless of beliefs and persuasions. No one knows when one day, we who are privileged now, may well find ourselves unable to climb out of the encroaching swamp without the helping hand of a passing stranger for whom hopefully compassion will have no boundaries.
Sonja Karkar
INTERVIEW: Revd Allan Boesak calls Israeli apartheid "more terrifying" than South Africa ever was.
Dr Hanan Chehata interviews Revd Allan Boesak
MEMO – Middle East Monitor
The Reverend Allan Aubrey Boesak is a veteran of the South African anti-apartheid struggle. He is the former president of the World Alliance of Reformed Churches, and is a signatory of the South African Christian response to the Kairos Palestine Document. This year he gave expert testimony at the Russell Tribunal on Palestine session in Cape Town, at which he spoke to MEMO's Hanan Chahata.
Hanan Chahata: You were one of the signatories of the South African Christian response to the Kairos Palestine Document. In this you said that the Palestinian experience of apartheid is "in its practical manifestation even worse than South African apartheid". Can you explain what you meant by this?
Allan Boesak: It is worse, not in the sense that apartheid was not an absolutely terrifying system in South Africa, but in the ways in which the Israelis have taken the apartheid system and perfected it, so to speak; sharpened it. For instance, we had the Bantustans and we had the Group Areas Act and we had the separate schools and all of that but I don't think it ever even entered the mind of any apartheid planner to design a town in such a way that there is a physical wall that separates people and that that wall denotes your freedom of movement, your freedom of economic gain, of employment, and at the same time is a tool of intimidation and dehumanisation. We carried passes as the Palestinians have their ID documents but that did not mean that we could not go from one place in the city to another place in the city. The judicial system was absolutely skewed of course, all the judges in their judgements sought to protect white privilege and power and so forth, and we had a series of what they called "hanging judges" in those days, but they did not go far as to openly, blatantly have two separate justice systems as they do for Palestinians [who are tried in Israeli military courts] and Israelis [who are tried in civil, not military courts]. So in many ways the Israeli system is worse.
Another thing that makes it even worse is that when we fought our battles, even if it took us a long time, we could in the end muster and mobilise international solidarity on a scale that enabled us to be more successful in our struggle. The Palestinians cannot do that. The whole international community almost conspires against them. The UN, which played a fairly positive role in the struggle against apartheid in South Africa, takes the disastrous position of not wanting to offend its strong members like the United States who protect Israel. So even in the UN, where international law ought to be the framework wherein all these things are judged, where international solidarity is not an assumption but is supposed to be the very foundation upon which the UN builds its views on things and its judgements as to which way it goes, the Palestinians don't even have that.
Palestinians are mocked in a way that South Africans were not. In a sense, the UN tried in our case to follow up on its resolutions to isolate the apartheid regime. Here, now, they make resolutions against Israel one after the other and I don't detect even a sense of shame that they know there is not going to be any follow up. Under Reagan the United States was pretty blatant in its so called constructive engagement programme and in its support for the white regime in South Africa, but what the United States is doing now in the week that UNESCO took the decision to support the Palestinian bid for a seat in the United Nations, to withdraw all US financial support; to resort immediately to economic blackmail, that is so
scandalous. So in all those ways I think we are trying to say that what is happening in Israel today is a system of apartheid that in its perfection of that system is more terrifying in many ways than apartheid in South Africa ever was.
HC: During an event celebrating black history month earlier this year you likened the US Civil Rights Movement to the South African struggle against apartheid. Would you liken both of those struggles to the Palestinian struggle today?
AB:I have just finished a chapter for a book that I hope will be out next year in which I speak of the similarities between the civil rights struggle, the anti-apartheid struggle, and the Arab Spring and the lessons we can draw from them.
