Wednesday 28 December 2016

The Peasant and the Daimyo.


A sensei once told me a story about a poor Japanese peasant farmer and his feudal lord. This is my rendition of it.

Friday 23 December 2016


"But with the development of industry, the proletariat not only increases in number; it becomes concentrated in greater masses, its strength grows, and it feels that strength more. … Thereupon, the workers begin to form combinations (Trades' Unions) against the bourgeois; they club together in order to keep up the rate of wages; they found permanent associations in order to make provision beforehand for these occasional revolts. Here and there, the contest breaks out into riots.
"Now and then the workers are victorious, but only for a time. The real fruit of their battles lies, not in the immediate result, but in the ever expanding union of the workers." (The Communist Manifesto)
How old is the communist/socialist movement? I can't answer that with any precision. For my purposes, let's say it's 168 years old, and started in 1848 with the publication of the Communist Manifesto. That's an arbitrary and questionable answer. Still, I hope you'll indulge me: the Manifesto has been translated to at least 80 languages, and is considered a very influential work. It often is the first -- in many cases, doubtless the only -- Marxist text readers encounter.

Monday 19 December 2016

On National Balance Sheets.

"Business annual reports provide two basic accounting statements—a balance sheet, which is also termed a statement of condition, and an income statement. A firm's balance sheet lists the dollar value of its assets and liabilities as of a specific date. A firm's income statement lists its revenues and expenses (the difference being profit) for a year. Similar statements are prepared on a national level in the United States. Analogous to a firm's income statement, a nation's production of goods and services for a year (as well as its spending and saving decisions) are summarized in its gross national product (GNP) accounts. Analogous to a firm's balance sheet, the U.S. balance sheet lists the dollar value of assets and liabilities for U.S. residents. The flows that are identified in the GNP accounts and elsewhere are linked to changes in the levels of assets and liabilities reported in this balance sheet".

Thursday 15 December 2016

Super Pay Scam?

The latest pay scandal in Australia? ABC News Online (also SBS) reports that:
"About a third of Australian workers are being ripped off by rogue employers who are holding back some or all of their superannuation entitlements, according to a report out today.
"Research by Industry Super Australia and Cbus has found employers dodging superannuation payments are pocketing $3.6 billion per year from 2.4 million workers.
"Under the mandatory Superannuation Guarantee, employers are required to contribute the current minimum 9.5 per cent into the super funds of any worker aged 18 and over earning $450 a month.
"But using Australian Tax Office (ATO) and Australian Bureau of Statistics (ABS) data, the study suggests the average worker was short-changed a conservative $1,489, or four months of super, in 2013-14."
What does it all mean?

Thursday 8 December 2016

The Poverty of the Liberal "Left".

I started writing this as a comment to an Australian friend's post. I decided to publish it here, too, so as to share it with other readers. It's slightly edited.

Since the Trump victory I've been trying to hear all the sides of the controversy. I claim no expertise on the issues involved. I'm just a foreigner curious about all the hullabaloo. It took me some effort, because I've never had much interest in American politics. I don't have too much time to research that, either. However, in spite of limitations, this is an exercise we all should try.

A few things I've found seem to me symptomatic of the political, intellectual, and moral bankruptcy of the American "left" and its identity politics.

Friday 2 December 2016

Friedman as Logician (ii)

Faust's pact with Mephisto,
engraving by Julius Nisle, circa 1840. [A]

The previous post argued that Friedman's methodology allows unsound arguments.

Fine. So what?

That post provides material sufficient for an answer. As it happens, the answer turns out to be delightfully topical: unsound arguments are a Faustian bargain.

Tuesday 29 November 2016

Free State of Jones.

Newton Knight (1837–1922). [A]
It's October, 1862. CSA Army medic Newton ("Newt") Knight, already sceptical about the real motivation behind the secession and appalled by the carnage he witnessed in the battlefield, deserted. Upon returning to his farm in Jones County, Mississippi, Knight witnesses the abuses visited by the Confederate authorities upon the white farm women left behind. Knight intervenes and is forced to join a band of runaway slaves, hiding in the swamps. Welcomed by the former slaves, Knight befriends and leads them, after finding they share a common cause.

Thursday 24 November 2016

Friedman as Logician (i)

"Few persons care to study logic, because everybody conceives himself to be proficient enough in the art of reasoning already. But I observe that this satisfaction is limited to one's own ratiocination, and does not extend to that of other men". Charles S. Peirce.
"You seem a little confused. You [sic] first statement ‘all dogs are mammals' is indeed circular". Phil Stein.

If the proposition "good reasoning is unimportant" were a human being, it would surely be an extremely unpopular and sad character: few would like to be seen in her company. In particular, economists and econo-aficionados of all stripes glory themselves in their assumed, but frequently unproven, logical thinking.

Monday 21 November 2016

Bits and Pieces: Aliens Edition.

Capitalism is a mess.

After a year's worth of news involving 7-Eleven Australia franchisees scamming their staff (Google News informs us: "About 562,000 results"), another new week brings us … another new 7-Eleven pay scandal! Surprise!

Friday 18 November 2016

Friedman's Methodology: Maximally Questionable.

