April 2010


The spirited attempt to see Smith as an advocate of pure capitalism, with complete reliance on the market mechanism guided by pure profit motive, is altogether misconceived. Smith never used the term “capitalism” (I have certainly not found an instance). More importantly, he was not aiming to be the great champion of the profit-based market mechanism, nor was he arguing against the importance of economic institutions other than the markets.

Smith was convinced of the necessity of a well-functioning market economy, but not of its sufficiency. He argued powerfully against many false diagnoses of the terrible “commissions” of the market economy, and yet nowhere did he deny that the market economy yields important “omissions”. He rejected market-excluding interventions, but not market-including interventions aimed at doing those important things that the market may leave undone.

Smith saw the task of political economy as the pursuit of “two distinct objects”: “first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and second, to supply the state or commonwealth with a revenue sufficient for the public services”. He defended such public services as free education and poverty relief, while demanding greater freedom for the in digent who receives support than the rather punitive Poor Laws of his day permitted. Beyond his attention to the components and responsibilities of a well-functioning market system (such as the role of accountability and trust), he was deeply concerned about the inequality and poverty that might remain in an otherwise successful market economy. Even in dealing with regulations that restrain the markets, Smith additionally acknowledged the importance of interventions on behalf of the poor and the underdogs of society. At one stage, he gives a formula of disarming simplicity: “When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.” Smith was both a proponent of a plural institutional structure and a champion of social values that transcend the profit motive, in principle as well as in actual reach ….

Amartya Sen Goes in ..

http://www.newstatesman.com/ideas/2010/04/smith-market-essay-sentiments

The struggle for control of a major natural gas supply corridor to Europe is heating up, with the two principal contenders announcing landmark agreements at the weekend in a race to get under way by the end of next year.

Both of the two proposed pipelines would supply a significant portion of Europe’s gas supplies, but increased competition from other sources means only one is likely to go ahead in the next five years, analysts say.

On Saturday, Russia signed an agreement with Austria to co-operate on the South Stream pipeline, which would transport Russian gas under the Black Sea and terminate in Austria. The day before, backers of the rival Nabucco pipeline said they were taking construction bids for that project, which would bring gas from the Caspian region and Iraq through Turkey, also ending in Austria.

Nabucco would potentially offer a link to lucrative markets for remote gas reserves in Iraq, Iran, Azerbaijan and Turkmenistan.

Vladimir Putin, the Russian prime minister, heaped scorn on the competing Nabucco proposal at a signing ceremony in Vienna, arguing it lacked sufficient gas supplies to fill the €7.9 billion (Dh38.93bn), 3,300km pipeline.


“We can guarantee Russia’s growing demand and that of essentially all our clients in Europe for the next 100 years,” Mr Putin said on Saturday. “Name me one [supply] contract that has been signed by Nabucco.”

Gazprom executives have said they see competition for Europe’s gas market increasing in coming years, not just from other pipelines but also from a global glut of liquefied natural gas (LNG) that is shipped by tanker and freely traded on the global market.


From Nichol —

Into the Ether: http://www.kushti.net/ http://kushtiwrestling.blogspot.com/

The Sea-ME-We-4 submarine cable had an breakdown between Alexandria and Marseilles, slowing the nation’s internet access to a crawl, according to Etisalat, the UAE’s largest telecommunications operator.

Reports suggest that the internet connection was cut Wednesday afternoon due to a “shunt fault” approximately 1,886 kilometers from Alexandria towards Palermo, Italy.

A shunt fault occurs when the submarine cable insulation becomes damaged and a short circuit occurs when it comes into contact with water.

The Sea-ME-We-4 connection provides the UAE with access to approximately 1,280 gigabytes per second of internet data and is approximately 18,800 kilometres long.

Of the seven cables that connect the UAE to the internet, the Sea-ME-We-4 is the primary backbone to web and contributes about 60 per cent of the country’s total online access,  according to data from telecoms consultancy TeleGeography.

The cable also provide main internet network hubs in Egypt, Saudi Arabia, Qatar, India and Pakistan with web access but it is unclear if services in those countries are also affected by the cut.

This is the fourth time the Sea-ME-We-4 cable has been severed since 2004. In 2008, the cable was severed in January and December slowing internet traffic in the region to a crawl.

A dragged anchor was blamed for the initial incident in 2008 but it is unknown why it happened a second time.

Etisalat is a partner in a US$400 million (Dh1.469 billion) submarine cable network consortium that will link India to the Middle East and Africa. Du has contributed $50m to the build of a 15,000 km cable linking the UK to India which is worth a reported $700m.

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