Re: Keynesianism
Carrol Cox <
cbcox@...>
2010-06-01 18:53:03 GMT
I have no underestanding at all of economics. Hence the following is a
series of free associations from the 'outside' as it were.
Capitalism (in its developed forms) has a very short history, of around
two centuries. As a result, historical understanding of how capitalism
operates in practice is very slight.
I am assuming the correctness of Postone's argument that Marx created a
Critique of Polical Economy (of capitalism at its most abstract level)
and NOT Critical Political Economy (of capitalism as it operates
concretely in givenhistorical conditons. That is there is no economic
science of any sort, only various empirical descriptions of this, that
or the other temporary capitalist operations. Capitalism at this
concrete level changes continuously, and at certain points in its
history the empirical understanding of an earlier condition becomes
irrelevant to the new conditons. Historical materialism (or reading
history backwards) gave us an understasnding of those fetures of
capitalism that make it capitalisdm under all historical condtions, but
it gives us no particular understanding of the operations of capitalism
at a particular time. Hence "economists" (historians pretending to be
scientists) will only begin to understand each 'new' form of capitalism
after it has existed for some time, and it seems that capitalism changes
fast enough for such understanding of a given fomr to begin to develop
only as that form is dying. We are in the midst of such a radical change
in the operations of capitalism, and so everyone is operating pretty
much in the dark.
Mere thinking out loud. Probably nonsense.
But economists should at least consider the possibility that their
knowledge is anachronistic. Consider a military historian whose
knowledge stopped with the Civil War trying to explain World War I.
Carrol
Jim Devine wrote:
>
> Lakshmi Rhone wrote:
> > I am also not convinced by the left Keynesians arguing that all we need do
> > to eliminate unemployment
> > is expand debt financed government programs. Well it may be true that there
> > is little evidence that there would capital crowd out effects
> > given that the present debt financed expenditures are not putting pressure
> > on interest rates. But it seems obvious to me
> > that if Obama were to spend like Krugman is demanding (and the Fed were to
> > commit itself to a high inflation target) that
> > there is a great possibility that business (US owned and foreign) will not
> > expand in the US given the fear of future tax burdens
> > and the instability associated with inflation. That is, the animal spirits
> > are not likely to be strengthened by even more fiscal expansion.
>
> Back in the 1930s, Joseph Schumpeter made much the same argument:
> either FDR-type changes or Keynesian stimulus would hurt business
> confidence. In that situation, I think he was wrong, because the _lack
> of_ Keynesian stimulus or any effort by government to so _something_
> (like FDR's non-Keynesian policies) was equally scary to business, if
> not more so. In the US, that's because there were commies and fascists
> marching in the streets (not to mention less organized disorder, plus
> socialists, social christians, etc.), which looked much worse to
> business because of the existence of a "communist" state in Russia and
> fascist ones in a lot of places in Europe. (Most businesscritters
> don't like fascism except under extreme circumstances.)
>
> Nowadays, with most working people in the US demobilized politically
> (or mobilized within the co-optive two-party system), the pressure is
> all from the right, especially from the bankers and Wall Streeters. So
> politicians -- including Obama -- are scared of offending a major
> sector of capital, i.e., the financiers. It's not just business
> confidence which threatens the President, it's the Dow-Jones average.
> Back in the 1990s, Clinton allegedly complained about serving the bond
> market. Now, it's hard to imagine Obama complaining, especially since
> he's the one who brought in Geithner, Summers, et al. (I'm surprised
> he didn't keep Hank Paulson in order to maintain financiers'
> confidence, the way he did with the SecDef Robert Gates to keep the
> warriors happy. No I'm not. Clearly Obama had to keep the voters happy
> on some levels. Some of Dubya's people had to be replaced, especially
> Mr. Tarp.)
>
> In this situation, pure Keynesian stimulus -- or fiscal programs (such
> as Dubya's tax cuts) that are specifically aimed at helping our poor
> beleaguered ruling class -- are more likely to work. But the Wall
> Streeters are up in arms about the deficit already. So it seems that
> what's needed is a big war, which always seems to open the door to
> Keynesianism. It's unclear what that would be. Bomb, bomb, bomb Iran?
> My Iranian friend tells me that such an attack would keep Ahmadinejad
> in office for a very long time. So that might lead to a bigger war...
> Hey, it'll create jobs!
>
> > On the contrary. It seems like we are stuck over the medium term with at
> > least astonishingly high levels of unemployment with a greater possibility
> > of a double dip about which the government can do nothing than of a
> > spontaneous increase in business confidence and real investment (in
> > something other than inventories).
>
> right.
> --
> Jim Devine
> "Those who take the most from the table
> Teach contentment.
> Those for whom the taxes are destined
> Demand sacrifice.
> Those who eat their fill speak to the hungry
> of wonderful times to come.
> Those who lead the country into the abyss
> Call too ruling difficult
> For ordinary folk." – Bertolt Brecht.
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