The expression below shall prove useful, even if we avoid the maths. So, be brave:

        Max p*q(K, L) – w*L – r*K
       K, L
(1)     K >= 0
        L >= 0

Firms and households/consumers are the two fundamental economic agents: microeconomics begins with their study. Expression (1) is the firm's most basic representation: it shows its profit maximisation problem in the long run and embodies a number of different assumptions (see Appendix 1, for details). Even if readers find that expression otherwise cryptic, at least the "Max" should indicate "maximisation", while p*q - w*L - r*K is profits: revenue (price times quantity) minus costs (wage bill: wages times manhours; and capital costs: percent return times capital).

Tuesday 15 November 2016

Her Grampa Saved Neil Armstrong!

"My grandfather had a lot of stories", writes Katie Mack, "but there was one that transfixed me: about how he worked with NASA and saved the crew of Apollo 11".

Really cool story. Mack's pride in her grandad is justified.

21/01/2016. "This is About - The Moon and Other Things", by Robyn Williams and Jordan Raskopoulos (14/01/2017) is an extended interview with Prof. Katie Mack (University of Melbourne page, personal website) about her grandfather, Apollo 11 and other things. She herself seems to be a very interesting young lady.

Saturday 12 November 2016

Dorman on Ideology.

One may learn something from Peter Dorman … in his better moments.

An example? "Taking a Stand on Standpoint" is a good post (mostly).

Prof. Dorman describes the relationship between one's position in the pecking order and one's beliefs system (ideology) in terms of proclivities or predispositions:
"Any differentiated social position, such as one’s national background, religion, subculture, age, etc., could be the basis for ideological proclivities. This wider conception of ideology begins to appear in Karl Mannheim and his program for a sociology of knowledge."

Tuesday 8 November 2016

Calling the Election: the People Lost.

Two sides battled it out for nearly a year: the crook vs the unhinged, the loudmouth vs the liar, the grotesque vs the repulsive, the misogynist and racist vs the elitist warmonger, the self-declared billionaire vs the Wall Street puppet. In short: the deplorable vs the irredeemable. One side had to win.

And the winner is... Hillary Trump! No, wait! It was Donald Clint'n?!

Human kind dodged a bullet and the world, once again, was made safe for democracy.


The older I get, the wiser this idiom sounds to me: same shit, different pile. To American readers: my sympathies.


Wikileaks and Julian Assange have endured a lot of criticism from liberals for publishing information damaging to the Hillary Clinton campaign. Well, it's time Assange addressed this issue and it's only fair to give him the chance of explaining himself: "Assange Statement on the US Election" (November 8, 2016), by Julian Assange.

Saturday 29 October 2016

Steve Roth Plays the Good Cop.

Source: Table H-12

In the millennia-long[*] evolution of human societies and economic systems, many things have changed. One thing, however, hasn't: there are two kinds of people. There are those being screwed (call them slaves, serfs, workers if you wish), and those doing the screwing (i.e. slaveholders, feudal lords, capitalists, respectively). For short, let's call the former group the "screwees" and the latter,  the "screwers".

Wednesday 12 October 2016

Contract Theory and Adam Smith.

Luke 16:1-13. (Source)
A fascinating thing about "A Scorecard to Keep Track of Players and Their Agents", which I mentioned last time, is that it traces contract theory back to a 1976 paper by Michael Jensen and William Meckling, and, much more distantly, to Adam Smith's 1776 "Wealth of Nations" (the whole section is well-worth your time):
"The directors of such [joint-stock] companies, however, being the managers rather of other people's money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private co-partnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master's honor, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company." (Emphasis added)
That quote is 240 years old. Note that Smith already uses the word "manager". "Stewards of a rich man" apparently alludes to an even earlier source: Luke 16:1-13. Concerns about managers/capitalists aren't recent by any means.

Monday 10 October 2016

Nobel: Capitalist as a Contractual Role.

This year's so-called Nobel Prize in Economics went to Oliver Hart (UK) and Bengt Holmström (Finland), from Harvard University and the Massachusetts Institute of Technology, respectively, for their contributions to Contract Theory.

As a subfield of microeconomics, Contract Theory probably is of little interest to macroeconomists. Similarly, econo-aficionados -- normally obsessed with macroeconomic policy -- might be indifferent to that announcement.

I think that would be unfortunate: Marxists and leftists, in general, should be interested.

Wednesday 5 October 2016

Romer’s Identification Problem in a Nutshell.

Unidentfied Economic Object. [A]
In his recent paper, Paul Romer mentioned several problems in macroeconomics. Some are clear enough and anyone can understand them: unmeasurability and unobservability of variables, for instance. I've written about that.

Others are more technical; the "identification problem", among them.

So, what is the "identification problem"?

David Ruccio explains using a simple supply and demand model. It's very didactic, so readers can follow easily (hell, even I did!), to get a general idea. It has a drawback, though: Prof. Ruccio explains the identification problem in a supply/demand setting, not in the specific situation Prof. Romer wrote about.

Based on Prof. Ruccio's explanation, I'll provide more concrete details using a "toy" model.

