My God. It just came to me that the idea of equilibrium in economics has infected the mainstream culture. I personally beleive we are heading for an economic collapse (based on steve keen's analysis and others) or at least a severe depression. Alot of the public think that this is simply a 'down' in the economy and that it's natural, not realizing that this is the apex of a series of debt bubbles.
Myrdal's early work on money was theoretical in nature. As a leading contributor to the Stockholm school, he followed Knut Wicksell's (1851-1926) cumulative process analysis, in which cumulative inflation occurs when banks hold the loan rate of interest below the natural rate of interest (at which saving out of full-employment income is equal to investment), resulting in a high level of investment demand.
Myrdal's as a leading contributor to the Stockholm school, he followed Knut Wicksell's (1851-1926) cumulative process analysis, in which cumulative inflation occurs when banks hold the loan rate of interest below the natural rate of interest (at which saving out of full-employment income is equal to investment), resulting in a high level of investment demand. In a 1931 work (published in English in 1939 as Monetary Equilibrium ),
3)Gunnar Myrdal, Swedish economist and 1973 Nobel Prize winner for his early work on monetary theory, made major contributions to macroeconomic theory, international economics, development economics, economic methodology, and social and economic policy. He was a critic of mainstream neoclassical economics His early work on money was theoretical in nature. As a leading contributor to the Stockholm school, he followed Knut Wicksell's (1851-1926) cumulative process analysis,
2)Other early contributions to critize the equilibrium were made by T. Veblen, Gunnar Myrdal,Karl William Kapp and N.Kaldor.The deepest work on the subject was perhaps Gunnar Myrdal's theoretical key concept "circular cumulative causation" that contributed to the development of modern Non-equilibrium economics.This approach is represented by modern researchers in the fields of evolutionary-institutional economics,Post Keynesian economics,Ecological Economics,development and growth economics
You continue to be the best. Your very many contributions to OUR salon, is appreciated beyond measure. Sweden has been fertile soil for you. You understand the history of ideas as few do.
)The critic of neoclassical equilibrium economics is not new.I think the first notable economist that pointed out there that it was something of a ilussion was Knut Wicksell from my own country Sweden.He critized the Anglo-American neo-classical monetary theory and the buissness cycle as static in debate with the leading representant for the point of view,at that time,famous Irving Fischer.
So where do you fall and why? In some videos you seem to herald Keynes, but yet you say equilibrium is BS, correct? I am trying to better understand where your theoretical allegiances lie. Thanks.
Keynes didn't say equilibrium is bullsh_t. He said there could occur periods of below full employment equilibrium. And during such periods the unemployed have no mechanism (money) to signal their potential demand, so government must use deficits to increase aggregate demand until full employment equilibrium is reestablished. So are you not a Keynesian? Is Keynes bullsh_t, too, in your view? Thanks.
I recently found your YouTube Channel and have been enjoying a sampling of your videos.
However, I am not sure what you are claiming here about equilibrium theory.
Are you saying while unfettered supply and demand may yield an optimal equilibrium under ideal circumstances, too often optimal equilibrium is not realized due to less than ideal circumstances? Or are you saying there is something wrong with equilibrium theory at its core?
Keen's DE is an excellent book in many ways, including its analysis of certain neoclassical ideas regarding tendencies to equilibrium - and Steve Keen is one of the brightest Post-K's out there - but unfortunately the book is also thoroughly flawed.
surnbe.Interventions in economic order as a part of society has allways been more or or less constant over time since ancient simple exchange of commodties.If state not intervene other orders of society allways does.Alternatenatively over time,Kings,Kinships-Klans,Church Religiuos Orders,Feudal-Lords,
Monopoly-Cartells,Para Military, Robbers& Bandits,Banks,Lenders and Loaners etc.I recommend you to read,Prof.F.Modligiano,MIT "Life Cycle, Individual Thrift and the Wealth of Nations",1986, AER
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Economics returned to classical economics because interventionism is not economically sound. Keynesian interventionism upsets equilibrium without understanding of the consequences.
Like ripples on a pond, the reflections of intervention of equilibrium is a great area of study by acedemia because it is extremely complex.
What your argument really misses is the need for equilibrium to reset when the environment changes. The cycle of loss, reorganization, and then profit is the system.
Nice very concise pronouncement of what is wrong with classical economics. The sad truth is that the wealthy have every reason to introduce instability into the system. They sell high and buy low. If they can force the behavior of market participants they can synchronize the behavior of the market. This synchronization is the source of instability.
5.)Hayeks attack upon those who refer to totalitarian serfdom as a new freedom is fully justified.But when he speaked on behalf of the old freedom of liberal capitalism,he only matches mere words with mere words.He should known,and probably did know,that his proposals in both national and international fields,for arresting the capitalist tendency toward totalitarianism cannot be realized,and, even if they could be realized,would bring forth only once more what they intended to destroy.
You are speaking as if Hayek advocated absolutism in praxis with regards to property rights (he did not) and as if Hayekians are stalwart defenders of de facto "capitalism" (they're not).
4.)Because of the process of accumulation, Hayeks competition has become monopolistic competition, and monopolistic competition has led to competition between totalitarian states. In the totalitarian state all layers are engaged in it to the point of death. Thus capital has finally triumphed over all of humanity. The ideal capitalism is always the present one, and whether Hayek likes it or not, the principle of capitalist competition is fully realized only in total war.
3.)Contrary to what Hayek wants his readers to believe, the success of liberalism has fostered, not disturbed competition. Hayeks competitive society has always been monopolistic, viz.,the capitalist monopoly over the means of production and the monopolistic position of the state. And if the competitive society has had its monopolies, the monopolistic society has not ceased being competitive. There is no need to restore competition; it has never left us.
2.)Hayek thinks it better to have the means of production in many hands,But he does not say in how many. At what point should the concentration process of industry be brought to an end?In reality,in Totally Freemarket of course, it cannot be brought to an end unless capital accumulation is stopped, that is, unless capitalism itself is abolished; and Hayek is out to save it.But he cannot admit that in and of itself capitalism leads to state-capitalistic systems since the success of liberalism
1.)Speak in the name of science "The road to serfdom"Russia and Germany prove to Hayek that socialism does not lead to freedom.The most important guaranty of freedom, he maintains,is a system of private property. Planning and freedom cannot go together.Without a labor market and an industrial reserve army,for example,discipline can be maintained only by corporal punishment,for which reason socialism implies slave-labor.This reduces the Economist,Hayek,to a mere propagandist for free enterprise
It's a nice little excerpt, but the bank of England is left out of the equation, fractional reserve banking is left out of the equation, there's nothing wrong with free market economics as long as central/fractional reserve banking is outlawed, as those things constitute legalized fraud, and thus corrupt and destabilize any free market economy they come in contact with.
the governments who tend to embrace a "free market ideology" seem to think it should only apply to the countries they exploit. the majority of developed western countries have been quite interventionist and protectionist in terms of their own economies, that is why they have had stronger middle classes but as we know, those are quickly disappearing. i think the corporatists/fascists seek a much tighter grip on society and the signs are showing. the financial crisis could be the catalyst.
"In consequence, neoclassical and neo-Keynesian economics is relegating its players to the social sidelines where they either call no plays or use the wrong ones. To change the metaphor, they manipulate levers to which no machinery is attached.
. If the state is the executive committee of the great corporation and the planning system, it is partly because neoclassical economics is its instrument for neutralizing the suspicion that this is so"
"Power and the Useful Economist" (1973); J.K Galbraith
"The decisive weakness in neoclassical and neo-Keynesian economics is not the error in the assumptions by which it elides the problem of power.Rather, in eliding power — in making economics a nonpolitical subject — neoclassical theory destroys its relation to the real world. In that world, power is decisive in what happens. And the problems of that world are increasing both in number and in the depth of their social affliction..
"Power and the Useful Economist" (1973); J.K Galbraith
"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. Let there be no question: economics, so long as it is thus taught, becomes, however unconsciously, a part of the arrangement by which the citizen or student is kept from seeing how he or she is, or will be, governed."
So far the wealth of the United States has been a function of our plundering of Post Nixon/Thatcher-IMF/World Bank client states and our continual trading of reputation to maintain imbalances in the worth of our currency. This is not a consequence of a free market system, in a free market system such imbalances would be effectively impossible to create and sustain. This is a consequence of the apparent limitless power granted to the Federal Reserve and of the printing of paper money.
1)As for the market, one has to distinguish between the hypothetical market and the real market. The hypothetical market operates according to purely objective laws of supply and demand that put pressure on prices and thus behavior of rational and egoistic individuals. But in fact, this hypothetical market has never existed and most certainly does not exist in the capitalist world-system.
"The hypothetical market" only implies that humans hypotheticaly exist. That is the market, you and I. There are three things that affect supply and demand.
2)Those most opposed to the hypothetical market are the capitalists themselves because, if the hypothetical market would actually be in operation, they wouldnt make a penny. The only way capitalists make serious money is if they have quasi-monopolies. To obtain quasi-monopolies, they need intervention by the state in multiple ways and capitalists are totally aware of this.(I.Wallerstein)
Hi friend. Visit Mises' explanation on capitalism. As for gov intervention, that is the cause of central planning. Of lowering interest rates artificialy and increasing m3 distorting market conditions. That is not capitalism, nor does it help capitalism.
Neoliberal globalization has had its day; it is now dead. In the economic turmoil of the next twenty years, the major centers of capital accumulation will probably be more, not less, protectionist. And the South is not going to permit further penetration without reciprocity. The world is coming out of, not into, a free-trade era. In the 1997 financial crisis, the Asian country that did best was Malaysia, which rejected outright the advice of the IMF.
.What the United States should be encouraging at home and abroad is the kind of economic policies that will decrease, not increase, polarization internally within countries, and worldwide among countries.
3.)Talk about this hypothetical market is, subsequently, ideological rhetoric. The market doesnt actually work that way and any sane and wealthy capitalist will tell you that. Free market economists wont tell you that, but no capitalist believes in the autonomy of the market.
I agree with your supporting statements and much of your conclusion, but free market economists and capitalists do believe in the autonomy of the markets. I'd ask you to try to logically think through how a free market economy COULD work - it does create its own checks and balances because private benefit occurs when societal needs become addressed. but the issue of our current situation isn't because of free markets - we do not have a free market, it is not capatilist it is creditalist.
Time and again friend, we have seen that capitalism calls for sound money and banking, and free markets..the free market chose gold, Gov chose paper. Every time without fail paper loses and we return to Gold, free market, and capitalism...ask y?
Some of the assumptions that you make; are that the market can regulate itself, and that the "free-market" is a good thing: the first is of course not true, there never has been, and never will be a free market, it will seek regulation either from the gov't, and hence the people, or it will be regulated by the capitalists through the gov't, as it is mainly now but not exclusivley, or directly by the capitalists because of the lack of gov't or powers there of, as the Libertarians want.
