tag:blogger.com,1999:blog-2761684730989137546.post6853068943198924015..comments2024-03-28T04:13:36.779-04:00Comments on Mike Norman Economics: Robert Paul Wolff — The Connection Between Expropriation and Exploitation, Part Onemike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger59125tag:blogger.com,1999:blog-2761684730989137546.post-16461441038269659452017-01-04T13:18:49.533-05:002017-01-04T13:18:49.533-05:00I think the first step in engaging people should b...I think the first step in engaging people should be first to consider the open possibilities given MMT analysis in which the constraint is real resources availability, with affordability not a issue.<br /><br />The second step is what it would take socially, politically and economically to create an ideal society and the steps needed to progressively actualize this vision based on present conditions.<br /><br />One aspect is negative, removing the obstacles and the other is positive, actualizing the vision <a href="https://en.wikipedia.org/wiki/Iterative_and_incremental_development" rel="nofollow">Iteratively and incrementally</a>.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-78439549375736559722017-01-04T13:11:48.091-05:002017-01-04T13:11:48.091-05:00continued
Instrumental Analysis and the Method of...continued<br /><br /><i>Instrumental Analysis and the Method of Functional Finance<br /><br />Lowe's investigations of the technological and structural features of contemporary capitalism from the 1920s to the 1950s led him to the position that modern industrial systems exhibit inherent macroeconomic instability, necessitating an abandonment of the traditional deductive method and its replacement with an alternative instrumental method for economic theory and public policy. Rather than taking only the initial conditions as given, and employing deductive analysis to predict and explain, Lowe proposed also taking as given a vision of desired macro-outcomes. These macro-goals would not be determined by economic analysis, but rather would be independently determined by democratic political process. Analysis would then "work backwards" from the macro-goals to the economic means for their attainment (Lowe, 1965; Forstater, 1997).<br /><br />Such a conceptualization of the means-ends relation is also found in Lerner's functional finance. Functional finance was first put forward by Lerner in his article, "Functional Finance and the Federal Debt" (1943) and in his Economics of Control (1944).2 Sound finance confuses the means and the ends; a balanced budget is taken to be the end. It is seen as "good" in and of itself. In many cases it is even a politically stipulated goal. For Lerner, what matters is the effects of the government budget and other fiscal and monetary policies. Is the current fiscal stance goal-adequate? Does it promote our macroeconomic goals?</i>Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-85387395784121276932017-01-04T13:10:51.589-05:002017-01-04T13:10:51.589-05:00Mat Forstater, Toward a New Instrumental Macroecon...Mat Forstater, <a href="http://www.levyinstitute.org/pubs/wp/254.pdf" rel="nofollow">Toward a New Instrumental Macroeconomics: Abba Lerner and Adolph Lowe on Economic Method, Theory, History and Policy</a> presents a vision that I agree should guide the way forward.<br /><br /><i>This paper argues that the ideas of Abba Lerner and Adolph Lowe contain overlapping and complementary insights and themes that may contribute to the development of a new approach to macroeconomics, and that have rather specific practical policy implications. This approach might be called Instrumental Macroeconomics, after Lowe's instrumentalism, but it could be termed Functional Macroeconomics after Lerner's functional finance without changing the intended meaning.1 Terminology aside, what is required today is a macroeconomics that considers macro-policy goals at the ground level of theoretical practice (a political macroeconomics), a macroeconomics that recognizes that the system is dynamic and transformational, with major features changing over time (an historical macroeconomics), a macroeconomics that pays careful attention to institutional frameworks and arrangements (an institutional macroeconomics). What is required is a macroeconomics rid of neoclassical microfoundations, but that considers sectoral as well as aggregate relations (a structural macroeconomics), technological change as well as monetary production, and that avoids the unacceptable mechanism of aggregate models that bypass the complex problems of human agency by slipping in unacceptable motivational and behavioral assumptions.