John Maynard Keynes — One of Wells’s Worlds

Keynes as public intellectual (philosopher) reflecting on liberalism and its future under capitalism.

New Republic (January 31, 1927)
One of Wells’s Worlds
John Maynard Keynes

ht Brad DeLong

Marc Lee — Climate Justice and the Good Life, for Everyone

If there is one phrase that sums up what's wrong with economics, it is "specious assumptions." The most specious assumption is that science is an independent disciple that investigates reality in order to discover natural invariances that can be modeled formally, similar to physics.

This involves denial that economics is a social science with emphasis on social. The social aspect of economics implies, first, that the subject matter is different from natural science, which also implies the need to employ different methodology in approaching it. 

Secondly, as an implication of the assumption that economics is natural science, it is also assumed that outcomes are "natural" as long as natural processes, here market forces, are not interfered with artificially. 

This is based on a concept of human being, called homo economicus, that does not accord with the findings of other disciplines about human being as homo socialis. It also puts economics at odds with widely accepted norms of social justice based on liberal principles grounded in equality of persons and the fairness this implies as the basis for rights.

There are good argument against government imposing any particular moral code in a liberal society. But to conclude from this that society is therefore immoral would be a violation of the fundamental principles of liberalism, which include egality and solidarity along with freedom.

Morality and ethics are imposed socially by political decisions taken democratically in a liberal society and promulaged through positive law and rights based on a concept of justice that is founded on the liberal principles of equality of persons before the law and due process. This implies lack of privilege and social fairness.

A growing body of research into well-being and happiness tells us to look beyond money and consumption. While income matters a great deal at lower levels – when one is poor, a little money makes a big difference – but once basic needs are met, higher income does not necessarily translate into gains in happiness. Research points to substantial benefits to be had from a more equitable distribution of wealth – inequality manifests in weaker performance on a range of social and health indicators. Social fairness in terms of income and employment distribution may, in fact, be vital for achieving the changes required for a transition to a sustainable economy. 

Some key insights into well-being relevant to a new conception of “the good life” include (key references at end): 

• Full employment and decent work....
• Time use and work-life balance....
• Community and social cohesion.... 

One major report to the French government from two Nobel laureates [Joseph Stiglitz and Amartya Sen] in economics argues that progress should be understood by assessing a diverse array of well-being indicators to capture a more comprehensive understanding of people’s lives, spanning key areas of: health, education, environment, employment, material comfort, interpersonal connectedness and political engagement. 

The Canadian Index for Wellbeing (CIW) was launched only recently in 2010 as a counterweight to the gross domestic product numbers. It aims to measure and track the quality of life of Canadians and is comprised of 64 indicators. The CIW has demonstrated that Canadians’ quality of life has not kept pace with the country’s economic growth from 1994 to 2008, where although GDP grew 31%, CIW rose only 11% in the same period. A key reason is that Canadians are spending less and less time on healthy social and leisure activities, and the state of the environment has declined.
This growing body of research is broadly consistent with the notion of climate action and climate justice....

The Progressive Economics Forum

Climate Justice and the Good Life, for Everyone
Marc Lee

Steve Randy Waldman — Tangles of pathology

Trilemmas are always fun. Let’s do one. You may pick two, but no more than two, of the following:

• Liberalism
• Inequality
• Nonpathology

By “liberalism”, I mean a social order in which people are free to do as they please and live as they wish, in which everyone is formally enfranchised by a political process justified in terms of consent of the governed and equality of opportunity.

By “inequality”, I mean high dispersion of economic outcomes between individuals over full lifetimes. [1]

By “nonpathology”, I mean the absence of a sizable underclass within which institutions of social cohesion — families (nuclear and extended), civic and religious organizations — function poorly or at best patchily, in which conflict and violence are frequent and economic outcomes are poor. From the inside, a pathologized underclass perceives itself as simultaneously dysfunctional and victimized. From the outside, it is viewed culturally and/or morally deficient, and perhaps inferior genetically. Whatever its causes and whomever is to blame, pathology itself is a real phenomenon, not just a matter of false perception by dominant groups.

This trilemma is not a logical necessity. It is possible to imagine a liberal society that is very unequal, in which rich and poor alike make the best of their circumstances without clumping into culturally distinct groupings, in which shared procedural norms render the society politically stable despite profound quality of life differences between winners and losers. But I think empirically, no such thing has existed in the world, and that no such thing ever will given how humans actually behave.

I would call it "tangles of asymmetry." The problem is reconciling social liberalism given asymmetry of status, political liberalism given asymmetry of power, and economic liberalism given asymmetry of wealth in a liberal society where individual freedom is a foundational principle. That foundational freedom leads to asymmetries that undermine liberalism is a paradox of liberalism. Or is it an inherent contradiction that cannot be overcome?

