Two-tier Price System Research Articles

A neo-Marxist anthropology of urban workers and peasant farmers in Thailand

This manuscript is an original cultural anthropological study that is based on fieldwork done by the principal investigator, Antonio L. Rappa, on groups of urban workers and peasant farmers of Bangkok, Chiangmai, and Pattaya from 1998 to 2016. The focus of this manuscript is on how these workers survive late modernity within the neoliberal capitalist world scenario. The fieldwork also showed the importance of materialism among Thai workers and how they remain trapped in giving up the surplus labor value of their work to the bourgeoisie (Marxian Theory). Since 1932 (the Siamese and since 1946), the Thai workers have been suppressed and exploited by the ruling elite (Power Elite Theory). Whether we use a Cultural Anthropological/Marxian, neo-Marxist Anthropological, or Power Elite theory (C. Wright Mills’ Theory) approach, it remains clear in 2022 that the Thai people still continue to be imprisoned by a desire for luxury goods and services (Thorstein Veblen). Then, there is the complication of religion. At least 93% of all Thai people are Theravada Buddhists and staunchly believe in worshiping the Buddha as well as in various superstitions. The remaining 5–7% are Muslims and Christians. It is only the Muslims who have consistently given political trouble to the Bangkok capitalists but the Muslims are not socialists or communists since they believe in the god known as Allah. Ever since the 1970s, Thailand came under serious threat from communism like many Southeast Asian states. King Bhumiphon Adulyadej (Rama IX) was already a deeply respected monarch and a virtual demi-God to the superstitious and animistic Thai Buddhists. Few Thais realized at that time that the King was also a well-read scientist knowledgeable in urban planning and agriculture. Rama IX applied the knowledge that he garnered from Switzerland and Cambridge, Massachusetts, toward building a new kind of thinking, called Self-Sufficiency Economy (SSE). Rama IX’s SSE was not unique to Thailand and commonly practiced to various effects in South Asia, the Far East, and Southeast Asia. Nevertheless, the king thought that the SSE would be a good way out for his people. He believed that if each Tambon or village could cooperate using existing resources, provincial assistance in agricultural knowledge, and the model-village concept, then the Thai people would be self-sufficient in many aspects. This was also known as the One-Tambon, OneProduct (OTOP) policy. This is itself a manifestation of the materialist cultural anthropologic of Thai culture itself. The manuscript concludes with an analysis of the dual pricing system or two-tier pricing system, and why the Thai people appear to support Thorstein Veblen’s Theory and C. Wright Mills’ Theory rather than any neo-Marxist theory of land distribution and property ownership.

A Neo-Marxist Anthropology of Urban Workers and Peasant Farmers in Thailand

This article is an original cultural anthropological study that is based on fieldwork done by the principal investigator, Antonio L. Rappa, on groups of urban workers and peasant farmers of Bangkok, Chiangmai, and Pattaya from 1998 to 2016. The focus of this article is on how these workers survive late modernity within the neoliberal capitalist world scenario. The fieldwork also showed the importance of materialism among Thai workers and how they remain trapped in giving up the surplus labor value of their work to the bourgeoisie (Marxian Theory). Since 1932 (the Siamese and since 1946), the Thai workers have been suppressed and exploited by the ruling elite (Power Elite Theory). Whether we use a Cultural Anthropological/Marxian, neo-Marxist Anthropological, or Power Elite theory (C. Wright Mills’ Theory) approach, it remains clear in 2022 that the Thai people still continue to be imprisoned by a desire for luxury goods and services (Thorstein Veblen). Then, there is the complication of religion. At least 93% of all Thai people are Theravada Buddhists and staunchly believe in worshipping the Buddha as well as in various superstitions. The remaining 5–7% are Muslims and Christians. It is only the Muslims who have consistently given political trouble to the Bangkok capitalists but the Muslims are not socialists or communists since they believe in the god known as Allah. Ever since the 1970s, Thailand came under serious threat from communism like many Southeast Asian states. King Bhumiphon Adulyadej (Rama IX) was already a deeply respected monarch and a virtual demi-God to the superstitious and animistic Thai Buddhists. Few Thais realized at that time that the King was also a well-read scientist knowledgeable in urban planning and agriculture. Rama IX applied the knowledge that he garnered from Switzerland and Cambridge, Massachusetts, toward building a new kind of thinking, called Self-Sufficiency Economy (SSE). Rama IX’s SSE was not unique to Thailand and commonly practiced to various effects in South Asia, the Far East, and Southeast Asia. Nevertheless, the king thought that the SSE would be a good way out for his people. He believed that if each Tambon or village could cooperate using existing resources, provincial assistance in agricultural knowledge, and the model-village concept, then the Thai people would be self-sufficient in many aspects. This was also known as the One-Thambon, One-Product (OTOP) policy. This is itself a manifestation of the materialist cultural anthropologic of Thai culture itself. The article concludes with an analysis of the dual pricing system or two-tier pricing system, and why the Thai people appear to support Thorstein Veblen’s Theory and C. Wright Mills’ Theory rather than any neo-Marxist theory of land distribution and property ownership.

