Wednesday, April 30, 2014

Krugman, Clark and Vernengo.

Among many other awards and honours, Paul Krugman won in 1991 the John Bates Clark Medal.

Paul Krugman (2014) on distribution:
"There are a few economists on the left who seem to believe that:
"2. If you believe in, or even use, marginal productivity theory, you are conceding that capitalists deserve their income.
"Neither of these things are true. … And saying that capital gets its marginal product in no way says that the people who own that capital deserve what they get." (emphasis mine)
John Bates Clark (1908) on distribution:
"The welfare of the laboring classes depends on whether they get much or little; but their attitude toward other classes-and, therefore, the stability of the social state-depends chiefly on the question, whether the amount that they get, be it large or small, is what they produce. If they create a small amount of wealth and get the whole of it, they may not seek to revolutionize society; but if it were to appear that they produce an ample amount and get only a part of it, many of them would become revolutionists, and all would have the right to do so. The indictment that hangs over society is that of 'exploiting labor.' 'Workmen' it is said, 'are regularly robbed of what they produce. This is done within the forms of law, and by the natural working of competition.' If this charge were proved, every right-minded man should become a socialist; and his zeal in transforming the industrial system would then measure and express his sense of justice.". (emphasis mine)
Clark sets out to disprove that labour was exploited by capitalists: he was an anti-Socialist. In "The Distribution of Wealth: a Theory of Wages, Interest, and Profits" Clark purports to show that each "factor of production" was remunerated according to its marginal contribution to output: if capital gets a larger and increasing share it's because its contribution is objectively greater, and growing.

Labour, on the other hand, creates only a small amount of wealth and gets the whole of it: it has no reason to complain.

Paraphrasing Krugman, Clark (whom never before had been accused of socialism or of leftism) is "conceding that capitalists [and workers] deserve their income".

If you accept Clark's argument (which any micro101 textbook teaches: it supposedly justifies the decreasing slope of production functions), his conclusion for you is, as it should be for Krugman, a positive fact (following Milton Friedman's terminology). Of course, Paul Krugman can deplore that on normative grounds. But that is a value judgment, a personal preference.

Krugman used to know this. In his 1992 pioneering piece on inequality (one of the first dealing on that subject in the popular press), Krugman wrote:
"Rising inequality need not have any policy implications. Even if you would prefer to have a flatter distribution … what should we do about it?"


Matías Vernengo discusses this subject here and here. Perhaps Vernengo would find it easier to explain that exploitation, contra Clark, is a positive fact, even if unpalatable to some.

Sunday, April 27, 2014

MIA: Marxists Internet Archive or Missing in Action?

The Marxists Internet Archive (MIA), as readers may know, is a non-profit online library/publisher of the work of Marxist and non-Marxist authors, made freely accessible by a group of voluntaries.

The Marx and Engels Collected Works (MECW), understandably enough, are a part of the content MIA features.

However, a consortium formed by Lawrence & Wishart (self-described as “independent radical publisher”, founded in 1936 and originally linked to the British Communist Party), Progress Publishers (Moscow) and International Publishers (New York) holds the copyright over at least volumes 1 to 10 of MECW and demanded that MIA remove them from their website by April 30th: ironically, Labour Day's eve.

If I am not mistaken, this would affect the first 10 volumes as in the following list:
  • General Introduction
  • Volume 1: (M) August 1835-March 1843
  • Volume 2: (E) August 1838-December 1842
  • Volume 3: (M) March 1843-Aug 1844. (E) May 1843-June 1844.
  • Volume 4: (M/E) 1844-45, incl. Holy Family & Condition of Working Class
  • Volume 5: (M/E) April 1845-April 1847, including German Ideology
  • Volume 6: (M/E) 1845-48, including Poverty of Philosophy and Manifesto
  • Volume 7: (M/E) 1848, articles for Neue Rheinische Zeitung
  • Volume 8: (M/E) 1848-49, articles from Neue Rheinische Zeitung
  • Volume 9: (M/E) 1849, articles from Neue Rheinische Zeitung
  • Volume 10: (M/E) 1849-51, including Peasant War in Germany
Lawrence & Wishart claim they need the revenue potentially generated by the sale of those volumes to educative institutions (W&L's full statement); while the MIA acknowledges L&W's legal rights, they deplore their decision (here, for their response).

Scott McLemee (from Crooked Timber) commented on the subject (some of the interventions in the comments thread are particularly useful); Ammar Aziz (from Lahore, Pakistan) is collecting signatures for his No Copyright for Marx Engels Collected Work public petition to L&W.

