[Marxism] Paul Phillips

Louis Proyect lnp3 at panix.com
Fri Jul 18 20:09:30 MDT 2008

Paul Phillips, a Canadian economist and long-time member of PEN-L has 
died. I am forwarding an obit and one of his posts to that list.


Paul Arthur Phillips

Died peacefully Wednesday, July 16, 2008, in Vernon, after a brief 
battle with cancer. He was predeceased by his parents Dick and Molly 
Phillips and his sister Ruth Phillips. He will be deeply missed by 
his wife Donna, daughters Erin and Nicole (Dale), his granddaughters, 
Lauren, Danika and Holly, his brothers David (Betty) and Rhys 
(Tatjana), brother-in-law Gary, sister-in-law Bobby (Ed), nephews and 
nieces and many dear friends especially his honourary family Barb, 
Mike, Eric, Jeanette and Colin Angel.

Paul was born November 3^rd , 1938, in Hong Kong, the son of 
missionaries. The outbreak of war caused them to return to Canada, to 
Victoria where Paul grew up.

A graduate of Mount View High School in Victoria, Paul enjoyed his 
50th high school reunion in 2006. He graduated with a BSc in 
Chemistry and an MA in Economics at the University of Saskatchewan. 
He obtained his PhD from the London School of Economics in 1967.

A true renaissance man, Paul possessed an incredible variety of 
passions and gifts. As a scholar and teacher he wrote numerous books 
and articles on a significant range of topics including labour 
economics and labour relations, Canadian economic history and 
political economy, comparative economic systems and labour-based 
economies, and Yugoslavia and transitional economies. In recent years 
he has focused much of his work on environmental issues. He was also 
a dedicated teacher, taking great satisfaction in working with 
students and with his colleagues at the University of Manitoba, where 
he taught for 34 years and which conferred on him the honour of 
Professor Emeritus in 2005. He was also Adjunct Professor of American 
Studies at the University of Llubljana in Slovenia. Much of his 
academic work and his involvement in political and community life was 
motivated by a deep and passionate commitment to social justice and a 
profound commitment to speaking for those who are left out of the 
economic, political and social conversation.

He had the same passion for his other interests: singing and acting, 
sailing, skiing, golfing, polo, gardening, cooking, beer and wine 
making, design and carpentry. Perhaps his greatest joy, however, came 
from music. A player of many instruments, Paul was active in folk 
music since the early '60s, sang for thirty years with the Manitoba 
Opera Chorus and most recently sang with Aura Chamber Choir and the 
Vernon Welsh Men's Choir. So many of his friendships began with a 
shared love of music and it was a love he shared with and nurtured in 
his daughters.

Despite all of his involvement in groups and organizations Paul was 
an independent thinker and unafraid to stand apart from a group. He 
took risks intellectually and personally and was not afraid to 
reassess a position. Yet in more trivial matters like taste in 
clothes or television shows he could be absolutely dogmatic and opinionated.

He will be remembered by friends and family for his fundamentally 
kind and generous nature, his great capacity for friendship and good 
humour, his dreadful puns, his steadfastness in any commitment, his 
willingness to stand up for what he believed was right, his curiosity 
and wide ranging intellect and his tendency to burst forth in song in 
just about any circumstance.

Cremation has taken place. There will be a memorial service Saturday, 
August 2, 2008 at the Schubert Centre, 3505 30^th Avenue, Vernon, at 11:00 AM.

Please, no flowers. Donations can be made in his name to the BC 
Cancer Agency, Southern Interior, 399 Royal Avenue, Kelowna, V1Y 5L3 
or the Vernon and District Hospice House, 3506 27th Avenue, Vernon, V1T 1S4.


Tom is quite right to challenge the prevailing view that we are not 
already witnessing many of the manifestations of depression that were 
the hallmark of the depression of the 1930s. (By the way, I wonder 
why no one has mentioned the 'great depression' in Britain after the 
financial crash in 1873 until circa 1896?) Still, that is not my 
point. We will not relive the depression of the 1930s for a number of 
reasons that have been mentioned on this list. But, equally, we will 
not relive the recovery of the '40s, '50 and '60s. The whole 
discussion of Fed and US gov't policy that I see in the financial 
press and on the media and even see on this list seems to me to be an 
Alice in Wonderland dreamscape because it assumes that once we settle 
the subprime debt problem and get the housing market back on course 
and get consumers buying (on the cuff) again, the economy can resume 
its upward and onward course without major deviations from the path 
of the last half-century. Nothing could be more delusionary because 
it ignores several immutable facts:
global warming, peak oil, peak water, peak food (and other 
commodities), overpopulation, deforestation, etc. etc.