The UN Global Compact: The Challenge and the Promise

Abstract:The UN Global Compact is a voluntary initiative designed to help fashion a more humane world by enlisting business to follow ten principles concerning human rights, labor, the environment, and corruption. Although the four-year-old Compact is a relatively successful initiative, having signed up over eleven hundred companies and more than two hundred of the large multinationals, and having begun some important projects on globalization issues, there is a serious problem in that very few of the major U.S. companies have joined. While the premier U.S. companies are interested in meeting the legitimate expectations of society, there is concern centering around accountability issues. The accountability issues are in four major areas: 1. Accountability showing that the globalization of the economy actually helps the poor. 2. Accountability showing the corporate performance matches rhetoric. 3. Accountability that provides legitimacy to a two-tier pricing system and other measures that are designed to assist the poor in developing countries. 4. Accountability in the human rights area; what societal expectations are multinational companies accountable for? The article outlines the problems that the Compact brings to the fore and offers some insight from the ethical literature that may address U.S. company concerns or provide new ways of thinking about the issues. It further argues that the forum provided by the Compact may be the most effective means to gain consensus of the role of business in society.

Modeling Economic Transition: A Two-Tier Price Computable General Equilibrium Model of the Chinese Economy

This paper presents a computable general equilibrium model with a two-tier price system incorporated. The model allows for analyzing reform policies in relation to plan prices and quantities. It captures the income effects generated from divergence between market and plan prices. The model is capable of simulating the reform process of transitional economies like China. A simulation of 50 percent rise in the plan price of crude petroleum, a highly controlled commodity in China, is provided as an illustrative example to show the complexity of market responses in a transitional economy.

Pricing system and the initial public offerings market: A case of Singapore

The initial public offerings (IPOs) market in Singapore offers a unique showcase for the price discovery process of risky securities. IPOs have traditionally been offered in the primary market under the fixed price system. In July 1991, the SES introduced an option to issuers for IPOs to be offered on a two-tier pricing system. This allows issuers to incorporate a tender tranche in the public offer. Our findings confirm the intuition that fixed pricing and tender pricing respectively induces the dominant participation of retail and institutional investors. This regulatory and institutional framework allows for the refutable implications of the information asymmetry and estimation risk hypotheses to be tested directly. Initial price performance of IPOs under the two-tier pricing system offers prima facie evidence that is consistent with the information asymmetry hypothesis. However, further analyses suggest the pricing of estimation risk in the IPO market and explains why the two-tier pricing system suffers a cutback.

Banks as Interest Rate Managers

Most banks have a two-tier pricing system, offering accounts at market-related interest rates and at posted rates that are changed at discrete intervals. In this paper, I develop a model of bank interest rate management. I consider a bank with two classes of loans and deposits in its balance sheet: One pays a market rate of interest, the other a posted rate. Market rates are exogenous and evolve stochastically over time. Posted rates are altered intermittently by the bank itself. The bank faces imperfect arbitrage by its customers between posted and market rate funds. Under simple assumptions about the stochastic process governing the market rate, I derive optimal decision rules for the adjustment of the posted rate and determine conditions under which these rules are asymmetric. A key prediction of the model is a negative correlation between market loan rates and the “gap”; this is more consistent with the behavior of British banks than is the contrary prediction of more “standard” models.

