By James Kwak
As a holiday gift to myself, I’ve actually been reading a real book, on paper — The Worldly Philosophers, by Robert Heilbroner. The book itself was not a gift to myself; I have my sister’s old copy, which is the 1980 edition. The book is a traditional intellectual history of some of the main figures in economics. As the original was written in 1953, it focuses less on the mathematical line of economics, from Walras and Marshall through Arrow-Debreu to the present, and more on what used to be called political economy: Smith, Ricardo, Mill, Marx, Keynes, etc. It’s not a way to learn economics, but a way to learn something about the historical conditions that helped give rise to some important economic ideas.
But some passages seem oddly relevant today. Discussing the conventional economic wisdom of the early nineteenth century (pp. 121-22):
“They lived in a world that was not only harsh and cruel but that rationalized its cruelty under the guise of economic law. . . . It was the world that was cruel, not the people in it. For the world was run by economic laws, and economic laws were nothing with which one could or should trifle; they were simply there, and to rail about whatever injustices might be tossed up as an unfortunate consequence of their working was as foolish as to lament the ebb and flow of the tides.”
And on the conventional economic wisdom of the late nineteenth-century Gilded Age (p. 215):
“Indeed, the world was so scrubbed as to be unrecognizable. One might read such leading texts as John Bates Clark’s Distribution of Wealth and never know that American was a land of millionaires; one might peruse F.H. Taussig’s Economics and never come across a rigged stock market. If one looked into Professor Laughlin’s articles in the Atlantic Monthly he would learn that ‘sacrifice, exertion, and skill’ were responsible for the great fortunes.”
The hero of that chapter is Thorstein Veblen, who argued that the so-called captains of industry were not the sources of technological progress and economic development, but a parasitic class engaged in financial games to divert excessive profits to themselves: “The bold game of financial chicanery certainly served as much to disturb the flow of goods as to promote it” (p. 235). For Heilbroner, writing and rewriting during the thirty years of postwar prosperity, this was a problem of the past; Veblen did not see the ability of capitalism to evolve into a more efficient, more socially beneficial form.
For us, however, that progress seems less certain, and the financial engineering of the past decade seems little removed from the exploits of the nineteenth-century robber barons. And conventional economic wisdom — not the stuff taught in Ph.D. programs, but the thin veneer of economism that dominates public discourse (raise the minimum wage and unemployment will go up; increase regulations on banks and capital will contract and unemployment will go up; increase the estate tax and business owners will work less hard and unemployment will go up) — has hardly changed, either.
45 thoughts on “The More Things Change …”
History often repeats itself…
From the book “AN AUTISTIC WORLD (1)”
A Spanish proverb says that the Devil knows more for being old than for being a Devil.
The revolution came and went. Men fought bitterly to the end defending their points of view and their interests. Athens never had such an unpalatable meal on its mouth before. Its government was in danger of being erased from history, years earlier the Spartans got rid of it on a swift invasion. Athens had lost its splendor as the center of a universe of alliances between city-states, usually sprinkled along the golden shores of the Mediterranean sea. On the winning side, corrupt and inefficient politicians, generals, and an array of well-established citizens were holding on to a tradition of superstition and mistrust that produced a society governed by an army of shifters, dealers, and merchants ready to exchange any hint of morality for a good profit. On the loosing side, a troop of idealists, mostly young fellows that found enough reasons and arguments to confront the crude reality of a decaying nation, submerged in chaos and absurdity.
There are too many books worth noting but one special work specifically in the HISTORY OF IDEAS has stood out and I think it deserves a renewed round of applause:
Imperialism: A Study
J.A. Hobson (Author)
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In his Preface to the 1902 first edition of Imperialism: A Study, imperial critic J.A. Hobson demonstrates his prophetic talents by noting, just as the Victorian age was ending and World War I was brewing, that “Imperialism has been adopted as a more or less conscious policy by several European States and threatens to break down the political isolation of the United States.” Though the book speaks mostly of British imperialism of the period, Hobson inevitably explores the general principals-and hidden motives-of imperialist policy. Hobson covers: . the commercial value of imperialism . imperialism as an outlet for population . economic parasites of imperialism . imperialist finance . moral and sentimental factors . and much more. With imperialism again a hot topic in the political arena, Hobson’s treatise continues to lend invaluable, necessary insight into a complex ideology. British writer JOHN ATKINSON HOBSON (1858-1940) was an historian and economist as well as a popular lecturer on the topics. His other books include The Evolution of Modern Capitalism (1894), The Economics of Distribution (1900), The Economics of Unemployment (1922), and the autobiographical Confessions of an Economic Heretic (1938).