I'd urge L&W and MIA to keep the discussion, hoping that a compromise between their legitimate interests is reached.

Thursday, April 24, 2014

Chris Dillow: Keynes' anti-Semitism.

Here I was, making a big deal of "my" discovery of Keynes' anti-Semitism not knowing Chris Dillow and others wrote about it 5 years ago. Dillow:
"In a cryptic footnote here (pdf, via), Paul Samuelson refers to Keynes' anti-Semitism."
So, credit where credit is due.

Dillow makes some pertinent observations, which one should keep in mind before passing judgment on his Lordship's work:
"Even Keynes' admirers (such as Skidelsky and Moggridge) agree that Keynes was anti-Semitic - though in his favour it doesn't seem to have stopped him supporting Jewish refugees or even Zionism."
While I suspect Lord Skidelsky and Prof. Donald E. Moggridge aren't exactly representative of the universe of Keynes' admirers, I would leave things at that.
"And of course, his view of Jews is irrelevant in assessing the relevance of Keynesian economics today; we should avoid the 'poisoning the well' fallacy".
Again, Dillow is right (mostly). Keynes' views on Jews certainly seem irrelevant in assessing the role of aggregate demand in the business cycle, for instance, or the usefulness of fiscal stimulus; but they are highly relevant in assessing other parts of Keynes' legacy.

Ironically, a leading Jewish American disciple of Keynes, an avowedly anti-Marxist one, shows how his Lordship's anti-Semitic fixation could cloud his judgment. (I'll remind readers of my contention that Keynes' anti-Semitism had an influence in his criticism of Marx: link.)

The disciple is Paul Samuelson, whose "cryptic footnote" Dillow mentioned above (my emphasis):
"Keynes's visceral social repugnance would interest future historians less if it never contaminated his intellectual judgments. However early on, like Bertrand Russell, Keynes did recognize barbaric evils in Lenin's utopia. Strange though that instead of discovering the key role of Georgian Josef Stalin, it was the beastliness of Leon (Lev) Trotsky that Keynes's pen picks up on". (Paul Samuelson. "A few remembrances of Friedrich von Hayek (1899–1992)," Journal of Economic Behavior & Organization 69 (2009) 1–4, page 3 footnote)

Joan Robinson, a leading member of the English branch of the Keynesian family, describes her fellow economists' attitude towards Marx (Joan Robinson. "Preface to the second edition". An Essay on Marxian Economics. Macmillan. 1966. pp. vi-vii.):
"In those days [early 1940s] most of my academic colleagues in England thought that to study Marx was a quaint pastime (though Keynes, who was allergic to Marx's writings, received my Essay kindly) and in the United States it was disreputable".
Rational criticism, however, didn't explain that attitude:
"The academics did not even pretend to understand Marx. It seemed to me that, apart from prejudice, a barrier was created for them by his nineteenth-century metaphysical habits of thought, which are alien to a generation brought up to inquire into the meaning of meaning". (Emphasis mine)
I wonder to what extent that applies to Keynes himself and to what extent things changed since.

Thursday, April 17, 2014

Was DeLong Right?

After pouring long-thought scorn on Karl Marx and his economics ("I have long thought that Marx's fixation on the labor theory of value made his technical economic analyses of little worth", link), Prof. Brad DeLong revealed how he came to those erudite views:
"The economist Suresh Naidu once remarked to me that there were three big problems with Karl Marx's economics. (…) And, third, Marx was fixated on the labor-theory of value". (link)
Those puzzling about DeLong's opinion finally learned where it came from: he's long thought what Suresh Naidu once remarked to him. DeLong doesn't make any excuses: it's not his fault.

(DeLong's dog never ate his master's homework, either -- if you, like me, were wondering)

But, as DeLong also wrote:
"Thus he vanished into the swamp, the dark waters closed over his head, and was never seen again."
Naidu, understandably, decided to make his own opinion crystal clear:
"The larger point is that Marx's fertile mind generated many ideas, distributed over a lifetime of thinking and writing exactly as capitalism was transforming itself and the world". (link)
To me, this seems diametrically opposed to DeLong's unqualifiedly negative opinion. And if one is right, the other must be wrong, yes? Well, no; not necessarily, it seems. In fact, I must be mistaken, judging by Naidu's closing remarks:
"But all this said, I think Brad wrote a good column, even if the question of 'Was Marx Right?' is fundamentally silly".
So, there, the mystery is solved. However diametrically opposed, everybody's right; DeLong isn't wrong, neither is Naidu. It's all the NYTimes editors' fault, for asking silly questions! And Michael Roberts' too, for making irksome comments!