<br /><br />The works of Lerner and Lowe serve as an interesting point of departure in thinking about such a new approach to macro theory and policy. While there are some important areas of overlap in their work and thought, Lerner and Lowe also have some important differences in areas of emphasis, which, it shall be argued, are strikingly complementary. Lerner's functional finance deals with aggregate proportionality and balance, while much of Lowe's work additionally emphasizes sectoral relations. While full employment and price stability were lifetime concerns of both, Lerner–following Keynes--focused more on monetary factors, while Lowe emphasized issues of structural and technological change. A Lowe-Lerner synthesis offers a powerful starting point in fleshing out an alternative approach to macroeconomic theory and policy, one which–because of its careful attention to historically changing social and institutional structures–is as fresh and relevant today as it was when Lerner and Lowe began formulating their historical and institutional approach to macroeconomic theory and public policy.</i><br /><br />continuedTom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-722900315072859802017-01-04T00:39:40.902-05:002017-01-04T00:39:40.902-05:00I have told this story about Marx as he who shall ...I have told this story about Marx as he who shall not be mentioned before, but it is worth telling again. <br /><br />A school at which I teaching received a grant to invite and videotape well-known of professors on different subjects. I was asked to invite a philosopher, so I invited a former professor that I got along with well who held a chair at a prestigious Ivy League university. Subsequently, I was told by the administration that I would have to disinvite him because he had written a book with "Marxism" in the title. I said that the book was contra Marxism. They said that it didn't matter because the donors might not get that fine point. Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-17573726025876623092017-01-04T00:32:52.688-05:002017-01-04T00:32:52.688-05:00On good logic that means that the grad school curr...<i>On good logic that means that the grad school curriculum by which you study did not pick all the important ones or "first tiers", no?</i><br /><br />"Philosophy" in the West means the Western intellectual tradition. That's just the way it is. <br /><br />In my day, "history" meant Western history and that pretty much excluded Eastern Europe and Russia. I had to read that on my own, too.<br /><br />Westerners in general have a superiority complex as far as I can see. I am not sure that has changed all that much, although there is wider appreciation in the West than when I was studying. But a lot of the understanding is fanciful.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-12820034097365069902017-01-04T00:22:59.461-05:002017-01-04T00:22:59.461-05:00I am sticking to my simple story. It's working...I am sticking to my simple story. It's working for me. The message has to be very simple and repeated over and over. <br /><br /><i>It's about real resource availability now and in the future. A sovereign current issuer like the US can afford to fund anything that the voters want to see happen as long as the real resources are available. <br /><br />The reason that this is not happening is due to the people in power that don't see it their interest. They are the takers. <br /><br />The first step is getting the money out of politics and locking the revolving door. Only then is it possible to level the playing field.</i><br /><br />Just keep hammering on that and answer questions as they come up.<br /><br />Most people can't even get their minds around Warren's 7DIF even after they read have it several times. And I am not talking about financial and economic illiterates either. It takes them about two seconds to fall back into their old patterns. It contradicts most people's deeply held beliefs, on one hand, and it seems counter-intuitive on the other. <br /><br /><i>So, what, exactly, makes socialism undoable and the JG doable? Prove to those guys that they are mistaken and the JG is eminently doable.</i><br /><br />I don't see the JG as the lede. The first step is monetary operations, sectoral balances and functional finance put in very simple terms — currency issuer v. currency users, government balance = nongovernment balance, and affordability is never a problem for the federal government in meeting its goals.<br /><br />The key is democracy as government of, by and for the people instead of "those who own the country should govern the country."<br /><br />People then obviously ask, "Well, what about….? Just answer the questions as they come up.<br /><br />The JG? Way down the line. People ask questions in line with their interests. Almost no one I talk to is concerned about full employment. When it comes up, I explain that the choice is between a buffer stock of employed and a buffer stock of unemployed. The unemployed are a real resource that government can put to work by funding, so it is wasteful (inefficient) to idle them.<br /><br />I don't believe in "full employment" anyway. Technology increases productivity, which increases the opportunity for leisure. Now this increased opportunity for leisure is being distributed to those that control technology (means of production).