Why we Work so Hard?

David Kestenbaum, Planet Money host, NPR:

"In 1930, the economist John Maynard Keynes published this famous essay called 'Economic Possibilities for our Grandchildren.' He's wondering what the future's going to be like, and he makes this bold kind of prediction. He imagines that in the time of his grandchildren - basically now - we might all be working just 15 hours a week." (Episode 641, July 24, 2015)

Robert Smith, co-host:

"Think about it - 15 hours a week. This would be like, OK, OK, go to work on Monday. Go to work on Tuesday, then, TGIT, five-day weekend. And Keynes didn't detail what we would do with all of this extra leisure time. But you can imagine. He was an aristocrat. He would want us to do poetry and dance, play the violin."

As Keynes had no grandchildren, the hosts asked his sister's grandchildren how did that prediction work out for them. Apparently, not very well:

"I probably worked about 15 a day … from breakfast 'til I went to bed at night."

Kestenbaum:

"When you read Keynes's essay, you get the sense that he imagined capitalism was just this phase that humanity was going to pass through, that it was a great system for solving what he called the economic problem, for creating enough economic growth so that everybody's basic needs could be met. But he imagined that after that, people could relax. We would outgrow this habit of working all the time."

It may sound like blasphemy, but Keynes was wrong. How is that even possible?

The show offers two explanations. For one "Keynes underestimated how competitive we are": we voluntarily work hard, even if we don't need to, to have more than everybody else.

Alternatively, "Keynes probably didn't pay enough attention to the way we feel about work. Some people like their jobs," like "craftspeople who take great pride in their craft".

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I know this is just anecdotal evidence, but as the son of a man who died getting ready to go to work (after working for years 16 hours a day, six days a week), I suspect those guys didn't try hard enough to understand why some work so hard, for my dad didn't love his work and he wasn't particularly competitive. Some people work really hard because  … they have no choice.

Note that both explanations the hosts advance assume -- implicitly and without a second thought -- that people choose to work harder/longer than they actually need.

Maybe Kestenbaum and Smith should try asking those working for Foxconn, Pegatron, and others: here and here.

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But if those guys' explanations seem weak, restricted to their direct personal experiences, in something else they were spot on. Richard Freeman (Harvard economist and director of the NBER):

"I don't think he [i.e. Keynes] knew that many normal people."

Now, taking into account Keynes' opinions about the "common man", the "boorish proletariat", "those who do not know at all what they are talking about" it's easy to understand he didn't care to know many normal people. And relying -- just as the show hosts do -- in introspection and personal experience he wasn't in an ideal position to guess other people's motivations.

So, it's either that or, considering Keynes fixation on Animal Spirits (which he fully formed later, in time for "The General Theory"), he might have been trying to pre-empt the Great Depression, while having a go at the Webbs.

Who knows, maybe "Economic Possibilities for our Grandchildren" was Keynes' first attempt at Keynesian stimulus. Appropriately Orwellian, if you think about it.

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Episode 641, Planet Money, July 24, 2015:




UPDATE:
22-08-2015. Alfred Marshall (Keynes' mentor) and missus, Mary Paley Marshall, explain in their 1879 book "The Economics of Industry" how general slumps happen (highly evocative of Hyman Minsky's work, btw) and how the economy finally recovers:

"The chief cause of the evil is a want of confidence. The greater part of it could be removed almost in an instant if confidence could return, touch all industries with her magic wand, and make them continue their production and their demand for the wares of others." (pp. 154-155)

Maybe with "Economic Possibilities" Keynes was trying to give the Confidence Fairy a hand.

Marxism 101.

Prof. Rick Kuhn (here and here) has compiled a list of online introductions to the classical Marxist tradition (here).

These are his recommendations and his comments:

• Hal Draper The Two Souls of Socialism, 1960/1992, also in German. Brilliant outline of what distinguishes Marxism from other approaches to socialism
• Chris Harman How Marxism Works 1997. A brief and straightforward introduction to Marxist theory that also takes account of the contributions of later Marxists
• Rick Kuhn et al. Class and struggle in Australia seminar papers 2004. Introductions to class, oppression and struggle in Australia
• Chris Harman The Economics of the Madhouse Bookmarks, London 1995 provides a clear introduction to Marxist economics
• Karl Marx Value, Price and Profit. An abridgement by Paul Zarembka of Marx's own introduction to the labour theory of value, which underpins Marxist economics
• John Molyneux What is the Real Marxist Tradition 1983. A useful guide through the maze of self-proclaimed 'Marxisms'
• David McNally Socialism from Below, 1984. An overview of Marxist politics
• Tom O'Lincoln Trade Unions and Revolutionary Oppositions: a Survey of Classic Marxist Writings
• Bertell Ollman Market Mystification in Capitalist and Market Socialist Societies 1998
• David Riazanov Karl Marx and Frederick Engels: An Introduction to Their Lives and Work 1927

Given the effort the apologists of capital put in slandering Marx and Engels and in seeding deliberate misinformation on Marxism and socialism, these links offer a treasure trove of information for workers.