What the hell, I also blame Sandwichman, who also commented on Suresh Naidu's guest post at Slack Wire!


Now you may have noticed I sometimes seem less than impressed by mainstream economists (including many from some of the warring Keynesian sects), among other things for their apparently philistine attitude to Marx.

For instance, lately I've commented on the NewKe(ynesian) Prof. DeLong; but I've also been known to comment on a PoMo PoKe Wunderkind (furiously anti-NewKe, btw, apart from anti-Marxist); even the big cheese himself, Lord Keynes, has not escaped criticism.

Don't get me wrong. I have nothing against Keynesian economists. As a matter of fact, some of my closest friends are Keynesian economists…

Sunday, April 13, 2014

Keynes' Close Friends: Will's Turn.

Another commentator writes to deny Keynes' anti-Semitism. Will, the commentator, likes Antonio Garrido de la Morena's conclusion, but not his argument and instead he advances his own:
"For what it's worth, I think that Keynes's attitude toward Marx was probably a result of (A) his elitism, as you say; (B) his acculturation in the Marshallian tradition, which posited Marx and others as illegitimate heirs to Ricardo, and Marshall as the legitimate heir who had read the Great Man correctly; (C) a generally weak familiarity with the history of economic thought."
So, there, chemically pure: no anti-Semitism whatsoever.


Will's explanation is straightforward enough, but I have two questions. Fear not, I'll try to make it snappy.

First Question.
Let's assume for a moment your explanation, Will. Based on it, when Lord Keynes, oozing unshakeable confidence, wrote:
"How can I accept a doctrine [i.e. Marxism] which sets up as its bible, above and beyond criticism, an obsolete economic textbook [i.e. Das Kapital] which I know to be not only scientifically erroneous but without interest or application for the modern world?"
He was just faking it. He didn't really know what he was talking about (C in your explanation, Will). It's not his fault, mind you: he was only parroting Marshall and the "Marshallian tradition" (i.e. B), but instead of doing it out of anti-Semitism, he did it out of disdain for the "boorish proletariat" only (i.e. A).

Now, I like that explanation. The anti-Semitism bit aside, it doesn't seem different from mine! But (and that's the first question)… is that supposed to be a defence? I mean, one more of those and Keynes goes back to Epirus alone.

Second Question.
Unfortunately, Will, I can't accept your explanation: you (exactly like Garrido) refuse to consider the evidence of anti-Semitism and want us to follow you.

What part of the quote below, Will, penned in clear English by his Lordship himself, and included in my previous comment but ignored by you, is not obviously, undeniably, offensively, anti-Semitic?
"He [i.e. Albert Einstein] is a naughty Jew boy covered with ink-that kind of Jew-the kind which has its head above water, the sweet, tender imps who have not sublimated immortality into compound interest. He was the nicest, and the only talented person I saw in all Berlin. … Yet if I lived there, I felt I might turn anti-Semite. For the poor Prussian is too slow and heavy on his legs for the other kind of Jews, the ones who are not imps but serving devils, with small horns, pitch forks, and oily tails. It is not agreeable to see civilization so under the ugly thumbs of its impure Jews who have all the money and the power and brains."

Thursday, April 10, 2014

Keynes' Close Friends. A reply to AGM.

If you live in an English speaking country, you are familiar with at least some iterations of the little speech "I don't hate X; as a matter of fact, some of my best friends are X, but..." (where X is a minority group: say, blacks, Jews, Hispanics...). Whenever you hear it, you know a rant (usually ethnically-motivated) against X is not far behind.

Indeed, the speech is so common that some know it by its own name: the friend argument.


Reader Antonio Garrido de la Morena (April 8, 2014 at 9:19 AM) took issue with my statement that
"His Lordship [i.e. John Maynard Keynes], it turns out, had a well-documented but seldom acknowledged anti-Semitic streak, which, together with his also well-documented but seldom acknowledged elitism, apparently were enough to make of Marx and his work the targets of Keynes' disparaging, but not enough to induce his lordship to read Marx."
Tellingly, Garrido does not acknowledge Lord Keynes' "well-documented but seldom acknowledged anti-Semitic streak"; the parallel charge of elitism didn't deserve a mention, so it's hard to tell his position on that. Garrido's full comment:
"Your comment on Keynes is utterly wrong.
"It is true that Keynes was 'alergic' to Marx, but not because Marx were Jewish. As a matter of fact, another Jewish in Cambridge as Sraffa and Kahn where very close friends of 'his lordship'."
Garrido's comment cuts to the chase, for which I thank him. However, to fill in the intermediate steps would have helped, for his argument is simple and to the point... but ultimately fallacious.

