Matias Vernengo — Sunday Reading: Economic Letters of Note

Another short review and a letter from John Kenneth Galbraith to Joan Robinson. It is timely given the present attention to the persisting paucity of women economists in the profession and the professional literature. Many feel that Joan Robinson never got the credit she was due.

Naked Keynesianism
Sunday Reading: Economic Letters of Note
Matias Vernengo | Associate Professor of Economics, Bucknell University

Lars P. Syll — Galbraith’s History of Economic Thought

Some history if you have time this long Labor Day weekend in the US marking the end of summer and vacation season and the return to business as usual on Tuesday. So expect light posting over the weekend.

Video series.

Galbraith fully acknowledged the successes of the market system in economics but associated it with instability, inefficiency and social inequity. He advocated government policies and interventions to remedy these perceived faults. In his book Economics and the Public Purpose (1973) he proposed the extension of the planning system used in the industrial core of the economy to the wider market economy. He argued for a new socialism, with more steeply progressive taxes, public housing, medical care and transportation, public support of the arts and the conversion of some corporations and military contractors into public corporations.

He was the most read social scientist of his era. Galbraith's association with the U.S. Democratic Party and his criticism of fellow economists, who promoted individualistic free-market economics that he perceived as a false social reality, occasioned strong responses. He was of the opinion that "Wealth is the relentless enemy of understanding".

In the midst of the Watergate scandal in the summer of 1973 Galbraith was called by Adrian Malone of the BBC and asked if he would be interested in doing a television series on the history of economic or social ideas. Galbraith had been thinking of retirement but quickly accepted Malone's proposal. At an early point they settled on the title "Age of Uncertainty" to reflect the sharp contrast between the great certainty in 19th century economic thought with the much less assured views in modern times.

As discussions about the series continued a further theme was developed: that what people believe about the workings of markets and their relationships to the state shapes history through the laws that are enacted or discarded. It was therefore decided that the treatment of these themes would loosely fall into two parts, ideas followed by their consequences.

Metropolis The Age of Uncertainty 11 John Kenneth Galbraith

1. 
   
2. The Prophets and Promise of Classical Capitalism
3. The Manners and Morals of High Capitalism
4. The Dissent of Karl Marx
5. The Colonial Idea
6. Lenin and the Great Ungluing
7. The Rise and Fall of Money
8. The Mandarin Revolution
9. The Fatal Competition
10. The Big Corporation
11. Land and People
12. The MetropolisDemocracy, Leadership, Commitment
13. Weekend in Vermont (three one hour programmes in which Galbraith discusses economics, politics and international relations with guests such as Henry Kissinger, Georgy Arbatov and Edward Heath). These interviews are not covered in the book.

Lars P. Syll’s Blog
Galbraith’s History of Economic Thought

Lars P. Syll | Professor, Malmo University

Also

The problem with New Keynesianism is 1) it contradicts Keynes, 2) the model is an oversimplification, 3) the assumptions are too unrealistic to make the model representation, and 4) it involves the fallacy of composition in its demand for microfoundations.

The History of ‘New Keynesianism’ (short text with quotes and comment, no video)

Sandwichman — The Iatrogenic and Incoherent "Theory" of Flexibility

Sandwichman hits it out of the park. Contains some choice references.

EconoSpeak
The Iatrogenic and Incoherent "Theory" of Flexibility
Sandwichman

Alexander Douglas — Some explanation on my last post

Alex Douglas thanks all for their support and asks for suggestions.

My suggestion is to take John Kenneth Galbraith's The Good Society: The Humane Agenda and Economics and the Public Purpose and update them in light of MMT. Of course, these books segue into lots of other relevant contributions No need to reinvent the wheel, just return the conversation from the trivial to the important. However, I think that "the good society" and "public purpose" are a good lede. 

As Alex notes this is essentially a philosophical issue. As I have said, it goes back to ancient Greece in the Western intellectual tradition. The Greeks were absorbed in the question of what it means to live a good life as an individual in a good society. Aristotle observed that humans are social animals and therefore the good life must include citizenship.