History has shown that the freer the market the worse off the working people are, and that there is an increasing concentration of wealth and a more volatile economy, as has been happening here because of the increasing influence of "free-market" thought from the right-wing. You know, I know someone else who supported free trade, you should read HIS work.
To sum up, what is free trade, what is free trade under the present condition of society? It is freedom of capital. When you have overthrown the few national barriers which still restrict the progress of capital, you will merely have given it complete freedom of action. So long as you let the relation of wage labor to capital exist, it does not matter how favorable the conditions under which the exchange of commodities takes place,
there will always be a class which will exploit and a class which will be exploited. It is really difficult to understand the claim of the free-traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage workers. On the contrary, the only result will be that the antagonism of these two classes will stand out still more clearly
"Gentlemen! Do not allow yourselves to be deluded by the abstract word freedom. Whose freedom? It is not the freedom of one individual in relation to another, but the freedom of capital to crush the worker.
But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade."
And I do not defend Liberterianism. Libertarianism, like communism is transitionally nonviable - it is an ideological utopia. It assumes that Free markets are by nature immune to militant tendencies. They are not - they can in effect function just like feudal governments when left unchecked.
I am serious, what makes the government any less susceptible to extortion and greed? If anything government even more vulnerable because it lacks accountability.
Please, discredit any incorrect assumptions I have made - I would love to debate them.
I do not wish to defend government. Governments are started by the rich to rob from the poor. Furthermore, governments are bureaucracies that rob people of democracy and freedom.
I suppose it depends upon how you determine what a successful economy is.
The misunderstanding between us I think lies in our interpretation of aggregate supply rather than demand - my interpretation is that excesses in supply and excesses in wealth can be a bad thing, that it is possible for people to have more than they can afford. I'd assume your view would be that wealth and supply is an absolute indication of the success of the economy.
All economists evaluate economies based on the Gross National Product (GNP) [i.e. wealth].
Capitalists adjust aggregate supply based on falling aggregate demand. This is what is happening now. Businessmen cannot adjust supply downward fast enough to be commensurate with falling demand. Hence the value of everything is falling fast (i.e. deflation).
However, when the Gross National Product is manipulated - when the product is reliant upon debt financed excess consumption the GNP becomes an unreliable indicator of true wealth. This is faux production based on inflated paper assets rather than true intrinsically valued exportable products.
I suppose this is reference to my lack of literary citations. Perhaps maybe I am illiterate, but it could be because my arguments come from personal convictions rather than regurgitated thoughts of supposed legends of history. I live with the belief that the persuasiveness of an argument should depend upon what's being said rather than who once said it.
To say that this country has not been seriously damaged by the libertarian principles that have been slowly forced upon us by the Republican Party and even some of the Dems is completely blind to the facts. And you also deny you own ideology if you think of it as a "reform" movement. The Libertarians want to eviscerate the gov't to the point of impotence. Then the large moneyed interests and the capitalists will then be in complete control.
You can try to distance your self from the Neocons but it is unsuccessful. The driving force behind neo-liberal globalization is libertarianism; freeing up capital from restrictions while increasing restrictions on labor and more of shifting the burden of upon the lower and middle class by inordinate and harmful privatizations and tax structures that favor the elites. It is libertarian policies of free-market that have seen us to this crisis as I have previously shown.
To try and say that even greedier "free-market" principles will help us is extremely foolish. Trying to fully institute the libertarian principles will only lead to a corpratocracy or fascism as capital becomes more concentrated with an elite sector and capital gains further influence in the gov't. In a truly free market such as you advocate, the holders of the greatest wealth would be the rulers.
What do you think would happen in a free market dreamland where money unchecked can buy all the power it wants? The fortunate few will become even fewer. Those that already have too much power will grab more. There will be absolutely no delineation between state and corporation. Mussolini would be happy because that's what he defined fascism as.
Under the market anarchists (Libertarians) there will be a fewer and fewer fortunate people with the power and capital. Fortunate that they have the right connections, connections that others don't have, and that enable them to finance any additional profiteering. They will be fortunate to be able to use their financial power to undercut and drive competitors out; monopolizing their power and controlling prices to their benefit.
They will be fortunate that they can make extreme profits off both sides during wartime. They will be fortunate that they don't have to pay the workers a decent wage capable of providing for them and their families. They will be fortunate that they can keep the workers in debt with little choice but starve. They will be fortunate that there are few or enforced rules of workplace safety. They will be fortunate that they can afford health care while their workers die.
They will be fortunate that they can fire without recourse any worker who complains about the conditions. They will be fortunate to have at their disposal private armies of thugs to beat into submission any employees who might organize. They will be fortunate to be able to virtually own the politicians that are theoretically there to represent the people being beaten by those private armies.
They will be fortunate to able to write the laws to favor them though those politicians. They will be fortunate to be able to pollute, and use the environment as a commodity. They will be fortunate that they can hire a plethora of lawyers. They will be fortunate that they could avoid taxes and skirt laws with those lawyers. They will be fortunate to be able to count on a complacent media owned by fellow robber barons to distract and confuse the public.
They will be fortunate that they can demonize everyone who stands against them with this media. They will fortunate that they wrote the school curriculums that made them look so fortunate. And finally; they will be fortunate; and their kind presently also are, that there are so many unfortunate people that still believe in the myth of that kind of fortune. For the working person it would become much worse, the Gilded age personified a multifold. Libertarians = Stateless-Neocons
You have not attended a college or university and studied economics seriously. You have not majored in economics. In fact, I doubt you have taken the most basic economics course.
Wcoltd!You seem to be expert on Austrian ecomists.Could you give some short overview of famous Austrian Economists as for exampel,Rudolf Hilferding,Austrian-economist,that was Finance Minister of Germany in 1923 and from 1928 to 1929. Most famous work Das Finanzkapital (Finance capital),or some of the other great Austrians economists as Karl Renner,Otto Bauer,Max Adler,Carl Grünberg,that all stand out as great Austrians Economists that are readen lively even today in European Universitys?
You are without humanity, in your denial of poverty and unemployment. You view unemployment and poverty as the "troubles" of individuals without a sense of personal responsibility, rather then great public "issues" that affect the great mass of humanity. When and if you become unemployed and live i povert, you will sing a different song.
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No it's my trust in the moral responsibility of individuals, I think it's immoral to defer societal burdens on an institution which is not held accountable, I would rather have a society which feels guilt about the state of those in need than to give the public a false comfort that a government institution is taking care of its people in need when in fact they are not. I am effectively unemployed and I eat Ramen noodles and oatmeal all day. And I still believe in personal responsibility.
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Relying on government institutions to deal with poverty is really immoral, we essentially depend on the government to help us out instead of helping each other, it will destroy local communities.
Be serious, the moral responsibility that sees huge fortunes grow while people starve under capitalism, and the even freer the market the worse off they are, look at the gilded age, look at industrializing England, look at the textile workers in Saipan, a place that was, until the real horrors became apparent, hailed by libertarians as a free market example. Yours' are just more unsupported a priori assumptions that are typical of libertarians.
The allure of free market theory is not to devalue professors, but its because its a fairer and more efficient system. Imagine a system in which a person holds money under his mattress, and every week, a man comes and takes a portion of his money - it would seem to the average economist that this thief is doing the person a service by giving incentive to spend the money. And the thief says the only way to prevent the money from being stolen is to give it to him and let him hold on to it.
I don't see it as a collapse of aggregate demand in so much as a correction. It's not that confidence is unnaturally low, its that we have kept demand unnaturally high for a long period of time through a system of perpetual increasing debt. I think actually its faux money that has been totally discredited by reality - can you think of a paper monetary system that has lasted for more than 150 years? Its all a fantasy - it is unsustainable and is vulnerable to corruption.
Libertarians are the worst brand of rightist. Their idea of freedom is the market. A market for freedom means that only those who can afford it are truly free. Libertarians are the new ultra-right hidden in the alluring prose of democracy. But it is a democracy few can afford. It is the libertarian camp that wants all of our public assets destroyed; they are the radical privatizers who carry on the Neocon mantra while denying it. Those who believe govt doesnt work have no reason to be in it.
Equating libratarianism to the neoconservative movement is a fallacy. It would be very wise to recognize the fundamental differences between the two, Libertarians on one hand believe the role of government should be only to protect civil liberties and that the banking system be decentralized with competing currencies. While on the other hand, Neocons believe there should be central money and impose a system of debt financing - they have no regard for civil liberties.
Libertarians are elitists who have no regard for the great mass of people who are becoming unemployed and poverty ridden. Yours is a religious philosophy based on lecturing people about individual resposibility, while folks are without work and live in poverty. Like other Puritans and Calvinists you seek to find people and institutions to blame without taking responsibilty for seeking solutions. You are in denial about the seriousness of the economic challenge before us.
If those who wanted the government to be reformed had no place in it, then it would be impossible to reform that government. Our whole system is dependent upon continual reformation, that's what makes our government so enduring and that's exactly the process we need in the economy. Otherwise we will be inevitably left with an unchanging corrupted, unaccountable and inefficient system.
Your "reforms " are what has destroyed our economy and society. Your Libertarian "reforms" are deregulation, privatization and the elimination of social services. These "reforms" were implemented over the last 30 years. Your "reforms" ushered in a "corrupted, unaccountable and inefficient system."
You are making a distinction without a difference. Confidence is not merely low, it is non existent. We are in a period of anomie (sociologist Emile Durkheim's word to describe a loss of faith in the norms of society).
You can continue your Libertarian, Austrian School, Neo Classical, Friedmnaite thinking as long as you wish, but the question remains; what are we to do about mass unemployment and concomitant poverty? This is the question that concerns Neo Keynesians.
As far as confidence is concerned, there exists an abundance of it, not in banks, but in government, and in the dollar - and we're trading both of those things to restore trust in our banking system.
I do not claim to have an answer, but I do believe one thing, it is not the role of government to answer the question, its the responsibility of each unemployed individual. It's up to employers and visionaries - not the government.
I will say what Lord John Maynard Keynes said of President Franklin Delano Roosevelt. You are an economic illiterate.
As with most Libertarians, Austrian Schoolers, Neo Classical types, Friedmnaites, you have no empathy, compasion for or solidarity with the great mass of people. You are an elitist.
You'd rather label me than retort my argument. But I sincerely believe that it's not elitist to believe in personal responsibility and civic duty. I do not revel in superiority, as a matter of fact I find myself in comparison to the majority of people to be inferior. But that doesn't mean my ideas are so.
