Saturday, June 30, 2012

Washington's Blog — Mainstream Economics is a Cult

Washington's Blog coming into the fold. Profusely quotes Steve Keen, Michael Hudson, Bill Black, and Philip Pilkington

Read it at WashingtonsBlog
Mainstream Economics is a Cult
Posted by WashingtonsBlog

Interestingly, Washington's Blog is reposted on a regular basis at Zero Hedge and less regularly at Naked Capitalism, kind of opposite ends of the spectrum.


y said...

Does anyone kwon if the UK has a primary dealer system like the US? Is there a guaranteed market for UK government bonds as there is in the US?

y said...

*know, not kwon!

Dan Lynch said...

Washington's Blog is sort of bi-polar on economics, depending on who is posting.

Poster "WashingtonsBlog" seems to be coming around to post-Keynesian economics.

Poster "Carl Herman" promotes the Austrian hard money line. I'm guessing Zero Hedge was attracted to their site by Carl Herman's posts.

It'll be interesting to see if Carl Herman converts.

In any event, Washington's Blog is fairly well known in political blog circles, so this is a major step for post-Keynesian economics gaining popular support.

Anthony said...

The relationship of neoclassical economics and evangelical Christianity is a complicated one. In Europe, classical economics flowed from the Enlightenment view of the world as rational, orderly, and objectively understandable. It tended to be politically liberal and religiously skeptical. In America, an effort was made to fuse the Enlightenment with Christianity by essentially arguing that the world's order came from God. Instead of arguing that "nature is so constructed in a way that markets produce optimal outcomes," American economic popularizers like Frances Wayland argued that "God has constructed nature in such a way that markets reveal his will." Thus, in the early national period, the economic project of freeing markets from mercantilist control, the political project of constructing a self-governed republic, and the evangelical project of making people moral enough to be self-governed, were fused. A substrate of methodological individualism undergirded all three.

This is why evangelicals tend to be uncomfortable with economic analyses that deploy methodological collectivism, such as Keynesianism, and one reason why they tend toward reactionary politics. Because they are convinced that nature reveals the will of God, and that markets represent "nature," they simply define the will of God as whatever they can convince themselves "the market" has produced.

Unforgiven said...

Y -

Looks like there are indeed "Gilt-edged Market Makers".

Tom Hickey said...

Thanks, Anthony. Important insight. Perhaps you would like to do a guest post on that. Lots to said generally and specifically that relates to trend analysis.

As you say, the history is complicated and varied geographically.

Basically there are four sources of Western civ. — 1) ancient Hebrew religion as adapted by Christianity, a subsequent interpretation of Jesus and Paul in light of Greek philosophy, 2) Classical Greek thought, 3) Roman law and organization, and 4) the development of science and technology. Different cultures incorporated these influences differently.

A major difference is that between Anglo and Continental mindsets, the former more empirical and the later more rationalist. Now there are three major influences, Anglo-American, Continental and non-Western, divided into Middle Eastern, South East Asian, and East Asian. There are aslo emerging mindsets in the South — South America and Africa ‚ that are beginning to play a role, too.

So understanding the history of these influences is key to anticipating likely trend development in the century of globalization. Clearly, globalization is not going to be a piece of cake culturally, as we are already seeing in "tribal"-based conflict.

What the US adds in particular is a nation not based on blood kinship, presenting a challenge to former evolutionary strategies based on kinship and survival of strands of genetic material. Now we are contesting for survival and dominance of cultures and ideas.

In other words, not so much whose genes are going to dominate globalization but whose memes.

Matt Franko said...

how do evangelicals reconcile that view with Romans 13? Ie "authority is from God' not chaos....

Imo, there is no scriptural basis for that view


Trixie said...

In other words, not so much whose genes are going to dominate globalization but whose memes.

Good one. And remember, there is no meme without ME ME.

Anthony said...


They argue that the market reveals God's will rather than determines it. Behind this view is the Calvinist (or more accurately pseudo-Calvinist) view that wealth is a mostly reliable outward sign of inward grace. God has favored the wealthy, so they prosper. I say it's pseudo-Calvinist because Calvin never actually said it, but it's been a popular assumption in America since the 17th century. Instead of seeing the chaos of the market as creating order -- that would be a more Darwinian view -- they see it as a process by which divine order is made visible. Hence, "external interventions" like government regulation and collective bargaining become "human interventions" that only cloud our ability to carry out God's plan for the world.

I am in the middle of a move and all my books are in boxes, but somewhere I have some Gilded Age sermons that state this quite explicitly, sometimes even going so far as claim that poor relief is an offense to God.

When I said in my last comment that evangelicals "simply define the will of God as whatever they can convince themselves 'the market' has produced," I was editorializing. I am sure most of them wouldn't see it that way at all.

Tom Hickey said...

Anthony: "' sometimes even going so far as claim that poor relief is an offense to God."

This is the lastest coming from the mega-church pulpits, and the pols that curry their votes.

Also it is necessary to distinguish two major strands of Evangelical Christianity in the US — the Calvinistic "Puritan" strain and the liberal social justice strand.

Each reads the same words differently, and in Protestantism, there is no "official" determination of articles of faith that musts be professed. There are different denominations and even different branches within denominations with different cultural norms and institutional arrangement resulting in different scriptural interpretations that all claim a literal basis in the NT.

The Calvinsitic Puritan strain has been dominant in the politics of the right for some time. Complicating the matter is the fact that the majority of the early colonists that later founded the USA were of this strain. So they claim priority not only in scriptural interpretation but also constitutional.

Matt Franko said...

suggest tell them that 'what is high in the eye of man is an abomination in the sight of God'....

Also, they misinterpret the word 'allotment' as 'inheritance'.. Rsp

Tom Hickey said...