The Greeks also introduced liberalism as the prioritizing of freedom. Freedom from constraint and freedom to choose are necessary for freedom for self-actualization as an individual and self-determination as a state (Gk: polis).

In my experience, ethics and aesthetics rest on ontology and epistemology as a foundation, and social and political philosophy rests on ethics. For example, one's world view ("philosophy" in the broadest sense) is foundational since one's world view is the conceptual model of reality that one employs. 

A key fundamental in a world view is the conception of human nature, for example. One's conception of human nature greatly influences one's world view both individually and socially. See, for instance, Twelve Theories of Human Nature, which is hardly exhaustive.

Here is a comment I left at The Multidisciplinarian yesterday that speaks to this:

“Philosophy” has many different meanings and to hold out one as the meaning would difficult to impossible to defend. Yes, I have those three letters after my name.

In the broadest sense philosophy is summarized in the colloquial question, “What’s your philosophy?” Philosophy in this sense it is reflection on one’s fundamental assumptions and those of society not only in particular but as a world view, that is, a conceptual system that models reality in symbols expressed as words rather than numbers.

Philosophy deals with quality as well as quantity and other uses of language than purely descriptive, as well as modality. The primary tool is logic and the method is reasoning. Just as mathematics is the language of science and accounting the language of business, logic is the language of philosophy.

Most people’s world view is acquired through socialization and education. Much of it remains implicit, and most people don’t endeavor to make it explicit or reflect on foundational matters much or even at all. Plato attributes to Socrates the observation that a life not reflected upon is not worth the living. This is generally taken to be the earliest and clearest definition of philosophy. Philosophy is reflection using reason in this broad view. What’s not to like about that?

Since there are many fields of life and knowledge, philosophy has many branches that attempt to make the implicit explicit and to subject it to a rigorous logical critique through debate. This is the Socratic dialectic. This post and comment thread is an example of it in action.

Moreover, philosophy isnt’ just shooting the bull over beers, although a lot of philosophizing is done that way. But philosophy is concerned with foundations rather than trivia. Philosophy of science can also be called “foundations of science,” for example. This involves the attempt to reflect on key fundamentals such as causality in order to clarify them, as well as to uncover inconsistencies in assumptions and presuppositions.

Philosophy in the broadest sense is the attempt to reflect on the foundations of a world view, making as much of it explicit as possible and then critiquing it rigorously using reason. This is pretty much the objective of Phil 101, which is about the basics of reasoning, logic and critical thinking, usually with reference to some of the “enduring questions” that continue to be debated since no resolution has been arrived at that compels assent since agreed upon criteria are lacking.

These questions used to be studied in terms of the great thinkers of the Western intellectual tradition and some professors still follow this course. Many others chose to seat the questions in current affairs and controversies such as medical ethics, liberal democracy, and other matters that are sure to result in spirited debate.

• #2 by Bill Storage on June 19, 2016 - 9:42 pm

  Thanks for the those well-expressed thoughts on logic, reasoning, and their application, Tom. I fear that spirited debate may be out of fashion in my neighborhood, where critical thinking is believed to kill creativity and most skepticism is viewed with skepticism.
  
  • 

    #3 by Tom Hickey on June 19, 2016 - 9:51 pm

    Some would say critical thinking went out of fashion along with liberal education. I would be one of them.
    

I also came to the conclusion over the years that it's not possible to deal with social and political philosophy without also dealing with both the philosophical foundations of economics and political economy. Since economics now concerns monetary production economies that also involves money & banking, and finance.

This is a big chunk and no one person is going to resolve the issues. But some people need to get the ball rolling if this debate is to take place.

The world badly needs an undated theory of liberalism made practical as an antidote to the faux liberalism that is actually illiberal, or, in the criticism of Karl Marx, bourgeois liberalism grounded in the freedom for accumulators to accumulate based institutional power and the power of the captured state.

Origin of Specious
Some explanation on my last post
Alexander Douglas | Lecturer in Philosophy at Heythrop College, London

Sandwichman — "Say's Law sank without trace."

Quote by John Kenneth Galbraith you might want to Evernote.