What SRW calls "pathology" is actually narrow self-interest and group-interest. The foundational freedom of liberalism is freedom to pursue self-interest as one sees fit within the law. But the law is determined by social, political and economic asymmetries that favor some over others. Are these others actually free, or is this just a justification of a human version of the law of the jungle manifesting as social Darwinism? Is governance just a euphemism for "civilizing" the law of the jungle by justifying institutionally the "law" of the stronger?

Interfluidity
Tangles of pathology
Steve Randy Waldman

Daniel Little — The mode of production as society's structure

Understanding Society
The mode of production as society's structure
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

The Difficulty of Accepting MMT

I've been immersed in the MMT movement for over a year now, and I have been reflecting a little bit on the incredibly enlightening journey that MMT has taken me on. The issue that is most present in my mind is the difficulty that other have in accepting MMT. I will openly admit that the operational descriptions that back MMT are somewhat difficult to understand. Since I had fairly little experience with economics beforehand, it took me four or five readings of Warren Mosler's "Soft Currency Economics" to really understand everything he was saying.

Thankfully, all the MMT blogs and videos were  tremendously helpful in rounding out my understanding of MMT; and once I did, it was an incredible feeling. I felt like I had entered a new stage of understanding in my life. I felt like a dark cloud of confusion and cynicism had finally been lifted off me, and I couldn't stop smiling for days. Macro policy made so much sense now, and I gained a new confidence in my ability to discuss economics with others.

Since then though, it has been more difficult. Understanding MMT, while living and working in Washington DC can be quite the emotional struggle. While I always want assume the best of people and give the benefit of the doubt whenever possible, I am constantly astounded by the ignorance of people in This Town. As far as I can tell, this ignorance is pervasive at all levels- from the lowliest Hill intern, to both ends of Pennsylvania Avenue, and all up and down K Street.

Its one thing for Republicans to be ignorant of economic realities, since the entire party is based on ignorance of basically everything. However, as someone who used to consider himself a Democrat, it is significantly more difficult to see fellow Dems/Progressives stuck using gold standard thinking and rhetoric. While it did take me a few years to stumble upon and learn MMT, I did so at the end of my undergrad years. What excuse do the career economists/policymakers have? Its really not that difficult people! To be fair, this journey was probably easier for me than others. I am fairly young, and do not have a long career in economics/politics that could be invalidated by accepting MMT.

I have come to realize that for most people, the barrier to accepting MMT is not intellectual deficiency, but a timid and pathetic desire to cling to the status quo. For many people, especially in the economics profession, accepting MMT would mean turning their backs on their entire careers of bullshit, and the income and prestige that came along with it. No matter how many times we try to explain monetary operations to so called experts, they cannot bring themselves to admit we are correct. The cognitive dissonance that MMT creates often leads, at best to denial (See Sumner, Scott), and at worst, to bitterness and anger (See Palley, Thomas). However, this also means that the few that have accepted MMT later in life, and possibly putting their careers in jeopardy, posses rare forms of courage and integrity. These people are true patriots.

Accepting MMT  means realizing that involuntary unemployment is an evil curse upon the human species, and not a natural cycle brought on by God. Accepting MMT means realizing that the vast majority of our policymakers and elected leaders are hideously incompetent, and are causing unbelievable harm to the people of the United States and the world. Accepting MMT means coming to the depressing conclusion that economic policymaking, unlike almost every other field of human endevour, has actually gotten worse, not better, over the past 100 years. 45 years after passing from this earth, Marriner Eccles' grave is spinning so fast, its probably hovering somewhere in the Utah desert.

We are making progress. To my great excitement., it appears that Dylan Matthews and Matt Yglesias, both members of the new "Vox Media" venture, are publicly accepting MMT. So despite the challenges described above, we have to shamelessly press forward. Only MMT can affirmatively answer the "how do we pay for it question". Only MMT has the firepower to defeat the evil empire of austerity. At this point, saving our country, and possibly our entire planet, requires using MMT to elevate policy discussions into the 21st century. Its up to us.

Chris Dillow — Changing Attitudes

Peter Taylor-Gooby points out that, as inequality has risen, attitudes towards the poor and benefit recipients have hardened.He suggests several longer-term reasons for this, among them the decline of class alignment and rise of individualism. I'd add three other factors:

- A mistaken factual base. The public under-estimate bosses' pay and over-estimate welfare benefits.

- Recessions usually make people more mean-spirited.

- Capitalism generates cognitive biases (ideologies) that result in hostility to welfare recipients.

As Taylor-Goody says, it doesn't need to be this way: "Alternative approaches that emphasise reciprocity, solidarity and inclusion are possible."

This poses the question: how do we get to such approaches from where we are?

Stumbling and Mumbling
Changing Attitudes
Chris Dillow | Investors Chronicle (UK)