J. A. Hobson (1858-1940) was an English economist and early social theorist. In Imperialism, published in 1902, he argues that imperial expansion was caused by the need to find new markets for the output of the Industrial Revolution, resulting in capitalistic exploitation of the colonies, and leading to international conflict.
Urgent, Prescient, Timely and Fascinating, June 17, 2003
James R MacLean (Oakland, CA United States) – See all my reviews
This review is from: Imperialism (Ann Arbor Paperbacks) (Paperback)
The word “imperialism” today has become worn from misuse. Many of us have come to expect the word to signify that the speaker is a radical Marxist, or perhaps an embittered citizen of a defunct imperial power. Unfortunate indeed, because discussion of imperialism as a type of foreign policy decision has thereby been squelched.
But in 1902, when Hobson wrote Imperialism, it was not yet a term of odium. Imperialism was a foreign policy strategy advocated as a benefit to the colonial power and to the subjugated nation alike; one advocate referred to it as “…the greatest secular agency for good known to the world,” and some of the greatest minds of the day–John Stuart Mill, John Ruskin, William Gladstone, Joseph Chamberlain and Alfred Milner–were “social imperialists,” partisans of a mission to bring liberal institutions to the rest of the world, and create markets for British manufactured goods. More common by far were advocates of imperialism as an alternative to redistributive socialist policies, as an outlet for surplus population (Britain was widely regarded as being overpopulated), and as a backyard for flagship companies. Hobson was addressing these arguments without acrimony, and without assuming a radical agenda his readers were unlikely to share.
The fact that self-described socialists and lassez-faire dogmatics alike, in 1902, regarded “imperialism” as a means to their rival ends, shows that this was not merely a right-left debate, and Hobson attacks the idea of solving the problems of capitalist societies by making war on other nations. His analysis of imperialism and its allure for the industrialized world makes this one of the most revealing books on 19th century history. The effects of imperialism on the rest of the human race are spelled out with precision and clarity, as is his nuanced analysis of why it is doomed to fail. Hobson’s forecasts of the future of imperialism is astonishingly prescient, especially his passage on China.
Hobson was a pioneer of the underconsumptionist theories, theories later advanced by Keynes, Samuelson, and Tobin. Underconsumption presupposes that mature economies are unlikely to be be able to consume all that they produce; as a result, more capital accumulates, the marginal return on that capital declines, and stagnation sets in. But while Hobson was a seminal mind in economics, this is not an economics book–it is overwhelmingly a historical survey of ideologies, propaganda and the harsh reality, a disciplined yet creatively assembled explanation of how the needs of industrial Britain were so woefully met by imperial dogma. With the terrifying triumph of neo conservative ideology in our era, it is an extremely relevant book for contemporary citizens of America, and of the world.
also check out (online: free reading)
Nieboer, H. J.,
# Slavery: As an Industrial System (Ethnological Researches), 2d edition, 1909. — [pdf file — 1st ed. 1900]
“…and to rail about whatever injustices might be tossed up as an unfortunate consequence of their working was as foolish as to lament the ebb and flow of the tides.”
Yes, indeed. One might also add, on behalf of the elite, that class divisions and economic inequality (along with misery and suffering), are of course natural, irrespective of governmental form.
Mr. Kwak wrote:
“The More Things Change …the financial engineering of the past decade seems little removed from the exploits of the nineteenth-century robber barons. ”
“History doesn’t repeat itself, but it does rhyme.”
– Mark Twain
For your next assignment, review the austerity measures imposed by Bruening in 1930 Germany and their effects with what we will see in 2011-2.
The bold game of financial chicanery certainly served as much to disturb the flow of goods as to promote it”.
This is important because the disturbed ratio is MUCH greater than the promoted one today. And because eventually there will be a clash of ones own generations, and leading up to it the financial chicanery can not, and will not be tolerated. Even innocents that happen to be in the way of shrapnal will suffer for the greater good of society. The longer this process takes, the greater the need for it to be in place. During this time many interpraters ideas will orbit the game in search of their solution to its problem.
I think “It’s Different This Time” shows the rhyme of economic history in sometimes excruciating quantitative detail.