Pricing Water for Power Generation: A Two-tier Approach

Current arrangements for pricing water [or power generation are often deficient in providing signals in which i~O base investment decisions and in allocating water to its highest valued use. To address these shortcomings, a framework is proposed which relies on a two-tier pricing system. Firstly, joint fixed costs are allocated in the form. of a. fixed access charge to the various users, therefore recovering costs and providing an incentive in which to proceed with socially beneficial investment. Secondly, entitlements to water are to be traded at prices and conditions negotiated between the relevant parties to facilitate the efficient allocation of the water resource among competing uses.

Continuity and change in China's rural development: collective and reform eras in perspective

This book is a detailed study of rural reform in China. After the death of Mao, and with the ascendency of Deng Xiaoping in 1978, China began a programme of agricultural reform intended to increase productivity. Three major changes moved the agricultural sector from a centrally planned system to a more market-oriented system. First, replacement of collective teams by farming by households. Second, an increase in free markets for rural products, and increase in state prices for farm products, and the partial elimination of the two-tier price system. Third were changes in the economic structure that facilitied greater productivity and a 250% increase in average real rural incomes between 1979 and 1986. This book is unique in that it studies a single township (Dahe in Hebei Province) in depth over the two periods, thus providing a great deal of data about the effects of the reform at the village level. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/9780195078725/toc.html

The Impact of Two-Tier Producer and Consumer Food Pricing in India

India's government procures agricultural products such as rice, wheat, and sugar at below-market prices and sells them in both urban and rural ration shops. The rest of such crops is sold in the open market. This creates a two-tier price system for consumers and producers. Many (including Dantwala, Mellor, and Hayami, Subbarao, and Otsuka) claim that such a policy raises the open-market price so much that it ultimately increases the average price received by farmers. If true, the gainers would be the farm sector as a whole and low-income urban consumers with access to the ration shops. Losers would be the high-income urban consumers who buy at the open-market price. This view has provided an intellectual basis for the policy. The author examines a variety of cases: with and without rationing, with rationing by ration cards or by queuing, with and without the urban rich having access to the ration shops, with and without free trade, and with a marketable surplus with positive, negative, or zero price elasticity. He finds that in most cases the policy's impact on the average price is either negative or ambiguous, and it is negative in the more realistic cases. A negative impact implies that farmers on the whole lose from the procurement policy. But small farmers who are net buyers of the procured crops, and landless laborers, gain from a lower average price in the short run (especially if they have easy access to the rural ration shops). The long-run effect depends on the impact of the lower average price on rural employment and wages.

China's exchange rate and the balance of trade

This paper examines the responsiveness of the balance of trade of the People's Republic of China to the real exchange rate. We find that, in both the short-run and the long-run, devaluation serves to improve the balance of trade. Using quarterly data for 1980:I to 1989:IV we show that the bulk of the response to devaluation occurs over a one year period, with noJ-curve effect. These results suggest that the two-tier price system and other measures to liberalize the Chinese economy have made the exchange rate an effective indirect tool for regulating trade.

Modelling China's Economy in Transition

The rapid decentralization in China in the last decade has dramatically reduced the role of central planning. However, the lack of a capital market has promoted rent seeking and resulted in an investment system trapped by the existing structure. The lack of a labor market has led to wage drift. The lack of reform in the social welfare system has caused distorted consumption demands. Moreover, the enterprise-by-enterprise negotiation under the Two-tier Pricing System and the Contract Management Responsibility System makes it dificult to use indirect policy instruments effectively. This paper presents a model incorporating these specific features in order to mimic the actual operation of the economy. Forecasts and policy simulations are made for the period from 1987 to 1995. The results have produced, for the first time, some empirical evidence for a number of hypotheses put forward by Chinese economists in the last five years.