<br /><br />I have not found socialism to be much of an issue. The people that I interact with would prefer to live in a social democracy as an update New Deal, e.g., free public education preschool thru PhD (as desired), single payer health care (Medicare for all), and federally funded pension system. When they get it that there is no financial reason not to do this their eyes are opened. The JG can be accounted for as an update to the New Deal WPA and CCC with a universal and permanent job guarantee as a buffer stock of employed.<br /><br />The way I talk about socialism is in terms of economic rent, which is extracted based on power. The real issue is power and who wields it for what purpose. Most people have no problem getting that, being on the short end of the stick. The real issue is leveling the power and ending the rent extraction and rent seeking.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-91998113907302238472017-01-03T23:24:53.405-05:002017-01-03T23:24:53.405-05:00Second and third tier.
Non-Westerners were not in...<i>Second and third tier.<br /><br />Non-Westerners were not included in the curriculum when I was in grad school. I had to pick that up on my own.</i><br /><br />On good logic that means that the grad school curriculum by which you study did not pick all the important ones or "first tiers", no?<br /><br /><i>I actually spend relatively little time reading econ.</i><br /><br />I totally believe you. :-)<br /><br />Then, the reasonable thing to do is to be very cautious with statements about things you may not be entirely sure.<br /><br />----------<br /><br />But this is what I think is more important:<br /><br /><i>I support MMT because it it not so far out of the mainstream to be [un]doable.</i><br /><br />MMT describes how economies like the US, Australia, UK, Japan, already work, Tom. You know that.<br /><br />The part that needs to be done, the bit that needs to be doable, is largely the Job Guarantee. <br /><br />I don't need to remind you, either, that among the post Keynesians (including some pretty close to MMT) the JG seems to be the big problem: they are pretty sure the JG is not doable at all. According to these people there is a need for unemployment if one is to be half the men they are.<br /><br />Kalecki seemed to believe it would take extensive popular mobilization to get full employment as a permanent goal of economic policy.<br /><br />Exactly the same extensive popular mobilization is required for socialism.<br /><br />So, what, exactly, makes socialism undoable and the JG doable? Prove to those guys that they are mistaken and the JG is eminently doable.<br /><br />From where I stand, the enemies of socialism are exactly the same enemies of the JG and for the same reasons.Magpiehttps://www.blogger.com/profile/07528637318288802178noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-56593184655651197192017-01-03T01:05:44.009-05:002017-01-03T01:05:44.009-05:00I should qualify. I think that most of economics i...I should qualify. I think that most of economics is pretty useless wrt to both understanding what is happening in the world and also policy formulation. The reality is what policy can get through the political process and how it is implemented. This has little to do with theoretical econ.<br /><br /> I appreciate Marx because he understood that its all about application of class power and conflicts among factions in the power elite over the levers of power. He also saw that capitalism is about private ownership that is based on expropriation of the commons and that the while the balance of power is actually held by the petite bourgeoise, they identify their interest with the haute bourgeoise rather than the proles. This says more about the reality of political economy that all the theoretical economists put together.<br /><br />MMT is useful, however, in that it deals with actual operations rather than theory. The takeaway is that as long as real resources are available, a currency sovereign can put them to use. I remember the day that I asked Warren that when he was commenting and he replied in the affirmative. That was revelatory for me. The problem is not economic, it is educational and political — education the electoral that they can afford any kind of system they chose as long as real resources are available to support it in the present and future. Then we can debate what kind of society we want to create, but that means doing away with the power elite that stand in the way first. All the rest is secondary.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-37339086867501943012017-01-03T00:46:25.601-05:002017-01-03T00:46:25.601-05:00That's why the history of economic thought is ...<i>That's why the history of economic thought is important. I'd suggest you read Marc Lavoie's "Should Sraffian economics be dropped out of the post-Keynesian school".</i><br /><br />One has to budget one's time on priorities. While I am interested in the history of economics and would like to know more about PKE, it's not anywhere near the top of my list in importance. I actually spend relatively little time reading econ.