Sunday, September 11, 2016

Michael Roberts — The end of globalisation and the future of capitalism


Must-read. Michael Roberts looks at capitalism in terms of the global economy.

I have been emphasizing for some time that the only closed economy is the global economy and therefore it is "the economy." Speaking of the "the economy" of regions and counties where "the economy" is open is very imprecise without tracing the tentacles, which is complicated and difficult to do and makes simple modeling intractable.

Michale Roberts' Blog
The end of globalisation and the future of capitalism
Michael Roberts

18 comments:

Matthew Franko said...

We have the ITAs (International Transaction Accounts) as an extension of the NIA framework... this is not that complicated...

Tom Hickey said...

It's not that complicated only if it is recognized that neoliberalism, neo-imperialism and neocolonialism are extensions of their historical precedents of liberalism, imperialism, and colonialism. That is what capitalism was built on and remains built on. That also accounts for the conflict between the socialist and capitalist countries, too, as well as the capitalist demand that Russia and China becomes vassal states since that is the "natural order," just as neoclassical economics describes "the natural order." This has been the course of history since the Great Divergence and the rise of the West, which were politically and militarily imposed. It began in 1492 with the quest for non-European sources of gold and sliver to finance Europe's militaries and is still ongoing. Post WWII the emphasis shifted from gold and silver to oil and other viral resources as well as cheap labor and foreign markets.

Matthew Franko said...

" historical precedents of blah... blah... blah...."

Tom,

When meteorologists at the Tropical Prediction Center update their hurricane track forecasts, do they take into account what the model said three days ago?

No.

They re-set t=0 to today and then re-run the model based on current conditions...and re-issue the 48 hour track from the new t=0...

You have to constantly re-run it as time progresses using current conditions not what was happening 3 days ago... or three centuries ago...

You are looking at things as like one single long time continuum...

I dont think deterministic systems are typically approached that way from a time domain perpsective... ie as "continuous time"...

Tom Hickey said...

Have you heard of path dependency and hysteresis?

Moreover there are policy agendas including hidden agendas. The US has had a consistent policy agenda since WWII that makes US behavior quite predictable. The deep state manages the hidden agenda.

No mystery why Obama did what he did after he entered office even thought it contradicted what he had said previously. There are slight variations depending on who is POTUS but they are only slight variations. The trajectory remains the same.

Matthew Franko said...

Tom,

In both time domain and spatial domain, you are not seeing intervals or boundaries or something like that...

This is like the left ignoring national boundaries (spatial domain) and always referring to ancient history (time domain)...

https://en.wikipedia.org/wiki/Spatial_analysis

https://en.wikipedia.org/wiki/Time_domain

Could just get back to cognitive studies again...

FD I was immersed YUGE in both spatial and time domain forms in my STEM training... ie my whole thought process now reflexively orients iaw time and spatial domain characteristics...


Tom Hickey said...

Hypotheses based on deterministic functions and testing protocols, please.

Matthew Franko said...

"including hidden agendas."

Consider you are conflating the prevailing libertarian biases of tptb with the existence of some sort of an "agenda"...

There is no "neo-liberal conspiracy!"... tptb have been staffed with libertarian cognitive biased people... what some might call "group think"...

When you say "group think" it is just pointing out a cohort with the same cognitive biases... its not a "conspiracy!"

You cant say "group think!" and "agenda!" at the same time... its one or the other...

So if one biased cohort is seen as failing, then we should try another biased cohort...

Tom Hickey said...

Some of the agenda has been stated publicly. Snowden, Manning and other whistle blowers have exposed parts of the hidden agenda.

Tom Hickey said...

Hypotheses based on deterministic functions and testing protocols, please.

Let me clarify.

I am open to a deterministic model based on causality in which measurable changes in independent variables lead to measure changes in dependent variables. These are few and far between in the social science, where models are based on "stylized facts" that are simplifications rather than actually measurable facts or events.