CREDIT CARDS AND THE TWO‐TIER PRICING CONTROVERSY: A COMMENTARY

This study evaluates the cost and benefits of credit cards as they relate to the two-tier pricing controversy concerning the use of credit cards. A two tier pricing system is one in which merchandise has two prices -- one for cash and one for credit. Under a two-tier pricing system, a cash customer may be charged lower prices than credit card customers. Without such a system it is sometimes argued that cash customers could be subsidizing the cost of credit card plans. In theory, the point of two-tier pricing systems is to permit a reallocation of costs in which the merchant can offer a price differential to cash customers to reflect the alleged savings realized by not having to pay the card issuer a percentage of the sales price to service the transaction.The two-tier pricing controversy involves several major issues. Of paramount concern is the validity of the underlying premise of two-tier pricing, namely, that cash customers are subsidizing credit card customers and should be charged a lower rate. If so, another issue involves whether a price differential should be offered In the form of a discount for cash customers or a surcharge for credit card customers. Finally, the issue concerning federal preemption of state usury laws is a matter of controversy. At the present time these three issues have been tentatively resolved with the passage by Congress on February 6, 1976 of S.2672 (Public Law 94-222). This legislation provides permission for merchants to grant discounts of up to 5% for the payment of cash but prohibits imposition of surcharges on credit card sales under the Fair Credit Billing Act. Cash discounts above 5% are permitted but the merchant would have to comply with truth-in-lending and state usury laws, which effectively precludes discounts exceeding 5%. This legislation will expire three years from date of enactment.This study contends that considerable research is needed to resolve these issues before final legislation is promulgated. As a preliminary step in this direction, a review, analysis, and synthesis was made of much of the literature concerning credit cards and their relationship to the two-tier pricing controversy. Cost data were also generated to provide a partial empirical basis for the analysis.To begin to develop a sound and equitable solution to the two-tier pricing controversy, including the cost benefit characteristics of credit cards and their alternative means of payment and credit, empirical answers to several questions must be found. At the present time much of what is known is based on advocacy hearsay, opinion, simplified and/or abstract theory, and rules of thumb. Among the questions that need answers before a rational decision can be made concerning two-tier pricing are the following:1.How would the real world competitive nature of trading area retail markets affect the so-called economic equivalency of discounts and surcharges?2. Is the impact of discounts on consumer behavior the same as that of surcharges?3. Would two-tier pricing discriminate against segments of the credit card using public?4. Is it equitable to impose two-tier pricing as a means of isolating credit card costs without also legislating separate pricing for each identifiable service offered by merchants?5.What would be the impact of discounts and surcharges on the level of economic activity?6. What are the costs (net) and benefits to the affected parties of alternative payment mechanisms (e.g., cash, checks, charge accounts, credit cards) and how can these factors be isolated, measured, collected, and compared?7. What are the costs (net) and benefits to the affected parties of alternative sources of credit (e.g., check credit and overdraft plans, installment credit, charge accounts, credit cards) and how can these factors be isolated, measured, collected, and compared?The last two questions are directly related to the purpose of this study. The others are outside the scope of this study.Based on the analysis and synthesis of the relevant information to the purpose of this study, the following tentative conclusions were reached:1. No “final” legislation concerned with two-tier pricing should be enacted until this important issue can be resolved on the basis of rational, objective, and empirical research. This research should include the economic, psychological, and equity aspects of two-tier pricing as related to card issuers, banks, merchants, consumers, and the economy.2.Those who favor two-tier pricing are implicitly assuming a partial unbundling of the costs of alternative payment mechanisms and sources of credit without sufficient evidence concerning their relative size and the benefits of these alternatives to the various affected parties.3. From the standpoint of the consumer, merchant and bank, the costs and benefits of credit cards combine to offer both a desirable market proven alternative method of payment and source of credit. These advantages are too important to the affected parties to be risked by legislation not based on valid empirical research.