Hogan suggested them to someone else, but I would repeat that, and tell you to read David Cay Johnson's books "Free Lunch" and "Perfectly Legal" I would also recommend Thomas Frank's works "What;s the Matter with Kansas" and especially "The Wrecking Crew" for its exposure of libertarianism in our policies and the damage its caused. Also check Kenneth Galbraith's "The Predator State" and if your really curious about the world read, Michael Parenti's "Blackshirts and Reds" its short but excellent
I have responded to every single one of your comments. You are a religionist who lectures the unemployed and the poor on "personal responsibility and civic duty." You are without soul. You will never sing the blues.
The utilitarian view is horribly flawed, the notion that you can quantize desires - it's a sketchy subjective practice - how is any governing body to know where the "equilibrium" of any economy is? It's the market - the excange of things which determines the equilibrium - and in many cases equilibrium it is not a static thing.
wait does john adams have a camp? did anyone not even enjoy his thinking? talk about a utopiac free market - to my knowledge he was all for no robber barons forming crap like the ICC or the federal reserve act robbing the rest of the merchants blind and the public in the middle of the warfare going broke.
that's all this seems to be at this point, one merchant vs another, and we're left holding the bag of poop.
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I think this really depends on how one defines "free market". Can government-granted monopolies exist in a "free market"? Is it "free market" to give corporations personhood and allow them to run free to compete with private business? ...corporate welfare? ...bail-outs?
Is the Federal Reserve "free market"? ...the FDIC?
Please view my video entitled: "Government Intervention" based on an essay by the eminent historian Howard Zinn. The American government has always intervened on behalf of the rich - from the very beginning.
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Well the first part of that video basically my point, doesn't it?
Big business lobbies and installs politicians to benefit their interests at the expense (and to the detriment) of everyone else, all the while declaring their allegiance to "free market" principles.
So how can you call the likes of Milton Friedman and Ronald Reagan "free-marketeers"?
...unless by "free-marketeer" you mean "corporate shill".
gunsbull.The height of monopoly growth in the U.S. coincided with its greatest period of laissez-faire,or government nonintervention.The Gilded Age between the Civil War and World WarI,this period saw the phenomenal rise ofthe Robber Barons and their great trusts (monopolies).John D. Rockefeller monopolized oil under his Standard Oil Company;J.P. Morgan dominated finance;Andrew Carnegie,steel;James Hill,railroads.These men lived for market conquest,and plotted takeovers like military strategy
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I don't know which alleged "free market" ideologies consider the Guilded Age "laissez-faire", but I'm of the variety that considers a central bank to be anathema to "laissez-faire" principles. According to my definition, the period between Jackson and Lincoln was the closest thing to a "free market" America ever had. Lincoln corrupted everything, in my opinion.
There a lot more modern example of Freemarket!Palermo is a wellknown
exampel of non-govermetal involvevement in Market.I don´t know what recent price for a mans life is,but i read it was estimated to about 200 dollars for some 20 years ago,but later years more active intervene in the freemarket have properbarly inflated the price a bit i think.
hmm why should you take the Austrian school seriously...how about having the best business cycle theory and predicting both this crisis and the Great Depression. Being right ought to count for something. Who cares how old the stuff is- people still haven't woken up to it
"Best buisness cycle theory"?Are you refering to old Austrian economist Joseph A Shumpeter Cycles?He used the work of Russian Anarchist-Socialist Economist Nikolai Dmitriyevich Kondratieff), a proponent of the New Economic Policy (NEP) in the Soviet Union.He proposed a theory that Western capitalist economies have long term (50 to 60 years) cycles of boom followed by depression. These cycles are now called "Kondratiev waves", or grand supercycles.Shumpeter also predicted a socialist future.
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someone doesn't know what they're talking about. Joseph Schumpeter, while Austrian, was not an 'Austrian School Economist', and while his prediction for the rise of democratic socialism was quite prescient, I'm not talking about him. The cycle theory is that of Mises and Hayek. Don't criticize a school you know nothing about
iqutsoccer.Enlight us all about how Von Mises and Von Hayeks theoris gives us tools to analyze,for exampel: commodities, equities (stocks), residential mortgages, commercial real estate, loans, bonds), an index (e.g., interest rates, exchange rates, stock market indices, consumer price index (CPI) — inflation derivatives), and such things that All ordinary economists deals with all days if they want to call them self seriuos and get a job?How do the Von-Mises-Hayek look at this phenomens?
I love how all the idiot socialists who watch this stuff thumb down stuff that is clearly and undeniably true. I love ideologues with depraved ideologies. Zylvana- Austrian economists don't st out with a goal to be different all the time- their analysis of most of the stuff you listed is the same as any regular economists. The key differences are methodology, of course, and theory- their theory of interest rates and consequently of the bond market and investment is markedly different
you sound like you've been educated in the American public school system. That's such a twist of the facts. You can complain about the monopolies they formed all you want, but the fact of the matter is that they enhanced the productive processes of their respective industries and thus made essential goods like oil, steel, coal, etc FALL dramatically in price. Capitalism is production for the masses. And if you really want to complain about monopoly- your issue is more with government
iquit.soccer.Lets face facts.The so called "Austrian School" have not come up with something new since 1870 when Menger made his "Marginal Utilty theory",(highly disputed to day),you preach Goldstandard as a all over magical solution,want no Central-Bank,your ideal is the 1900 century British Empire Economy,you reject Statistics as useless,
you say that only states creates Monopolies,a fact that are overwhelmingly rejected by facts.How do expect we ever could take you seriously?
Well, what are you home schooled, or perhaps never graduated. That would actually explain a lot, either that, or you just spent too much time daydreaming. At least you're honest enough to recognize that the Austrian School/Stateless-Neocon ideology leads to gross monopolies. You probably should have actually read your text books too though.
[Rather than passing savings on to employees and consumers, however, he (Rockefeller) reaped large profits. He paid his employees extremely low wages and drove his competitors out of business by selling his oil at a lower price than it cost to produce it. Then when he had control of the market, he hiked prices far above their original level to gain back his money.]
The Austrian school is all a priori. It tries to prove preconceived assumptions without looking at the data. They have a well known aversion to statistics because the statistics do not support them. The Stateless-Neocon philosophy would only result in a greater concentration of wealth than we have now. It is the marriage between state and capital by the means of eviscerating the state into paralysis. Then large capital becomes the state. You know what that is; don't you?
The Rockefeller fortune was built on Lies, Deceit, and Murder and they continue to harm America. "Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure--one world, if you will. "If that's the charge, I stand guilty, and I am proud of it." - David Rockefeller, Memoirs (2002)
[For most of the Austrian School's history, mainstream academia has simply ignored it. Even today, none of its works are on the required reading list at Harvard. Most introductory economics texts don't even mention the school, and its economists are absent from many encyclopedias or indexes of the century's great economists.
Perhaps the first thing to stand out about Austrian economics is its relationship to mainstream economics. The two completely reject each other, and proudly so. Their differences extend even deeper than their diametrically opposite interpretations of the economy; they even use different philosophical approaches. The two could almost be called separate disciplines, if they were not attempting to describe the same phenomena. So, then, how do they view each other?
Mainstream economists dismiss the Austrians as cranks. Nobel economist Paul Samuelson wrote that "I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." Noted economist Mark Blaug has called Austrian methodologies "so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone."] - A Critique of the Austrian School of Economics
would you be referring to the same mainstream economists who didn't see this crisis coming? The Austrian methodology is far superior and far more rigorous and realistic than neo classicals or Keynesians. Mathematics and Statistics are not useless- they serve to show which of the factors elucidated by reasoning is more important in a given situation, but economics is a study of human action, not a hard science.
Who didn´t se it coming?What sort of nonscense!Everybody with their head screwed on saw it coming!!All Economist just waited to se the bubble blow.Even Milton Friedman(wellknown freemarket friend) saw Murray Rothbard as clown.You can´t find a "Austrian Scolar" even in Austria the last 100 years!Not even Jurg Haiders extreme right want to have anything to do with "Austrians"!Nobody at any university in US wanted to hire Von Mises.A "Royal Tannebaum"-Figure Billionair-Dwellyn fixed his job
James K. Galbraith has been warning of Systematic problems for some time.
I would also mention Nouriel Roubini, Dean Baker, and Paul Krugman as real ecnomists who are credited with predicting the crisis. Rigorous Haha the Austrians rely on a priori assumptions and the simple observations of individual actions, hardly rigorous. They build backward from the conclusion that markets are the end all, and then fit their "data" in to fit the theory. That's not rigorous, that's dishonest.
Von Mises saw no need for giving women or workers equal right or the right to vote,- "motherhood is the highest state of female happiness".... "a woman is simply the lover and mother who serves the sexual drive."
And Workers No! "Masses do not think. This is precisely the reason why they follow those who do think.The intellectual leadership of mankind is a position held by the very few who are able to think." Ludwig von Mises,The Market Economy,(Jena: Gustav Fischer, 1932)
"It is perfectly legitimate to assume that the races are different in their cognitive abilities and in their willpower and accordingly are unequally suited for the task of setting up societies, and that the better races are characterized in particular by their special ability to strengthen social bonds." Ludwig von Mises,The Market Economy,(Jena: Gustav Fischer, 1932)
I guess our libertarian friend has quit more than soccer. I can't see why anyone would even admit to being a free-markteer in this time. But it is typical of them that they try and twist history and absolve themselves of blame. Haha-how many have tried to wiggle away from Chile, or ignorantly claim that somehow the US isn't capitalist. even on the face of it, both those statments are ridicules, but they all constantly repeat the same foolish junk. Just like Murdoch's Faux News channel.
actually it is you, the big government types who blithely attempt to blame everything on the free market- in fact, I think such people jump at economic crisis because it gives them a chance to rail against the market system- talk about bending reality to fit ideology. Austrians do not work backwards, pal. If you knew anything about their methodology that statement would strike you as outrageous. And you ad hominem attack on Mises' views on race is irrelevant.
and how is that relevant to his economics? are you trying to paint him as a Nazi or something...because he was Jewish. As for the thing about the Masses not thinking- that's probably true, like it or not. Keynes himself even made references to that fact.
For me it is don´t matter if Von Mises is aborigin or jew or
mongolian tungus!But do you share Von Mises idees that -workers,women and coloured people are "lower species" and therefore should not have the right to vote and be "ruled by supieror leaders "?
Austrians do not work backwards- if anyone does that it is empiricist mainstream economists who do not critically examine the theories behind the data they gather. If you knew anything about Austrian methodology, you'd never make such an ignorant statement. Deducing from simple assumptions a full paradigm of economics is hardly working backwards. But if you think that capitalism is to blame for this crisis well then I guess you would make such a retarded accusation.