Thursday 29 September 2016

Open Letter to Young Leftists.

Dear Young Leftists,

It's been ten years since the housing bubble burst in the US back in 2006, followed by the Great/Long Recession.

Time flies, as they say.

Saturday 24 September 2016

Dave Oliver: Vote Down the TPP.

The ACTU's Dave Oliver is sending this email:
Our PM is working his hardest to ram through a dangerous deal. We need to stop him.
Right now, Malcolm Turnbull is swanning around the United States, pushing for a trade deal that could cost you your job, your health and our democracy: the Trans Pacific Partnership (TPP).
When he returns he'll set his sights on our Senators and try to get them to rubber-stamp it.
Luckily, the Liberals don’t have the numbers in the Senate to pass this dangerous deal if Labor, the Greens and the crossbench unite to block it.
Will you sign the petition calling on all Senators from all parties to reject this dangerous deal and stand up for Australian jobs, health and democracy?
We have to defeat the TPP because:
  • it allows corporations to sue Australia just for making laws in the public interest (like lowering the cost of medicines for the sick).
  • it will force Australia to take even more workers on dodgy visas, undermining our wages and conditions and allowing corporations to make a killing off the backs of exploited foreign workers.
  • it says it will protect workers and the environment but is vague and almost unenforceable.
If Malcolm gets his way, the Australian parliament will rubberstamp this corporate power grab. We have to stop him. The Senate has to stop him.
Tell Senators they need to stand with the people, not the corporates.

Dave Oliver
ACTU Secretary

Speaking on my behalf: the Liberal government can shove their TPP up their backside. I demand Labor, Greens, and crossbenchers to stop that abomination.

If you guys don't stop the TPP, I hereby give you my word: in the next election I'll vote Liberal, even if the Antichrist is in their list. I'll do that for the first time in my life: if you can betray me, I will betray you.

Romer's Waves.

Paul Romer's "The Trouble With Macroeconomics" gave the blogosphere heaps to comment.

You didn't read Romer's paper? No worries! Noah Smith ("The New Heavyweight Macro Critics", September 14) summarises it, in a Reader's Digest kind of way. What does Smith think about it? Hard to say, other than "Ouch. He also calls various typical DSGE model elements names like 'phlogiston', 'aether', and 'caloric' " Smith remains safely non-committal ("committal" would sound dangerously like "commie", I suppose). Maybe one could sum up his view as "totally awesome, dude".

Tuesday 20 September 2016

Romer's Magical Creatures.

I ain’t no economist. So, it is more with a kind of morbid fascination than with any real deep understanding that I have been following Paul Romer’s critique of economics.

Things began last year, with “Mathiness in the Theory of Economic Growth”, when Prof. Romer took aim at growth theory (one of his areas of expertise). Now, with “The Trouble with Macroeconomics” he extends his critique to macroeconomics (particularly to RBC and the much maligned DSGE).

Friday 9 September 2016

Bits and Pieces (ix)


Julia Baird (above) writes that educated, qualified and experienced professional women lacking self-confidence should follow the example of much more confident, but less educated, less qualified and less experienced white male colleagues:

Saturday 3 September 2016

Liberal Democracies' Debates.


If you are a discontent with capitalism, globalization, and/or free trade chances are you’ve found the exact phrase “lifted millions of people out of poverty” as a predicate in a sentence with capitalism, globalization, and/or free trade as subject.

Thursday 25 August 2016

Earth to Polanyian Social-Democrats.

This was Economix, on November 6, 2013:
"John Podesta, a longtime adviser to Bill and Hillary Clinton and President Obama, is starting a research center in Washington [Washington Center for Equitable Growth] to investigate the causes and effects of growing economic inequality.
"J. Bradford DeLong, one of the best-read economics bloggers, will move a significant portion of his writing to a new blog being started by the center."

Saturday 20 August 2016

Marx's Boils and Brad DeLong.

Readers may be surprised to learn that, as a Marxist, I never felt great interest for Karl Marx, the man (not exactly Robert Paul Wolff's attitude, but not that different, either).

That's why having read recently that Marx was afflicted (in his old age?) by frequent boils was a bit of a revelation to me. Having once had a big and very visible abscess in my right thigh, I can put myself in Marx's shoes.

I remember that boil, too: blood, pus, redness, warmth. Neither a pretty sight, nor fatal -- evidently -- although undeniably uncomfortable.

Saturday 13 August 2016

As Seen on the Internetz (ii)

Unbeknownst to me, the wise and good were already discussing subjects related to my last post: maths in economics.

Noah Smith began with his provocatively titled "Economics Without Math is Trendy, But it Doesn't Add Up" (Bloomberg View, Aug. 8). Whether you agree with Smith or not, you get the gist of his comment from the title (rather ingenious, you'll have to give him that). But, is it fair? Go there, read it, and make your own mind up.

Friday 12 August 2016

INET to Students: "Your Wish is My Command".

Emmanuelle Benicourt from MEPREE (Mouvement des étudiants pour la réforme de l’enseignement en économie, France) does not seem impressed with the CORE e-book "The Economy" (h/t Robert Vienneau).

