Saturday 30 August 2014

The Most Dangerous Woman in America.

"How can I adopt a creed [i.e. Marxism] which, preferring the mud [i.e. you and yours] to the fish, exalts the boorish proletariat above the bourgeois and the intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement?" (J.M. Keynes, "A Short View of Russia", 1925. My emphasis.)

Mary (Mother) Harris Jones is but one example of those the "bourgeois and the intelligentsia" so despise, hate, and fear.

Mother Jones. [A]


How did a lonely migrant woman, with little wealth or education, become "the most dangerous woman in America", as the West Virginia district attorney, Reese Blizzard, called her in 1902?

I cannot speak for Blizzard, but one thing is for sure: her fearsome reputation didn't come from being the sinister conspirator of bourgeois nightmare. Nobody, not even her opponents, ever claimed she had anything to do with the Elders of Zion, the Illuminati, reptilian aliens, or other night frights of rich people's feverish imagination.

Reading Lance Selfa I came with an answer. Trotsky -- whom Selfa quotes -- compares Jones with another American left-wing icon, Emma Goldman:
"Lying in the open air, I looked through a collection of articles by the anarchist Emma Goldman with a short accompanying biography, and am now reading the autobiography of 'Mother Jones.' They both came from the ranks of American working women. But what a difference! Goldman is an individualist, with a small 'heroic' philosophy concocted from the ideas of Kropotkin, Nietzsche and Ibsen. Jones is a heroic American proletarian, without doubts or rhetoric, but also without a philosophy. Goldman sets herself revolutionary aims, but tries to achieve them by completely unrevolutionary means. Mother Jones always sets herself the most moderate aims: more pay and less hours, and tries to achieve them both by bold and revolutionary means. They both reflect America, each in her own way: Goldman by her primitive rationalism, Jones by her no less primitive empiricism. But Jones represents a splendid landmark in the history of her class, while Goldman signifies a departure from her class into individualistic non-existence. I could not stomach the Goldman articles: lifeless moralizing which smacks of rhetoric, despite all its sincerity. I am reading the Jones autobiography with delight." (My emphasis. See here)
Mother Jones' didn't call for revolution, violent or otherwise, or the abolition of the property of the means of production. That's not why she was "dangerous". What she did do was equally outrageous and unforgivable, from the point of view of the powerful: she sided, not in words only, but in actions, with the "mud", the miners and seamstresses, her adopted children. She gave them voice and made them visible.

To side with the "boorish proletariat" is more than enough to make of you a dangerous person to be ridiculed, whose ideas must be opposed out of hand, if not deliberately misrepresented. And if you are "the bourgeois and the intelligentsia" why wouldn't you do that? Isn't the right to humiliate, oppress, deceive, and exploit your natural right?

Image Credits:
[A] "Mother Jones, American labour activist (04/11/1902)". Author: Bertha Howell. This media file is in the public domain. Source: Wikipedia.

Monday 25 August 2014

You Asked for Institutions.


A few days ago, Daron Acemoglu and James Robinson published a critique ("The Rise and Fall of General Laws of Capitalism") of Thomas Piketty's book "Capital in the Twenty First Century".

In it, Acemoglu and Robinson liken Piketty's views with those of "the great classical economists, Malthus, Ricardo and Marx":
"We argue that all of these general laws are unhelpful as a guide to understand the past or predict the future, because they ignore the central role of political and economic institutions in shaping the evolution of technology and the distribution of resources in a society".
Branko Milanovic replies to the charge that Piketty totally neglects institutions:
"This is hard to understand since Piketty's explanation for a large part of changes in inequality in the US, France and elsewhere are precisely institutional: higher and then lower income and inheritance tax rates, abolition of slavery
"Actually, that part of the critique is fundamentally dishonest. It proceeds as follows. First, Acemoglu and Robinson establish the equation Piketty=Marx 
So far, so good. The Acemoglu/Robinson charge against Piketty is obviously unfounded.

But then, as if to show he is a reasonable mainstream economist, Milanovic "bounces" the charge against Marx:
"They then criticize Marx for ignoring institutions, more or less correctly (but clearly that has nothing to do with Piketty)".