As poetic rhyme, it’s not lyrical, but it has an overwhelming impact. Although the verses may be different, the chorus is the same–over and over and over again.
Pecuniary interest aside, I have always been struck that the legal profession — in analyzing public policy issues and proposing solutions — leans heavily on economic models — the Smithian-Marshallian line — that the economics profession has largely buried with other analytic and evaluative techniques. As James Kwak is attending law school, I would be interested in his perspective.
Interesting stuff, Bruce. I’ve not read any of Hobson’s work but I have read ‘SUPERIMPERIALISM’ by Michael Hudson (25 years ago?). I’m not sure though if Hudson was influenced by Hobson or not, seems very probable though.
As for “underconsumption”, the following makes me curious:
“Underconsumption presupposes that mature economies are unlikely to be be able to consume all that they produce; as a result, more capital accumulates, the marginal return on that capital declines, and stagnation sets in.”
…It seems, that the anticipation of “underconsumption’ may have had an important influence on the social engineering that brought us the ‘investor nation’ concept, and, ‘platforming’, and, in general… Globalization as it is being implemented?
Globalization as we know it though, has been defined so poorly, insofar as I know at least, that I suspect that the lack of information regarding specific intentions has been necessarily secretive. Even the word ‘exploitation’ has become suspiciously absent from our ‘national debates’.
And I am perpetually surprised at how little folks know about what is actually happening out there, even our politicians and pundits are remarkably uninformed and that is especially so regarding trade issues etc. Most economists too, seem stuck in a myopic haze when it comes to global issues and that is routinely made obvious by comparisons to historical periods that simply are not commensurable. Comparing for instance a service-based economy to the manufacturing-based economies of the past is mostly pointless… but it is done again and again as if the dynamics of growth remain unchanged.
We are living in delusional times and Hobson’s work is a good suggestion, thanks.
Found this on the internets. Look at the date and the last paragraph. Annus Horribilis 2011 – Here we come!
sorry forgot the link
Found this on the internets. Look at the date and the last paragraph. Annus Horribilis 2011 – Here we come!
I’ll try to keep it short and to the point… in the hopes it will be noticed.
Economics and politics pre-date BOTH money and government.
For a hunter-gatherer society it was it’s DECISIONS… both individual and collective that determined its survival. (More accurately its an interplay of decisions, resources and chance but its only decisions which are under our control.)
Political structures and financial models are “DECISION TECHNOLOGIES”.
With me so far?
The drivers of human decision cannot be separated from their roots in our evolution.
I believe these models have NOT yet adequately addressed some inherent problems which arise with the scaling of human society.
Most especially the ‘altruism problem’… and its connection to Dunbar’s Number (natural human community size).
The root of biological altruism is NOT about ‘being kind’… its about demarcation between in-group and out-group… and while that may spark great generosity for the ‘in-group’… a very natural ‘decision bias’ in its favor…
For the rest it can be anything from indifference, to exploitation (labor is a resource to be gotten as cheaply as possible SO LONG AS ITS NOT YOUR OWN CHILD if you catch the drift!)… all the way to genocide.
In fact it’s this that rationalizes things like cronyism on the one hand… and the weakness of the ‘wealthy’ left to truly fight for things like minimum wage or to tie labor standards to global trade agreements.
THESE THINGS CAN BE ADDRESSED! But the political/economic conversation isn’t even close to defining the proper terms for discussion.
P.S. “The Commons-dedicated Account Network” concept… is NOT some ‘kumbayah’ impracticality. It’s a very pragmatic and needed piece of the puzzle necessary for addressing this conundrum.
Social Networks & The Social Organism: Healing the Breach
Re-Igniting the Enlightenment: On Building Landscapes for Decision
A needed definition:
The Commons-dedicated Account Network:
A self-supporting , Commons-owned neutral network of accounts for both political and charitable monetary contribution… which for fundamental reasons of scale must allow a viable micro-transaction. Such a network ideally should maintain its own cloud and bank.
Accounts may be created and/or maintained with zero balances and/or only momentary balances during a pass-through transfer (The monetization model requires no burden on the actual transaction.)
Its use of existing currencies is natural and unavoidable but need not be the only currencies … (in other words it can facilitate the development of local or specialized currencies)…
The utility of such a distributed, Commons-owned and governed network… which maintains its OWN CLOUD AND BANKING… then becomes a vital, global, bottoms-up LANDSCAPE for human development…
Decision Technologies: Currencies and the Social Contract
This is a worthwhile idea but needs to be taken in the broader context of the process by which conscious creatures construct their economic culture.
