Stellenbeschreibung:

What is Competitiveness? #1 Robert Reich

This is the first in an ongoing series of articles we are planning, toexplore what competitiveness is, from the perspective of particular public figures or intellectuals. For the first in this series we’ve chosen Robert Reich , a former U.S. Labor Secretary.He’s written an articlein plain English that makes a number of clear and important points, which are still fully valid even though it was written in 2011.

Itbegins with an excellent summary:

“Whenever you hear a business executive or politician use the term “American competitiveness,” watch your wallet. Few terms in public discourse have gone so directly from obscurity to meaninglessness without any intervening period of coherence.”

(We’ll add that to our newquotations page when it’s up and running.)

As we write this, the BBC has just published apre-electionarticle about UK politicians, reminding us that this lack of coherence on ‘competitiveness’doesn’t only plague U.S.politics. In different guises, it’s global. The BBC quote is from UK Prime Minister David Cameron, who said:

“The real common ground, the real centre-ground of British politics right now, is who has got the answers to making sure Britain competes and succeeds in the global race? That’s the question which wasn’t answered by Labour, which is being answered by us.”

This wasn’t an off-the-cuff mistake: Cameron has a record of using the fatuous Twitter hashtag #globalrace , and other nonsenses. We aren’t convinced that Cameron’s predecessors in theLabour Party would necessarily have said anything more sensible, but it would be fascinating if a television interviewer who understands the issues were toconfront a politican who has said something like this and then proceeded to ask ‘exactly what do youmean by ‘compete,’ Prime Minister / President / esteemed CEO? And not give up probing this questionuntil the politician has fallen off his or her chair or done something like this .

Back to Robert Reich. We’ve copied plentyof his textbut haveinternationalised itbecause his pointsare all quite generic.

Whatis American “competitiveness” and how do you measure it? Here are some different definitions:

1. It’s exports. Okay, but the easiest way for companies to increase their exports from this country is forlocally-made products to become cheaper internationally. To do that, companieshave tocut production costshere. Their biggest cost is their payrolls. So the simplest way for them to become more “competitive” is to cut their payrolls — either by replacing localworkerswith machines,or cutting theirwages and benefits. How is this a good thing for the country?

2.It’s net exports. The balance of trade: how much we import from abroad, versus how much they import from us. The easiest and most direct way to improve the trade balance is to devalue the currency, tomake locally produced goodscheaper inworld markets. But this creates two problems: first, everything we buy from overseas becomes more expensive; and second,this could lead to currency wars. How is this good for the country?

3.It’s the profits of ‘our’companies . In case you haven’t noticed, the profits of multinationalcorporations are soaringassales from their foreign-based operations boom, andbecause they cut local production costs(see the first item above). “Our” multinationalshavebecome increasingly global,so their profitability has relatively little to do with the number and quality of jobs here. “In fact, it may be inversely related,” Reich adds.

Source: Fools’ Gold, derived from Federal Reserve Bank of St Louis, FRED database.

(FG: Hisarticlewas written in 2011 but the basic point remains valid. Corporate profits in many countries have been soaring for decades, in large part because corporations have been winning political battles with workers and paying themlower wages and benefits, figuring out better ways to dodge taxes, and so on. Here’s a graph we created recentlyshowing how U.S. corporate profits rose from a low point of under 4 percent of GDP in the mid 1980s to nearly 12 percent by 2013. Click to enlarge.)

4.It’s the number and quality of localjobs created . This is Reich’spreferred definition.But the only sure way to improve the quality of jobs over the long term is to build the productivity of workers and the economyoverall, which means major investments in education, infrastructure, and basic R&D. Which requires at least two big things: tax, and giving the middle and working classes sufficient purchasing power to get the economy going again, such as by getting corporations to pay their workers more.But this is kind of the opposite ofwhat politicians tend to mean when they say ‘competitive economy’.

Reichsummarises, briefly, by saying that it’s politicallyimportant for politicians, as for any president, to avoid being seen as “anti-business” — but that peoplemust not be seduced into believing that the well-being of ‘our’businesses is synonymous with the well-being of our country. If their wealth is substantially extracted from the rest of the economy, it’s not obvious how the country as a whole is any better off.

All these brief comments by Reichseem to make eminent sense. In fact, who could argue?

On hislast point,“anti-business” is one of those code words, very much like ‘uncompetitive’, that is used to bludgeonopposition to policies that involvetaking wealth from one part of the economy and giving it to wealthier people and multinational corporations. (See more code words here .) Former British Prime Minister Tony Blair highlighted thepolitical effects that such use of language can have:

“If… chief executives say it is Labour that will put the economy at risk, who does the voter believe? Answer: the chief executives. Once you lose them, you lose more than a few votes. You lose your economic credibility.”

So this isthefirst inour “What is competitiveness?” series.

Next up, we may perhaps look at the work of Mariana Mazzucato , or visita classic 1994 essay in Foreign Affairs by Paul Krugman entitled “Competitiveness: a Dangerous Obsession .” We will also visit a particular form of the ‘competitiveness’ obsession, called ‘tax competitiveness.’ Any other suggestions, of course, are welcome.

The author

Nick Shaxson

Nicholas Shaxson is a journalist and writer on the staff of Tax Justice Network. He is author of the book Poisoned Wells about the oil industry in Africa, published in 2007, and the more recent Treasure Islands: Tax havens and the Men who Stole the World, published by Random House in January 2011. He lives in Berlin.

Your email address will not be published. Required fields are marked *

Comment

Name *

Email *

Website

#J-18808-Ljbffr

NOTE / HINWEIS:

EN: Please refer to Fuchsjobs for the source of your application

DE: Bitte erwähne Fuchsjobs, als Quelle Deiner Bewerbung