Today, David Ruccio literally taught the three men a lesson. Out of Capital, volume 1 -- only -- he cites thirteen (yes, 13!) chapters where Marx considers institutional details in addition to an assortment of works by Marx and Engels (including Engels' "The Origin of the Family, Private Property, and the State" -- can there possibly be any title more explicit about its institutional content?).

Ruccio closes his post with this (although I urge you to read the whole epic takedown post):
"They want institutions? Then try this vivid summary (from Chapter 31) of the institutions that gave rise to capitalism:
"Tantae molis erat, to establish the 'eternal laws of Nature' of the capitalist mode of production, to complete the process of separation between labourers and conditions of labour, to transform, at one pole, the social means of production and subsistence into capital, at the opposite pole, the mass of the population into wage labourers, into 'free labouring poor,' that artificial product of modern society. If money, according to Augier, 'comes into the world with a congenital blood-stain on one cheek,' capital comes dripping from head to foot, from every pore, with blood and dirt.
"Acemoglu and Robinson and Milanovic (not to mention Piketty) can't, it seems, handle that kind of institutional analysis."

Will Very Serious Economists learn anything from this? My guess, for what it is worth: not a chance in hell.

Saturday 23 August 2014

Nietzsche at Nuremberg.

Thursday, 17 January 1946.

Morning Session

The President: "I call upon the Counsel for France".


M. François de Menthon (Chief Prosecutor for the French Republic):
"Over a people in this state of spiritual crisis and of negations of traditional values the culminating philosophy of Nietzsche was to exercise a dominant influence. In taking the will to power as a point of departure, Nietzsche preached, certainly not inhumanity but superhumanity. If there is no final cause in the universe, man, whose body is matter which is at once feeling and thinking, may mould the world to his desire, choosing as his guide a militant biology. If the supreme end of humanity is a feeling of victorious fullness which is both material and spiritual, all that remains is to insure the selection of physical specimens, who become the new aristocracy of masters.
"For Nietzsche the industrial revolution necessarily entails the rule of the masses, the automatism and the shaping of the working multitudes. The state endures only by virtue of an elite of vigorous personalities who, by the methods so admirably defined by Machiavelli, which alone are in accord with the laws of life, will lead men by force and by ruse simultaneously, for men are and remain wicked and perverse.
"We see the modem barbarian arise. Superior by his intelligence and his wilful energy, freed of all conventional ethics, he can enforce upon the masses obedience and loyalty by making them believe in the dignity and beauty of labor and by providing them with that mediocre well-being with which they are so easily content. An identical force will, therefore, be manifest in the leaders, by the harmony between their elementary passions and the lucidity of their organizing reason, and in the masses, whose dark or violent instincts will be balanced by a reasoned activity imposed with implacable discipline.
"Without doubt, the late philosophy of Nietzsche cannot be identified with the brutal simplicity of National Socialism. Nevertheless, National Socialism was wont to glorify Nietzsche as one of its ancestors. And justly so, for he was the first to formulate in a coherent manner criticism of the traditional values of humanism; and also, because his conception of the government of the masses by masters knowing no restraint is a preview of the Nazi regime. Besides, Nietzsche believed in the sovereign race and attributed primacy to Germany, whom he considered endowed with a youthful soul and unquenchable resources."
(see here)

After the previous tragicomic interpretation of Nietzsche and his moral philosophy, the words of the French Chief Prosecutor at Nuremberg add a rather sinister dimension to the man and his political philosophy.

And, yet, Nietzsche (and his political philosophy) is the man some (like this young, up-and-coming Post Keynesian) want to propose as your inspiration, instead of Karl Marx.

Now, choose.

Don't worry if you have a family. It's not me you'll have to answer to, if you chose the wrong guy.

Image Credits:
[A] Nuremberg Trials: some of "he accused on their bench (front left to right: Wilhelm Frick, Julius Streicher, Walther Funk; back left to right: Franz v. Papen, Arthur Seyß-Inquart, Albert Speer, Konstantin v. Neurath)". The image is in the public domain. Source: Wikipedia.

Tuesday 19 August 2014

Wren-Lewis and Syll on Prediction.