You have actually said nothing. The fact remains that the Austrians are renowned throughout the economic world for their poor methodology. They work from the assumption that only the unrestrained market can provide a myriad of wonders from freedom to clean teeth. That is undeniable, and that is what the Austrians do: that you attempt to deny this means either that you are a willing propagandist or ignorant of your own ideology.
"Theories behind the data" - You see, you have it backward. The data supports the theory, not the theory supporting, or behind the data. Deducing from simple assumptions, as you admit the Austrians do, could make one believe that the sun revolves around the earth. It is only by looking at the larger data and in a larger context also that the actual action of those bodies becomes apparent. But the Austrians are even more dishonest and often ignore or twist inconvenient data.
you are one hundred percent wrong. if the theory is correct but that data do not represent it- then something else is a lurking variable in the study. For instance- monetary expansion- can you say it does not happen if prices don't rise? you know the answer to that. Only through logic and theory can you ever answer WHY data appear the way they do. Economics is not guess and check- it involves acting human beings not mathematical equations
No Haha that is silly - Listen, in academics if the data does not support the theory than the theory is incorrect and needs to be revised, not the other way around. You really were home schooled, weren't you? - LOL. Your statement is the most silly and unscientific statement I have heard outside of a creationist. You see, you are just digging yourself a deeper hole and further proving that Libertarian economics is junk just like their cycle theory and their gold fetish.
you wouldn't know econ if it hit you in the face- wasn't home schooled and go to a pretty damn good liberal arts college with a 3.9 so go f urself. The Austrian cycle theory needs a lot more than your ignorant and empty criticisms to be disproved. You treat economics like your swinging a baseball bat in the dark- maybe you should learn to think critically- but I doubt they taught you that at po dunk u
Of course you disavow math and statistics because you can gain no support from them. Intuition does not make good rational science.
The theory that the Fed's monetary expansion and easing of credit restrictions results in "malinvestment" is an unsupported claim. It is backed up only by the Austrian's faith and deductive "logic" that such malinvestment occurs.
And I'm sorry this is a capitalist nation always was and still is. Notice that for you to say otherwise, you have to totally redefine capitalism to fit your own libertarian mold, sorry that's not how it's done. And EVERY economy is regulated, if there WAS the total "deregulation" that you wish, it would only mean that the large capitalists and the monopolists would regulate it for their own behalf.
The regulation would not disappear it would simply be absorbed into the undemocratic and unanswerable system of the capitalists. So once again you would have the marriage between the state and business; and again do you know what that is? And once again it is the Libertarian market ideology that bares a great deal of responsibility to blame for the current situation.
[Fundamental and pragmatic banking regulations, which arose from the devastating financial collapses of the Great Depression, for decades strengthened U.S. banks and capital markets, making them the twin engines of American growth and the envy of the world.
The systematic dismantling of those same regulations by greedy bankers began in earnest in 1980, peaked in 1999, and finally climaxed with an insane Securities and Exchange Commission ruling in April 2004, a final decision that paved the way for the implosion of everything regulation was designed to protect.
In 1980, in a virtual landslide, Ronald Reagan was elected and grabbed the conservative mantle. A year later, the shock troops of the heralded Reagan Revolution launched their attack and embarked on a massive, systematic de-regulatory campaign. President Reagans first treasury secretary, former Merrill Lynch & Co. Chief Executive Officer Donald T. Regan, became chairman of the Depository Institutions Deregulation Committee.
In a burst of deregulatory bravado in 1982, Treasury Secretary Regan ushered through the Garn-St. Germain Depository Institutions Act. Key provisions of the Act ultimately coalesced with Treasury Secretary Regans protection of the lucrative brokered deposits business, in which Merrill was a major player, and paved the way for the future collapse of the savings and loan industry.
the question is- who tampered with that system to the extent that only massive and extremely wise regulation could have prevented the business cycle? The real answer is the Fed's interest rate policy- which misrepresented the time preferences of consumers and led to an artificial lengthening of the capital structure that was unsustainable. Consumers saving less and businesses investing in more remote sectors is a recipe for bust. See Roger Garrison's stuff for more on capital based macro
First of all, when you respond to a sequence, you should respond to the final one and not break up the statement. Next, if you are going to school, which is far from obvious, you should probably take a basic economics course. You know, a real one where this Austrian crap is given only the passing mention it deserves. And if you did take that class you would know that capitalism itself has its own built in cycle of boom and bust, there has been a lot of work done on this.
And it should be pointed out that there were cycles before there was a central banking system and therefore the structure that is necessary for the Austrian cycle. The Austrian theory is only predicated upon the a priori notion that central banking is bad and malinvestment occurs; two whole unsupported assumptions, and also two superficial notions.
(3/16) Austrians can not point to anything with their theory without absolutely twisting the information or ignoring other major factors at play that may have been more important. Even Libertarian Milton Friedman recognized that the Austrian cycle is fallacious: in 1969 he concluded that: "The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false." He analyzed the issue using newer data in 1993, and again reached the same conclusions.
Furthermore, mainstream economists argue that the theory requires bankers and investors to exhibit a kind of irrationality that they be regularly fooled into making unprofitable investments by temporarily low interest rates. And Paul Krugman has argued the theory implies that consumption would increase during downturns and cannot explain the empirical observation that spending in "all sectors" of the economy fall during a recession.
[The hangover theory is perversely seductive—not because it offers an easy way out, but because it doesn't. It turns the wiggles on our charts into a morality play, a tale of hubris and downfall. And it offers adherents the special pleasure of dispensing painful advice with a clear conscience, secure in the belief that they are not heartless but merely practicing tough love.
Powerful as these seductions may be, they must be resisted—for the hangover theory is disastrously wrongheaded. Recessions are not necessary consequences of booms. They can and should be fought, not with austerity but with liberality—with policies that encourage people to spend more, not less. Nor is this merely an academic argument: The hangover theory can do real harm. Liquidationist views played an important role in the spread of the Great Depression-
-with Austrian theorists such as Friedrich von Hayek and Joseph Schumpeter strenuously arguing, in the very depths of that depression, against any attempt to restore "sham" prosperity by expanding credit and the money supply. And these same views are doing their bit to inhibit recovery in the world's depressed economies at this very moment.
Why should the ups and downs of investment demand lead to ups and downs in the economy as a whole? Don't say that it's obvious-although investment cycles clearly are associated with economywide recessions and recoveries in practice, a theory is supposed to explain observed correlations, not just assume them. And in fact the key to the Keynesian revolution in economic thought-a revolution that made hangover theory in general and Austrian theory in particular as obsolete as epicycles
was John Maynard Keynes' realization that the crucial question was not why investment demand sometimes declines, but why such declines cause the whole economy to slump.
My God. It just came to me that the idea of equilibrium in economics has infected the mainstream culture. I personally beleive we are heading for an economic collapse (based on steve keen's analysis and others) or at least a severe depression. Alot of the public think that this is simply a 'down' in the economy and that it's natural, not realizing that this is the apex of a series of debt bubbles.
LuqmanNaq 1 year ago
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zsylvana 1 year ago
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zsylvana 1 year ago
Myrdal's early work on money was theoretical in nature. As a leading contributor to the Stockholm school, he followed Knut Wicksell's (1851-1926) cumulative process analysis, in which cumulative inflation occurs when banks hold the loan rate of interest below the natural rate of interest (at which saving out of full-employment income is equal to investment), resulting in a high level of investment demand.
zsylvana 1 year ago 5
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zsylvana 1 year ago
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zsylvana 1 year ago
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zsylvana 1 year ago
Myrdal's as a leading contributor to the Stockholm school, he followed Knut Wicksell's (1851-1926) cumulative process analysis, in which cumulative inflation occurs when banks hold the loan rate of interest below the natural rate of interest (at which saving out of full-employment income is equal to investment), resulting in a high level of investment demand. In a 1931 work (published in English in 1939 as Monetary Equilibrium ),
zsylvana 1 year ago 9
3)Gunnar Myrdal, Swedish economist and 1973 Nobel Prize winner for his early work on monetary theory, made major contributions to macroeconomic theory, international economics, development economics, economic methodology, and social and economic policy. He was a critic of mainstream neoclassical economics His early work on money was theoretical in nature. As a leading contributor to the Stockholm school, he followed Knut Wicksell's (1851-1926) cumulative process analysis,
zsylvana 1 year ago 9
2)Other early contributions to critize the equilibrium were made by T. Veblen, Gunnar Myrdal,Karl William Kapp and N.Kaldor.The deepest work on the subject was perhaps Gunnar Myrdal's theoretical key concept "circular cumulative causation" that contributed to the development of modern Non-equilibrium economics.This approach is represented by modern researchers in the fields of evolutionary-institutional economics,Post Keynesian economics,Ecological Economics,development and growth economics
zsylvana 1 year ago 23
@zsylvana
Dear Z:
You continue to be the best. Your very many contributions to OUR salon, is appreciated beyond measure. Sweden has been fertile soil for you. You understand the history of ideas as few do.
All the best / Mike
radiohogan 1 year ago 13
)The critic of neoclassical equilibrium economics is not new.I think the first notable economist that pointed out there that it was something of a ilussion was Knut Wicksell from my own country Sweden.He critized the Anglo-American neo-classical monetary theory and the buissness cycle as static in debate with the leading representant for the point of view,at that time,famous Irving Fischer.
zsylvana 1 year ago 8
Someone needs to read up on their Hayek and Mises.
VeryGreatMan 1 year ago
So where do you fall and why? In some videos you seem to herald Keynes, but yet you say equilibrium is BS, correct? I am trying to better understand where your theoretical allegiances lie. Thanks.
dfairchildks 1 year ago
Keynes didn't say equilibrium is bullsh_t. He said there could occur periods of below full employment equilibrium. And during such periods the unemployed have no mechanism (money) to signal their potential demand, so government must use deficits to increase aggregate demand until full employment equilibrium is reestablished. So are you not a Keynesian? Is Keynes bullsh_t, too, in your view? Thanks.
t
dfairchildks 1 year ago
@dfairchildks
The man who wrote "Debunking Economics" wroyr eqilibrium is BS (My paraphrase). Keynes would have been a big believer in equilibrium as a reality.
radiohogan 1 year ago
RadioHogan,
I recently found your YouTube Channel and have been enjoying a sampling of your videos.
However, I am not sure what you are claiming here about equilibrium theory.
Are you saying while unfettered supply and demand may yield an optimal equilibrium under ideal circumstances, too often optimal equilibrium is not realized due to less than ideal circumstances? Or are you saying there is something wrong with equilibrium theory at its core?