Perhaps the easiest way to see why is by noticing that Garrido's argument is an instance of the friend argument and only slightly less absurd than Rowan Atkinson's sketch.

Let's put another audio-visual example. Former PM Julia Gillard accuses then opposition leader (current PM) Tony Abbott of being misogynist and sexist:

Inspired by Garrido, Abbott could just have replied: "You are wrong! I'm no misogynist: my mum, sisters, wife and daughters are all women!".

Even though he sold the Christian Messiah for 30 silver coins, Judas is no traitor. "No! You are utterly wrong!", replies Judas, "We were friends! The 30 silver coins prove nothing!"

Hopefully, you are satisfied with this explanation (and I do hope you are), so you can save yourself some time and skip the rest of this comment, which I hated writing. Otherwise, by all means...


Well, you asked for it.

Let's proceed step by step. The fact that some Jews (Piero Sraffa and Richard F. Kahn) and Lord Keynes allegedly were "close friends" (which, btw, Garrido neither defines, nor supports with any evidence), shows that Lord Keynes couldn't be an anti-Semite. After all, anti-Semites and Jews, Garrido seems to imply, can't have "friendly" relations: they can't talk to each other and work together. They probably can't share the same professional opinions.

To do so would be contradictory, and, well, people are not contradictory. (I mean, come one, people being contradictory!? Impossible!)

Therefore, his Lordship's "allergic" anti-Marxism had nothing to do with anti-Semitism (what the cause of this "allergy" was is not explained, either; it may actually be biochemical, I suppose).


Garrido, flesh-and-blood human beings (even demi-gods like Lord Keynes) are full of contradictions.

There is something perversely surreal, absurd even revolting in having to prove this. But I suppose it is incumbent upon me to show that his Lordship was a contradictory man. As I'll have to go into other people's private affairs, I apologise in advance.

Anyway, I'll note that Lord Keynes' personal life confirms abundantly my remark about contradictions, beginning with his marriage to Lydia Lopokova, after a lifetime of homosexual relationships. And I haste to add, this was observed by Lord Keynes' Bloomsbury other "close friends", who should know him best:
"To Duncan Grant, who was formerly the love of Keynes' life, this new development was shocking. 'Until I see him carrying on with L,' he wrote to Vanessa Bell, 'I must give up trying to imagine what happens-it beggars my fancy'." (link)
The malicious humour, and possibly the jealousy, notwithstanding, Grant had a point, a point that Lord Keynes' other "close friends" didn't miss and didn't fail to remark on: even to outsiders, Lopokova seems an unlikely partner for Lord Keynes and not only because of her gender, but for other reasons, including her Russian nationality.

In 1925 the year Lord Keynes married Lopokova, he also published his essay A Short View of Russia, where he explains the mood of oppression he observed in Soviet Russia: "in part, perhaps, it is the fruit of some beastliness in the Russian nature - or in the Russian and Jewish natures when, as now, they are allied together" (emphasis added).

However beneath his Lordship Lopokova was, according to observers and maybe even the groom, they actually got married and for all one knows lived happily for ever after.


I hope to have demonstrated Lord Keynes' immense capacity for self-contradiction. It is this element in Lord Keynes' personality which helps me to reconcile the idea of a man who (1) had good relations with some Jews (and who, more controversially, endorsed Zionism, then beginning to gain popularity among the Jewish diaspora), but (2) was able to write this of Albert Einstein and of the German Jews:
"He is a naughty Jew boy covered with ink-that kind of Jew-the kind which has its head above water, the sweet, tender imps who have not sublimated immortality into compound interest. He was the nicest, and the only talented person I saw in all Berlin. … Yet if I lived there, I felt I might turn anti-Semite. For the poor Prussian is too slow and heavy on his legs for the other kind of Jews, the ones who are not imps but serving devils, with small horns, pitch forks, and oily tails. It is not agreeable to see civilization so under the ugly thumbs of its impure Jews who have all the money and the power and brains." (emphasis added)
While the previous passages illustrate much of the ideology common at the time to anti-Semites of all stripes in Europe, it would be unfair to conclude here without observing that Lord Keynes and the British "educated bourgeoisie" (on whose side Lord Keynes would place himself in case of a class war) never condoned the use of violence or anti-democratic means against the British Jews.


On a personal note: I despise racists, even those of a less malignant strain. I don't like parasitic elitist toffs, either. And I make no apologies for that.

Mind you, I know the feeling is mutual and I'm perfectly cool with that.