I think it is fascinating in so many different ways. It's almost as if I personally lived through the difficult choices that people have to make in North Africa and in the Middle East every day. As every day goes by my admiration for them grows. I see what is happening in Syria and in Yemen and that there is still relatively little violence on the part of the protesters. You can still see that their basic fundamental goal is to get rid of the tyranny through non-violent protest and it is amazing to watch. I do believe that there is such a thing as historic moments that never disappear from which people learn. South Africa learned so much from Ghandi in India; Martin Luther King learned from Ghandi; we learned from Martin Luther King and we had our own traditions and I'm sure the young Arab people who saw some of these things happening are drawing on that. 1994 (when the first democratic government of South Africa was formed) and the 1980s are not that far behind us. Many of those people who are participating today were sat in front of their televisions watching when we were in the streets day after day after day braving the dogs and the guns and the tear gas, burying our people, funeral after funeral. When I see the funerals taking place in the Arab world I think of the time Archbishop Tutu and I buried 27 people (actually 42 were killed but the police would not release the other bodies); I think of that when I see bodies being carried out to be buried Friday after Friday in the Arab world.
Our struggle had all sorts of political ideologies but it was never completely secularised. The faith, as Archbishop Tutu said this morning, that there is a God of justice who will help us sustain the struggle is an amazing thing. When I see all those thousands of Muslims go down and bow down before Allah I must say, when I saw it for the first time I looked at my wife and I said, I tell you now, if people sustain that, all those tyrants will be quaking in their boots and they know that they will not be able to hold out against that power.
I believe that, just as a few years ago the civil rights struggle in the United States, and then more especially the anti-apartheid struggle, became the moral standard by which the world was judged in terms of its taking sides in terms of right or wrong and getting on the right side of the human revolution for humanity and for justice and for the restoration of dignity
and for the future for children; that particular moment in history where the world is invited to participate in this revolution for the sake of the good and for the sake of the future and for the sake of justice; and where that decision hinges upon evil and wrong on the one side and justice and right on the other side and will mark the world in a way that says this is a litmus test for international solidarity and for international law and justice, that test today comes from the Arab Spring.
HC: The Arab Spring or Palestine?
AB: You have the Arab Spring taking place but at the hub of it all is Palestine. I believe that what is happening now would not have happened if it had not been for the perennial struggle of the Palestinian people. They may not be mentioned every time but I can tell you now that if it was not for them, nothing like the Arab Spring would ever have happened in the Middle East.
Just as we thought, when we watched Martin Luther King or when we went through our own struggle, that the face and direction of history and the world, whether they like it in the West or not and whether or not they come to it with hidden agendas for the sake of greed or whatever, it does not really matter; what is happening in the end is that something fundamental is changing in the Middle East and thereby something fundamental is changing in the history of the world. Those people, I believe, who are going through that revolution now will, for instance, never make the same mistakes that their parents and grandparents made, thinking that the West is always good and that the deals we make with the West are always for the good of our people. There is a new critical element that has come in. Never again will people think the same; what I am hoping is that the Arab revolutions will be so sustainable and so successful and morally so strong that they will force the West to think differently about themselves in terms of the viewpoints and stands they take on events.
HC: Christianity is under threat in the Holy Land. People tend to forget that this is not an issue between Jews and Muslims; there are Christian Palestinians too. There has been a disturbing trend over the years, which has seen Christian Palestinians leaving the Holy Land because of the extraordinary difficulties that Israel has placed on their lives. In what
ways has the occupation affected Christians?