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-65280801326338624102017-01-03T00:31:46.293-05:002017-01-03T00:31:46.293-05:00see, then, that in that guest list Marx, Schopenha...<i> see, then, that in that guest list Marx, Schopenhauer, Nietzsche, John Stuart Mill, Jeremy Bentham, Bertrand Russell, Wittgenstein, Kierkegaard, Comte, Pascal are not included (to mention, off the top of my head, only the Westerners: no non-Westerners at all).</i><br /><br />Second and third tier. <br /><br />Non-Westerners were not included in the curriculum when I was in grad school. I had to pick that up on my own. Non-Western philosophy developed along different lines with different methodology and different concerns. <br /><br />The Big Five, what we would now call "influencers," are Plato, Aristotle, Descartes, Hume and Kant. They established the enduring questions in metaphysics, epistemology and ethics, and to a lesser extent in social and political philosophy. These are the comprehensive thinkers that established traditions.<br /><br />The others are of particular interest rather than general, so they are not as widely read or referred to.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-35606255118960761642017-01-03T00:09:54.324-05:002017-01-03T00:09:54.324-05:00I support MMT because it it not so far out of the ...I support MMT because it it not so far out of the mainstream to be doable. <br /><br />I have said that I prefer a more radical approach, but that is not going to happen without something drastic happening that puts more options on the table politically. <br /><br />Nothing radical is going to happen in economic policy with out removing the power elite or neutering theme.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-28396089709198670092017-01-02T23:35:25.827-05:002017-01-02T23:35:25.827-05:00He [Marx] was not considered important in comparis...<i>He </i>[Marx]<i> was not considered important in comparison. The big ones are Plato, Aristotle, Aquinas, Descartes, Hume, and Kant. Th second tier are people like Plotinus and Augustine, Leibniz and Spinoza, Berkeley and Locke, and maybe Hegel.</i><br /><br />I see, then, that in that guest list Marx, Schopenhauer, Nietzsche, John Stuart Mill, Jeremy Bentham, Bertrand Russell, Wittgenstein, Kierkegaard, Comte, Pascal are not included (to mention, off the top of my head, only the Westerners: no non-Westerners at all).<br /><br />I can imagine worse company, if one is to be snubbed.Magpiehttps://www.blogger.com/profile/07528637318288802178noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-50212359156848995442017-01-02T23:34:50.412-05:002017-01-02T23:34:50.412-05:00I didn't mention Sraffa since I don't know...<i>I didn't mention Sraffa since I don't know. I am not a student of Post Keynesianism and its history. My impression is that Sraffa is associated with PKE as a matter of association and contribution than identification. Something like Schumpeter wrt Austrian economics.</i><br /><br />I'm sure you are sincere when you say you "don't know".<br /><br />That's why the history of economic thought is important. I'd suggest you read Marc Lavoie's "Should Sraffian economics be dropped out of the post-Keynesian school".<br /><br />Lavoie places the focus of the conflict in disagreements between "Fundamentalist Keynesians" and "Marxian Sraffians" (his categories). The latter represent the "surplus approach": who gets what out of the wealth socially produced.<br /><br />The former reject it. Instead, they consider "Keynesian uncertainty" (by extension animal spirits and the confidence fairy) sacrosanct: the Word of the Lord.<br /><br />In spite of attempts to synthesise the two currents (there were conferences in Trieste, Italy between 1980 and 1992 to that effect) "conflicts between strong personalities" explain the failure of the Trieste thing.<br /><br />You and most post Keynesians are more influenced by the Fundamentalist Keynesian side.<br /><br />What Lavoie diplomatically doesn't mention -- but diplomacy doesn't constrain me -- is that Sraffa and his ideas were well received and seen by Fundamentalists as useful tools in their fight against mainstream economics: Sraffa was the leading post Keynesian theoretician in the Cambridge Capital Debates. Good enough to hit Samuelson and the <br />"bastards Keynesians" over the head, but not politically convenient. Remember the surplus approach: who gets what.<br /><br />This also explains why post Keynesians don't have a price theory. In Fred Lee's words:<br /><br /><i>Post Keynesian price theory has no real existence beyond the idiosyncratic writings of various Post Keynesian economists, its various renditions are theoretically incompatible to a lesser or greater degree, and it has not been entirely freed from neoclassical concepts and terminology. My objective in this book is to move Post Keynesian analysis forward towards a more comprehensive, coherent, realistic - and, indeed, believable - non-neoclassical theory of prices by setting out its non neoclassical pricing foundation by developing an empirically grounded pricing model.