So, I make a point of referring to Keynes as his Lordship, Lord Keynes and Baron Keynes. As I am a believer in reciprocity, it is meant to convey my contempt for the person, even if I, unlike them, can see merit in my enemies' intellectual work. Like I am fond of saying, two can play the contempt game, so why should his Lordship and his peers have all the fun?

It also highlights the divide existing between two opposed parts of our species. I didn't establish the separation, but I will not pretend it is not there and I want my readers to see and feel it. One day, I suspect, they will have to take sides.

In this last respect, Garrido, whether you like it or not, however surprisingly, his Lordship himself and yours truly are probably in agreement, Lord Keynes being, as he was, very comfortable with it.

Monday, April 7, 2014

Was Marx Right? Are You?

Last week The New York Times asked Brad DeLong, Tyler Cowen, Doug Henwood, Michael R. Strain, and Yves Smith whether Marx was right.

The New York Times in its characteristically meretricious style:
"In the golden, post-war years of Western economic growth, the comfortable living standard of the working class and the economy's overall stability made the best case for the value of capitalism and the fraudulence of Marx's critical view of it. But in more recent years many of the forces that Marx said would lead to capitalism's demise - the concentration and globalization of wealth, the permanence of unemployment, the lowering of wages - have become real, and troubling, once again." (Emphasis mine)
Well, two can play that game, so why should the NYTimes' editors have all the fun?

Anyway, as David Ruccio observed, it's interesting that the editors of this most global of global newspapers "felt the need at this point in time to host a debate on the question 'was Marx right?' and, then, that most of the participants admit that Marx did in fact get a great deal right".

Ruccio is right: if Marx is so evidently dead, why must people keep killing him all over again?

However, "most participants" is not the same as "all participants". Brad DeLong didn't admit that Marx had anything right: he has long thought Marx was wrong, wrong, wrong, on everything. In fact, Marx is deader than dead (even alive he was already dead), so let's kill him once more, just in case:
"I have long thought that Marx's fixation on the labor theory of value made his technical economic analyses of little worth. … Thus he vanished into the swamp, the dark waters closed over his head, and was never seen again."
A few lefty bloggers took him specifically to task for that. Others penned a more general response to all five commentators.

In my opinion, by far the best takedown was a focused one (aiming at DeLong) due to the blogger colourfully known as Sandwichman.

Quoting Marx, Sandwichman shows that DeLong managed the remarkable feat of being wrong in every single case (which is quite an achievement, even for a history of economic thought buff as DeLong).

In particular, Sandwichman demonstrates that Marx did not arrive at the labour theory of value for "ontological reasons", as DeLong (who seems to be reading PoMo PoKe bloggers lately) would have us believe:
"Marx surveyed a century and a half of thought in classical political economy 'beginning with William Petty in Britain and Boisguilbert in France, and ending with Ricardo in Britain and Sismondi in France' that dealt with the concepts of labor time and exchange value and their relationship. Of particular pertinence to refuting DeLong's ontological fantasy is Marx's discussion of the contributions of James Steuart and David Ricardo."
Matías Vernengo (one of Marx's modern Sraffian grandnephews), while more of a generalist, also noticed, like Sandwichman did, that in DeLong's writing, if not in his mind, Marx appears as the only classical economist who ever used the labour theory of value.

Moreover, Vernengo adds, DeLong seems to admire Adam Smith…
"And yet Adam Smith did use the labor theory of value, which should make his analysis of little worth, one would imagine. … One is forced to assume that [DeLong's] reasons for dismissing Marx are not related to the LTV, and are political, or are based in a misunderstanding of the LTV"

As DeLong, I too have long thought about these things and I have come to believe Vernengo has a point: something other than academic reasons must be behind DeLong's evident bad blood towards Marx.

To the two alternative explanations Vernengo advances, I think I can add a third, rather obvious, one.

The elephant in the room, the one nobody (not even Vernengo) seems to notice, is Marx's Jewish background, which never endeared him to the powers that be. For one, it didn't endear him to John Maynard Keynes. His lordship, it turns out, had a well-documented but seldom acknowledged anti-Semitic streak, which, together with his also well-documented but seldom acknowledged elitism, apparently were enough to make of Marx and his work the targets of Keynes' disparaging, but not enough to induce his lordship to read Marx.

Would it be possible that in that DeLong follows Baron Keynes?
"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist."

Finally, Michael Roberts, one of Marx's TSSI grand-kids, also adopted a generalist approach and briefly replied to the five original commentators, plus a particularly incompetent onlooker who decided to crash the party without being invited.

You can't blame that party crasher, though. After all, is there anything more fun and safe than bullying a dead Jew?