Brad DeLong — John Maynard Keynes: Essays In Biography

Brad rates this as a should-read. For anyone interested in Keynesianism, Post Keynesianism and MMT, the history of economics, or economic theory, it is a must-read.

Conventional economists have apparently concluded that they don't need to read it if they even thought about, which most probably haven't, being under the spell of the "normal paradigm" in spite of its poor results empirically.

Washington Center for Equitable Growth
John Maynard Keynes: Essays In Biography

Brad DeLong

Here is a link to download Keynes's Essays in Biography (1933) as a PDF.

Another must-read from Brad.

 I think the very smart Jeffrey Friedman gets this… not quite right. The case for the empirical benefits of capitalism is very strong—but only if one is willing to remove libertarian blinders and focus on eliminating the market failures (in distributions, in aggregate demand, in externalities, in information, etc.) that keep the function the market maximizes from being a good proxy for societal well-being. And once one has the market properly supported and disciplined, the philosophical discussion can commence: Jeffrey Friedman: What’s Wrong with Libertarianism: “Libertarian arguments about the empirical benefits of capitalism are, as yet, inadequate…

From the Marxian and Institutionalist points of view,  economic liberalism, of which contemporary Libertarianism is a variant, provides the philosophical framework for bourgeois capitalism. Its fundamental weakness is prioritizing economic liberalism over social and political liberalism, which gives rise to many paradoxes of liberalism that result in illiberality such as have been pointed out many time here at MNE.

Brad also provides another keeper Keynes quote.

Here is an excerpt:

But, above all, individualism, if it can be purged of its defects and its abuses, is the best safeguard of personal liberty in the sense that, compared with any other system, it greatly widens the field for the exercise of personal choice.

Individualism as the pursuit of self-interest does not lead to the greatest good for the greatest number the spontaneous emergence of natural order, unless "natural order" is conceived as the outcome of social Darwinism. This result is so grossly unfair that overtime it becomes unstable politically.

Keynes is saying here that individualism only works as a guiding principle of liberalism if collective consciousness is sufficiently high, which is manifested in a society's culture and institutions. The fact that civil and criminal law are needed goes to show that collective consciousness alone is not that high presently. In addition, the level of social and political dysfunctionality in liberal countries shows that the culture and institutions of the society are insufficient to bridle narrow self-interest to the degree necessary to generate a harmonious society and balanced social, political and economic conditions.

This is a design problem.

Jeffrey Friedman: What’s Wrong with Libertarianism

More from BDL:

Three Books for 2017: Economics for the Common Good, Janesville, Economism

Weekend Reading: Richard Thaler: Behavioral Economics

Dietrich Vollrath — Who are you calling Malthusian?

Everything you wanted to know about "Malthusian" summarized, if you wanted to know.

Growth Economics
Who are you calling Malthusian?
Dietrich Vollrath

Timothy Taylor — Engels Rebuts Malthus

Instructive for those unfamiliar Engels. He has the reputation as Marx's sidekick, financial benefactor, and sort of assistant in collaboration, definitely playing a secondary and subordinate role. But reading the Marx-Engels correspondence dispels that simplistic notion. While is true that Engels depends on Marx for his fame, he was a high-level thinker in his own right.

This also dispels the false rumor that Marx and Engels did not appreciate the contribution of science, technology and innovation to economics.

Tim Tayor does mention that Engels presumes that there is no necessity of monetary incentive based on competition for profit to bring forth investment and fund technological development.

It made me smile a bit to contemplate Engels offering a defense of rising output driven by technological progress (and apparently no need for market-based incentives to raise output) as a central part of his challenge to Malthus.

I have always wondered why economists believe that this assumption about the need for money incentive is self-evident, so that creative people need to bribed to create. This belies the evidence of "the starving artist" and "the mad inventor." Creative people create and many if not most want to share this bounty with others without great concern for monetary recompense beyond needs and basic wants. At the opposite end of the spectrum, many of the super-rich also continue to "work" until they are no longer able to do so. Does Warren Buffet need the money or even have any use for more of it?

Conversable Economist
Engels Rebuts Malthus
Timothy Taylor | Managing editor of the Journal of Economic Perspectives, based at Macalester College in St. Paul, Minnesota

Andrew Lainton — Is Piketty the New Malhus?

Lets generalise Malthus’s argument, to look not just at land rent but all quasi rents on assets which though scarcity tend to return yield returns greater than g. 

All such asset purchases will deduct from savings and investment. If we take the proportion of wealth invested in assets as A then the correct expression is not S=I but S(1-A)=I. Of course we also need to consider the investment of yields from assets. So you can modify this through a geometrical expansion (effectively getting an NPV) adding interest as a term.

So we can see that rentier income r>g is deflationary, it reduces aggregate demand. One might indeed argue that the growth in debt over the 20th Century has been a means of compensating for this deflation and once this stops – as per now through austerity – we get deflationary stagnation. Of course assets cant inflate in price forever above their real returns, we get bubble and bust.

Decisions, Decisions, Decisions
Is Piketty the New Malhus?

Andrew Lainton

Polly Cleveland — Piketty’s Model of Inequality and Growth in Historical Context, Pt 1

The background to Piketty. Must read unless you are a historian of economics or read Michael Hudson. Short summary of what political economy is really all about.

Dollars & Sense Blog
Piketty’s Model of Inequality and Growth in Historical Context, Pt 1
Polly Cleveland | Executive Director of the Association for Georgist Studies