Prof. Simon Wren-Lewis (economics professor at Oxford University, and a fellow of Merton College) has long been posting on the topic of prediction. In a recent post he writes:
"Macroeconomic forecasts produced with macroeconomic models tend to be little better than intelligent guesswork. That is not an opinion - it is a fact. (…) In other words, model based forecasts are predictably bad.
"The sad news is that this situation has not changed since I was involved in forecasting around 30 years ago."
His conclusion is that, even tough unreliable, macroeconomic forecast/prediction is "probably no worse than intelligent guesses". Although he doesn't specify, he is presumably speaking of predictions based on New Keynesian/Neoclassical models.

In reply, Prof. Lars Pålsson Syll (professor of civics at Malmö University) wrote about the impossibility inherent in forecasting/prediction:
"The future is inherently unknowable - and using statistics, econometrics, decision theory or game theory, does not in the least overcome this ontological fact. The economic future is not something that we normally can predict in advance. Better then to accept that as a rule 'we simply do not know.'
"So, to say that this counterproductive forecasting activity is harmless, simply isn't true."
Syll goes further than Wren-Lewis: he seems to make a case for the impossibility of prediction/forecast in economics in general, and, unlike Wren-Lewis, accuses forecasting/prediction of being harmful.

Regardless of their philosophical differences, or whether New Keynesian/Neoclassical models are to be blamed, both men seem to agree on two things: (1) prediction is essentially out of the question. What's more, if I am not mistaken, both (2) tend to favour government intervention in the economy.


While I disagree with them on what refers to prediction/forecasting, I am not taking sides in their debate, neither am I in their league and I won't pretend otherwise.

I can't, however, avoid this question: if prediction is at least very unreliable (if not outright impossible and harmful, as Syll seems to claim) -- i.e. point (1) above -- how can an active government  -- i.e. point (2) -- predict the effects of its policies?

This is not a matter of simply making a general statement like "plan A is the way to go", and leave things at that, for if the government faces mutually exclusive courses of action (say, plan A, B, and C), it must decide which is the most beneficial; for that, it seems, it would need some kind of quantitative estimate: say, how many jobs it predicts each alternative would create.

If econometric methods are not reliable, what kind of methods would be used instead?

In the absence of good answers to those questions (and it would be incumbent upon both men to provide them), it seems to me the ultimate implication of their reasoning is that government intervention could be as unreliable and potentially as harmful as the predictions on which it is based on. To me, this seems a pretty good argument for a hands-off government: laissez faire.

What's more, although they focus on macroeconomic policy, I see no reason why their argument should be limited to that. Urban planning, for instance, uses pretty much the same kind of data and forecasting methods: should it be abandoned? How do public transport authorities decide how many lanes a new road should have? How many beds should a new hospital have?

Sunday 17 August 2014

Wages and Profits.

"plural noun: wages
"1. a fixed regular payment earned for work or services, typically paid on a daily or weekly basis.
"'we were struggling to get better wages'
"synonyms: pay, payment, remuneration, salary, emolument, stipend, fee, allowance, honorarium; More" (see here)
With wages, things work like this: you perform a task, you do something which your employer deems necessary, and your employer pays you for that, usually after you've done whatever it is you had to do.

For example: you are the tea lady, you serve tea, coffee and cookies. You are the company's accountant, you keep the company's accounting books. You are the CEO, you run the firm. You do your job, you are paid; you don't do your job, you are not paid. Easy.

It's all about work.

"1. a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
"'record pre-tax profits'
"synonyms: financial gain, gain, return(s), payback, dividend, interest, yield, surplus, excess; More" (see here)

With profits, things are this way: you own a business or a share of a business and you are paid for that, in proportion to your share. The same with losses. You don't own a business or part of a business, you don't get any profits (or suffer any losses). Period.

For instance, if you buy shares in the Stock Exchange, you don't need to know what the company listed as ABCXYZ does, or what that symbol means. You don't need to run the company, work there, or move a finger: you'll get dividends, for the amount the company decides, whenever it decides, in proportion to the stock you hold; and as a stockholder you have your say in that decision. Easy.