</i><br /><br />A price theory is not politically convenient. The end result is that post Keynesians not only don't have a price theory: they are incapable of understanding why they need one. Or, as you put it:<br /><br /><i>This is chiefly a moral issue and framing it that way is the way to go from the pov of persuasion.</i><br /><br />In a way, the parallel with MMT is striking: MMT and functional finance are alright, so long as full employment (politically inconvenient) is left aside. MMT, like Sraffa's maths, is only a useful theoretical cudgel to hit deficit hawks/doves over their heads.<br /><br />Lavoie, however, considers that<br /><br /><i>[T]here is no true incompatibility between Sraffian economics and the rest of the post-Keynesian school.</i><br /><br />Similarly, from a theoretical point of view, I think there's no true incompatibility between MMT and Marxism (dogmatic or not).Magpiehttps://www.blogger.com/profile/07528637318288802178noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-85091641342572830042017-01-02T20:42:34.973-05:002017-01-02T20:42:34.973-05:00The injection has to go where it belongs: the dism...The injection has to go where it belongs: the dismal science.Peter Panhttps://www.blogger.com/profile/09473311771939167712noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-20154878129167969992017-01-02T17:27:32.920-05:002017-01-02T17:27:32.920-05:00The work ethic, Protestant or otherwise, is sociol...<i>The work ethic, Protestant or otherwise, is sociological; power is a sociological category when described in non-economic terms; class is sociological, but not the Marxist definition of class, which is economic.</i><br /><br />Try telling that to economists.<br /><br /><i>How can you remain objective if political ideology is introduced?</i><br /><br />That's the economists' answer to injecting class into economics. Injecting class and power = Marxism in their view.<br /><br />Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-12572622693326813752017-01-02T16:45:31.805-05:002017-01-02T16:45:31.805-05:00The work ethic, Protestant or otherwise, is sociol...The work ethic, Protestant or otherwise, is sociological; power is a sociological category <i>when described in non-economic terms</i>; class is sociological, but not the Marxist definition of class, which is economic.<br /><br />Sociologists are not forbidden to write about other fields, or to express their political views. But science is about describing reality, in a verifiable and objective manner. How can you remain objective if political ideology is introduced?Peter Panhttps://www.blogger.com/profile/09473311771939167712noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-91418908128792765462017-01-02T15:33:24.296-05:002017-01-02T15:33:24.296-05:00At the time Marx was writing, there was no field o...At the time Marx was writing, there was no field of sociology or economics. Both field were just emerging.<br /><br />Marx's work on capitalism was sociological in today's terms and class and power are sociological categories rather than economic ones.<br /><br />Weber also wrote on capitalism from the sociological perspective in <a href="https://en.wikipedia.org/wiki/The_Protestant_Ethic_and_the_Spirit_of_Capitalism" rel="nofollow">The Protestant Ethic and the Spirit of Capitalism</a><br /><br />C. Wright Mills, the author of The Power Elite,<a href="https://en.wikipedia.org/wiki/The_Power_Elite" rel="nofollow">The Power Elite</a> was a also sociologist.<br /><br /><i>C. Wright Mills was heavily influenced by pragmatism, specifically the works of George Mead, John Dewey, Charles Sanders Peirce, and William James.[12] The social structure aspects of Mills' works is largely shaped by Max Weber and the writing of Karl Mannheim, who followed Weber's work closely. Mills also acknowledged a general influence of Marxism; he noted that Marxism had become an essential tool for sociologists and therefore all must naturally be educated on the subject; any Marxist influence was then a result of sufficient education. Neo-Freudianism also helped shape Mills' work.[13] Mills was an intense student of philosophy before he became a sociologist and his vision of radical, egalitarian democracy was a direct result of the influence of ideas from Thorstein Veblen, John Dewey, and George Herbert Mead.[14]<br /><br />C. Wright Mills was heavily influenced by pragmatism, specifically the works of George Mead, John Dewey, Charles Sanders Peirce, and William James.[12] The social structure aspects of Mills' works is largely shaped by Max Weber and the writing of Karl Mannheim, who followed Weber's work closely. Neo-Freudianism also helped shape Mills' work.[13] Mills was an intense student of philosophy before he became a sociologist and his vision of radical, egalitarian democracy was a direct result of the influence of ideas from Thorstein Veblen, John Dewey, and George Herbert Mead.