EconoSpeak
"Say's Law sank without trace."
Sandwichman

Stephanie Kelton — The Good Society: Lessons Not (Yet) Learned

John Kenneth Galbriath’s book, The Good Society: The Humane Agenda, creates a blueprint for a more just, prosperous and stable world. I’m re-reading it for the nth time because I continue to believe we might just get there one day. Indeed, I’m convinced we must.

Here are some excerpts....

New Economic Perspectives
The Good Society: Lessons Not (Yet) Learned
Stephanie Kelton | Associate Professor of Economics and Chair of the Economics Department, UMKC

A fundamental question of the global intellectual tradition and perennial wisdom is, What is the good life for individuals in a good society, and how to achieve it. The history of thought is about the different answers based on different ontological, epistemological, ethics, aesthetic assumptions about reality, experience, and the place of humanity in it. These assumptions underlie social and political thought.

Economics generally presupposes foundational assumptions and makes theoretical and methodological assumptions based on such implicit prior assumptions that frame the enquiry.

Since the Enlightenment, the design problem has been reconciling social, political and economic liberalism, along with developing institutions and policy based on different design solutions. These solutions differ based on both normative assumptions for example, that serve as criteria, as well as differences in worldview that frame reality differently.

In The Good Society (1996), John Kenneth Galbraith presents his summation of a 20th century liberal position eloquently, and, if one shares his values and worldview, convincingly.

Contrasting positions are developed by: 

• Ludwig Mises in Liberalism 
• Friedrich Hayek in The Constitution of Liberty (1960), Law, Legislation and Liberty (1973)
• Murray Rothbard in Man, Economy, and State (1962), For a New Liberty: The Libertarian Manifesto (1973), and The Ethics of Liberty, Humanities Press (1982)
• Ayn Rand in The Virtue of Selfishness (1964), Introduction to Objectivist Epistemology (1979), and Philosophy: Who Needs It? (1982)
• Milton Friedman, Capitalism and Freedom (1962) and Free to Choose (1980), which was a response to John Kenneth Galbraith's book and television series, The Age of Uncertainty. 

These positions are now the dominant subject of discussion in American political economy today rather than Galbraith's The Good Society.

Notable is that there is nothing on the right that mentions society.This is unsurprising since the underlying assumption of these works is methodological individualism grounded in the implicit assumption of ontological individualism.

The exception to this is journalist Walter Lippmann's The Good Society (1937). Lippmann is remembered, however, more for A Preface to Morals (1929) and The Public Philosophy (1955). While very influential in presenting the conservative viewpoint in the last century, he is hardly cited today, like his then famous opponent on the left, American educator and philosopher John Dewey. "... [Dewey] wrote in The Public and its Problems: "Till the Great Society is converted in to a Great Community, the Public will remain in eclipse. Communication can alone create a great community" (p. 142).

Time to again shine the light on the living a good life in a good society and the great community of humanity as we enter the age of globalization and a rising collective awareness of humanity, as well as ecological interdependence in the community of being.

Bill Moyers interviews James K. Galbraith — Zero Hedge

JKG: An extraordinary concentration of wealth is an extraordinary concentration of power. Favorite Adam Smith quote (the only short sentence): "Wealth is power, as Mr. Hobbes says."

Read an excderpt and watch the videos at Zero Hedge
Bill Moyers and James K. Galbraith Talk About the Financial Crisis and John Kenneth Galbraith
Submitted by ilene

Not what you'd expect to see at Zero Hedge. Good for them.

The videos were posted at Jesse's.

Review of The Affluent Society by J.K. Galbraith

This view that production for the sake of goods produced is no longer urgent is carried across into a forensic analysis of the balance between private production and public services. He vividly contrasts the healthy state of markets that privately produce (often useless) goods with the poverty and underinvestment in fundamentally important public services, and explains the provenance of the conventional wisdom that applauds the former and distrusts the latter. Restoring the 'social balance' – by which he means engineering the commitment to invest properly in public services such as education and health – is seen as a key objective, and one that has under-appreciated positive impact on pure economic outcomes.

Read it at Feasta — The Foundation for the Economics of Sustainability
The Affluent Society by J.K. Galbraith: review

by Graham Barnes