Thank you,
Dave in Kansas
dfairchildks 1 year ago
@dfairchildks
I am saying equilibrium, as an economic idea, is bullsh_t.
radiohogan 1 year ago 3
Why do you say downtown "New Jersey?" That doesn't make sense to me.. unless you mean downtown Trenton.
jonnniefivemiles 2 years ago
Hi JFM:
It makes no sense to me, either. As an existentialist, I have a need to be absurd at times.
All the best / mike hogan
radiohogan 2 years ago
Keen's DE is an excellent book in many ways, including its analysis of certain neoclassical ideas regarding tendencies to equilibrium - and Steve Keen is one of the brightest Post-K's out there - but unfortunately the book is also thoroughly flawed.
See Robert Murphy of NYU's succinct review.
jonnniefivemiles 2 years ago
surnbe.Interventions in economic order as a part of society has allways been more or or less constant over time since ancient simple exchange of commodties.If state not intervene other orders of society allways does.Alternatenatively over time,Kings,Kinships-Klans,Church Religiuos Orders,Feudal-Lords,
Monopoly-Cartells,Para Military, Robbers& Bandits,Banks,Lenders and Loaners etc.I recommend you to read,Prof.F.Modligiano,MIT "Life Cycle, Individual Thrift and the Wealth of Nations",1986, AER
zsylvana 2 years ago 2
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Economics returned to classical economics because interventionism is not economically sound. Keynesian interventionism upsets equilibrium without understanding of the consequences.
Like ripples on a pond, the reflections of intervention of equilibrium is a great area of study by acedemia because it is extremely complex.
What your argument really misses is the need for equilibrium to reset when the environment changes. The cycle of loss, reorganization, and then profit is the system.
surnbe 2 years ago
Nice very concise pronouncement of what is wrong with classical economics. The sad truth is that the wealthy have every reason to introduce instability into the system. They sell high and buy low. If they can force the behavior of market participants they can synchronize the behavior of the market. This synchronization is the source of instability.
j0hnwi11iams 2 years ago 54
Hello J0hnWi11iams:
Your comment is appreciated.
All the Best / Mike Hogan
radiohogan 2 years ago
5.)Hayeks attack upon those who refer to totalitarian serfdom as a new freedom is fully justified.But when he speaked on behalf of the old freedom of liberal capitalism,he only matches mere words with mere words.He should known,and probably did know,that his proposals in both national and international fields,for arresting the capitalist tendency toward totalitarianism cannot be realized,and, even if they could be realized,would bring forth only once more what they intended to destroy.
zsylvana 2 years ago 66
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You are speaking as if Hayek advocated absolutism in praxis with regards to property rights (he did not) and as if Hayekians are stalwart defenders of de facto "capitalism" (they're not).
jonnniefivemiles 2 years ago
4.)Because of the process of accumulation, Hayeks competition has become monopolistic competition, and monopolistic competition has led to competition between totalitarian states. In the totalitarian state all layers are engaged in it to the point of death. Thus capital has finally triumphed over all of humanity. The ideal capitalism is always the present one, and whether Hayek likes it or not, the principle of capitalist competition is fully realized only in total war.
zsylvana 2 years ago 64
3.)Contrary to what Hayek wants his readers to believe, the success of liberalism has fostered, not disturbed competition. Hayeks competitive society has always been monopolistic, viz.,the capitalist monopoly over the means of production and the monopolistic position of the state. And if the competitive society has had its monopolies, the monopolistic society has not ceased being competitive. There is no need to restore competition; it has never left us.
zsylvana 2 years ago 54
2.)Hayek thinks it better to have the means of production in many hands,But he does not say in how many. At what point should the concentration process of industry be brought to an end?In reality,in Totally Freemarket of course, it cannot be brought to an end unless capital accumulation is stopped, that is, unless capitalism itself is abolished; and Hayek is out to save it.But he cannot admit that in and of itself capitalism leads to state-capitalistic systems since the success of liberalism
zsylvana 2 years ago 52
1.)Speak in the name of science "The road to serfdom"Russia and Germany prove to Hayek that socialism does not lead to freedom.The most important guaranty of freedom, he maintains,is a system of private property. Planning and freedom cannot go together.Without a labor market and an industrial reserve army,for example,discipline can be maintained only by corporal punishment,for which reason socialism implies slave-labor.This reduces the Economist,Hayek,to a mere propagandist for free enterprise
zsylvana 2 years ago 49
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It's a nice little excerpt, but the bank of England is left out of the equation, fractional reserve banking is left out of the equation, there's nothing wrong with free market economics as long as central/fractional reserve banking is outlawed, as those things constitute legalized fraud, and thus corrupt and destabilize any free market economy they come in contact with.
luke666808g 2 years ago
the governments who tend to embrace a "free market ideology" seem to think it should only apply to the countries they exploit. the majority of developed western countries have been quite interventionist and protectionist in terms of their own economies, that is why they have had stronger middle classes but as we know, those are quickly disappearing. i think the corporatists/fascists seek a much tighter grip on society and the signs are showing. the financial crisis could be the catalyst.
willydeaner 2 years ago 29
Hello WillyDeaner:
Thank you.
All the Best / Mike Hogan
radiohogan 2 years ago
"I have forecasted 9 of the 5 last recessions" Paul. A Samuelson,ironicially about limitiations in Economic Methodology.
zsylvana 2 years ago 22
Power and the Useful Economist´(1973J.K Galbraith
"In consequence, neoclassical and neo-Keynesian economics is relegating its players to the social sidelines where they either call no plays or use the wrong ones. To change the metaphor, they manipulate levers to which no machinery is attached.
. If the state is the executive committee of the great corporation and the planning system, it is partly because neoclassical economics is its instrument for neutralizing the suspicion that this is so"
zsylvana 2 years ago 24
"Power and the Useful Economist" (1973); J.K Galbraith
"The decisive weakness in neoclassical and neo-Keynesian economics is not the error in the assumptions by which it elides the problem of power.Rather, in eliding power — in making economics a nonpolitical subject — neoclassical theory destroys its relation to the real world. In that world, power is decisive in what happens. And the problems of that world are increasing both in number and in the depth of their social affliction..
zsylvana 2 years ago 13
"Power and the Useful Economist" (1973); J.K Galbraith
"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. Let there be no question: economics, so long as it is thus taught, becomes, however unconsciously, a part of the arrangement by which the citizen or student is kept from seeing how he or she is, or will be, governed."
zsylvana 2 years ago 13
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So far the wealth of the United States has been a function of our plundering of Post Nixon/Thatcher-IMF/World Bank client states and our continual trading of reputation to maintain imbalances in the worth of our currency. This is not a consequence of a free market system, in a free market system such imbalances would be effectively impossible to create and sustain. This is a consequence of the apparent limitless power granted to the Federal Reserve and of the printing of paper money.
Wcoltd 3 years ago
1)As for the market, one has to distinguish between the hypothetical market and the real market. The hypothetical market operates according to purely objective laws of supply and demand that put pressure on prices and thus behavior of rational and egoistic individuals. But in fact, this hypothetical market has never existed and most certainly does not exist in the capitalist world-system.
(I.Wallerstein)
zsylvana 3 years ago 19
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"The hypothetical market" only implies that humans hypotheticaly exist. That is the market, you and I. There are three things that affect supply and demand.
fabolous2482004 2 years ago
2)Those most opposed to the hypothetical market are the capitalists themselves because, if the hypothetical market would actually be in operation, they wouldnt make a penny. The only way capitalists make serious money is if they have quasi-monopolies. To obtain quasi-monopolies, they need intervention by the state in multiple ways and capitalists are totally aware of this.(I.Wallerstein)
zsylvana 3 years ago 21
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Hi friend. Visit Mises' explanation on capitalism. As for gov intervention, that is the cause of central planning. Of lowering interest rates artificialy and increasing m3 distorting market conditions. That is not capitalism, nor does it help capitalism.
fabolous2482004 2 years ago
Neoliberal globalization has had its day; it is now dead. In the economic turmoil of the next twenty years, the major centers of capital accumulation will probably be more, not less, protectionist. And the South is not going to permit further penetration without reciprocity. The world is coming out of, not into, a free-trade era. In the 1997 financial crisis, the Asian country that did best was Malaysia, which rejected outright the advice of the IMF.
zsylvana 2 years ago 16
.What the United States should be encouraging at home and abroad is the kind of economic policies that will decrease, not increase, polarization internally within countries, and worldwide among countries.
zsylvana 2 years ago 14
3.)Talk about this hypothetical market is, subsequently, ideological rhetoric. The market doesnt actually work that way and any sane and wealthy capitalist will tell you that. Free market economists wont tell you that, but no capitalist believes in the autonomy of the market.
(I Wallerstein)
zsylvana 3 years ago 19
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I agree with your supporting statements and much of your conclusion, but free market economists and capitalists do believe in the autonomy of the markets. I'd ask you to try to logically think through how a free market economy COULD work - it does create its own checks and balances because private benefit occurs when societal needs become addressed. but the issue of our current situation isn't because of free markets - we do not have a free market, it is not capatilist it is creditalist.
Wcoltd 3 years ago
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Time and again friend, we have seen that capitalism calls for sound money and banking, and free markets..the free market chose gold, Gov chose paper. Every time without fail paper loses and we return to Gold, free market, and capitalism...ask y?
fabolous2482004 2 years ago
This comment has received too many negative votes show
No, I never resort to calling myself anything, but I do believe in these principles,
Protection of Civil Liberties for all human beings,
A sound un-manipulatable currency
Trade without restrictions
Localizing governments whose role is to primarily enforce the preceding two principles.
Wcoltd 3 years ago
(1/6)
Some of the assumptions that you make; are that the market can regulate itself, and that the "free-market" is a good thing: the first is of course not true, there never has been, and never will be a free market, it will seek regulation either from the gov't, and hence the people, or it will be regulated by the capitalists through the gov't, as it is mainly now but not exclusivley, or directly by the capitalists because of the lack of gov't or powers there of, as the Libertarians want.
Rundstedt1 3 years ago 3
(2/6)
History has shown that the freer the market the worse off the working people are, and that there is an increasing concentration of wealth and a more volatile economy, as has been happening here because of the increasing influence of "free-market" thought from the right-wing. You know, I know someone else who supported free trade, you should read HIS work.
Rundstedt1 3 years ago 2
(3/6)
To sum up, what is free trade, what is free trade under the present condition of society? It is freedom of capital. When you have overthrown the few national barriers which still restrict the progress of capital, you will merely have given it complete freedom of action. So long as you let the relation of wage labor to capital exist, it does not matter how favorable the conditions under which the exchange of commodities takes place,
Rundstedt1 3 years ago 2
(4/6)
there will always be a class which will exploit and a class which will be exploited. It is really difficult to understand the claim of the free-traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage workers. On the contrary, the only result will be that the antagonism of these two classes will stand out still more clearly
Rundstedt1 3 years ago 2
(5/6)
"Gentlemen! Do not allow yourselves to be deluded by the abstract word freedom. Whose freedom? It is not the freedom of one individual in relation to another, but the freedom of capital to crush the worker.