AB: The Christian community in Palestine has been decimated in many ways. By doing this the Israelis are doing two things: they are simplifying the presentation of the struggle as if it is only between Jews and Arabs, with the result that Christians outside think that there is nothing and nobody for us to be in solidarity with. Hence, the Christian Zionists, those ultra conservative fundamentalists in the United States who have for so long helped to dictate foreign policy under the Bush and Reagan administrations, they can say "it's not about us; it's not about Christians and Christian witness, it's about those Muslims"; that, I think, is the intention. I'm hoping that those of us who are Christians outside the Middle East will keep that fact alive and will find ways and means to inject that argument into every single political situation so that the discourse that goes forward and gives rise to action does not push aside the reality of Christians in the Middle East, especially in the Holy Land.
The second thing they are doing is that they are dislodging, not just denying, but dislodging the roots of the Christian faith in the Middle East; that's where it all started. If you dislodge that it's like cutting off your nose to spite your face – you are cutting yourself off from the most ancient roots of Christianity and that will set the Christian church adrift, and in the end that will not be good for Israel. So I'm glad to see that the World Council of Churches is rising up again. It is not nearly as radical as it should be, it's not nearly as clear as it should be nor as hard-nosed as it should be on this issue, but at least it is taking up the Palestinian issue and responding to the situation in Egypt, Iraq, Syria and elsewhere where Christians are under pressure. In doing so they must remember that this is not just a Christian cause; it's not important just because of the Christians involved, but also because the future of humanity is at stake.
HC: There are an estimated 50 million Christian Zionists worldwide. How would you council them with regards to their support for the state of Israel which is based, they would say, on Biblical reasoning?
AB: It's like with so many things, it's the way that people read and interpret the Bible and so we must just make sure that we are as clear and as enthusiastic and as open about our understanding of the Bible and as willing to engage our understanding of the Bible as they seem to be. There must be ways; we have just not been imaginative enough. I think one reason is because we have not, until very recently, realised the very dangerous nature of the views that those people hold, not just for Palestinians and for Muslims in general but also for the Christian Church itself. Now that we begin to see how deadly that kind of logic is, how absolutely anti-Christian and anti-human that logic is, we have no excuses left.
HC: Israel is demanding that Palestinians recognise it as an exclusively "Jewish state". How would you respond to this demand?
AB: They can't. There is no such thing as a specifically Jewish state. You can't proclaim a Jewish state over the heads and the bodies and the memories of the people who are the ancient people who live there. That is Palestinian land we are talking about. Most of the Jews who are there come from Europe and elsewhere and have no claim on that land and we mustn't allow it to happen to the Palestinians what happened to my ancestors who were the original people in this land (South Africa) but now there are hardly enough of them to be counted in the census. That is Palestinian land and that should be the point of departure in every political discussion.
HC: In the past you urged Western countries to impose economic sanctions on the South African apartheid regime. Would you support a similar call for sanctions against the state of Israel?
AB: Absolutely! Pressure, pressure, pressure from every side and in as many ways as possible: trade sanctions, economic sanctions, financial sanctions, banking sanctions, sports sanctions, cultural sanctions; I'm talking from our own experience. In the beginning we had very broad sanctions and onlylate in the 1980s did we learn to have targeted sanctions. So you must look to see where the Israelis are most vulnerable; where is the strongest link to the outside community? And you must have strong international solidarity; that's the only way it will work. You have to remember that for years and years and years when we built up the sanctions campaign it was not with governments in the West. They came on board very, very late.
It was the Indian government and in Europe just Sweden and Denmark to begin with and that was it. Later on, by 1985-86, we could get American support. We never could get Margaret Thatcher on board, never Britain, never Germany, but in Germany the people who made a difference were the women who started boycotting South African goods in their supermarkets. That's how we built it up. Never despise the day of small beginnings. It was down to civil society. But civil society in the international community could only build up because there was such a strong voice from within and that is now the responsibility of the Palestinians, to keep up that voice and to be as strong and as clear as they possibly can. Think up the arguments, think through the logic of it all but don't forget the passion because this is for your country.