Friday 5 August 2016

Glenn Stevens, Oz's Alan Greenspan?

"The risk he [Glenn Stevens] faces is that, if doomsayers such as Steve Keen are right this time, Stevens could go down as Australia's Alan Greenspan - the man who fuelled the US housing bubble that ended up blowing up its economy." (Michael Janda)

Last Tuesday (August 2) the RBA decided to lower interest rates to a historical minimum of 1.5%, in an attempt to inject some oomph into the flagging Australian economy.

Sunday 31 July 2016

Steve Keen: Oz Headed for Recession.

Prof. Steve Keen is back and predicts Australia is heading for a recession next year, reports the ABC's Elysse Morgan.

Morgan reminds us that Keen famously lost a bet, a few years back, after producing a prediction that never materialised: the Australian housing bubble, according to Keen, was about to burst and prices would fall.

This time, at least in Morgan's online report, there is no reference to housing prices.

Saturday 23 July 2016

So, Who is a Capitalist?

“By bourgeoisie is meant the class of modern capitalists, owners of the means of social production and employers of wage labour.

“By proletariat, the class of modern wage labourers who, having no means of production of their own, are reduced to selling their labour power in order to live.” (Manifesto of the Communist Party. Chapter I. Footnote 1, see also)

The quote above offers a clear answer to the question in the title. A careful reading suggests the key concept is that of private property of the means of production.

Saturday 2 July 2016

Kwak: Orthodox Mysteries of Money.

"One of the great metaphysical ideas in economics is expressed by the word 'value'." (Joan Robinson)

James Kwak (Associate Professor at the University of Connecticut School of Law, columnist at The Atlantic, co-founder of "The Baseline Scenario" blog, and running "James Kwak") is no heterodox economist.

Recently Kwak demonstrated his orthodox credentials in "Economics 101, Good or Bad?" (May 13th), where he offers his interpretation of the critique Paul Krugman and others have made of economics teaching (i.e. "101ism").

Friday 24 June 2016

Thursday 16 June 2016

Thursday 9 June 2016

As Seen on the Internetz.

The Sandwichman (aka Tom Walker) is attempting a civilised dialogue on the so-called "Lump of Labour Fallacy" and out of the blue comes the following random comment:

Saturday 21 May 2016

Bits and Pieces: Touching Wood.

Dedicated to tovarisch Bradislav Josipovich Delongiev, Head Political Commissar NKVD/Amerika

Maria Farrell (Irish writer and consultant on Internet policy) took off her British Army helmet and wrote "Post-Democracy" (May 20) for Crooked Timber.

Farrell has been re-reading "Colin Crouch's Post-Democracy on and off for about eighteen months" and agrees with his analysis: liberal democracy has managed to keep the trappings of democracy (elections, "free" press, "free" speech), while abandoning the substance of it.

Sunday 1 May 2016

"Capitalism is the Legitimate Racket of the Ruling Class".

"Scarface" Al Capone [A]

Somehow I missed an equally titled post at David Ruccio's "Occasional Links & Commentary".

Prof. Ruccio makes a good case linking the increase in inequality with capitalism.

But what really impressed me is the origin of that line in the title.

It was uttered by Al Capone.

Saturday 23 April 2016

Coyle on Distribution.

Diane Coyle reviews Adam Ozanne's book "Power and Neoclassical Economics".

Coyle is very positive about the book, whose thesis -- it seems to me -- is "surely one of the longer-term outcomes of the crisis will be -- must be -- to turn economics back to political economy" (emphasises mine). They believe power relations should be reintroduced into economic theorising.

Fair enough.

Wednesday 20 April 2016

Monbiot: Who, What, and When?

So, who wrote the quotes presented in the previous post? When were they written?

The key below answers that:

First pair: A. George Monbiot (2016); B. J.M. Keynes (1933)

Second pair: C. Adam Smith (1776); D. Monbiot

Third pair: E. Herbert Spencer (1851); F. Monbiot

Fourth pair: G. J.M. Keynes (1936); H. Monbiot.

Monday 18 April 2016

George Monbiot: a Quiz.

Lately -- most unusually, given my naturally bubbly personality -- I've been in a rather brooding mood. Against my first reaction -- to write an equally somber post -- I decided to propose readers a little trivia game, similar to those played at pubs or TV shows.

Below there are some recent George Monbiot quotes, paired with quotes from other authors. Unfortunately, I forgot Who wrote What and When.

Can you help me out?

Wednesday 13 April 2016

Pragmatism AND Perdition

"euphemism (n.)
"1650s, from Greek euphemismos 'use of a favorable word in place of an inauspicious one,' from euphemizein 'speak with fair words, use words of good omen,' from eu- 'good, well' (see eu-) + pheme 'speech, voice, utterance, a speaking,' from phanai 'speak' (see fame (n.)).
"In ancient Greece, the superstitious avoidance of words of ill-omen during religious ceremonies  …" (Online Etymology Dictionary)

Brad DeLong ("Pragmatism or Perdition", Feb 29, Project Syndicate) is peddling his (and co-author Steve Cohen's) new book. Yay! Another book on economic policy! Just what we needed.