Rundstedt1 3 years ago 3
(6/6)
But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade."
Marx on the question of Free Trade. 1848
Rundstedt1 3 years ago 5
And I do not defend Liberterianism. Libertarianism, like communism is transitionally nonviable - it is an ideological utopia. It assumes that Free markets are by nature immune to militant tendencies. They are not - they can in effect function just like feudal governments when left unchecked.
Why do you assume I am an elitist Libertarian?
Wcoltd 3 years ago
Would you call yourself an Anarchist?
radiohogan 3 years ago
I am serious, what makes the government any less susceptible to extortion and greed? If anything government even more vulnerable because it lacks accountability.
Please, discredit any incorrect assumptions I have made - I would love to debate them.
Wcoltd 3 years ago
I do not wish to defend government. Governments are started by the rich to rob from the poor. Furthermore, governments are bureaucracies that rob people of democracy and freedom.
Why do you assume I am a supporter of government?
radiohogan 3 years ago
I suppose it depends upon how you determine what a successful economy is.
The misunderstanding between us I think lies in our interpretation of aggregate supply rather than demand - my interpretation is that excesses in supply and excesses in wealth can be a bad thing, that it is possible for people to have more than they can afford. I'd assume your view would be that wealth and supply is an absolute indication of the success of the economy.
Wcoltd 3 years ago
All economists evaluate economies based on the Gross National Product (GNP) [i.e. wealth].
Capitalists adjust aggregate supply based on falling aggregate demand. This is what is happening now. Businessmen cannot adjust supply downward fast enough to be commensurate with falling demand. Hence the value of everything is falling fast (i.e. deflation).
radiohogan 3 years ago
However, when the Gross National Product is manipulated - when the product is reliant upon debt financed excess consumption the GNP becomes an unreliable indicator of true wealth. This is faux production based on inflated paper assets rather than true intrinsically valued exportable products.
Wcoltd 3 years ago
You are an economic illiterate.
radiohogan 3 years ago
I suppose this is reference to my lack of literary citations. Perhaps maybe I am illiterate, but it could be because my arguments come from personal convictions rather than regurgitated thoughts of supposed legends of history. I live with the belief that the persuasiveness of an argument should depend upon what's being said rather than who once said it.
Wcoltd 3 years ago
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To say that this country has not been seriously damaged by the libertarian principles that have been slowly forced upon us by the Republican Party and even some of the Dems is completely blind to the facts. And you also deny you own ideology if you think of it as a "reform" movement. The Libertarians want to eviscerate the gov't to the point of impotence. Then the large moneyed interests and the capitalists will then be in complete control.
Rundstedt1 3 years ago
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You can try to distance your self from the Neocons but it is unsuccessful. The driving force behind neo-liberal globalization is libertarianism; freeing up capital from restrictions while increasing restrictions on labor and more of shifting the burden of upon the lower and middle class by inordinate and harmful privatizations and tax structures that favor the elites. It is libertarian policies of free-market that have seen us to this crisis as I have previously shown.
Rundstedt1 3 years ago
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To try and say that even greedier "free-market" principles will help us is extremely foolish. Trying to fully institute the libertarian principles will only lead to a corpratocracy or fascism as capital becomes more concentrated with an elite sector and capital gains further influence in the gov't. In a truly free market such as you advocate, the holders of the greatest wealth would be the rulers.
Rundstedt1 3 years ago
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What do you think would happen in a free market dreamland where money unchecked can buy all the power it wants? The fortunate few will become even fewer. Those that already have too much power will grab more. There will be absolutely no delineation between state and corporation. Mussolini would be happy because that's what he defined fascism as.
Rundstedt1 3 years ago
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Under the market anarchists (Libertarians) there will be a fewer and fewer fortunate people with the power and capital. Fortunate that they have the right connections, connections that others don't have, and that enable them to finance any additional profiteering. They will be fortunate to be able to use their financial power to undercut and drive competitors out; monopolizing their power and controlling prices to their benefit.
Rundstedt1 3 years ago
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They will be fortunate that they can make extreme profits off both sides during wartime. They will be fortunate that they don't have to pay the workers a decent wage capable of providing for them and their families. They will be fortunate that they can keep the workers in debt with little choice but starve. They will be fortunate that there are few or enforced rules of workplace safety. They will be fortunate that they can afford health care while their workers die.
Rundstedt1 3 years ago
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They will be fortunate that they can fire without recourse any worker who complains about the conditions. They will be fortunate to have at their disposal private armies of thugs to beat into submission any employees who might organize. They will be fortunate to be able to virtually own the politicians that are theoretically there to represent the people being beaten by those private armies.
Rundstedt1 3 years ago
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They will be fortunate to able to write the laws to favor them though those politicians. They will be fortunate to be able to pollute, and use the environment as a commodity. They will be fortunate that they can hire a plethora of lawyers. They will be fortunate that they could avoid taxes and skirt laws with those lawyers. They will be fortunate to be able to count on a complacent media owned by fellow robber barons to distract and confuse the public.
Rundstedt1 3 years ago
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They will be fortunate that they can demonize everyone who stands against them with this media. They will fortunate that they wrote the school curriculums that made them look so fortunate. And finally; they will be fortunate; and their kind presently also are, that there are so many unfortunate people that still believe in the myth of that kind of fortune. For the working person it would become much worse, the Gilded age personified a multifold. Libertarians = Stateless-Neocons
Rundstedt1 3 years ago
You have not attended a college or university and studied economics seriously. You have not majored in economics. In fact, I doubt you have taken the most basic economics course.
radiohogan 3 years ago
That is false I have taken exactly 2 courses, I got an A in Macroeconomics, and a B in microeconomics.
Wcoltd 3 years ago
Wcoltd!You seem to be expert on Austrian ecomists.Could you give some short overview of famous Austrian Economists as for exampel,Rudolf Hilferding,Austrian-economist,that was Finance Minister of Germany in 1923 and from 1928 to 1929. Most famous work Das Finanzkapital (Finance capital),or some of the other great Austrians economists as Karl Renner,Otto Bauer,Max Adler,Carl Grünberg,that all stand out as great Austrians Economists that are readen lively even today in European Universitys?
zsylvana 3 years ago 4
You would not have received those grades at my university. You appear to have discarded Macroeconomics, in favor of religious zeal.
radiohogan 3 years ago
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You'd be fooling yourself to believe that labeling the spirit of my convictions acts to discredit the validity of my arguments.
Wcoltd 3 years ago
I am the one who has approved evry one of your comments and made them available in this forum.
radiohogan 3 years ago
You are without humanity, in your denial of poverty and unemployment. You view unemployment and poverty as the "troubles" of individuals without a sense of personal responsibility, rather then great public "issues" that affect the great mass of humanity. When and if you become unemployed and live i povert, you will sing a different song.
radiohogan 3 years ago
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No it's my trust in the moral responsibility of individuals, I think it's immoral to defer societal burdens on an institution which is not held accountable, I would rather have a society which feels guilt about the state of those in need than to give the public a false comfort that a government institution is taking care of its people in need when in fact they are not. I am effectively unemployed and I eat Ramen noodles and oatmeal all day. And I still believe in personal responsibility.
Wcoltd 3 years ago
Your Puritanical Calvinism is saintly.
radiohogan 3 years ago
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Relying on government institutions to deal with poverty is really immoral, we essentially depend on the government to help us out instead of helping each other, it will destroy local communities.
Wcoltd 3 years ago
Be serious, the moral responsibility that sees huge fortunes grow while people starve under capitalism, and the even freer the market the worse off they are, look at the gilded age, look at industrializing England, look at the textile workers in Saipan, a place that was, until the real horrors became apparent, hailed by libertarians as a free market example. Yours' are just more unsupported a priori assumptions that are typical of libertarians.
Rundstedt1 3 years ago 3
Please remember what Tom Paine had to say about charity: "The people don't want charity, they want their rights."
radiohogan 3 years ago
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You should take a look into Joseph Stiglitz the 2001 nobel prize winner in economics, I think he would agree with my position.
Wcoltd 3 years ago
You can see Stiglitz interviewed on DemocracyNow web site.
radiohogan 3 years ago
The allure of free market theory is not to devalue professors, but its because its a fairer and more efficient system. Imagine a system in which a person holds money under his mattress, and every week, a man comes and takes a portion of his money - it would seem to the average economist that this thief is doing the person a service by giving incentive to spend the money. And the thief says the only way to prevent the money from being stolen is to give it to him and let him hold on to it.
Wcoltd 3 years ago
"Free Market" symbolism has been totally discredited by reality. Those who chose to ignore reality are in denial.
You do not understand "aggregate demand." We are currently experiencing a complete collapse of aggregate demand.
radiohogan 3 years ago
I don't see it as a collapse of aggregate demand in so much as a correction. It's not that confidence is unnaturally low, its that we have kept demand unnaturally high for a long period of time through a system of perpetual increasing debt. I think actually its faux money that has been totally discredited by reality - can you think of a paper monetary system that has lasted for more than 150 years? Its all a fantasy - it is unsustainable and is vulnerable to corruption.
Wcoltd 3 years ago
Libertarians are the worst brand of rightist. Their idea of freedom is the market. A market for freedom means that only those who can afford it are truly free. Libertarians are the new ultra-right hidden in the alluring prose of democracy. But it is a democracy few can afford. It is the libertarian camp that wants all of our public assets destroyed; they are the radical privatizers who carry on the Neocon mantra while denying it. Those who believe govt doesnt work have no reason to be in it.
Rundstedt1 3 years ago
Well said, Rundstedt1. You have hit the proverbial nail on the head.
radiohogan 3 years ago
Equating libratarianism to the neoconservative movement is a fallacy. It would be very wise to recognize the fundamental differences between the two, Libertarians on one hand believe the role of government should be only to protect civil liberties and that the banking system be decentralized with competing currencies. While on the other hand, Neocons believe there should be central money and impose a system of debt financing - they have no regard for civil liberties.
Wcoltd 3 years ago
Libertarians are elitists who have no regard for the great mass of people who are becoming unemployed and poverty ridden. Yours is a religious philosophy based on lecturing people about individual resposibility, while folks are without work and live in poverty. Like other Puritans and Calvinists you seek to find people and institutions to blame without taking responsibilty for seeking solutions. You are in denial about the seriousness of the economic challenge before us.
radiohogan 3 years ago
If those who wanted the government to be reformed had no place in it, then it would be impossible to reform that government. Our whole system is dependent upon continual reformation, that's what makes our government so enduring and that's exactly the process we need in the economy. Otherwise we will be inevitably left with an unchanging corrupted, unaccountable and inefficient system.
