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.