Saturday 9 April 2016

Böhm-Bawerk on Keynesian Stimulus.

Now that Eugen von Böhm-Bawerk (1851-1914) joined Friedrich von Hayek in the online PoKe pantheon, it seems fair to bring to the readers' attention Richard M. Ebeling's 2015 essay "Eugen von Böhm-Bawerk: Leading Austrian Economist and Finance Minister of Fiscal Restraint".

Apart from being a critic of Marxism -- aspect of Böhm-Bawerk's work endearing him to internet PoKes, but which Rudolf Hilferding ("Böhm-Bawerk's Criticism of Marx", 1920) and Nikolai Bukharin ("Economic Theory of the Leisure Class", 1927) replied to -- Ebeling describes other, apparently less well-known, aspects of Böhm-Bawerk's economic thought.

Wednesday 6 April 2016

Misnomers in Economics.

Economics, it seems, is largely the science of attributing to authors ideas they never supported (h/t Economist's View). At least, this is what one infers from a recent Vox column by Thorvaldur Gylfason, Helgi Tomasson, and Gylfi Zoega (Vox, Mar 24). Referring to the cases of David Ricardo and Irving Fisher, GTZ write:
"The pattern is pretty clear – you make a discovery (or perhaps you just make a point!) and it may become irretrievably associated with your name.
"Or it may not.
"Or something completely different can happen. Just ask David Ricardo and Irving Fisher."
Or you could ask Karl Marx.

Saturday 2 April 2016

Ironies of the Pseudo-Left.

The ironies of the pseudo-Left: to get a better piece of anti-Sanders bash, Trish Regan should have called a plebeian American liberal, like Jonathan Chait or V.S.P. P. Krugman, instead of a Norwegian/Venezuelan member of the South American white oligo-aristocracy in power since colonial times.

Friday 1 April 2016

Question & Answer.

A few days ago Nigel O. left the following comment:
"Okay, you say Post-Keynesians don't have a theory of price.

Why should anyone care about a theory of prices? Or a theory of value, for that matter?"

Wednesday 30 March 2016

Lee: Poverty of Post Keynesian Price Theory.

"In the end, it all comes down to the theory of value". David Ruccio.

The late Prof. Frederic (Fred) S. Lee, it seems, did not mince words. That's an admirable quality, particularly when the targets of one's words are our colleagues.

His 1998 book "Post Keynesian Price Theory" (Cambridge University Press) opens with a highly critical review of what passes for a post Keynesian price theory (this post's title borrows from a subtitle in that book's Introduction).

Lee closes the first section of the Introduction with these electrifying words:
"Post Keynesian price theory has no real existence beyond the idiosyncratic writings of various Post Keynesian economists, its various renditions are theoretically incompatible to a lesser or greater degree, and it has not been entirely freed from neoclassical concepts and terminology. My objective in this book is to move Post Keynesian analysis forward towards a more comprehensive, coherent, realistic - and, indeed, believable - non-neoclassical theory of prices by setting out its non neoclassical pricing foundation by developing an empirically grounded pricing model". (p. 3)

Friday 25 March 2016

Einstein on the Philosophy of Science.

Albert Einstein quoted by Prof. Don A. Howard in "Albert Einstein as a Philosopher of Science":
"In a 1936 article entitled 'Physics and Reality,' he [i.e. Einstein] explained why the physicist cannot simply defer to the philosopher but must be a philosopher himself:
'It has often been said, and certainly not without justification, that the man of science is a poor philosopher. Why then should it not be the right thing for the physicist to let the philosopher do the philosophizing? Such might indeed be the right thing to do at a time when the physicist believes he has at his disposal a rigid system of fundamental concepts and fundamental laws which are so well established that waves of doubt can’t reach them; but it cannot be right at a time when the very foundations of physics itself have become problematic as they are now. At a time like the present, when experience forces us to seek a newer and more solid foundation, the physicist cannot simply surrender to the philosopher the critical contemplation of theoretical foundations; for he himself knows best and feels more surely where the shoe pinches. In looking for a new foundation, he must try to make clear in his own mind just how far the concepts which he uses are justified, and are necessities'."

Monday 21 March 2016

Keynes' Gravitational Waves?

"Einstein actually did for Physics what Mr. Keynes believes himself to have done for Economics." (A.C. Pigou)

Last week's Question and Answer show (Monday, March 13), broadcast by ABC and hosted by Tony Jones, featured a panel of five scientific guests, including Brian Greene -- yes, that Prof. Greene -- answering audience questions.

The first question was:
"What does the detection of gravitational waves actually mean for those of us who aren't so scientifically minded, and what repercussions does it hold for everyone?"

Friday 18 March 2016

Conservative Panic.

(source: h/t David Ruccio)
Some weeks ago ("Liberal Panic", Jan 31) I commented on Glenn Greenwald's denouncing a then starting backlash against the Bernie Sanders nomination in the U.S. and how it would parallel the equally hysterical tantrums against Jeremy Corbyn in the U.K.

Greenwald was right on much, although time shows he did miss two important things.

