Capital, capital everywhere – How to invest it wisely?

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With oil revenues soaring, the time has come for Norway to consider how best to apply them to strengthen its economic infrastructure and policy framework to promote the nation’s longer-term development. As matters now stand, the oil wealth is causing problems by making the krone a petrocurrency pricing Norwegian labor and industry out of world markets. Rather than lowering production costs by using the oil revenue to cut taxes, financial policy makers have let themselves be frightened by an unwarranted fear that tax cutting and infrastructure investment are inflationary. Indeed, by unduly burdening industry they are aggravating rather than alleviating inflationary pressure. If there is any economy today that need not tax its manufacturing, shipping and other industries out of business, ...

Oil in Norway’s Balance of Payments and the prospective impact of privatization on the krone

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Speech to the Norwegian Shipowners' Association, August 17, 2000 by Dr. Michael Hudson, ISLET © The debate over whether to privatize Norway’s oil, telephone system and other national assets has focused on considerations of whether private management would be more efficient than government management. The discussion to date has turned more on political ideology than on calculations of the quantitative impact of privatization on the balance of payments, tax and monetary policy. Arguing over management efficiency is a blind alley, theoretically speaking. Economic observers evaluating Britain’s privatizations of the 1980s quickly came to the conclusion that ownership has little inherent impact on managerial efficiency. Government agencies can manage enterprises in the same way that private managers do, if instructed to do so. The ...

Tainted Transactions: An Exchange

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From The National Interest No. 60 http://www.nationalinterest.org http://www.ciaonet.org/olj/ni/ni_00saj01.html A letter exchange in response to Janine Wedel's “Tainted Transactions: Harvard, Russia and the Chubais Clan” (Spring 2000). Participants: Jeffrey Sachs, Anders Aslund, Marek Dabrowski, Peter Reddaway, Igor Aristov, Wayne Merry, Michael Hudson, David Ellerman, Steven Rosefielde and Janine Wedel. Jeffrey D. Sachs, director of the Center for International Development, Harvard University: Janine Wedel, for the umpteenth time, repeats her phony diatribes against me ("Tainted Transactions: Harvard, the Chubais Clan and Russia’s Ruin", Spring 2000). Please permit me to correct the record. Despite Dr. Wedel’s weird insinuations that I had no advisory role with the Russian government, I was an official adviser to that government, but only for two years and two months, from December 1991 to January ...

How Interest Rates Were Set, 2500 BC – 1000 AD

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Originally published in Journal of the Economic and Social History of the Orient 43 (Spring 2000):132-161 Máš, tokos and fænus as metaphors for interest accruals* * An earlier draft of this paper has benefited from comments by William Hallo, the late W. F. Leemans, Johannes Renger, Piotr Steinkeller, Cornelia Wunsch and Norman Yoffee. For the points on which I was unable to convince them, I take full responsibility. ABSTRACT. The earliest interest rates in Mesopotamia, Greece and Rome were set not economically to reflect profit or productivity rates, but by the dictates of mathematical simplicity of calculation. The interest that was born calendrically did not take the form of young animals, but rather of the unit fraction, the smallest unit fraction in each ...

Speech to the Communist Party of Cuba

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Personal Introduction Here is a copy of my Havana speech last week. I suspect that some of my statements may raise ideological hackles among you. But the fact is that it was enormously successful, and established credibility to be invited back to advise the Cuban government. I believe that the important thing is the analysis, not the rhetorical ideological wrapping. Esteemed colleagues: Everyone says that globalization is inevitable. But what kind of globalization are we going to have? Whose globalization? Can we still influence what kind of globalization the world will have? A century ago, Marx supported the globalization of his day - colonization - to the extent that it would break down the institutions of backwardness in Asia, the Near East, Latin America ...