Monthly Archives: May 2013

Current Events Opinion Science

Economics and What? A Response to Rob Johnson.

Many economist’s only job is to model reality. This means that they must make certain assumptions to make their models practical. A model airplane that can fly and carry passengers ceases to be a model. Apparently, the modeling nature of economics is lost on one of its most senior practitioners, and critics. Rob Johnson, currently president of the “Institute for New Economic Thinking” and former Chief Economist for the Senate’s Banking Committee. In an article posted on May 14 to Yahoo! Finance, Mr. Johnson claimed that economics had become inhuman. Criticizing economic’s  ideal of objectivity, he claimed that “Without admitting it, or even worse, at times without even knowing it, economists make powerful value judgments about what matters in our society.”

Of course that much is true. Economists often must measure, quantitatively, things that may not be easily measured. And, predictably, they offer up a model to do this. I fail to see how we could expect more of them, given what we have asked them to do. But economics is useful precisely to the extent that it is inhuman. Rather that equivocate on the emotional and philosophical definition of value, economists allow us to compare things in terms everyone understands: money. Estimates of how much people value their own lives prove extremely useful in determining the usefulness of government spending on safety. But that it is an estimate must be emphasized. Economists do not professionally speculate on the “true” value of human life, that’s what all the other humanities are for.

So you can imagine my chagrin when Mr. Johnson shamelessly advertised his own brilliant reformation of the field: the New Economic Thinking’s “Economics and Theology” series, which he saved for the third to last paragraph. What could be more sensible, than to induce collaboration among have those who spend their lives measuring out evidence as precisely as they can, and making some of the most qualified and precise claims of any intellectuals, with those who persuade through fear and blatant appeals to the aptly sheeplike congregation. What could the ancient sophists possibly add to the discussion of economies? Will they propose adding eternal damnation as an opportunity cost for condoms? This is barely jest, for Mr. Johnson claims that “leading theologians… are used to thinking about life’s ultimate concerns.” Nonsense is far too kind a word, pernicious opportunistic pandering is closer to the mark. I hope Mr. Johnson’s series goes off swimmingly, and people talk of it for ages to come. I hope the theocrats catch of whiff of the standard of evidence to which the Queen of the Humanities holds itself.

References

Johnson, Rob. “Creating an Economics for the 21st Century” Yahoo! Finance. Retrieved 5/14/2013 http://finance.yahoo.com/blogs/the-exchange/creating-economics-21st-century-223645471.html

 

Activism Current Events Opinion

PT Kizone’s New Bankruptcy Trial

I can only barely conceal my melancholy at the issues on which the illustrious students of Grand Valley State University seize. The United Students Against Sweatshops has recently been the most prominent litigator, yet it seems no one has had the wherewithal to ask what sweatshops in Indonesia have to do with contracts in the U.S. This is not a trick question. The USAS is protesting GVSU’s contract with Adidas, on the grounds of a particularly emotional case regarding PT Kizone, a clothing manufacturer in Indonesia. PT Kizone did supply Adidas. What’s conveniently unmentioned is that PT Kizone also sold “collegiate apparel” (dumbass sports jingoism) for Nike, and similarly useless products for the Dallas Cowboys. Adidas is only one customer, and no convincing argument has been made to link the PT Kizone debacle to the Adidas-GVSU contract. Forget the dwindling space program, the increasingly useless investments our government makes, and our crumbling infrastructure, GVSU students need to take to the streets to rectify the injustices of an Indonesian bankruptcy court!

Photo by Robert Matthews

I will not present any illusions that I am an expert in Indonesian business law, but since this is apparently the problems the liberal-arts students of Grand Valley concern themselves with, I found a report from 2006 that provided some clarity:

 

An employment relationship may be terminated by either the employer (the company) or the appointed receiver [the creditor], subject to the provisions of the prevailing labour laws, provided that at least a 45 days’ notice is sent before the termination… The new law also clearly provides that after the date of the declaration of bankruptcy, any unpaid salary prior to or after the declaration of the bankruptcy decision will be a part of the debt of the bankruptcy estate. (Mandala, S. 2006, pp. 4-5)

 

I’ll remind the dear reader that I am not arguing PT Kizone’s bankruptcy was handled ideally. But I doubt that it was handled illegally by Adidas. PT Kizone is not owned by Adidas, in fact, the owner fled the country after closing the plant (Brettman, A. 2013). As far as I’m aware, what debts get paid, and what don’t, is decided by that infamous Indonesian bankruptcy court. Not, say, twenty students and their solidarity outside Kirkhoff.

Which raises an impolite question for the the former employees of PT Kizone: why aren’t you handling this in Indonesia? The salient students bemoan the loss of “legally” mandated severance pay (Brettman, A. 2013), but if the issue is a legal one it has no business in American universities. Similarly, what about the legal obligations the universities have to Adidas? I could not find the GVSU-Adidas contract, but I very much doubt it requires Adidas to pay the severance fees of companies it buys clothing from. Not that that stopped anyone, because of this unwanted attention, Adidas is compensating 2,700 ex-employees of PT Kizone (“Victory,” 2013).

I suppose no one should be surprised that a private company bowed to unwanted political pressure, or that many universities did the same. Institutions aren’t known for sticking up for the unpopular. But I am surprised by what University students are bothered. Our congress can’t pass a bill to make gun control laws consistent for gun shows and gun shops. First New York flooded, then Grand Rapids did. We’re at war for who knows what, and terrorist’s internet magazines have Inspired lone-wolf attacks on U.S soil. It’s not the conversation I find problematic, but that this seems to be the only one.

References

Brettman, A. 2013. Adidas settles with Indonesian workers over PT Kizone. The Oregon. Retrieved from http://www.oregonlive.com/playbooks-profits/index.ssf/2013/04/adidas_settles_with_indonesian.html

Mandala, S. 2006. INDONESIAN BANKRUPTCY LAW: AN UPDATE. OECD. pp. 4-5. Retrieved from http://www.oecd.org/indonesia/38184160.pdf

VICTORY! “Badidas” Campaign Forces Adidas to Respect Indonesian Garment Worker Rights. 2013. Retrieved from http://usas.org/tag/pt-kizone/