Wednesday 16 March 2016

Blaug & Weintraub: Keynesian Historiography.

(from part i)

Next Blaug examines the question "what did Keynes mean?"

After noting that Skidelsky, Moggridge and Don Patinkin all agree "on the central message of Keynesian economics" Blaug reminds us that Keynesians disagree on many things.

Saturday 12 March 2016

Blaug: Keynesian Biographies.

Reviews, whether of fiction or non-fiction, almost by necessity are more boring than the work reviewed. Take a film: whether it was good or not, directors had at their disposal all the resources of a studio. Reviewers have their written words, only.

Based on that, one could expect less from Mark Blaug's 1994 12-page long joint review of Donald E. Moggridge's "Maynard Keynes: An Economist's Biography" and Robert Skidelsky's "John Maynard Keynes" (volumes 1 and 2): the two leading academic biographies of Keynes.

Without being a thriller, Blaug's review is anything but boring.

Tuesday 8 March 2016

Baumol: Marx and the Iron Law of Wages.

"I find few things as discouraging as the persistent attribution of positions to a writer whose works contain repeated, categorical, indeed emotional, denunciations of those views. Marx's views on wages are a prime example. Both vulgar Marxists and vulgar opponents of Marx have propounded two associated myths: that he believed wages under capitalism are inevitably driven near some physical subsistence level, and that he considered this to constitute robbery of the workers and a major evil of capitalism. Yet Marx and Engels tell us again and again, sometimes in most intemperate language, that these views are the very opposite of theirs. These observations, incidentally, are hardly new discoveries. Thus, for example, Roman Rosdolsky (1977, p. 287 ff.) disposes of the subsistence wage allegation and Robert Tucker (1969, ch. 3), and Allen Wood (1972) cover Marx's view on the morality of capitalist distribution very effectively." (Emphasis mine)

Sunday 28 February 2016

Marx, Fiat Money and a Simple Business Card Economy.

Jehu: "LK gives what I think is incontrovertible evidence for this view: Fiat contains only a vanishingly small quantity of living human labor: 
Lord Keynes (?!): "[The] amount of labour needed to create $1 of fiat money is hardly different from that needed to create $1 million or $100 billion (namely, a few extra key strokes). Yet obviously one dollar of high-powered money and $1 million buy commodities with vastly different quantities of abstract socially necessary labour time in Marx's sense of this concept. You cannot explain the exchange value of fiat money by appealing to the abstract socially necessary labour time needed to create it."

A few years ago, to illustrate the logic of a fiat money economy, Prof. Bill Mitchell offered the following example ("A Simple Business Card Economy", Mar 31, 2009)

Thursday 25 February 2016

What if Capitalists Disappeared?

A few years ago my post "Krugman, Robots, and Exchange Value" gained some attention from the wise and good, and over time has kept on attracting hits.

In that post I explored a scenario: what if robots replaced all human labour? The conclusion was that market prices and GDP would drop to 0, because stuff would not be sold (after all, consumers no longer receive income from wages). There would be no exchange value, value would not be realised.

It's a situation so absurd that it constitutes a reductio ad absurdum of the proposition "not all value comes from labour".

However, isn't there any credible alternative?

Tuesday 23 February 2016

Was Keynes anti-Nazi?

What was Keynes' real attitude towards Nazism?

Well, it depends who you ask.

If you ask Lord Skidelsky, the answer is clear: Keynes was unambiguously opposed to Nazism, from the start.

Keynes may have been an anti-Semitic, virulently anti-Communist eugenicist, with a questionable attitude towards democracy -- rather like the Nazis -- but he would not give comfort to totalitarian enemies of liberal society, even to support his own theories.

Saturday 20 February 2016

Political Spectrum: a Metaphor.

So, you want to know how to tell Left, Centre, and Right apart, but you despair from reading the commentariat, with all their endless talk and weasel words.

I'll give you my take on this; you do with it whatever you feel like.

Friday 19 February 2016

But the Powerful Should be Careful.

James K. Galbraith (Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government, Lyndon B. Johnson School of Public Affairs, The University of Texas) has penned a reply to the letter liberal economists Alan Krueger, Austan Goolbee, Christina Romer, and Laura D'Andrea Tyson wrote accusing the Bernie Sanders campaign and Prof. Gerald Friedman of voodoo economics (h/t The Philosopher's Stone).

It's a powerful, eloquent letter and I really recommend its reading.

You don't need to remind me. Trust me: I know. Senator Sanders is more of a reformist than a Real McCoy socialist. Prof. Galbraith himself is a post Keynesian.

Still, Sanders and Jeremy Corbyn are the best we have for now and I really, profoundly, viscerally dislike liberal, wealthy, self-satisfied, arrogant bullies. It's nice to see someone tell them a couple of things.

Tuesday 16 February 2016

Keynesian Theory of Value.