My thanks to the authors and to Prof. Kuhn for compiling that list.

I am proud to contribute, in whatever measure, to the diffusion of this literature.

UPDATE:
04-10-2015. Andy Blunden's Study Guide is a useful complement to Marx's "Value, Price and Profit". Hosted by the MIA, the contains 14 questions which one should keep in mind while reading "Value, Price and Profit".

Stewart and the Keynesian Anti-Zugzwang.

It may be hard to believe it, but it seems I'm starting to resonate to the thought of smart and interesting people.

A few weeks ago I mentioned -- in passing -- the old titbit that Keynes' quote "When the facts change, I change my mind. What do you do, sir?" might be apocryphal. The story involves an unnamed critic reproaching Keynes' frequent -- and often contradictory -- changes of mind. M'Lord, perhaps with some irritation, would have replied with those words.

Imagine my surprise to find that John Kay ("one of Britain's leading economists", as his personal website helpfully notes) wrote a whole post ("Keynes was Half Right about the Facts", August 4, in the website of the august Financial Times) precisely about that.

It's a curious, if confusing, short note on the relationship between Keynes, facts, evidence, information, and the conclusions people are entitled to draw from them.

After a few preliminaries, Kay writes:

"[T]here are still some who valiantly struggle to form their own opinions on the basis of evidence".

And mentions Keynes: if facts, evidence, information do change -- Kay says -- then one's conclusions and opinions must change accordingly. Keynes' intellectual honesty and magnanimity impose it. No shame it that.

Makes sense, doesn't it?

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Then, Kay adds:

"But Keynes might have done better to say: 'Even when the facts don't change, I (sometimes) change my mind.' The history of his evolving thought reveals that, with the self-confidence appropriate to his polymathic intellect, he evidently felt no shame in doing so."

Facts, evidence, information may not change -- Kay contends -- but Keynes' conclusions and opinions may still change … His self-confidence and polymathic intellect allow it. No shame in that.

Makes … sense … !? Wait a minute … Oops.

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Unfortunately, I ain't no Jon Stewart (sadly, JS won't be JS any longer, either), but I sure miss him:

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A good thing about discussing aphorisms, idioms, one-liners, proverbs, and quotes, even apocryphal ones, is that they remind you of related things.

This time, for example, I was reminded of "damned if you do, damned if you don't". You've surely heard that: roughly, what Germans mean by Zugzwang.

You saw it here first, ladies and gentlemen: the first documented instance of the Keynesian anti-Zugzwang.

Blessed be M'Lord for sticking to evidence … and for ignoring it.

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By the way, ("we can't do anything, until we know everything") I smelled something while reading this.

Following your advise, Jon, I've just said something.

Reading Robinson: Introduction (part i)

After John Maynard Keynes, Joan V. Robinson (1903-1983) was the most influential figure of the original Keynes' “Circus” at the University of Cambridge; and her active role promoting Keynesian economics earned her the title of “patron saint of Post-Keynesian economics”.

Right-click to open in a separate tab (source)

Born Joan Violet Maurice, Robinson was one of five children of a bourgeois English family with a Christian socialist background and a penchant for outspokenness. During World War I, her father, Major-General Sir Frederick Maurice, was forced to resign his commission after publishing an open letter criticising PM David Lloyd George on military matters.

Robinson studied economics at Girton College, where she met Maurice Dobb, at the time the unpopular and bullied Marxist odd man out at Cambridge. According to her close friend, one-time student, and unofficial literary executor and biographer, Geoff Harcourt, Robinson learned little from Dobb, as they took a quick dislike for each other:

"No, they had a very lukewarm relationship. She thought he was schizophrenic. She could never understand him. Here he was, this great Communist, Marxist, out of office hours, teaching Marshall in office hours. And I think Maurice thought that she was an upper-class bourgeois liberal with pinkish overtones who wouldn't go the whole hog. And also, I think, he was offended by her rather philistine, very British, attitude to the philosophical problems of the labor theory of value, whereas he argued that the labor theory of value was the base on which you should erect Marxism." (Harcourt and King, 1995)

Marrying to fellow economist Austin Robinson soon after graduation, for nearly a decade there is little of interest to report on Robinson's career. Back at Cambridge from India, in 1934 Robinson was appointed to an assistant lectureship, and promoted to lecturer in 1936/37, no mean feats for an initially unknown female economist in a male-dominated milieu, apparently against initial opposition from Keynes (Gold, 2009).

Demonstrating independent thought, during this time Robinson's economics shifted from the originally Marshallian mainstream, to increasingly Keynesian, and quasi-Marxian/Neo Ricardian, influenced by Michał Kalecki and Piero Sraffa -- both Jewish foreigners at their turn influenced by Marx, and, like Robinson less-than-obvious choices to join the Keynesian pantheon.

