Saturday, November 24, 2018

J. W. Mason — In Jacobin: A Demystifying Decade for Economics

(The new issue of Jacobin has a piece by me on the state of economics ten years after the crisis. Since it’s not online yet, I’m posting the full text here, plus a few paragraphs that did not make it in. Even though they gave me plenty of space, and Seth Ackerman’s edits were as always superb, they still cut some material that, as king of the infinite space of this blog, I would rather include.)
J. W. Mason's Blog
In Jacobin: A Demystifying Decade for Economics
JW Mason | Assistant Professor of Economics, John Jay College, City University of New York


Bob Roddis said...

So, the Austrians are correct again. Keynesian "macro-economics" is just an excuse for a dictatorial planner to plan everyone's life:

There’s a funny history to this technique. It was invented by Frank Ramsey, a young philosopher and mathematician in Keynes’ Cambridge circle in the 1920s, to answer the question: If you were organizing an economy from the top down and had to choose between producing for present needs versus investing to allow more production later, how would you decide the ideal mix? The Euler equation offers a convenient tool for expressing the tradeoff between production in the future versus production today.

This makes sense as a way of describing what a planner should do. But through one of those transmogrifications intellectual history is full of, the same formalism was picked up and popularized after World War II by Solow and Samuelson as a description of how growth actually happens in capitalist economies. The problem of macroeconomics has continued to be framed as how an ideal planner should direct consumption and production to produce the best outcomes for anyone, often with the “ideal planner” language intact. Pick up any modern economics textbook and you’ll find that substantive questions can’t be asked except in terms of how a far sighted agent would choose this path of consumption as the best possible one allowed by the model.

The Road to Serfdom. To coin a phrase.

Keynesianism and Socialism: Solving problems that don't exist and causing the ones that do.

Calgacus said...

There is no state, no government, no money without planning. The Austrian critique of planning and exaltation of a free market that never existed anywhere, because it is logically, not merely empirically impossible, is based on the idea of calling one kind of "planning" and "state intervention" "Not planning" and "laissez-faire". The problems that this causes are very real. People would come to agreement a lot quicker if they just decided to speak English, or whatever their native language is, and not play these silly word games.

The sort of stuff that Mason is talking about is just decoration.

Bob Roddis said...

Calgacus: It should not take a genius level I.Q. to understand that the issue here is WHO does the planning and HOW it is done. The folks who run this blog voluntarily plan how it is to be run and what is to be posted, either collectively or individually. They do not take orders from a government planner with the power to fine, jail or shoot them if they do not obey those orders. Duh.