"I believe myself to be writing a book on economic theory which will largely revolutionise … the way the world thinks about economic problems. When my new theory has been duly assimilated and mixed with politics and feelings and passions, I can’t predict what the final upshot will be in its effect on actions and affairs. But there will be a great change, and in particular the Ricardian foundations of Marxism will be knocked away". (Keynes to George Bernard Shaw, Jan 1, 1935, as quoted by Geoffrey Pilling)
Ever since the dawn of capitalism, humanity wondered about the laws governing distribution: prices, profits, wages. The Physiocrats in France, Adam Smith, David Ricardo, and Karl Marx, in Britain -- among others -- devoted their best efforts to that endeavour.

All to no avail.

Sunday 14 February 2016

Moseley on Marx and Money.

Fred Moseley (professor of Economics at Mount Holyoke College) has launched "Money and Totality. A Macro-Monetary Interpretation of Marx's Logic in Capital and the End of the 'Transformation Problem'." (h/t davidmfields @ URPE):
"From the nineteen century until today, Marx’s critics have rejected his theory on the grounds that the Volume 3 account of prices of production contradicts the analysis of labor time values in Volume 1. Marx’s defenders have responded by attempting to 'transform' labor values into prices of production in ways that avoid this criticism and enable some of Marx’s key claims to still be affirmed. In this brilliant book Moseley provides extensive textual evidence from all the drafts of Capital that neither critics nor advocates have adequately understood Marx’s methodological framework. Marx’s project was not to transform labor values into prices of production; Capital is a monetary theory from beginning to end. The same money quantities are first comprehended on an aggregate level, and then on a more concrete level where differences among sectors are taken into account. Moseley provides elegant algebraic proofs that all of Marx’s key claims can be established within this framework. This book may well overcome the obsession with the 'transformation problem' once and for all, moving debates about Marx’s theory onto more fruitful paths. It is surely one of the most important contributions to Marxian scholarship published in our time."
Tony Smith, Iowa State University

Saturday 13 February 2016

Copernicus: Ellipses and Circles.

Copernicus' heliocentric system exerts a clear attraction on mainstream economists' imagination. Typically, one casts oneself in the role of Copernicus, the underdog, and one's opponents as Ptolemaic astronomers/Catholic Church leaders. Things are clear: David versus Goliath.

Or, are they?

A closer look may prove instructive.

Thursday 11 February 2016

Sunset on Mars.

"NASA's Curiosity Mars rover recorded this view of the sun setting at the close of the mission's 956th Martian day, or sol (April 15, 2015), from the rover's location in Gale Crater." (here)

Credit: NASA/JPL-Caltech/MSSS/Texas A&M Univ.


Friday 5 February 2016

Popper and the Dark Matter Matter.

Although the ongoing public debate on string theory has captured the limelight and the public's attention (at least, the interested public's attention) leaving dark matter in the dark (pun intended), chances are my readers have heard/read about the latter.

Together with the slightly more recent dark energy (and the even more recent and highly controversial dark flow), dark energy is another hot topic in contemporary physics.

But, what is dark matter? How was it discovered? More importantly for my own purposes: how does it fit in the great Popperian scheme? The following video clip, accessible to the wider public, provides an overview as useful as it is entertaining:

Wednesday 3 February 2016


"Imitation is the sincerest form of flattery". (Charles Caleb Colton)


Wikipedia expands on Google:
"Plagiarism is the 'wrongful appropriation' and 'stealing and publication' of another author's 'language, thoughts, ideas, or expressions' and the representation of them as one's own original work."
Universities all over the world generally have explicit policies against plagiarism (the University of New South Wales and the University of Melbourne, for example) and they tend to be quite similar: the idea is that plagiarism is unethical, goes against academic integrity and honesty.

At UNSW, for instance, they give this brief additional characterization of plagiarism: "Plagiarism at UNSW is defined as using the words or ideas of others and passing them off as your own."

At the other hand, Internet post Keynesians, based abroad, are not fond of definitions and enjoy re-defining words to suit their purposes, so things might be different with them.

Sunday 31 January 2016

Liberal Panic.

Speaking about the growing hostility among American liberals against Bernie Sanders' political campaign and their increasingly obvious pro-Hillary Clinton bias (as evidenced, among others, by Paul Krugman, who just re-embraced the "Very Serious People" title he until recently derided), Prof. David Ruccio explains liberal ideology:
"That’s how liberal ideology works in economics. And, as it turns out, that’s exactly how liberal ideology is being deployed in our current political debate -- to normalize one, very limited set of options and to marginalize any discontent or desire that threatens to go beyond them."
Even though Ruccio largely limits himself to the American political scene, I believe his exposition has more general application.

Saturday 30 January 2016



The Two Minutes Hate is about to start. The image of Karl Marx Emmanuel Goldstein appears on the screen …

Tuesday 26 January 2016

Folly and Wisdom of Slaves.

"Eles são brancos e se entendem". (Brazilian idiom)

Robert Vienneau informs us that slaves in the U.S. often identified themselves with -- and even took pride in -- their masters.

Vienneau quotes from "Narrative of the Life of Frederick Douglas":
"When Colonel Lloyd's slaves met the slaves of Jacob Jepson, they seldom parted without a quarrel about their masters; Colonel Lloyd's slaves contending that he was the richest, and Mr. Jepson's slaves that he was the smartest, and most of a man."
Apparently, Brazilian slaves could be a bit more cynical than their North American counterparts. One of their pieces of folk wisdom (the opening quote) suggests that; surprisingly, it endured and entered contemporary popular speech.

