An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Tuesday, April 15, 2014
Robert Kuttner — Karl Polanyi Explains It All
In November 1933, less than a year after Hitler assumed power in Berlin, a 47-year-old socialist writer on Vienna’s leading economics weekly was advised by his publisher that it was too risky to keep him on the staff. It would be best both for the Österreichische Volkswirt and his own safety if Karl Polanyi left the magazine. Thus began a circuitous odyssey via London, Oxford, and Bennington, Vermont, that led to the publication in 1944 of what many consider the 20th century’s most prophetic work of political economy, The Great Transformation: The Political and Economic Origins of Our Time.
Polanyi, with no academic base, was already a blend of journalist and public intellectual, a major critic of the Austrian School of free-market economics and its cultish leaders, Ludwig von Mises and Friedrich Hayek. Polanyi and Hayek would cross swords for four decades—Hayek becoming more influential as an icon of the free-market right but history increasingly vindicating Polanyi.
"Libertarian economists, who treat the market as universal—disengaged from local cultures and historic time—are fanatics whose ideas end in tragedy. ...... In the same period, the rise of a rigidly enforced gold standard limited the state’s ability to temper periodic downturns."
"Back in the era of the gold standard, if a government tried to combat unemployment, Polanyi wrote, “any governmental measure that caused a budgetary deficit might start a depreciation of the currency.” That analysis could describe contemporary Argentina or Indonesia, except that the discipline of today’s bond market is even more relentless than the classical gold standard."
Kuttner sounds like a Clintonista-Rubinite here... terrified of the big bad "bond vigilantes"...
"Libertarian economists, who treat the market as universal—disengaged from local cultures and historic time—are fanatics whose ideas end in tragedy. ...... In the same period, the rise of a rigidly enforced gold standard limited the state’s ability to temper periodic downturns."
ReplyDeleteThe rest of the article is superfluous fluff....
"Back in the era of the gold standard, if a government tried to combat unemployment, Polanyi wrote, “any governmental measure that caused a budgetary deficit might start a depreciation of the currency.” That analysis could describe contemporary Argentina or Indonesia, except that the discipline of today’s bond market is even more relentless than the classical gold standard."
ReplyDeleteKuttner sounds like a Clintonista-Rubinite here... terrified of the big bad "bond vigilantes"...