 Among my teachers were several Austrian school professors who I had enormous respect for. And one of the things I learned from them was to always be mindful of unintended consequences. So economists talk about the law of unintended consequences. And I have to say that I think that is a very sharp idea. If I was in charge of anything, I would want somebody next to me saying, if you do that, this might happen. And things might not turn out the way you expect them to. I'm Gary Monjovey. I teach economics at St. John's University in Queens, New York. Keynes is normally understood as someone who was trying to rescue capitalism from its own dysfunctions. As I think about his work, it seems to me that, in fact, he had a much more comprehensive and radical vision of how society should be organized. He understood that the creation of a good society required much more involvement by the state in organizing and designing institutions that would generate good outcomes for the vast majority of people. And for him, that meant democratic socialism. He didn't explicitly use that term. But when you go through all of his writings, that is the picture that he paints, one in which people participate in governance and participate in conversations about how institutions should be designed so that they produce generalized broad-based well-being. This is an idea that has recently been developed in a book by James Crotty called Keynes Against Capitalism, which I think is an outstanding book. And it really opened my eyes to understanding that Keynes's vision was much more radical than is sometimes thought. Mainstream economics is often thought of as reactionary and anti-labor. And I think that certainly misunderstands its origins. The theory of supply and demand, which we typically associate with orthodoxy and mainstream economics, it is economics. For most people, originated in the 1870s and really didn't get traction, didn't become the dominant mode of economic analysis until the early 1900s and the 1920s. And the founders of that branch of that new departure were, in some degree, fairly progressive. They wanted a set of tools that could help society cope with the problems that were being raised by increasing industrialization, problems of urbanization, problem of monopoly power and the regulation of monopoly, problems connected to public health and taxation in order to cope with all of these various problems, problems connected to labor unrest. And one of the reasons, I think, for the success of neoclassical economics was that it provided a useful set of tools. It was a nice tool kit for coping with those problems for a good part of the first half of the 20th century. I think it hit a brick wall with the Great Depression. But I think it also was a departure from earlier theories that we associate with Adam Smith, David Ricardo, and I think in that same line, Karl Marx. And the big distinction between these two approaches, the approaches of the classical economists in Marx and neoclassical supply and demand theory has to do with the way they explained income distribution. And modern theory sees income distributions fundamentally regulated by the forces of supply and demand with the demand for labor being grounded in the productivity of labor. So that in an equilibrium outcome, the position of central tendency of the system, wages reflect the contribution of labor to output. The classical economists in Marx never had that presumption. They saw the distribution of income as regulated by the subsistence needs of workers plus the historically contingent institutional setting plus a tug of war between workers and capitalists. They also were open-ended about what regulates demand. They never understood the demand for commodities as being regulated by explainable in terms of price elastic demand functions. They would have explained that in terms of historical patterns of consumption, societal norms, group norms, and so forth. The prices of things for them were not determined by the interaction of the forces of supply and demand. They were determined by the cost of production, which seems to me to be a much more adequate and intuitive and sensible way of understanding why the price of a new car might be $60,000 and the price of this shirt might be $40 and not the other way around. So that opens up a whole range of alternative ways of understanding what goes on in the world. Marketing people, for example, don't fuss too much about demand curves. They understand that what regulates spending patterns is much more nuanced, much more sociologically complex than that. I think that neoliberalism's greatest ideological triumph was convincing the vast majority of people that the way capitalism worked in the golden age, the quarter of a century that immediately followed the Second World War, is the way it normally works. In fact, that golden age era, as it is sometimes described, was an aberration. That's why we refer to it as a golden age. And I need to point out that that golden age bestowed most of its benefits on white males and their families. So that needs to be said. But that golden age was partly driven by massive amounts of public spending and public investment, partly in reaction to the Cold War. The interstate highway system was justified on grounds of needing to move material, in case there was a confrontation with the Soviet Union or Mao's China. There was massive amounts of investment in education to train sociologists, anthropologists, political scientists who would be useful in projecting US hegemony across a world that was in conflict. So as a result of that, you get a situation in which the economy is generating high rates of growth, high productivity, growth, high profits. And because there was a strong union movement, there was 30% of the US workforce was unionized, and the workers are sharing in the benefits of productivity growth. So you have a situation in which the system is generating broad-based prosperity. But that period eventually petered out in the 1970s for a variety of reasons. One, there was competition in manufacturing from lower-cost, less-developed economies. There was an oil embargo generated by OPEC. That gave rise to a period of stackflation, which was not beneficial to Keynesian modes of analysis. It put Keynesian economics on the back foot. And eventually, mainstream Keynesianism got displaced by neoliberal outlook, which saw