We might better say it is 1. Intention 2. Prediction (theoretic) 3. Decision to act, and 4. Action in the world.
If we want to understand the economic form, we must always begin with intention taken in the context of human experience at a specific time and in a specific place.
The wellspring of intention can be found in the genetically shaped imperatives of existence, but in culture, are transformed a thousand-fold over time.
One of the more recent (and on-going) developments in neoliberal economics is the attempt (deliberately, perhaps) to purge economic history from the halls of academia. (I’ve heard this complaint from non-neoliberal economists from around the globe, so I give it some weight.) Here, from a 1980 review on the subject, Kwak highlights why: The economic “winners” need us to think that these things are controlled by some unalterable economic laws, and not by the imposition of some distorting economic ideology upon the markets.
Knowledge is power; the lack of it, weakness, and the powerful need you to not know that it doesn’t have to turn out this way.
The Wall Street propaganda machine has just as much impact on American thinking as the Goebbels propaganda machine did in Germany in the thirties. Do not underestimate it.
The American people accept so much economic hogwash as gospel. For instance, when oil and commodity prices bubbled up in 2008, most well educated Americans I talked to had swallowed the lie that the bubble was all about supply and demand. When I pointed to the EIA consumption and supply numbers for that year, how demand was not driving price, they looked puzzled. The propaganda line in 2008 was that we might see massive supply disruptions in 2008 caused by Nigerian rebels, and an Israeli attack on Iran. The New York based media parroted whatever Goldman Sachs and Morgan Stanley “analysts” were spreading. Herd mentality took over and $140 oil gave the economy one more shock at a time when the economy was already fragile.
Fragile because speculation on real estate had created a huge bubble.
We will continue down this path until economics professors and teachers start teaching the idea that, yes, over the long term supply and demand are an important factor; however, herd mentality, and financial misinformation are also huge factors.
Hudson is VERY MUCH into economic history, and is one of those I’ve heard from complaining of the neoliberal attempt to purge economic history from academia. It seems that historical knowledge of economics does not help students land the highly-paid quant jobs on Wall Street, and is therefore considered inefficient and superfluous.
Thanks for note! And I like your 4 points…
I have no dispute with them and they are implicit in all human decision.
What’s important (from the perspective of my work at least)… is to recognize that both intention and prediction have their roots in the evolutionary history of human society.
And that both those components are shaped by a very long history in small groups… much, much longer than our time since the development of agriculture and larger social bodies.
And that ‘sub-groups’ making decisions within a larger social body will inevitably have a natural ‘decision bias’ …
And that the decision bias arises out of a root in the ‘fuzzy boundaries’ of biological altruism and will be accommodated by another perfectly natural human mental mechanism: cognitive dissonance.
I hypothesize that the above are scientifically valid propositions. And are the source of a very fundamental scaling issue for civilizations.
Now, on the purely and admittedly speculative side… it could even have connection to the Fermi Paradox…
Just for fun… (but you never know):
The Problem in Scaling Altruism: Where’s the Intelligent Life?
Superb Twain quote! Thanks.
Again, good stuff. I would suggest that once conscious, evolution is overlaid by cultural revolutions in which theory is cast and recast in accordance with specific economic conditions. Some of these conditions are externally determined, but most are socially constructed, as is the case when one group realizes a power differential in relations with others. (See Thomas Kuhn)
I do not much like the psy concept of cognitive dissonance but if this is taken to mean the delta between prediction in theory and outcomes in practice, which is a much clearer in my view, then I am good with it.
Altruism is another concept that creates problems because it tends to be cast in exceptional terms. It is the rule rather than the exception and I suspect that this is your meaning. In consciousness, all human knowing is a collaborative social project. All competition and conflict take place within the boundaries of the collaborative project. These theoretic constructions constitute what many today refer to as “the economic system”.
Yep, “very much into economic history”:
“In 1984, Hudson joined Harvard’s archaeology faculty at the Peabody Museum as a research fellow in Babylonian economics. A decade later, he was a founding member of ISCANEE (International Scholars Conference on Ancient Near Eastern Economies), an international group of Assyriologists and archaeologists that has published a series of colloquia analyzing the economic origins of civilization. This group has become the successor to Karl Polanyi’s anthropological and historical group of a half-century ago. Four volumes co-edited by Hudson have appeared so far, dealing with privatization, urbanization and land use, the origins of money, accounting, debt, and clean slates in the Ancient Near East (a fifth volume, on the evolution of free labor, is in progress). This new direction in research is now known as the New Economic Archaeology.”