text:
Национална академия дей Линчеи (, "Национална академия на рисовете") е официалната научна академия на Италия със седалище в град Рим. Тя съществува с няколко прекъсвания от 1603 г., когато е основана от Федерико Чези и се превръща в един от центровете на научната революция. Името ѝ се дължи на острото зрение на рисовете – качество, присъщо в преносен смисъл, и на посветените на науката.

Национални академии на науките
Наука в Италия
Организации в Рим

redpajama_set_name: RedPajamaWikipedia


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Get em while you still can, some of these boots as you will see in coming posts are very unique.
These babies are great for the upcoming weather + they're rad!!
These are the lovely Air Jordan 1's reissued in orginal colorways. They are a rare find & unfortunatly not for sale. I thought I'd showcase them since the newer reissues are not as well made.


A couple of things could happen to people with a CDL license or a commercial driver's license. When talking about a DUI, the main difference between a CDL and a regular driver's license is that a separate area of the law would apply to someone with a CDL.
Someone with a commercial driver's license who was in their commercial vehicle, like a semi-truck, would be charged with a DUI if they had a blood alcohol level at or above a 0.04, as opposed to the average person who would be charged with a DUI if their blood alcohol level was at or above a .08, which would be the main difference when it comes to DUIs between normal and CDL vehicles.
The government would try to suspend the person's ability to drive a commercial vehicle for one year simply because they were arrested and suspected of DUI while having a commercial driver's license, even if they were driving their normal automobile. This would not necessary require conviction, it would simply mean suspected.
When dealing with a commercial driver's license, the person would definitely want to try and fight the Motor Vehicle Division aspect. The commercial driver's license would be suspended forever if the person was convicted of a second DUI while driving with a CDL, even if they were in their normal vehicle and they were just suspected.
It would be a lifetime ban if the person got a second DUI while having a commercial driver's license, regardless of what vehicle they were operating, although they could still get a civilian driver's license. The civilian driver's license rules would still apply to them in that case, but as long as they had a CDL, one DUI would result in the commercial license suspended for a year, and a second DUI would result in the commercial driver's license suspended for life.
A commercial driver's license holder would generally have more on the line because that would usually be their career, so they would probably be more inclined to want to go to trial and fight everything because losing on anything would have such a severe impact on their career.
A DUI would probably have the most life altering affect on a commercial trucker than on anyone else, because just about everyone else would be able to overcome it. Doctors, teachers, nurses, politicians, and even police officers would probably be able to overcome their DUI by taking certain steps like counseling and by doing everything they were supposed to do.
The outcome of these cases would depend because every case would be different. Commercial truck drivers would need to fight, even if they did not necessarily have a case, because they would need to fight to continue on with their career.
A commercial driver's license would allow the driver to operate a vehicle of a certain weight. There have been situations where the trucker's company liked them so much that they allowed them to continue driving when they got their valid driver's license, but they were just not allowed to drive a vehicle of a certain weight because that would require a commercial driver's license.
They would be allowed to drive smaller loads, as long as the loads did not exceed the requirement to need a commercial driver's license.
For more information on Commercial Driver's License Restriction, a free initial consultation is your next best step. Get the information and legal answers you're seeking by calling 480-900-0384 today.
How Do Administrative Hearings Proceed In Arizona?
How Does The Point System Work With A DUI?
Home > Arizona DUI Defense > What Is The Basis Of CDL Disqualification In Arizona?


Software Engineer II with general guidance of a senior staff member, develop software for medium to large-sized projects by studying information needs; conferring with clients; studying systems flow, data usage, and work processes; investigating problem areas; following the software development lifecycle. Determines operational feasibility by evaluating analysis, problem definition, requirements, solution development, and proposed solutions. Documents and demonstrates solutions by developing documentation, flowcharts, layouts, diagrams, charts, code comments and clear code. Improves operations by conducting systems analysis; recommending changes in policies and procedures.
Designs, modifies, develops, writes and implements software programming applications. Supports and/or installs software applications/operating systems. Participates in the testing process through test review and analysis, test witnessing and certification of software.
Bachelor's Degree in Computer Information Systems or related field.
Years of Experience: 3+ years in software engineering.
3+ years of experience developing J2EE application including J2EE/Java performance testing and tuning.
1+ years of MVC framework experience; STRUTS, SPRING MVC, JSF.
1+ years of PL/SQL experience.
Experience working with Oracle databases.
Intermediate/advanced understanding and working knowledge on Software Development methodologies (Waterfall, RUP, AGILE/SCRUM).
Experience with CVS or other source code control system.


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text:
using Shouldly;
using StructureMap.Testing.Pipeline;
using StructureMap.Testing.Widget;
using Xunit;

namespace StructureMap.Testing.Bugs
{
    public class Bug_416_missing_name_instance_in_try_get_instance
    {
        [Fact]
        public void should_be_able_to_resolve_by_name()
        {
            var container = new Container(_ =>
            {
                _.For<ColorRule>().MissingNamedInstanceIs.ConstructedBy(c => new ColorRule(c.RequestedName));
            });

            container.GetInstance<ColorRule>("Red").Color.ShouldBe("Red");

            container.TryGetInstance<ColorRule>("Red").Color.ShouldBe("Red");
            container.TryGetInstance<ColorRule>("Blue").Color.ShouldBe("Blue");
            container.TryGetInstance<ColorRule>("Green").Color.ShouldBe("Green");
        }
    }
}

redpajama_set_name: RedPajamaGithub