the market as knowing best. And the best thing that the state could do to generate well-being would be to get out of the way of the market. And you had that kind of a mentality take root. And it has, to a large extent, dominated since the early 1980s. You have episodes in which there's a backing away from that as in after the 2007 global financial crisis and the need to stimulate the economy. And then, of course, the COVID pandemic also led to recognition that the state needs to play a role in ensuring economic well-being. Marx made a distinction between what he called vulgar economics and classical political economy. And the distinction had to do with whether the discourse was genuinely scientific, genuinely taking account of reality in a systematic and measured way versus an approach that was simply a form of ideology masquerading as science. Vulgar economics is the latter. It's ideology masquerading as science. It looks at superficialities. It doesn't look beneath the surface. And a good example, just a very basic kind of example, is supply and demand theory, which Marx regarded as vulgar. The idea that if the amount demanded of a good exceeds the amount of it available, the price of that good will rise. That is a very superficial observation about what happens in markets. It's obviously true. You don't need scientific analysis to make that determination. And Marx, in fact, said that if everything was as it appeared on the surface, there would be no need for science. Well, I think that my current research project has to do with looking at the work of James Buchanan and the Virginia School of Political Economy and trying to understand it as a form of vulgar economics. It starts from a very simple idea. That is the idea that people who work in government are no different from the rest of us. They are partly motivated by self-interest. And that motivation in self-interest leads them to manage the affairs of government in ways that are wasteful, inefficient, and detrimental to the rest of us. And the fact that we have a government that is proactive in many ways, we have all of these agencies that are responsible for public health or regulating markets and so forth, creates opportunities for what Buchanan calls rent-seeking, efforts by different players, to powerful players, to control policy in the direction that benefits them rather than the general public. And this rent-seeking creates all kinds of problems. The Virginia School and Buchanan and Gordon Tullock, his name needs to be mentioned as well, they argue that this rent-seeking applies across the ideological spectrum. So their argument is, well, it's not just large corporations who are trying to control the reins of government. It's also workers. It's also students who are, say, demanding relief from student loans and so on and so that they agreed to in a contract and so forth. I think that the approach of the public choice school, in a sense, there's some overlap between ideas that we find in Marx and the institutionalists in the sense that big players do try and exercise control. But Marx and the institutionalists have a theory of government. They have a theory of the state. And that theory of the state is partly grounded in power differentials and class conflict. And it recognizes that corporations generally have the upper hand in these kinds of conflicts. Certainly, that idea goes all the way back to Adam Smith, who talks about the wage bargain in terms of the balance of power between employers and workers. The Virginia school has no theory of the state other than the individuals who work in the state are self-serving and therefore are manipulable by big players. I think also that what the Virginia school and Buchanan, their work is grounded in methodological individualism. Everything needs to be explained in terms of the self-interested choices of individuals. And what they leave out of the picture is the fact that individuals are socialized. Their motives, their behavior patterns, their sense of right and wrong, their values are all shaped by the social context and the economic circumstances in which they exist. And because everything needs to be for the Virginia school and the Buchanan approach, has to be understood in terms of the choices that individuals make, there is no scope for the formation of values and the formation of norms. Their literature often will make references on the side to the fact that, yes, there are norms. But when they start talking about policy questions, they go back to this reductionist approach in which it is the self-serving, self-seeking, self-interested individual who drives what happens and that generally leads to problems when they are in positions of power in government. They are able to exert coercive control over the rest of us. And that is almost always, in their view, inefficient and almost always, in their view, unjust because it's an infringement of individual liberty. I think the principal danger of this approach is that it loses sight of the fact that there are dysfunctions in the market that can only be corrected by some kind of collective process involving regulation and a setting of institutional constraints. I studied at NYU and among my teachers were several Austrian school professors who I had enormous respect for. And one of the things I learned from them was to always be mindful of unintended consequences. So economists talk about the law of unintended consequences. And I have to say that I think that is a very sharp idea. If I was in charge of anything, I would want somebody next to me saying, if you do that, this might happen and things might not turn out the way you expect them to. So that is, I think, should be a part of the way that anyone goes into a policymaking discussion, right? The fact that human beings react to policies in ways that you cannot fully predict. And that could lead to unfortunate consequences that you did not anticipate. What that view overlooks is the fact that all human activity has unintended consequences, not just the activity of the government, but also the activity of the private sector, the corporations. There is no reason, there is no good reason to think that the market will eventually correct those unintended consequences. We know that the market can sometimes exacerbate problematic circumstances as when you get real estate bubbles and other kinds of dysfunctions in financial markets.