“Professor Hudson received his Ph.D. in economics from New York University in 1968. His dissertation was on American economic and technological thought in the nineteenth century. He received his M.A. also from New York University in 1963 in economics, with a thesis on the World Bank’s philosophy of development, with special reference to lending policies in the agricultural sector. He was a philology major with a minor in history at the University of Chicago, where he received his B.A. in 1959. He attended the University of Chicago’s Laboratory School for high school and grade school.”
“…and he is president of the Institute for the Study of Long-term Economic Trends (ISLET)”
Discovered an economist named Mark Blyth at Brown University. Here’s his take on austerity.
The law and economics movement has had a huge but shallow influence. Unfortunately, lawyers come out of law school knowing a tiny bit of economics and think that every legal issue should be solved by creating the incentives that maximize economic efficiency. It’s not a good thing.
Hay Ray ! Happy New Year !! *(It’s bound to be interesting…)
Yes: I follow Michael Hudson and his writings are essential guides through the Theories from the “Emerald City.”
There is a distinction to be drawn between lineage theory (schools) which are bound by ideological fixations, on the one hand, and practice based descriptive accounts of foundations in the field and on the ground in real time. Polanyi is one great example of the Observer theorist and in many ways so was Keynes (check out his father…there was serious scientific method to his measured evaluations and conclusions; but these remain somewhat time-setting specific and therefore vulnerable when taken out of context. Yet his greatest achievements were to establish general and universal measures that are still applicable to the reality of economic context (if adjusted to the corrupting or at least disruptive elements of subjective content and evoked/ prevoked and promoted potentials as variables pulling on the sails…so to speak). Hudson is a pragmatic observer and does not bend towards conventional consensus to be popular, but he does apply theory to retain a measure of deductive assertion for a positivistic (and realistically critical) correction. He is fabulous and a great credit to academic history and I would say American Democracy.
I have also found a title (recent) which appears to have some real promise from another author. Since I gave my selection from the History of Ideas (relative to today), let me throw this one out as well from contemporary research into (legalize =…) foundation and discovery. (directed from Amazon: I have ordered it but have yet to assess it directly):
The Blood Bankers: Tales from the Global Underground Economy [Paperback]
James S. Henry
James S. Henry (Author)
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(Author), Bill Bradley (Foreword)
Like tentacles on a vast octopus, the firsthand investigations in The Blood Bankers all lead to one core. A financial detective of sorts, investigative journalist Jim Henry analyzes a range of scandals, including the looting of the Philippines by the Marcos family and the financial collapse of nations throughout the developing world.
A rogues’ gallery of international criminals owes its existence to the dramatic growth of the underground global economy over the last two decades. Our world is being reshaped, often in sinister fashion, by wide open capital markets and an international banking network that exists to launder hundreds of billions of dollars in ill-gotten gains.
Here is an inside look at globalization’s dark side—the new high growth global markets for influence-peddling, capital flight, money laundering, weapons, drugs, tax evasion, child labor, illegal immigration, and other forms of transnational crime.
About the Author
Former Chief Economist for McKinsey & Co. and VP Strategy for IBM/Lotus, James S. Henry has written for many publications, including The New York Times, The Washington Post, and U.S. News & World Report. One of the original “Nader’s Raiders,” he is founder and managing director of the Sag Harbor Group, a strategy consulting firm with a special focus on technology strategy and business development. He has managed projects on a wide variety of competitive strategy issues for many prominent global companies. His clients have included AT&T, Chase Manhattan, GE, GM, IBM, Lucent, Merrill Lynch, the Samsung Group (Korea), Xerox, the Joint Caribbean Task Force for Scotland Yard and the FBI, the Rockefeller Foundation, the Swedish Power Board, and the government of Extremadura (Spain). —
HAPPY NEW YEAR TO EVERYONE ! AND THANK YOU ALL FOR MAKING THIS THE BEST EDUCATIONAL COMMUNICATION SITE ON-LINE !
I suspect that reading Heilbroner on the history of economic thought is a vastly more useful tool for understanding how the world works than a Ph.D. in economics would be. And faster and cheaper, too.