It's all about ownership.


What if Joe, who is the firm's CEO (or Maggie, the tea lady or Bob, the accountant, for that matter), also owns shares? He is the big boss and also a shareholder: he gets his salary for doing his job (as any other employee/worker) plus dividends (as any other shareholder). Two different roles, two different incomes.

Each and every single one of them knows that those two sources of income are different. If Joe quits his job but keeps his shares, he'll keep receiving dividends; if he sells his shares but keeps his job, that won't stop him from demanding his salary payments.

If Joe dies -- God forbid -- his estate will keep receiving dividends, potentially per saecula saeculorum (unless the shares are sold); but bye, bye to CEO compensation.


(19/08/2014): Does it mean that CEOs, like Joe, are in the exact same position as tea ladies, like Maggie, or accountants, like Bob?

Let the cartoon below (h/t David Ruccio) answer that question:

That's his job.

Thursday 14 August 2014

Was Keynes a Conservative?

Prof. Bill Mitchell (Professor in Economics at the Charles Darwin University, Director of the Centre of Full Employment and Equity, and leading MMT proponent: here) recently pointed out that "Keynes was a conservative" and that
"We used to talk about the 'Keynesian Revolution', in the context of his debunking of the perceived classical thinking at the time (1930s) but it was replacing a flawed theoretical structure with a conservative set of ideas based on reality. Hardly revolutionary." (see here)
To support his claim, Mitchell presented a quote from Bruce Bartlett about Keynes' motivations:
"… two basic motivations … One was to destroy the labor unions and the other was to maintain the free market. Keynes despised the American Keynesians. His whole idea was to have an impotent government that would do nothing but, through tax and spending policies, maintain the equilibrium of the free market. Keynes was the real father of neoconservatism, far more than (economist F.A.) Hayek!"
Predictably, the Defenders of the Truest Faith Martyr's Brigade jumped to the Prophet's defence, ready to do Jihad. They "really don't get where Bartlett gets that idea from at all".

I don't presume to speak for Bartlett, but maybe he got that idea from John Kenneth Galbraith, whom he cites immediately after Drucker's quote:
"John Kenneth Galbraith, whose politics were well to the left of Keynes, not to mention Drucker, agreed with this assessment [i.e. Drucker's]. 'The broad thrust of his efforts, like that of Roosevelt, was conservative; it was to ensure that the system would survive,' he wrote. But, Galbraith added, 'Such conservatism in the English-speaking countries does not appeal to the truly committed conservative'."
Or perhaps from the Prophet Keynes himself:
"As Keynes himself explained, 'the class war will find me on the side of the educated bourgeoisie.' He expressed contempt for the British Labour Party, calling its members, 'sectaries of an outworn creed mumbling moss-grown demi-semi Fabian Marxism.' He also termed it an 'immense destructive force' that responded to 'anti-communist rubbish with anti-capitalist rubbish'."
(The whole article is available from Forbes).

But, wherever Bartlett got that, Professor Lord Skidelsky would seem to agree with him:
"From a distance it is easy to see how many presuppositions they [Hayek and Keynes] shared. (1) They both came to their economics through philosophy. (2) Neither believed that economics was like a natural science. (3) Both emphasised the importance of subjectivism in economic thinking. (4) Both were critical of econometrics. (5) Both subscribed to procedural theories of justice. (6) Both were inegalitarians, believing in the beneficial spillovers from pockets of wealth. (7) Neither was an ardent democrat. (8) When Keynes wrote of the market system in 1936 that it is 'the best safeguard of the variety of life', preserving 'the most secure and successful choices of former generations' it may have been Hayek speaking. (9) Both believed in the overriding power of ideas, and rejected or ignored explanations of events in terms of vested interests and technology. (10) Both men admired Hume and Burke and delighted in the paradoxical wisdom of Mandeville. (Keynes's General Theory is full of 'unintended consequences', eg. the 'paradox of thrift'.) What Hayek would have called Keynes's 'constructivist rationalism' was tempered by prudence and regard for tradition. (11) Hayek called himself an 'Old Whig', and Keynes had a good deal of whiggery in him. (12) Both came to believe that Western civilization was precarious, which they found hard to square with their jointly held conviction that it was an evolutionary success story. (13) In short, both were liberals, and finally understood, that on the great issues of political philosophy and personal freedom, they were in the same camp. It was on the means needed to preserve a free society that they differed." (see here)
I mean, Keynes was a liberal; in fact, as much liberal as Hayek 

