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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Sunday, June 21, 2015
Sandwichman — Keynes "hadn't got round to it"
Keynes and growth theory.
Ecological Headstand — The Work Less Institute of Technology: Because Working Less IS a Technology! Keynes "hadn't got round to it" Sandwichman
Macroeconomics is a theoretical discipline that is irrelevant wrt practical application. Actually worse than irrelevant. It is harmful other than to the class whose interests it is designed to benefit.
Many have said that we need a practical discipline, maybe "political economy," as a policy science that integrates knowledge that is relevant and useful including from economics, sociology, and poli sci.
Unfortunately you can't share the unemployment around effectively. Not everybody can be a Brain Surgeon.
Shorter working weeks only work if people work a shorter week. The trend is towards longer ones as people suck up to their peers and betters looking for a promotion.
It's the same trend with two income households, two car households and so on. The urge to get one over your neighbours runs strong through human society.
Like all these ideas they founder on the way humanity is. And very likely 'is' is absolute rather than 'at the moment' - if history is any guide.
It's more to do with the culture of the society. I don't know of anywhere in the Western World that actually prevents people from working longer hours to curry favour with people. The EU social chapter tries to impose a maximum 48 hour working week, but it has so many get outs as to be utterly useless. Even the fables 35 hour week of the French has more holes in it than a Swiss cheese.
Eventually enough people curry favour that you simply can't get on unless you follow the chase to the bottom. And that's the problem. You can' t share out the unemployment sufficiently evenly to reduce the working week in a fair manner.
You need social pressure to make it unacceptable to work such long hours because of the impact it has on others and family life. Business constantly works to undermine any such consensus coming about.
When I was a salaried employee, I was expected to work 50 - 60 hours a week. If you didn't you would be on the list of employees who would be laid off in the round of downsizing.
I was never motivated by more money because it all went to taxes anyway. I would tell my boss, "if you want to reward me, instead of giving me a raise, give me more time off."
Without regulations and without a strong labor market, employees are little more than slaves.
The basic issue is sharing productivity gains from technology. It's a distribution issue, and capitalism handles distribution through markets and markets are dominated by those with market power.
So it's either introduce a more competitive system based on economic liberalism, or else change the system toward one with a different approach to distribution.
Keynes's solution seems to have been eliminating economic rent in a capitalistic system — "Euthanize the rentiers."
This would involve eliminating market power or redistribution. Difficult when those with market power also hold political power and design institutions to perpetuate and expand that power.
>Without regulations and without a strong labor market, employees are little more than slaves.>
That's the idea. Capitalism Depends for profits on extracting a certain percentage of free labor from workers. That "profit" is is rent that goes to ownership share and those employees that have the power to extract it, mostly top management through influence on company boards.
"Who needs a Keynesian policy goal of full employment anyway when the neoclassical model can simply assume full employment?"
ReplyDeleteWhy do we bother with macroeconomics? It wasn't needed for 4.5 billion years. Why obsess over it now?
Macroeconomics is a theoretical discipline that is irrelevant wrt practical application. Actually worse than irrelevant. It is harmful other than to the class whose interests it is designed to benefit.
ReplyDeleteMany have said that we need a practical discipline, maybe "political economy," as a policy science that integrates knowledge that is relevant and useful including from economics, sociology, and poli sci.
Keynes said "I regard the investment policy as first aid . ... Less work is the ultimate solution."
ReplyDeleteInteresting tidbits on Keynes, whose views seemed to continually evolve.
Unfortunately you can't share the unemployment around effectively. Not everybody can be a Brain Surgeon.
ReplyDeleteShorter working weeks only work if people work a shorter week. The trend is towards longer ones as people suck up to their peers and betters looking for a promotion.
It's the same trend with two income households, two car households and so on. The urge to get one over your neighbours runs strong through human society.
Like all these ideas they founder on the way humanity is. And very likely 'is' is absolute rather than 'at the moment' - if history is any guide.
@Neil yet the fact is that some countries have shorter work weeks and longer vacations than others, mainly due to regulations.
ReplyDeleteCome on - delve under the averages.
ReplyDeleteIt's more to do with the culture of the society. I don't know of anywhere in the Western World that actually prevents people from working longer hours to curry favour with people. The EU social chapter tries to impose a maximum 48 hour working week, but it has so many get outs as to be utterly useless. Even the fables 35 hour week of the French has more holes in it than a Swiss cheese.
Eventually enough people curry favour that you simply can't get on unless you follow the chase to the bottom. And that's the problem. You can' t share out the unemployment sufficiently evenly to reduce the working week in a fair manner.
You need social pressure to make it unacceptable to work such long hours because of the impact it has on others and family life. Business constantly works to undermine any such consensus coming about.
But why do workers strive to "curry favor?"
ReplyDeleteWhen I was a salaried employee, I was expected to work 50 - 60 hours a week. If you didn't you would be on the list of employees who would be laid off in the round of downsizing.
I was never motivated by more money because it all went to taxes anyway. I would tell my boss, "if you want to reward me, instead of giving me a raise, give me more time off."
Without regulations and without a strong labor market, employees are little more than slaves.
The basic issue is sharing productivity gains from technology. It's a distribution issue, and capitalism handles distribution through markets and markets are dominated by those with market power.
ReplyDeleteSo it's either introduce a more competitive system based on economic liberalism, or else change the system toward one with a different approach to distribution.
Keynes's solution seems to have been eliminating economic rent in a capitalistic system — "Euthanize the rentiers."
This would involve eliminating market power or redistribution. Difficult when those with market power also hold political power and design institutions to perpetuate and expand that power.
>Without regulations and without a strong labor market, employees are little more than slaves.>
That's the idea. Capitalism Depends for profits on extracting a certain percentage of free labor from workers. That "profit" is is rent that goes to ownership share and those employees that have the power to extract it, mostly top management through influence on company boards.
"But why do workers strive to "curry favour?""
ReplyDeleteGroup belonging.
Being part of the 'in crowd'.