“it is for historys’ sake that mankind knowest the end where time embraces naught”
If so, then why haven’t we got anyone who rhymes with Teddy Roosevelt, much less FDR? A new Gilded Age without any major reformers or trustbusters is closer to white noise.
Thanks very much. Some people might not know, so it might be worth mentioning that the author of the paper, William Vickrey, won the Nobel in 1996.
January 1, 2011 The Real News Network (TRNN)
Higher Taxes on Top 1% Equals Higher Productivity
History of US shows economy grows when top tier tax rates and workers wages are high
December 16, 2010
Why Government is More Afraid of Debt than Depression
Deficit Hawks Want a One Two Punch Against the Economy
December 26, 2010
World Tired of Paying Bill for US Military
Major countries looking for alternatives to US dollar
“plus ça change, plus c’est la même chose”
Warning: The author writes like its 1812 so it isn’t a quick read. It reminds me of reading Dickens or Lyell back in school.
And like most economists – those worthless Nobel-memorial prizes notwithstanding — William Vickrey was quite clueless. He predicted 1929-like crash “if a budget balancing program should actually be carried through”. Was the recent crash caused by balanced budgets?? Most of his 15 points are dubious or even outright wrong.
@ redleg___Question Authority:
“What is it that gives this prestidigitation…these Noble-Hermetic-Laureate’s” meaning?
A subtle affinity garbed in symbolic nonsense prescribe to the aggrandized affluent that cannonize goodwill for whom?
Imbibe in my infallible selection and I will set back Darwins’ humanity for millennium!
People think outside the box…stop looking at the past as if today…focus on the future – put forth your convictions untested but with the wherewithal and willingness to except humility if failure should come with little success – buck-up!
We need not stagnant our minds on the words of a few…for leadership is in all as are “their” ideals sequestered by ideology cowardness?
For God’s Sake – question authority!”
“Most economists too (including Hudson to a degree), seem stuck in a myopic haze when it comes to global issues and that is routinely made obvious by comparisons to historical periods that simply are not commensurable. Comparing for instance a service-based economy to the manufacturing-based economies of the past is mostly pointless… but it is done again and again as if the dynamics of growth remain unchanged.”
Hudson, (like nearly all educated people), is failing to realize that unproductive human capital is at the center of the problem. His argument for example regarding marginal tax rates at 90%, as compared to those now at 35%, assumes that a service-based economy is as able to expand at a commensurable rate to a manufacturing-based, or a genuinely productive economy… Nearly everyone seems to be missing just how dependent the US economy is on wars, crime, poor health, and etc., in regards to the jobs being created which add to costs, but… which are being counted as gains. If the US did not have the highest incarceration rates in the world, for instance, the job shortfall would be worse and so on. And, service-based economies must generate growth from sources that are counter-productive in ways that feign progress that is not actually progress. Wars, crime, rents, and exploitation of foreign resources and etc., Hudson sees the problems, but fails to understand the ‘why’.
It is just so difficult to be objective in regards to the importance of education. The democracy desperately needs voters to be more educated and etc., but the US economy as structured has become far too dependent on not just the financial services sector, but on the service-sector in general. But of course the very people who run things, and influential people throughout our society, are part of this sector and they are finding it difficult to recognize that their unproductive roles are the source of the problem.
As the gains from abroad diminish though, something must give! So yes, it will be an interesting year, Americans are about to find out just how ‘productive’ they really are.
Oh I’ve questioned authority much more than you will ever know, and have the physical, financial and legal scars to back it up.
Austerity in this case is authority, and it must be questioned. There is an interesting case study, Germany 1930-32, available that presents insight into the economic and political situation of that time. That insight is relevant to the current world situation, but of course this time is different.
There is a more recent instance of severe austerity that is overlooked – Latvia. But that’s different too.
Austerity measures MUST be questioned, just as Keynesian spending must be. If one is to question authority, one must question all of it.
In my reading of Hudson’s writings, I find he is in fact aware that a larger and larger portion of our economic activities are devoted to extractive as opposed to productive methods. Hudson repeatedly refers to the Finance-Insurance-Real-Estate (FIRE) sector, pointing out that inclusion of these activities in the measure of overall economic activity is a flawed measure for gauging economic health. Hudson also rails on the loss of high-paying manufacturing jobs in the US thanks to globalization and NAFTA. I have to agree with just about everything he says.