Hail Mary full of grace, it seems the heresy is more extended than one would have imagined 


(17-08-2014) To be crystal clear: it is good to see there still remain a few men of courage, like Prof. Mitchell. He may be a post-Keynesian, but unlike the Keynesian mujahideens, he is an honest intellectual, not a cheap ideologue (you guys know who you are).

Humans Need not Apply.

But, never fear, you can exorcize those evil spirits by chanting in a trance-like manner: "There will always be jobs". That and enough faith you and you alone will keep your job should do the trick.

Besides, even if you lost your job, you can always apply to Joe Hockey's new Newstart Allowance...

Monday 11 August 2014

Nietzsche, the Übermensch?

Or, The Birth of Tragicomedy.

In life, Friedrich Wilhelm Nietzsche (1844-1900) was, or tried to be, many things. Intellectually influential, however, he was not, as the following Google Ngram chart suggests:

(Right-click to open in a separate tab)

Born well into the Romantic period, Nietzsche in many ways embodies, with diverse degree of success, notions associated with that movement: the man struggling alone against frightful difficulties, against society itself and its norms, to bend the world to his will: the Übermensch (Superman).

Nietzsche's goal in life:
"I teach you the overman [i.e. Übermensch, literal translation; superman]. Man is something that shall be overcome. What have you done to overcome him?" (link)
"Wanderer Above the Sea of Fog" [A]

It was in death (first intellectual and, then, physical) that Nietzsche became influential. There is little more romantic than that.


During most of his childhood, after his father and little brother's deaths, Nietzsche was the only male in a not very affluent Prussian household, dominated by strong female authority figures (including his mother and domineering sister, Elisabeth -- two years younger -- grandmother and two unmarried aunts).

Never much of a "farfallone amoroso" (oblivious to his shyness, moody disposition, and chronic financial insolvency, Nietzsche apparently attributed his lack of success with the ladies to his appearance alone), Nietzsche twice turned to the military in pursuit of fulfilment ("Cherubino, alla vittoria! Alla gloria militar!"), in spite of his poor eyesight and health.

The first time (1867), as a trainee artillery officer, a horse-riding accident left him disabled. A few years later, during the Franco-Prussian War (1870-1871), fully recovered from his injuries, he volunteered for duty but, after a short stint, was sent home in defeat, not by French bullets or bayonets, but by diarrhoea and diphtheria.

After that experience, Nietzsche settled for academic life. However, unhappy with the professorship his teacher, Friedrich Wilhelm Ritschl, got for him at the University of Basel, in 1878 Nietzsche resigned, to become a gardener. A few weeks later, he quit his new career; his weak back taught him the seemingly unimagined: gardening involves not only fresh air and the magnificent Alpine outdoors; it involves back-breaking work.

Then, he attempted a writing career, but his books wouldn't sell, leaving him always short of cash.


On January 1889, Nietzsche's writing career came to an end, after suffering an irreversible mental breakdown. A final indignity awaited for him: his care fell upon Elisabeth (for whom Nietzsche had mixed feelings), until his death in 1900.

Those proved to be Nietzsche's luckiest career moves, as the Google Ngram chart also suggests. Elisabeth would become his best literary agent: immortality finally was at hand.


As is often the case with philosophers, Nietzsche's work is subject of interpretation. For Alain de Botton [*] a generous interpreter (from whom I draw heavily), Nietzsche is a moral philosopher and tragic romantic hero whose own life illustrates his philosophy of struggle in the face of overwhelming adversity:
"Like his father, he [i.e. Nietzsche] had wished to offer us paths to fulfilment. But unlike pastors … he had judged difficulties to be a crucial prerequisite of fulfilment, and hence knew saccharine consolations to be ultimately more cruel than helpful." [page 243]
While that interpretation allows us to salvage something valuable from his life, Nietzsche himself conspires against it, for his own inadequacies (among them, lack of empathy, and egotism) and lack of self-awareness. More a tragicomedy than a drama.