[14</i> —<a href="https://en.wikipedia.org/wiki/C._Wright_Mills" rel="nofollow">Wikipedia </a><br /><br />He also wrote a book on liberalism v Marxism.<br /><br /><i>The Marxists (1962) takes Mills' explanation of sociological models from Images of Man and uses it to criticize liberalism and Marxism. He believes that the liberalist model does not work and cannot create an overarching view of society, but rather that it is more of an ideology for the entrepreneurial middle class. Marxism, however, may be incorrect in its overall view, but does have a working model for societal structure, the mechanics of the history of society, and the roles of individuals. One of Mills' problems with the Marxist model is that it uses units that are small and autonomous, which he finds too simple to explain capitalism. Mills then provides discussion on Marx as a determinist.[13]</i> (see above link)<br />Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-51283418240438432142017-01-02T15:08:59.872-05:002017-01-02T15:08:59.872-05:00I have a problem with naming Marx as a founder of ...I have a problem with naming Marx as a founder of sociology when his intent was to critique capitalism. Sociology was incidental to the development of the Marxian perspective. Herbert Spencer is problematic for a similar reason i.e. his political and socio-economic views. As for Marx, he was not a scientist, nor was he impartial to the study of human societies. He had an agenda from the beginning.<br /><br />Naming these figures from history as "founders" may be useful for establishing a posthumous legacy, but it runs the risk of having the ideas overshadowed by the person. Many people believe Karl Marx is responsible for the deaths of millions. It's not true, nor should it tarnish the field of sociology, but that is how it can be portrayed. Having Mr. Survival of the Fittest as another founder is not a good PR move.<br /><br />One dismal science is casualty enough. Sad to say, but public perception is more important than what scholars may think. I wished we lived in a genteel world, but we don't.Peter Panhttps://www.blogger.com/profile/09473311771939167712noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-82871719840182734542017-01-02T13:11:00.584-05:002017-01-02T13:11:00.584-05:00"We are all Post-Keynesians here" - Tom ...<i>"We are all Post-Keynesians here" - Tom Hickey</i><br /><br />I don't recall the context then, but I would say it is true of this.<br /><br /><i>Post-Keynesian economists are united in maintaining that Keynes' theory is seriously misrepresented by the two other principal Keynesian schools: neo-Keynesian economics, which was orthodox in the 1950s and 60s, and new Keynesian economics, which together with various strands of neoclassical economics has been dominant in mainstream macroeconomics since the 1980s.</i><br /><br />Post Keynesians in general hold that neo-Keynesianism (as in Samuelson's neoclassical synthesis and John Hicks ISLM, and New Keynesianism (which PKE views as a variety of monetarism in which the interest rate controls the economy excepting at the lower bound) are not actually Keynesian. Samuelson's version of economic formalism is sometimes called "bastard Keynesianism."<br /><br />Keynesianism is based on the principles of effective demand and uncertainty, and it rejects Say's law, long-run money neutrality, loanable funds, general equilibrium at full employment in the long run, and assumptions of symmetry that exclude uncertainty other than from exogenous shock. PKE is in agreement with that and so is MMT. But PKE is not a homogenous school. There are differences among PKE economists even though they agree on the essentials that Keynes pioneered.<br /><br />The first PKE economist was Abba Lerner, who quickly took the General Theory to its logical conclusion. At first Keynes himself disagreed publicly but then later concurred with Lerner.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-60016573086309051032017-01-02T12:47:57.510-05:002017-01-02T12:47:57.510-05:00Marx as the 'founder' of sociology? Grotes...<i>Marx as the 'founder' of sociology? Grotesque.</i><br /><br />Marx is recognized as one of the originators, among whom was 14 c. Arabian Ibn Khaldun and 19th c. Auguste Comte and Herbert Spencer. The founders of sociology as a social science were Durckheim and Weber.<br /><br /><i>Durkheim, Marx, and the German theorist Max Weber (1864–1920) are typically cited as the three principal architects of sociology.[40] Herbert Spencer, William Graham Sumner, Lester F. Ward, W. E. B. Du Bois, Vilfredo Pareto, Alexis de Tocqueville, Werner Sombart, Thorstein Veblen, Ferdinand Tönnies, Georg Simmel and Karl Mannheim are often included on academic curricula as founding theorists.</i> — <a href="https://en.wikipedia.org/wiki/Sociology" rel="nofollow">Wikipediai/Sociology</a><br /><br />Wikipedia omits Engels but he was contributing along with Marx. I would include him. Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-31149896090059414692017-01-02T12:18:57.701-05:002017-01-02T12:18:57.701-05:00"We are all Post-Keynesians here" - Tom ..."We are all Post-Keynesians here" - Tom Hickey<br /><br />It was years ago, and I don't remember the forum you posted that in.<br /><br />I'm still waiting for Richard Wolff's thoughts on MMT. As a self-described Marxist economist he should be able to recognize the implications of this theory. He is in favor of a jobs program and worker self-directed enterprises.<br /><br />Marx as the 'founder' of sociology? Grotesque.Peter Panhttps://www.blogger.com/profile/09473311771939167712noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-75788481058879823702017-01-02T11:48:33.789-05:002017-01-02T11:48:33.789-05:00Correction to my 10:35 AM
"Highly developed ...Correction to my 10:35 AM<br /><br />"Highly developed math skills should be needed to do this.." should be Highly developed math skills should NOT be needed to do thisTom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-17080808003676259502017-01-02T11:31:43.398-05:002017-01-02T11:31:43.398-05:00I'm sure there's something to that in thei...<i>I'm sure there's something to that in their positions. But that is not the whole deal, not by a long shot. From Prof. Wray's "Theories of Value and the Monetary Theory of Production"</i><br /><br />That is true, and I suspect that at least Randy and Bill among the MMT economists would give Marx a more central role if he were not culturally toxic. But as it stands, Marx is not presented as core MMT.<br /><br />BTW, there is even a controversy over whether Minsky is core MMT.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-82710338266454002272017-01-02T11:28:53.517-05:002017-01-02T11:28:53.517-05:00My view on Marx is that he was a second-rate philo...<i>My view on Marx is that he was a second-rate philosopher at best</i><br /><br />That not only my view but that of historians of philosophy. My grad work was heavily oriented toward history of philosophy and I never had to study Marx, nor was he included in the comprehensive exam. He was not considered important in comparison. The big ones are Plato, Aristotle, Aquinas, Descartes, Hume, and Kant. Th second tier are people like Plotinus and Augustine, Leibniz and Spinoza, Berkeley and Locke, and maybe Hegel. Hegel was not on the comprehensive either in the sense of a deep understanding being required. He was just not that key in the development of the Western intellectual tradition, which Whitehead famously called a footnote to Plato, who posed the enduring questions. Philosophy is about those enduring question, the responses they have evoked, and how those responses have shaped Western thought and civ from the POV of reasoning about them.<br /><br />Marx's major contribution as a philosopher is twofold. First, he originated dialectical materialism, but here he was admittedly deeply indebted to Hegel, as he himself said, "standing Hegel on his head." Marx chose to adopt and adapt Hegel's method which was an adaptation of Plato's Socratic dialectic leaving out the dialogue. Marx took over Hegel's method, which classical Greek thought suggested to him, and applied it novelly. Secondly, Marx viewed philosophy in terms of political activism. But so did the Greeks, for whom philosophy — literally, love of wisdom — signified a way of life as a person and a citizen. Wisdom is not only to be acquired but also lived in society. This is what Marx was about, too. <br /><br />Subsequently, Marx came to be viewed by followers as a prophet and enemies as the devil incarnate, but Marx's self-image was a reformer of the status quo that was shaped by the Age of Reason. He would likely be both amused and shocked about his present reputation. Marx rejected the search for universal first principles in favor of historical development. Hegel did, too, in a sense but his logic shows that he considered this logic to be the metaphysics of historical development. Marx didn't see it that way and preferred an empirical approach more consistent with the scientific spirit of the time.I don't think Marx would appreciate being garbed in the robes of a prophet but he probably would revel in his reputations as a gadfly (Socrates had described himself as a gadfly and was ordered to be put to death by the vote of the citizens of Athens for going to far.)<br /><br />As a philosopher Marx chose to focus on social and political philosophy and make it relevant to the issues of his day, a revolutionary time. The biggies in social and political phil are Plato and Aristotle (Athenian democracy), Hobbes, Locke and Rousseau, and Kant. Marx was well-versed in Greek thought and his views are somewhat of dialectical response to this, as were Hegel's. Marx was aligned with Locke's liberalism by he rejected Locke's bourgeois liberalism. Marx was also aligned with Rousseau in assuming that humans in the state of nature are essentially virtuous and become corrupted by what they acquire, hence change is possible. <br /><br />All educated Germans were familiar with Kant. Hegel was also responding to Kant's philosophy in his work, including his political philosophy. Kant was a republican, and Hegel saw the Prusssian state as the apex of history in in achieving self-detemination along with rational ordering of life. Marx was responding and reacting dialectically to these influences, too.