In reading his work, I also realized that less insurance is better than more insurance if it is something small like a car, or the deductible on your homeowner’s policy. That is, if you can afford to replace something with what you have in savings, then forego all the optional insurance and, chances are, you will come out ahead in the long run (never mind what Galbraith said about us all being dead in the long run).
A simple economic truth is this: you will enjoy a higher standard of living if you pay less in interest and buy less insurance.
Paying off public debt is necessary, but should only be done after defaulting. When the bankers take their harsh medicine, everyone else will be much less likely to riot when they must take theirs – again.
I still think that this will end peacefully without bloodshed, but I’m probably over-optimistic.
I agree. I meant to include Hudson in that group of economists who make comparisons across time periods that are not commensurate. He is a little sloppy at times but otherwise Hudson is well ahead of the rest.
So much for Elizabeth Warren…she’s been neutralized…meet the new boss…same as the old boss!
Please view this interview:
January 7, 2011
New Obama Chief of Staff a Message to Wall Street
Glen Ford: President Obama is more concerned with pleasing Wall St than appeasing public opinion
pretty much says it all…
and special for you tippygolden…
Obscurum per obscurius; solitudinem faciunt, pacem appellant!
OK Bruce E. Woych … I’ll think about this. Canada is suppose to be a bilingual country. A place where the French and English (historic enemies in Europe) found a way to get along.
Just having some fun. The French have a lot of interesting sayings and many have their semantic nuances. “All History would be different…if Cleopatra had a big nose…(the Americanized / English equivalent) to one great French exclamation concerning the heart and essence of historical particularism.
The Latin phrase I teased out of the books for you is a combination of two separate expressions: “obscurum per obscurius” is likewise of “two minds.” It literally means an unclear meaning reiterated in even more unclear terms (the obscure explained by the obscure). But, oerhaps due to the many degrees of delinations in Latin the phrase has an interpretation meaning (sarcastically or cynically) “I am as wise as I was before” or some version of that reference thereof. I choose this only because you say in French (more elegant perhaps, but for most Americans…more obscure)…what the title says in English…and I would have liked to hear some elaboration from “plus ça change, plus c’est la même chose” perhaps from the lessons of French history.
The second segment of the Latin: solitudinem faciunt, pacem appellant! is a phrase from TACITUS / Agricola xxx and refers to a Scottish leader Calgacus who rouses opposition to Pax Romana with the “scathing denunciation” of
…they make a desert [and] call it peace!
Which I believe is along the lines of today’s changes (OBAMA) that change nothing except the interpretation of Change itself. Which feeds back to Obscurum…per se. and the “double” meanings of the phrase.
I have spent time in the world of Canada and I can state from experiences that it is idyllic compared to many of the living compromises of the USA. BUT DESPITE the happy medium between French and English back-country cultural heritage; you really can’t say there is no dissent or discontents between the two sides of Canadian co-habitation. It is more closely, in my opinion, like a amiable divorce arrangement with common children that bind certain interests. Still further, I have found that it is not a pleasant response when an American calls Canada part of North America (with the implication that while they do not like direct identity with the USA…they are still technically American in the continental order of things). This will certainly get all Canadians speaking a very vivid FRENCH !!!
Have some fun:
Morum dissimilitudo dissociat Amicitias (Cicerio);
Odulce nomen libertis, O ius examium nostrae civitatis (legal: Cicero).
Robert, I’m curious who in the legal profession you have found to lean on Smithian- and Marshallian- type models when analyzing policy issues/solutions. Are you thinking of the “law and economics” movement James referred to?
Robert, who in the legal profession have you found to lean on Smithian- or Marshallian- style models when analyzing policy issues/solutions? Were you thinking of the “law and economics” movement James referred to in reply to your post?
Glory: Wow! Welcome to the University without Borders!
This is a great posting and very stimulating at many levels. I have two comments generally and One specifically.
1. I am not familiar with Heilbroner’s work (and I intend to correct that…), but generally speaking I have had some interesting interactions with the process of hermenuetics. The problem I concern myself with (critically) in that area is how to avoid presuppositional factors and precluded outcomes when deconstructing and reconstructing communication (cybernetic factors of systems itself refer to the quality of input conditions if not determines the output. In accordance with this objective question, there is a subjective question whenever one is accepting “outcome” or conclusions that are essentially based upon “referential” material (preselected to the degree of bias) of the investigator. In more constructivist terms, phenomenology is ultimately a judgment call (in the more integrated sense of the term).