Wcoltd 3 years ago
Your "reforms " are what has destroyed our economy and society. Your Libertarian "reforms" are deregulation, privatization and the elimination of social services. These "reforms" were implemented over the last 30 years. Your "reforms" ushered in a "corrupted, unaccountable and inefficient system."
radiohogan 3 years ago
You are making a distinction without a difference. Confidence is not merely low, it is non existent. We are in a period of anomie (sociologist Emile Durkheim's word to describe a loss of faith in the norms of society).
You can continue your Libertarian, Austrian School, Neo Classical, Friedmnaite thinking as long as you wish, but the question remains; what are we to do about mass unemployment and concomitant poverty? This is the question that concerns Neo Keynesians.
radiohogan 3 years ago
As far as confidence is concerned, there exists an abundance of it, not in banks, but in government, and in the dollar - and we're trading both of those things to restore trust in our banking system.
I do not claim to have an answer, but I do believe one thing, it is not the role of government to answer the question, its the responsibility of each unemployed individual. It's up to employers and visionaries - not the government.
Wcoltd 3 years ago
I will say what Lord John Maynard Keynes said of President Franklin Delano Roosevelt. You are an economic illiterate.
As with most Libertarians, Austrian Schoolers, Neo Classical types, Friedmnaites, you have no empathy, compasion for or solidarity with the great mass of people. You are an elitist.
radiohogan 3 years ago
You'd rather label me than retort my argument. But I sincerely believe that it's not elitist to believe in personal responsibility and civic duty. I do not revel in superiority, as a matter of fact I find myself in comparison to the majority of people to be inferior. But that doesn't mean my ideas are so.
Wcoltd 3 years ago
Hogan suggested them to someone else, but I would repeat that, and tell you to read David Cay Johnson's books "Free Lunch" and "Perfectly Legal" I would also recommend Thomas Frank's works "What;s the Matter with Kansas" and especially "The Wrecking Crew" for its exposure of libertarianism in our policies and the damage its caused. Also check Kenneth Galbraith's "The Predator State" and if your really curious about the world read, Michael Parenti's "Blackshirts and Reds" its short but excellent
Rundstedt1 3 years ago
I have responded to every single one of your comments. You are a religionist who lectures the unemployed and the poor on "personal responsibility and civic duty." You are without soul. You will never sing the blues.
radiohogan 3 years ago
The utilitarian view is horribly flawed, the notion that you can quantize desires - it's a sketchy subjective practice - how is any governing body to know where the "equilibrium" of any economy is? It's the market - the excange of things which determines the equilibrium - and in many cases equilibrium it is not a static thing.
Wcoltd 3 years ago
wait does john adams have a camp? did anyone not even enjoy his thinking? talk about a utopiac free market - to my knowledge he was all for no robber barons forming crap like the ICC or the federal reserve act robbing the rest of the merchants blind and the public in the middle of the warfare going broke.
that's all this seems to be at this point, one merchant vs another, and we're left holding the bag of poop.
shakaama 3 years ago
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I think this really depends on how one defines "free market". Can government-granted monopolies exist in a "free market"? Is it "free market" to give corporations personhood and allow them to run free to compete with private business? ...corporate welfare? ...bail-outs?
Is the Federal Reserve "free market"? ...the FDIC?
Food for thought.
gunsandbullhorns 3 years ago
Please view my video entitled: "Government Intervention" based on an essay by the eminent historian Howard Zinn. The American government has always intervened on behalf of the rich - from the very beginning.
radiohogan 3 years ago
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Well the first part of that video basically my point, doesn't it?
Big business lobbies and installs politicians to benefit their interests at the expense (and to the detriment) of everyone else, all the while declaring their allegiance to "free market" principles.
So how can you call the likes of Milton Friedman and Ronald Reagan "free-marketeers"?
...unless by "free-marketeer" you mean "corporate shill".
gunsandbullhorns 3 years ago
gunsbull.The height of monopoly growth in the U.S. coincided with its greatest period of laissez-faire,or government nonintervention.The Gilded Age between the Civil War and World WarI,this period saw the phenomenal rise ofthe Robber Barons and their great trusts (monopolies).John D. Rockefeller monopolized oil under his Standard Oil Company;J.P. Morgan dominated finance;Andrew Carnegie,steel;James Hill,railroads.These men lived for market conquest,and plotted takeovers like military strategy
zsylvana 3 years ago 10
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I don't know which alleged "free market" ideologies consider the Guilded Age "laissez-faire", but I'm of the variety that considers a central bank to be anathema to "laissez-faire" principles. According to my definition, the period between Jackson and Lincoln was the closest thing to a "free market" America ever had. Lincoln corrupted everything, in my opinion.
gunsandbullhorns 3 years ago
There a lot more modern example of Freemarket!Palermo is a wellknown
exampel of non-govermetal involvevement in Market.I don´t know what recent price for a mans life is,but i read it was estimated to about 200 dollars for some 20 years ago,but later years more active intervene in the freemarket have properbarly inflated the price a bit i think.
zsylvana 3 years ago 11
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hmm why should you take the Austrian school seriously...how about having the best business cycle theory and predicting both this crisis and the Great Depression. Being right ought to count for something. Who cares how old the stuff is- people still haven't woken up to it
iquitsoccer 3 years ago
"Best buisness cycle theory"?Are you refering to old Austrian economist Joseph A Shumpeter Cycles?He used the work of Russian Anarchist-Socialist Economist Nikolai Dmitriyevich Kondratieff), a proponent of the New Economic Policy (NEP) in the Soviet Union.He proposed a theory that Western capitalist economies have long term (50 to 60 years) cycles of boom followed by depression. These cycles are now called "Kondratiev waves", or grand supercycles.Shumpeter also predicted a socialist future.
zsylvana 3 years ago 11
This comment has received too many negative votes show
someone doesn't know what they're talking about. Joseph Schumpeter, while Austrian, was not an 'Austrian School Economist', and while his prediction for the rise of democratic socialism was quite prescient, I'm not talking about him. The cycle theory is that of Mises and Hayek. Don't criticize a school you know nothing about
iquitsoccer 3 years ago
iqutsoccer.Enlight us all about how Von Mises and Von Hayeks theoris gives us tools to analyze,for exampel: commodities, equities (stocks), residential mortgages, commercial real estate, loans, bonds), an index (e.g., interest rates, exchange rates, stock market indices, consumer price index (CPI) — inflation derivatives), and such things that All ordinary economists deals with all days if they want to call them self seriuos and get a job?How do the Von-Mises-Hayek look at this phenomens?
zsylvana 3 years ago 9
I love how all the idiot socialists who watch this stuff thumb down stuff that is clearly and undeniably true. I love ideologues with depraved ideologies. Zylvana- Austrian economists don't st out with a goal to be different all the time- their analysis of most of the stuff you listed is the same as any regular economists. The key differences are methodology, of course, and theory- their theory of interest rates and consequently of the bond market and investment is markedly different
iquitsoccer 3 years ago
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you sound like you've been educated in the American public school system. That's such a twist of the facts. You can complain about the monopolies they formed all you want, but the fact of the matter is that they enhanced the productive processes of their respective industries and thus made essential goods like oil, steel, coal, etc FALL dramatically in price. Capitalism is production for the masses. And if you really want to complain about monopoly- your issue is more with government
iquitsoccer 3 years ago
iquit.soccer.Lets face facts.The so called "Austrian School" have not come up with something new since 1870 when Menger made his "Marginal Utilty theory",(highly disputed to day),you preach Goldstandard as a all over magical solution,want no Central-Bank,your ideal is the 1900 century British Empire Economy,you reject Statistics as useless,
you say that only states creates Monopolies,a fact that are overwhelmingly rejected by facts.How do expect we ever could take you seriously?
zsylvana 3 years ago 5
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Well, what are you home schooled, or perhaps never graduated. That would actually explain a lot, either that, or you just spent too much time daydreaming. At least you're honest enough to recognize that the Austrian School/Stateless-Neocon ideology leads to gross monopolies. You probably should have actually read your text books too though.
Rundstedt1 3 years ago 2
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[Rather than passing savings on to employees and consumers, however, he (Rockefeller) reaped large profits. He paid his employees extremely low wages and drove his competitors out of business by selling his oil at a lower price than it cost to produce it. Then when he had control of the market, he hiked prices far above their original level to gain back his money.]
"The Americans" - Teacher edition
Rundstedt1 3 years ago 3
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The Austrian school is all a priori. It tries to prove preconceived assumptions without looking at the data. They have a well known aversion to statistics because the statistics do not support them. The Stateless-Neocon philosophy would only result in a greater concentration of wealth than we have now. It is the marriage between state and capital by the means of eviscerating the state into paralysis. Then large capital becomes the state. You know what that is; don't you?
Rundstedt1 3 years ago 3
The Rockefeller fortune was built on Lies, Deceit, and Murder and they continue to harm America. "Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure--one world, if you will. "If that's the charge, I stand guilty, and I am proud of it." - David Rockefeller, Memoirs (2002)
Rundstedt1 3 years ago 3
[For most of the Austrian School's history, mainstream academia has simply ignored it. Even today, none of its works are on the required reading list at Harvard. Most introductory economics texts don't even mention the school, and its economists are absent from many encyclopedias or indexes of the century's great economists.
Rundstedt1 3 years ago 3
Perhaps the first thing to stand out about Austrian economics is its relationship to mainstream economics. The two completely reject each other, and proudly so. Their differences extend even deeper than their diametrically opposite interpretations of the economy; they even use different philosophical approaches. The two could almost be called separate disciplines, if they were not attempting to describe the same phenomena. So, then, how do they view each other?
Rundstedt1 3 years ago 4
Mainstream economists dismiss the Austrians as cranks. Nobel economist Paul Samuelson wrote that "I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." Noted economist Mark Blaug has called Austrian methodologies "so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone."] - A Critique of the Austrian School of Economics
Rundstedt1 3 years ago 4
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would you be referring to the same mainstream economists who didn't see this crisis coming? The Austrian methodology is far superior and far more rigorous and realistic than neo classicals or Keynesians. Mathematics and Statistics are not useless- they serve to show which of the factors elucidated by reasoning is more important in a given situation, but economics is a study of human action, not a hard science.
iquitsoccer 3 years ago
Who didn´t se it coming?What sort of nonscense!Everybody with their head screwed on saw it coming!!All Economist just waited to se the bubble blow.Even Milton Friedman(wellknown freemarket friend) saw Murray Rothbard as clown.You can´t find a "Austrian Scolar" even in Austria the last 100 years!Not even Jurg Haiders extreme right want to have anything to do with "Austrians"!Nobody at any university in US wanted to hire Von Mises.A "Royal Tannebaum"-Figure Billionair-Dwellyn fixed his job
zsylvana 3 years ago 5
James K. Galbraith has been warning of Systematic problems for some time.