To paraphrase Wm. Blake, the devil reads the Bible too — just differently. According to Lloyd Goldfein, he is doing God's work, and I take him at his word that he believes he is.

Matt Franko said...

Maybe what Anthony points out here with the Evangelicals is the same reasoning Lloyd Blankfein used wrt 'Gods work' Tom.... They interpret earthly human success thru corruption as some sort of divine providence...... Absurd imo. Rsp

Trixie said...

Another one of my favorites:

In a discussion about morality and markets at St. Paul’s Cathedral in London, Goldman Sachs international vice chairman Brian Griffiths, a former adviser to Margaret Thatcher, described giant paychecks for bankers as an economic necessity. “We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” he said.

These people absolutely have to believe their rhetoric. Otherwise, they would have to admit to themselves and to the world that they are psychopaths. So instead, we get TINA...and by the way, I am sacrificing myself with a $10M bonus this year so YOU can succeed.

Everyone scratches their head, or their ass depending on how you interpret it, and moves on. And TINA lives to see another day. Or century.

WSJ doesn't see Goldman as genuinely delusional as I do though:

Blankfein clearly knows who he works for. After all, God couldn’t afford him.

Greg said...

Tom, Matt, Anthony

That whole paradigm you are discussing is talked about in some detail in the book "The Family" by Jeff Sharlett.

Sharlett spent some time in a house in DC that was part of the K Street cult. He lived there for a while and examined the history of this group which trains our politicians (mostly republican) that free market capitalism is the will of god. The entire ideology goes back to some scandinavian guy in the 20s who came to this country and started preaching a gospel that financially powerful people were doing gods work. The fact that you were financially powerful meant that god was on your side. People pushing this line of reason have been becoming involved in all our major institutions in this country for the last 40+ years.... education, government, health care and banking

Its an interesting and scary book

Trixie said...

Why don't Democrats connect the REAL dots?

Part of the answer, surely, is that elected Democrats are still almost as beholden to the wealthy for campaign funds as the Republicans, and don’t want to bite the hand that feeds them. Wall Street can give most of its largesse to Romney this year and still have enough left over to tame many influential Democrats (look at the outcry from some of them when the White House took on Bain Capital). But I suspect a deeper reason for their reticence is that if they connect the dots and reveal Romney for what he is—the epitome of what’s fundamentally wrong with our economy—they’ll be admitting how serious our economic problems really are. They would have to acknowledge that the economic catastrophe that continues to cause us so much suffering is, at its root, a product of the gross inequality of income, wealth and political power in America’s new Gilded Age, as well as the perverse incentives of casino capitalism.

Tom Hickey said...

Greg: "That whole paradigm you are discussing is talked about in some detail in the book "The Family" by Jeff Sharlett."

I am familiar with The Fellowship aka The Family and Jeff Scarlett's work exposing its agenda and m.o. As you say, scary.

A cult that is dangerous to liberal democracy has insinuated itself deeply into the political process, and not only the US. It's based on Dominionism. Doug Coe, its US leader, apparently thinks that Hitler's agenda was off-base but his m.o. was right on target.

Everyone should be concerned at the level of power of these nut jobs have garnered in a relatively short time.

Used to be that the John Birch Society was considered fringe. Not it and fringe groups like it are mainstream GOP, and it a position to influence policy.

This is another reason I have been saying that people that don't want to stay in the belly of the tiger and fight it out should be making alternative plans.

Tom Hickey said...

Trixie: "Why don't Democrats connect the REAL dots?"

I lot of people are starting to figure it out. Now there are more independents that members of either party. The political battle is for their votes and political strategy is county by county in swing states, especially battleground states. The amounts spend in this political "war" are staggering. As a result, it is not possible for an uncompromised candidate to win office in a general. So it's the wealthy donors competing against each other, and hedging by contributing to both candidates.

Matt Franko said...

There is no scriptural congruity in anything that those people are doing.

they might as well think they are part of the Jedi order...... they are disgraced.

"alledging themselves to be wise they are made stupid."


Unforgiven said...


"WSJ doesn't see Goldman as genuinely delusional as I do though:

Blankfein clearly knows who he works for. After all, God couldn’t afford him."

Love it!

Did you ever get your search engine problem sorted?

Greg said...


"There is no scriptural congruity in anything that those people are doing."


They are now trying to write their own Bible ya know?
Phyllis Schaffleys son Andy is recreating a Bible, sort of an anti-Jeffersonian Bible. Instead of cutting out all the verses about miracles and such while focusing on the social gospel, Schaffley is going the other way, removing all verses that "sound"socialistic
and only emphasizing those that encourage people to support the top down structure of our churches and other institutions.

Fucking insane

Leverage said...

Too bad we couldn't destroy Calvinism in time in Europe, the only good thing that would come good from catholic church back then. What I find puzzling is Catholicism defending similar stupidity to Calvinism and protestant-derived economic thought nowadays.

Is interesting though how things developed in Britain (retaining most of the catholic influence), there "socialism" has deep roots too, contrary to the american scene.

From a philosophical and scientific point of view though all this discussion is bastardized, as we impose order into chaos by applying controlled energy (human action). A market is not something 'natural' but actually something totally controlled built up by a delicate equilibrium between the environment and applied energy to keep entropy in check.

The vision (either religious or pseudo-scientific) that a market is an emerging feature of the cosmos order without applied control is completely bogus. Is actually self-organisation that offsets natural entropy that creates markets (along as other human institutions which are prerequisite to any sort of commercial exchange, documented from anthropological investigation).

IMO we are still struggling how to scale options and mechanisms which evolved to auto-organize organisms and colonies of organisms during millions of years to complex modern civilizations with millions of individuals disconnected but connected at the same time. There lies the irony of our own success and current frustrations dealing with cyclical similar problems during millenniums.