Saturday 23 January 2016

Coyle on Minsky, Where's Keynes?

Diane Coyle (part-time professor of Economics at the University of Manchester, plus a long CV) is a high-profile British Keynesian economist. She posted recently a favourable review of L. Randall Wray's latest book "Why Minsky Matters". Wray, as readers know, is a leading MMT proponent and an expert on Minsky.

Friday 22 January 2016

A New 9th Planet for the Solar System?

Mike Brown and Konstantin Batygin (astronomers from the California Institute of Technology) announced they have conjectural evidence for the existence of a ninth planet in our solar system.

Details were published in the newsmedia, in the Caltech website ("Caltech Researchers Find Evidence of a Real Ninth Planet", by Kimm Fesenmaier, Jan. 20), and in the Science magazine website ("Astronomers say a Neptune-Sized Planet Lurks Beyond Pluto", by Eric Hand. Jan. 20).

Wednesday 20 January 2016

Keynes' "National Self-Sufficiency".

After decades advocating "free trade not only as an economic doctrine which a rational and instructed person could not doubt, but almost as a part of the moral law", in June 1933, writing for the selected readership of The Yale Review, John Maynard Keynes suddenly discovered that protectionism (aka economic nationalism, national self-sufficiency) was an experiment well-worth trying.

Saturday 16 January 2016

Stigler and the Unbalanced Keynes.

"His statistical diagrams [W.S. Jevons'] were so precisely prepared that I have been able to recover his data in several cases with sufficient precision to reproduce his averages to two significant figures. It is rare to be able to do that, even with modern computer drawn graphics. Indeed, it is rare today to be able to reproduce averages even if the data are published!"
Prof. Stephen M. Stigler is Ernest DeWitt Burton Distinguished Service Professor at the Department of Statistics of the University of Chicago. He's also the son of that Stigler.

During a long academic career, Stigler the Younger has written extensively on the history of statistics, with occasional stopovers on allied subjects. In his 2002, in equal measures interesting and entertaining short paper (Statisticians and the History of Economics, Journal of the History of Economic Thought, 24(2), pp.155-164. paywalled) Stigler evidences subtle humour, wit, and irony while commenting on a set of 39 authors selected for their contributions to both statistical theory and economics.

Monday 11 January 2016

Popper and the Coelacanth.

No, that's not Popper. That's Marjorie Courtenay-Latimer and her dino-fish. [A]

On December 23, 1938, while visiting her friend captain Hendrick Goosen, Marjorie Courtenay-Latimer (curator of the provincial natural history museum of East London -- northeast of Cape Town, South Africa) accidentally discovered, part-hidden under Goosen's daily catch, a fairly large, odd-looking fish.

Friday 8 January 2016

Reply to Hedlund.

Frankly, I am a bit puzzled. My latest posts on Popper generated some controversy among my readers.

The latest comment, by long-time reader Hedlund, replying to "Popper, Art and Science" is an example. Hedlund starts like this:
"The importance of falsification is widely recognized these days, and there's overlap between Popper's critical rationalism and a thoroughgoing realism.
"An adequate summary of Popper would not end at falsificationism. Also important is anti-justificationism;"

Wednesday 6 January 2016

Hear Kazin's Advice, Corbyn.

It was December, 2011, when Michael Kazin (a professor of history at Georgetown University and co-editor of quasi-mainstream/leftish Dissent magazine) wrote "Class Warfare Waged by FDR Holds Lesson for Obama", for Bloomberg.

Kazin was recommending Barack Obama to learn from Roosevelt's example, and quotes from Roosevelt's October 31, 1936 Madison Square Garden speech:
"We had to struggle with the old enemies of peace —- business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
"They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.
"Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me —- and I welcome their hatred."
As electrifying as those words are, in the voice of Roosevelt they sound hollow, and lacking in sincerity. Still, he did win the 1936 elections.

Obama's voice wouldn't have added any sincerity, had he even considered Kazin's advice.

But the advice is good. Perhaps Jeremy Corbyn could appropriate those words and, hopefully, in his voice they will have more substance.

Saturday 2 January 2016

Eric Harwood's Story.

Eric Harwood (source)

(h/t Matt Bruenig)

"Eric Harwood, a 47-year-old man from Henderson, Nevada, has embarked upon a somewhat quixotic quest to draw attention to his desperate plight. Due to a serious physical disability, Harwood was discharged from his locksmithing job of 15 years in August and has been battling with the Social Security Administration to receive disability insurance ever since. As the battle dragged on, Harwood scrambled to keep his life afloat. He sold many of his possessions through yard sales and the internet. He set up a GoFundMe page and asked friends and family to donate. And he, embarrassingly, enrolled in Food Stamps, Medicaid, and LIHEAP. These stop-gap strategies have reached their end, however. In early February, if something doesn’t change, he will be booted from the house he rents, and he and his wife will be forced to move in with family in Arizona."

Dear Australian workers, read the rest here. Eric's YouTube channel and GoFundMe.