I would also mention Nouriel Roubini, Dean Baker, and Paul Krugman as real ecnomists who are credited with predicting the crisis. Rigorous Haha the Austrians rely on a priori assumptions and the simple observations of individual actions, hardly rigorous. They build backward from the conclusion that markets are the end all, and then fit their "data" in to fit the theory. That's not rigorous, that's dishonest.
Rundstedt1 3 years ago 3
Von Mises saw no need for giving women or workers equal right or the right to vote,- "motherhood is the highest state of female happiness".... "a woman is simply the lover and mother who serves the sexual drive."
And Workers No! "Masses do not think. This is precisely the reason why they follow those who do think.The intellectual leadership of mankind is a position held by the very few who are able to think." Ludwig von Mises,The Market Economy,(Jena: Gustav Fischer, 1932)
zsylvana 3 years ago 5
Mises' views of race are similarly enlightened:
"It is perfectly legitimate to assume that the races are different in their cognitive abilities and in their willpower and accordingly are unequally suited for the task of setting up societies, and that the better races are characterized in particular by their special ability to strengthen social bonds." Ludwig von Mises,The Market Economy,(Jena: Gustav Fischer, 1932)
zsylvana 3 years ago 5
I guess our libertarian friend has quit more than soccer. I can't see why anyone would even admit to being a free-markteer in this time. But it is typical of them that they try and twist history and absolve themselves of blame. Haha-how many have tried to wiggle away from Chile, or ignorantly claim that somehow the US isn't capitalist. even on the face of it, both those statments are ridicules, but they all constantly repeat the same foolish junk. Just like Murdoch's Faux News channel.
Rundstedt1 3 years ago
actually it is you, the big government types who blithely attempt to blame everything on the free market- in fact, I think such people jump at economic crisis because it gives them a chance to rail against the market system- talk about bending reality to fit ideology. Austrians do not work backwards, pal. If you knew anything about their methodology that statement would strike you as outrageous. And you ad hominem attack on Mises' views on race is irrelevant.
iquitsoccer 3 years ago
and how is that relevant to his economics? are you trying to paint him as a Nazi or something...because he was Jewish. As for the thing about the Masses not thinking- that's probably true, like it or not. Keynes himself even made references to that fact.
iquitsoccer 3 years ago
For me it is don´t matter if Von Mises is aborigin or jew or
mongolian tungus!But do you share Von Mises idees that -workers,women and coloured people are "lower species" and therefore should not have the right to vote and be "ruled by supieror leaders "?
zsylvana 3 years ago 4
no.
iquitsoccer 3 years ago
Austrians do not work backwards- if anyone does that it is empiricist mainstream economists who do not critically examine the theories behind the data they gather. If you knew anything about Austrian methodology, you'd never make such an ignorant statement. Deducing from simple assumptions a full paradigm of economics is hardly working backwards. But if you think that capitalism is to blame for this crisis well then I guess you would make such a retarded accusation.
iquitsoccer 3 years ago
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You have actually said nothing. The fact remains that the Austrians are renowned throughout the economic world for their poor methodology. They work from the assumption that only the unrestrained market can provide a myriad of wonders from freedom to clean teeth. That is undeniable, and that is what the Austrians do: that you attempt to deny this means either that you are a willing propagandist or ignorant of your own ideology.
Rundstedt1 3 years ago 2
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"Theories behind the data" - You see, you have it backward. The data supports the theory, not the theory supporting, or behind the data. Deducing from simple assumptions, as you admit the Austrians do, could make one believe that the sun revolves around the earth. It is only by looking at the larger data and in a larger context also that the actual action of those bodies becomes apparent. But the Austrians are even more dishonest and often ignore or twist inconvenient data.
Rundstedt1 3 years ago 3
you are one hundred percent wrong. if the theory is correct but that data do not represent it- then something else is a lurking variable in the study. For instance- monetary expansion- can you say it does not happen if prices don't rise? you know the answer to that. Only through logic and theory can you ever answer WHY data appear the way they do. Economics is not guess and check- it involves acting human beings not mathematical equations
iquitsoccer 3 years ago
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No Haha that is silly - Listen, in academics if the data does not support the theory than the theory is incorrect and needs to be revised, not the other way around. You really were home schooled, weren't you? - LOL. Your statement is the most silly and unscientific statement I have heard outside of a creationist. You see, you are just digging yourself a deeper hole and further proving that Libertarian economics is junk just like their cycle theory and their gold fetish.
Rundstedt1 3 years ago 2
you wouldn't know econ if it hit you in the face- wasn't home schooled and go to a pretty damn good liberal arts college with a 3.9 so go f urself. The Austrian cycle theory needs a lot more than your ignorant and empty criticisms to be disproved. You treat economics like your swinging a baseball bat in the dark- maybe you should learn to think critically- but I doubt they taught you that at po dunk u
iquitsoccer 3 years ago
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Of course you disavow math and statistics because you can gain no support from them. Intuition does not make good rational science.
The theory that the Fed's monetary expansion and easing of credit restrictions results in "malinvestment" is an unsupported claim. It is backed up only by the Austrian's faith and deductive "logic" that such malinvestment occurs.
Rundstedt1 3 years ago 2
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And I'm sorry this is a capitalist nation always was and still is. Notice that for you to say otherwise, you have to totally redefine capitalism to fit your own libertarian mold, sorry that's not how it's done. And EVERY economy is regulated, if there WAS the total "deregulation" that you wish, it would only mean that the large capitalists and the monopolists would regulate it for their own behalf.
Rundstedt1 3 years ago 4
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The regulation would not disappear it would simply be absorbed into the undemocratic and unanswerable system of the capitalists. So once again you would have the marriage between the state and business; and again do you know what that is? And once again it is the Libertarian market ideology that bares a great deal of responsibility to blame for the current situation.
Rundstedt1 3 years ago 4
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[Fundamental and pragmatic banking regulations, which arose from the devastating financial collapses of the Great Depression, for decades strengthened U.S. banks and capital markets, making them the twin engines of American growth and the envy of the world.
Rundstedt1 3 years ago 4
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The systematic dismantling of those same regulations by greedy bankers began in earnest in 1980, peaked in 1999, and finally climaxed with an insane Securities and Exchange Commission ruling in April 2004, a final decision that paved the way for the implosion of everything regulation was designed to protect.
Rundstedt1 3 years ago 4
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In 1980, in a virtual landslide, Ronald Reagan was elected and grabbed the conservative mantle. A year later, the shock troops of the heralded Reagan Revolution launched their attack and embarked on a massive, systematic de-regulatory campaign. President Reagans first treasury secretary, former Merrill Lynch & Co. Chief Executive Officer Donald T. Regan, became chairman of the Depository Institutions Deregulation Committee.
Rundstedt1 3 years ago 4
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In a burst of deregulatory bravado in 1982, Treasury Secretary Regan ushered through the Garn-St. Germain Depository Institutions Act. Key provisions of the Act ultimately coalesced with Treasury Secretary Regans protection of the lucrative brokered deposits business, in which Merrill was a major player, and paved the way for the future collapse of the savings and loan industry.
Rundstedt1 3 years ago 4
the question is- who tampered with that system to the extent that only massive and extremely wise regulation could have prevented the business cycle? The real answer is the Fed's interest rate policy- which misrepresented the time preferences of consumers and led to an artificial lengthening of the capital structure that was unsustainable. Consumers saving less and businesses investing in more remote sectors is a recipe for bust. See Roger Garrison's stuff for more on capital based macro
iquitsoccer 3 years ago
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First of all, when you respond to a sequence, you should respond to the final one and not break up the statement. Next, if you are going to school, which is far from obvious, you should probably take a basic economics course. You know, a real one where this Austrian crap is given only the passing mention it deserves. And if you did take that class you would know that capitalism itself has its own built in cycle of boom and bust, there has been a lot of work done on this.
Rundstedt1 3 years ago 2
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And it should be pointed out that there were cycles before there was a central banking system and therefore the structure that is necessary for the Austrian cycle. The Austrian theory is only predicated upon the a priori notion that central banking is bad and malinvestment occurs; two whole unsupported assumptions, and also two superficial notions.
Rundstedt1 3 years ago
(3/16) Austrians can not point to anything with their theory without absolutely twisting the information or ignoring other major factors at play that may have been more important. Even Libertarian Milton Friedman recognized that the Austrian cycle is fallacious: in 1969 he concluded that: "The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false." He analyzed the issue using newer data in 1993, and again reached the same conclusions.
Rundstedt1 3 years ago 2
(4/16)
Furthermore, mainstream economists argue that the theory requires bankers and investors to exhibit a kind of irrationality that they be regularly fooled into making unprofitable investments by temporarily low interest rates. And Paul Krugman has argued the theory implies that consumption would increase during downturns and cannot explain the empirical observation that spending in "all sectors" of the economy fall during a recession.
Rundstedt1 3 years ago 2
(5/16)
Additionally he states about it:
[The hangover theory is perversely seductive—not because it offers an easy way out, but because it doesn't. It turns the wiggles on our charts into a morality play, a tale of hubris and downfall. And it offers adherents the special pleasure of dispensing painful advice with a clear conscience, secure in the belief that they are not heartless but merely practicing tough love.
Rundstedt1 3 years ago 2
(6/16)
Powerful as these seductions may be, they must be resisted—for the hangover theory is disastrously wrongheaded. Recessions are not necessary consequences of booms. They can and should be fought, not with austerity but with liberality—with policies that encourage people to spend more, not less. Nor is this merely an academic argument: The hangover theory can do real harm. Liquidationist views played an important role in the spread of the Great Depression-
Rundstedt1 3 years ago 2
(7/16)
-with Austrian theorists such as Friedrich von Hayek and Joseph Schumpeter strenuously arguing, in the very depths of that depression, against any attempt to restore "sham" prosperity by expanding credit and the money supply. And these same views are doing their bit to inhibit recovery in the world's depressed economies at this very moment.
Rundstedt1 3 years ago 5
(8/16)
Why should the ups and downs of investment demand lead to ups and downs in the economy as a whole? Don't say that it's obvious-although investment cycles clearly are associated with economywide recessions and recoveries in practice, a theory is supposed to explain observed correlations, not just assume them. And in fact the key to the Keynesian revolution in economic thought-a revolution that made hangover theory in general and Austrian theory in particular as obsolete as epicycles
Rundstedt1 3 years ago 5
(9/16)
was John Maynard Keynes' realization that the crucial question was not why investment demand sometimes declines, but why such declines cause the whole economy to slump.
Rundstedt1