Having gained little from her association with Dobb, Robinson -- the self-taught student of Marx -- tactfully (for once) comments:

"In those days most of my academic colleagues in England thought that to study Marx was a quaint pastime (though Keynes, who was allergic to Marx's writing, received my Essay kindly) and in the United States it was disreputable." (Robinson, 1966:vi)

Evidently, little changed since.

During this period, Robinson (whom Prof. Robert Paul Wolff calls with good-natured irony "the doyenne of English Marxists", here), “was considered to be the leading expert on John Maynard Keynes and Karl Marx”, and credited for “her role in putting Marx's insights back on the agenda of modern economics" (Spartacus Educational, 2015), a considerably high praise.

Departing from Keynesian orthodoxy, and perhaps out of sympathy/admiration for a female Jewish economist, revolutionary Marxist, and founder of the Communist Party of Germany, martyred in 1919 by the German Social Democracy and its proto-Nazi accomplices, Robinson wrote in 1951 the introduction to Rosa Luxemburg's magnum opus, "The Accumulation of Capital":

"Rosa Luxemburg, neglected by Marxist and academic economists alike, offers a theory of the dynamic development of capitalism which is of the greatest interest." (Luxemburg, 2013: 13)

Five years later, Robinson herself would use the same title for her own book on the subject. One can only imagine how Keynes would have reacted to that.

Politically, Robinson sympathised with the British Labour Party. Although far from being a revolutionary party, the Labour Party was the object of suspicion and fear by other members of the British bourgeoisie and intelligentsia (with characteristic exaggeration, Keynes himself called it the "Party of Catastrophe").

Like Keynes, who visited the Soviet Union, Robinson visited the People's Republic of China. To make things worse, unlike Keynes, "as Robinson aged, her left-wing sympathies grew, and ultimately she became an admirer of Mao Tse-Tung’s China and Kim Il Sung’s North Korea." (Encyclopedia Britannica, 2014).

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Although I cannot share her sympathies for Mao and Kim, it's hard for me to dislike such a woman; additionally, Harcourt has a highly positive opinion of Robinson, the thinker:

“Robinson's incisive mind made her a powerful critic; her insight and intuition, whereby she provided logical arguments of great penetration (without the help of modern mathematical techniques), allowed her to make significant contributions across the whole spectrum of economic theory.” (Spartacus Educational, 2015) 

Although others have less appreciative views (Sen, 2015)  (Stiglitz, 2015), Harcourt is not alone in his admiration. From all these descriptions, Robinson emerges as a formidable character, with many virtues and some serious flaws.

For all there's to admire in Robinson, it is in her capacity as intellectual that I am here interested, and particularly in her 1962 book, “Economic Philosophy”, where she outlines her views on the philosophy of science in general, philosophy of economics (or methodology) in particular and history of economic thought.

It is, therefore, with some trepidation that I intend to probe to what extent those words of praise are justified as evidenced by “Economic Philosophy”.

The following quotation seems an appropriate tribute to Robinson and should sound as a warning to teenage readers of a fanatical internet Keynesian persuasion:

“It has been claimed that Joan Robinson did not mind upsetting people with her work: 'Never one to mince words, possessor of a civilized wit, sometimes bleakly rude, not always fair but always honest, as hard on herself as on those she criticized, Joan Robinson more than any other economist of the twentieth century became a model for progressive radicals, fearlessly following arguments to conclusions no matter how incompatible they proved to be'." (Spartacus Educational, 2015)

What is sauce for the goose is sauce for the gander.


References:


Encyclopedia Britannica, (2014). Joan Robinson | biography - British economist. [online] Available at: http://www.britannica.com/biography/Joan-Robinson [Accessed 12 Aug. 2015].

Gold, N. (2009). The Provocative Joan Robinson: The Making of a Cambridge Economist. [online] Times Higher Education. Available at: https://www.timeshighereducation.co.uk/books/the-provocative-joan-robinson-the-making-of-a-cambridge-economist/409084.article [Accessed 12 Aug. 2015].

Harcourt, G. and King, J. (1995). Talking About Joan Robinson: Geoff Harcourt in Conversation with John King. Review of Social Economy, 53(1), pp.31-64.

Luxemburg, R. (2003). The accumulation of capital. London: Routledge.

Robinson, J. (1962). Economic philosophy. Chicago: Aldine Pub. Co.

Robinson, J. (1966). An essay on Marxian economics. London: Macmillan.

Robinson, J. (1969). The accumulation of capital. London: Macmillan.

Robinson, J. and Gibson, B. (2005). Joan Robinson's economics. Cheltenham, UK: Edward Elgar.

Sen, A. (2015). Amartya Sen - Biographical. [online] Nobelprize.org. Available at: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1998/sen-bio.html [Accessed 12 Aug. 2015].

Spartacus Educational, (2015). Joan Robinson. [online] Available at: http://spartacus-educational.com/Joan_Robinson.htm [Accessed 12 Aug. 2015].

Stiglitz, J. (2015). Joseph E. Stiglitz - Biographical. [online] Nobelprize.org. Available at: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2001/stiglitz-bio.html [Accessed 12 Aug. 2015].