[*] De Botton, Alain. 2000. "The Consolations of Philosophy". Sydney: Penguin Books Australia.

Image Credits:
[A] "Wanderer Above the Sea of Fog", 1818, by Caspar David Friedrich. This is a faithful photographic reproduction of a two-dimensional, public domain work of art. The work of art itself is in the public domain. Wikipedia

(17-08-2014) Added the short paragraph on Nietzsche's luckiest career move.

Saturday 9 August 2014

Rain Dances.

John Quiggin, it seems, doesn't like prog rock much (maybe he likes "conservative" rock better?).

I, at the other hand, although ambivalent about the "progressive" label when applied in other contexts, was a big prog rock fan. A matter of tastes, I suppose.

For you, youngsters, prog rock (progressive rock) was a largely British musical genre popular from the late 1960s to 1970s. From the U.K. it extended its influence to other parts of Europe and Canada; while in the U.S. a few bands, like Chicago, occasionally managed a somewhat similar feeling.

From Camel's 1977 album "Rain Dances" (largely instrumental, in my opinion their best by far), the opening and closing tracks are variations of the same theme (note the pizzicato guitar, played by Andrew Latimer, in Rain Dances: the rain drops):

First Light (opening track):

Rain Dances (closing track):

Thursday 7 August 2014

Despotism (2014)

For once, it seems I was way too optimistic.

In the previous post, doubting that liberal/capitalist democracy was about to collapse, as David Selbourne apparently believes, I wrote: "I am not sure the situation has deteriorated as much as Selbourne implies".

These were the news today, courtesy of The Guardian, Australia:

Website visits will be saved for two years, says Brandis
Confusion over how metadata laws will work
'You want my metadata? Get a warrant'
Should I worry about data retention?
Oliver Laughland: my 24 hours in metadata

Perhaps liberal democracy is not about to collapse in Oceania, but the Abbott government sure is trying hard.

Heil Abbott!

Wednesday 6 August 2014

Selbourne on Democracy's Collapse.

David Selbourne (a British political philosopher, social commentator, historian of ideas, and writer) published recently an article on the left's failings, and particularly those of the British Labour Party, post-Modern left and such.

There's much I share in Selbourne's criticism. But then again, to point to the many errors of the Left is like shooting fish in a barrel.

There are several things one could comment from Selbourne's rather long article, but I'll touch three only.


Near the beginning of his article, Selbourne writes:
"... today's collapsing liberal democracies cannot be saved from themselves by socialists of whatever stripe or kind. They [i.e. the socialists] had their chances and blew them."
I'm not sure the situation has deteriorated as much as Selbourne implies; but, in any case, I don't think Marxists should feel guilty about liberal democracy's demise. Selbourne knows Marx claimed that capitalism was doomed to collapse, surely? As catastrophic as the loss of democracy would be, liberal democracy is just a piece of the whole building.

It was Keynes, the social democrats, Fabian socialists, Laborites, and liberals (many of them intellectuals much like Selbourne himself) who thought they could keep capitalism from collapsing.

If liberal democracy collapses, as Selbourne fears, it is at them that he should direct his reproach: it is them who had their chances and blew them.


The second thing Selbourne writes (around the middle of the article) and I'd like to comment is:
"Moreover, phoney progressives make their own pick'n'mix selection of ills on which to focus and ignore others, or oppose measures to deal with them."
Considering that Selbourne is providing his own list "of ills on which to focus and ignore others, or oppose measures to deal with them", I trust the irony of that statement will not be lost on his readers.


In closing, I'll pick one among Selbourne's own "pick'n'mix selection of ills" and measures to save liberal/capitalist democracy from itself:
"It is a civic consciousness, not a class consciousness, that we need."
So, let's all together, exploited and exploiters, workers and capitalists, poor and rich, powerless and powerful, light incense sticks, join hands, concentrate intensely, and repeat the mantra "I've got to have civic consciousness".

This, no doubt, will avoid democracy's collapse. Right?