Let me be more explicit. The 1930s were, as Keynes clearly pointed 
out, a period of insufficient demand, and indeed the whole canon of 
Keynesian thought pushed for supplementing aggregate demand with 
government expenditures, tax cuts, investment incentives, 
redistributive transfers – anything to increase C + I + G + (X-M) in 
the classic Keynesian formulation. But fundamental to this 
prescription was the underlying understanding of insufficient 
aggregate demand relative to excess aggregate supply. Many Marxists, 
including our Jim, attribute it, at least in part, to an 
'underconsuption undertow' resulting from an increasingly unequal 
income distribution which robbed the working class of the ability to 
consume. One should also, of course, mention the collapse of 
international demand that resulted when Germany's access to borrowed 
funds to pay Britain and France its war reparations were cut off. 
Certainly, in Canada's case, it was the collapse of export markets 
for our commodities, in particular, grains, which triggered the depression.

The 2nd World War 'solved' the problem for North America by creating 
excessive aggregate demand ('military Keynesianism') but, what is 
readily apparent, is that this massive increase in aggregate demand 
(gov't expenditures approaching 50% of GNP) was relatively easily met 
with existing resources and capital stocks. That is, there was 
massive excess capacity in both capital and in commodity resources. 
There was some rationing and inflationary pressure but, in general, 
macroeconomic balance was maintained and, when the war was over, 
capacity was switched to consumer products – and to capital goods to 
restock Europe --with relative ease. Productivity increase prompted 
by the war, unions and the 'labour-management accord' meant that for 
the majority industrial workers, income increases were sufficient to 
absorb the increased output of US industry and to the extent it was 
not, the government expenditure on the military for the 'cold war' 
sufficed. Hence the 'golden age', otherwise known as 'mass-production 
for mass-consumption.'

However, this was coming to an end in the late 1960s. Though much of 
the analysis of this period stressed the re-emergence of excess 
capacity or, the other side of the coin, falling profits, little 
attention has since been paid to another phenomena that caused 
considerable comment among post-Keynesian economists at the time, the 
secular rise in real commodity prices. Though the increase was fairly 
widespread, it was the rapid jump in oil prices in 1973-4 accredited 
to OPEC that caught the attention of most. Over the next half decade 
or so the battle between capital and labour over who was to absorb 
the cost of oil rents paid to the mid-east oil barons resulted in 
inflation which again accelerated in 1978 with the second oil shock. 
This necessitated, from capital's point of view, the destruction of 
labour's countervailing power and the virtual destruction of the 
labour movement, at least in the capitalist surplus value sector. 
This was accomplished by monetarism and the severe recession of the 
early 1980s. It is no coincidence or accident that real wages have 
remained stagnant (or declined for the lower waged and minimum waged 
workers) since the mid-1970s. Family wages have increased marginally 
entirely due to increased female participation and longer hours 
worked by both men and women which allowed consumption to increase 
even as income distribution became more and more unequal.

The '70s seem to me to be a kind of pivotal decade in the post-war 
period. As mentioned real commodity prices began to rise even before 
the OPEC oil crises, real wages peaked and began falling, Bretton 
Woods was abandoned, the unions entered a secular decline in the face 
of a monetarist-neoliberal response to stagflation. At the same time 
Ehrlich published his "Population Bomb" (1968) and the Club of Rome, 
"The Limits of Growth" (1972) which highlighted for the first time 
since Malthus the physical resource limits to economic expansion and 
population growth. Malthus' prediction was countered by colonial 
expansion opening up the food resources of the new world. Ehrlich's 
and the Meadow's projections were countered by North Sea and other 
non-OPEC oil discoveries, the 'green revolution' in agriculture (made 
possible by the expansion of fossil fuel availability) and a renewed 
expansion of mineral discovery and development. This made possible 
the demand-led recoveries from the '81-'83, '91-'94, and 2001-'02 
recessions based on easy credit and monetary expansion and 
ridiculously low prices for oil.

These conditions have changed since 2002. Oil and commodities are no 
longer in elastic supply (ie real commodity prices are rising along 
with resource rents redistributing income from resource poor 
countries which now includes the United States to resource rich 
countries and regions) and the 'green revolution' is failing, in part 
due to global warming, a growing shortage of water, soil degradation, 
rising resistance to pesticides, herbicides, and the rising cost of 
fossil fuel based fertilizer.

This implies that we can not expect a Keynesian 'demand side' 
solution to the current slump/crisis nor that we can 'grow' (invest, 
consume) our way out of a recession-depression. It also suggests that 
any longer term solution must involve both a declining population and 
a major redistribution of (a declining) GDP, as well, of course, of a 
major change in our 'style' of living necessary to offset the 
increase and impacts of global warming, never mind of peak oil.

Any short term 'fix' of credit and consumption expansion will 
immediately run up against rising real energy (and food) costs, 
inflation, rising emissions (and hence climate change) and, even in 
the short run, increased shortages of water (it takes thousands of 
litres of water to produce one litre of ethanol; 3 to 6 barrels of 
water to produce one barrel of synthetic crude, etc.)
In view of these realities, I think we have to look at a quite 
different family of policies to get us out of the current recession. 
What is perhaps the most disheartening is that in the current 
presidential primary debates, one hears next to nothing from Clinbama 
indicating even an awareness of the problem. (This is not to say that 
in Canada there is any greater awareness. The Harper conservative 
government has its head firmly buried in the sand with its backside 
facing south.)

Paul Phillips

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