2. This leads us to a question of divine authorship and lexicon. When referring to Marxist literature there are a great deal of insights to specific materials which lend support to general inferences overall. The inferences are followed, however, as if they were absolute consequences which (as predictions…) has yet to be completely proven. I find that the deductive materials are often “right on the money (slight pun intended)” but the inferences are couched in ideological class struggle which often actually cloud and even presents a false dialectic and a social dichotomy to findings that is counterproductive at best (if not actually misleading in the tenacity of the bias on both ends of the spectrum).
Under these concerns, the cults of personality syndrome form all sorts of theoretical precepts that distort the potential analysis from becoming useful and operational. “Marxism” is no better than “Spencerianism” or “Darwinism” or Friedmanistic reactionary deviciveness…etc. (…aka…lineages…, schools / classes / ideological constraints, etc.). The question then becomes (deconstructively speaking) is Marxism seen as a single unified system assessing and critiquing a “single unified system” of capitalism? If the statics (steady state / status quo) and dynamics (interelationships of fundamental components in duration over time and transformations) are coherently assessed…all constants are relative.
I am trying to be (briefly) analytically definitive here (just gets complex…perplexing…). the drift is that my own presupposition and premise is that both theory and capital are being presumed to be two fully integrated and unified entities; and the outcome of their interaction is tainted by the fact that this becomes an “all or nothing” set of propositions. Instead, I conceive both sides of this dissuasive/equasive disposition as a paradox of social consciousness. One that has constructed a polemical duality of full spectrum paradigms where it is actually a case of poly-systemic factors from both sides. Marxism succeeds best when it is empirical, and classifying those findings as “Marxism” only excites and incites the false polemic. ( I see this reflected in the last 2 paragraphs). There is this presumption that the system is “only” fragmented…and that “implies” that the “healing process” would make it one big working whole again. I think this is a fundamental “reification” problem in perception and all consequential attempts to conceptualize its components.
Specifically speaking: (attempting some hermeneutics?)
“…focused on how power and social organization intersect in the material provisioning of humankind…, in order to reveal the internalized institutions and values which compromise the capitalist system… to show how his [Heilbroner’s] analysis focuses on the interlocking nature of, and tensions among, three central internalized institutions and values in capitalism: the drive to accumulate capital, the market, and division between private and public realms…
[U]ncovering the central contradictions…”
Once again, I suppose one could argue that this passage “does” interject a componential factor, but I would argue otherwise…especially since it is aiming at the “central contradiction” conclusion of a unified systems capacity failure conclusion.
The essential ingredient to the “language communicated” however, is really pivoting upon (but sweeping over…) the primary concern between the public and private systems and subsystems interacting.
I propose to you that the public and private are not mutually exclusive extremes but that they are two parts of an inseparable continuum that either adjusts to one side and the other, or forces tension to the extreme of one preference creating an inevitable counter-reaction from the instability. The fact is that either side can entertain (and has done so…) tyrannical and violent coercive force to maintain that imbalance of coherent systems. The truth is that capitalism will destroy democracy in the long run and lend itself to absolute competitive exclusion within geopolitical systems and finally between geopolitical systems. Marx was wrong. He based his assessment upon a single unified industrial system and conclude that it was “only” class struggle” working itself out (entropy) to its resting position of egalitarian distribution. The conclusion is not only wrong, it is frighteningly dangerous because it points to a false outcome and distracts us from the realisms of our empirical politics. Capitalism will lead to domination and coercive control and lend itself more and more to both tyrannical despot rule domestically and ultimately to competitive exclusion between global systems. the integrating process of whole system analysis is fragmented because it can not accomodate the “whole” system and never will. It will move from fragment to factional and finally, as with the monetary system itself right now becoming monopolized…to fractional representative values of the factioned fragments and will formulate in the mutual interests of the power elites.
Contradiction will not dismantle capitalism, but it will dismantle democracy. Citizen or workers; a plebian alliance will only foster a greater degree of repression in a globe that is ignoring its ecological boundaries and will be competing for diminished resources one way or the other. Competitive contradictions will not format a universal evolution under unilineal descent group capitulation. It will, in my opinion, and is heading to a greater regression rather than progression. The change is growing in scope; not scale.
Thank you for your post and the opportunity to reflect off of you very well articulated presentation.
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