For example, show a model based on the analogy of an electrical or electronic circuit that is based on measurable variable instead of stylized facts or stipulated postulates.

Almost all regularity involving human agency that is actually measurable is stochastic, based on probabilities involving distributions in populations.

So I am skeptical of claims about deterministic models in social sciences, including econ, to the degree that agency is involved. For example, in spite of all the handwaving about rational choice and optimization of preferences, no calculus has been forthcoming that related measurable inputs to measurable outcomes

Ryan Harris said...
This comment has been removed by the author.
Matthew Franko said...

"no calculus has been forthcoming that related measurable inputs to measurable outcomes"

They dont have the inputs Tom.... but Mike might...

You have to re-set t=0 at 1971 when we went over to a numismatic system and left the gold/metals...

"inputs and outputs"

Even the MMT elites violate this all the time when they say "deficit spending!"... they dont have an input and an output here...

The input would be the govt withdrawals and the output would be a function of those withdrawals...

Tom Hickey said...

Matt, if it is deterministic as claimed, then why are there no models. It's not like the math chops are lacking. It's measurable input. The the degree there is no precisely measurable input and no functions shown to be reliable based on prediction of output, then stochastic method is all there is left.

As Ryan points out. there are similar issues at the frontier of physics, but classical physics is well-understood and even though most people don't understand the theory they can witness the result in technology, which is proof enough. That's not the case with econ or policy science. The best that is available is estimation. Precision remains elusive.

Matthew Franko said...

I dont think Ryan is talking about Newtonian physics Tom...

Newtonian physics imo is pretty solid theory... as is Euclidean geometry... throw 'time' in there too....

Those two things, Newtonian physics and Euclidean geometry imo have gotten us a long way from a material systems perspective.... all of the 'dark matter!" and "black holes!" stuff comes in thru some other theory like relativity or something...

As far as econ... the time was restarted to t=0 as recent as 1971 so this is not that long ago .... imo seems to be moving in our direction but very slowly... extremely slowly... taking decades...

A key (deterministic) input would be how much the govt withdraws from its account and 99.999% of economists in the academe are probably all going around thinking "we're out of money!" due to strong libertarian cognitive biases so the whole academe is still remaining stupid in this....

Without the academe on board this is going to take us a loooong time....

This is why I advocate for a return to higher rates to at least give us some fiscal reprieve for a while ... meanwhile we dont need the zero rates hammering us over the heads in order to make our technical arguments at the same time...

Actually we can use the more robust rate environment to help us illustrate what is going on empirically...

So why the MMT elites would want low rates to currently remain in place really escapes me... makes me wonder if they really know what is going on...

Tom Hickey said...

So why the MMT elites would want low rates to currently remain in place really escapes me... makes me wonder if they really know what is going on...

The MMT economists are never ever going to recommend using monetary policy to do fiscal adds through interest rates. In the view of MMT, it's ass-backwards.

It also contradicts cb assumptions, so they will never do it either.

There is an established way to do fiscal and if the politicians in charge of fiscal don't act on it, then the electorate can replace them.

It's anti-democratic enough to give the cb independent power to conduct monetary policy.To give them fiscal powers too would be end democracy for all practical purposes.

Ryan Harris said...

Sorry I deleted my post, didn't think anyone had seen it. It was criticism of econ people. And MNE always get grief for harshly criticizing. So when I catch myself making a harsh criticism, I delete it on the theory that most people in econ understand their errors and don't need me harping on it.

Ignacio said...

"I delete it on the theory that most people in econ understand their errors"

Don't think so... the definition of an error is not understanding what you are doing wrong. Needs to be pointed out, over and over.

Kaivey said...

That's interesting, I will have to do more research on that.

Gary Hart said...


The only president since WWII to go off course was Kennedy and what happened to him was a demonstration to what could happen to any president who doesn't fall in line. Trump will find out the truth if he wins.