<br /><br />So Marx was not a highly original thinker philosophically, or at least history has not regarded him as such. His major contributions were in sociology, a subsequent discipline in its own right of which he was one of the founders. His historical analysis was deep and influential, and it is still relevant. But his understanding of class and power were his chief contributions that are lasting. Because they capture a lot about reality, they won't go away.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-23453410131011900662017-01-02T10:35:16.897-05:002017-01-02T10:35:16.897-05:00I'm pleasantly surprised that you no longer re...<i>I'm pleasantly surprised that you no longer reject maths as merely "physics envy" and indeed I'm curious about that radical change of mind. What made you reconsider that?<br /><br />But why should formal training in maths be necessary, when formal training is not necessary in one's own field?</i><br /><br />My take is that theoretical economics as a science requires very highly level math skills as well as the ability to adapt them to theorizing about the real world, as real scientists do. Jason Smith has looked at economics and found economists wanting in this regard. They are out of their league.<br /><br />I see practical economics as essentially difference from theoretical economics, which doesn't interest me. I see practical economics as an offshoot of social and political theory the way that Marx, Veblen, Galbraith, etc. did. The objective is not to come up with a formal models or an overarching theory of the "the economy," but rather to get some handles on economic phenomena relative to society as a whole as a key piece of the material life support system of a society. The chief questions that practical economics is concerned with are 1) living a good life as person in a good society, which presupposes the questions what being a good person means and what citizenship is about, and 2) how this applies in the context of particular societies, in particular one's own. Highly developed math skills should be needed to do this and where they are needed, that can be farmed out to heavy math dudes armed computers, which is what central banking officials do now as well as financial managers.<br /><br />Practical economics is like practical biology wrt to medicine. Of course, bio research is needed for both theoretical understanding and ongoing innovation, but the practical types work on solving the issues of the day and informing medical professionals as well as providing them with cutting edge tech.<br /><br />This hat practical economists should be doing, especially from the macro scale since that is most applicable to policy. Political economy as I view is taking that info and applying it to policy formulation.<br /><br />These are different knowledge types and skill sets. Theoretical economics are not qualified to be doing practical economics or policy formulation any more than Ashton Carter's PhD in theoretical physics equips him to be Def Sec. He spent years in on the job training but that is not a replacement for expertise in political theory, international relations, foreign policy and military strategy. He gets that input from experts.<br /><br />To summarize, my view is use the tool to fit the job. This means being skilled in the use of the tool and being able to tell which tool is most suitable. <br /><br />In teaching econ, I would have a widely application intro course in high school and a more detailed one in Econ 101. I would then have a two track system divided into theoretical econ with heavy math with a view to grad study and practical econ with training in related disciplines that are needed for application that would qualify student for grad study in practical econ, political economy, political theory, IR, and foreign policy.These people would have to be well qualified in statistic and algebra, but not necessarily heavy math since they would not constructing formal systems to support theory. But they would need enough math chops to understand what theorists produce.<br /><br />In my view, the challenge of econ arises in the relation between money & banking and finance, and econ. Econ is about real stuff — production, distribution and consumption. But in a monetary production economy, the unit of measurement is the unit of account and distribution is rationed by price in markets in which "money" pays a key role. So exploring this relationship must be a key feature in teaching economics.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.com