"I discovered that the Keynes that I had been taught was not the right Keynes historically. This is one of the two or three most famous economists in history. So how could we have gotten him so wrong?" The same way that you got Adam Smith wrong.
Kinda surprisingly Adam Smith could be seen as proto Marxist in some respects... He was constant about his hatred for land lords specifically because of their relationship to the means of production.
@@lonelyone69 What the fuck are you talking about. Optimization and good allocation of resources is the reason Adam Smith had those issues. If you have gold and don't exploit you are losing an implicit advantage with other countries. If you don't use land, in the time of history which was more important to life subsistence, then is logically to think about fucking killing people who are slowing the progress of everyone. Working and produce value is the way in which everyone gets out of poverty.
Keynes was actually far from being a socialist though (in any form). He was actively trying to keep the capitalist system well and alive. Calling him any form of socialist is kind of misleading when he didn't care at all about social ownership of means of production at all. You can 100% say that he opposed laissez-faire capitalism, but he was not against capitalism in general. Opposing unregulated capitalism doesn't make you a socialist to be honest. People often believe that he opposed capitalism because he was supporting government interventions. But keep in mind that just because a government does something, it is not socialism (some people who don't know anything about economics tend to believe that socialism is "when the government does something"). His theories/policies were made to make sure that the capitalist system will be running well even when it is under recession. The closest thing that he can be labeled as is a social democrat or more of a state capitalist.
Keynes said ‘Empires make you poor’. Well, it certainly didn’t benefit the ordinary working class, who in many cases, lived in as miserable conditions as their counterparts around the empire.
@@cathaldeveney7488 No bills in a hut your legally allowed to be in and police are not trying to push you out for existing seems pretty wealthy to me. The “poor” who farm a small garden and eat fish and rice all day own their lives. I rent the right to exist every day. Or else I become gypsy scum living in my car getting kicked out of parking lots by boot lickers. I paid for my parking pass, there are cars covered in dust with slashed tires that have been in the garage for years. But because I sleep it my car, i’m arrested, my car impounded, then the cops realize… oh this is isn’t a crime… and then I gotta pay to get my car back.
Yes this is from a larger series published in 2016, which we are resurfacing in memoriam of his life- Here is the original article: www.ineteconomics.org/perspectives/blog/james-crotty-and-the-responsibilities-of-the-heterodox And the playlist: ruclips.net/p/PLmtuEaMvhDZaiIQUQbWWc5Qk98rdsklhM
:Deficit spending is okay in the bad times, provided the debt is paid back in the good times. The politicians were cheering so loud after the first part of the statement, that they didn't hear the second part.
@@TheMahayanist Totally wrong !. The public debt becomes the debt of the private sector and the lowest income earners. Why because there is nobody else to pay for it when the money borrowed by government via bond sales to pay for it's budget deficits becomes mature.
@@Rob-fx2dwbut doesnt that debt just get refianced or wrote down, I cant thing of a country thats ever really had to pay its debt. Look at japan or the many country bailed out by the IMF they never really had to pay it back. If we ever really had to pay it back every single devloped country would be doomed
@@jimpaddy79 You better start thinking again because you have not thought it through. The national debt is comprised of the sum of Treasury securities that were sold to the public or the Federal Reserve bank (central bank) or foreign entities. Those securities mature in time and on maturity are paid out with interest to the people who invested in them initially or the people who bought them from those initial buyers. It is all paid out but what you may see when comparing what it was some years ago compared to today is the yearly sum of more recently sold treasuries compared with older treasuries most of which no longer exist.
I commend the work of Anwar Shaikh to help get a handle on the history of the interpretation and misinterpretation of the great figures in economics. Thanks for posting.
The working class won't tolerate it, unless some effective means to mind-manage them (the masses) is achieved. I think that means has, for some time, been achieved. And even so, it doesn't seem to be doing much to prevent decline. But I guess that's not a concern.
Beg to differ. If Linux were real competition to Microsoft, the latter would have faded from the market. Moreover, my point is that oligopoly is just as bad and exists in almost all areas of the economy
Keynes was actually far from being a socialist though (in any form). He was actively trying to keep the capitalist system well and alive. Calling him any form of socialist is kind of misleading when he didn't care at all about social ownership of means of production at all. You can 100% say that he opposed laissez-faire capitalism, but he was not against capitalism in general. Opposing unregulated capitalism doesn't make you a socialist to be honest. People often believe that he opposed capitalism because he was supporting government interventions. But keep in mind that just because a government does something, it is not socialism (some people who don't know anything about economics tend to believe that socialism is "when the government does something"). His theories/policies were made to make sure that the capitalist system will be running well even when it is under recession. The closest thing that he can be labeled as is a social democrat or more of a state capitalist.
Crotty may turn out to be one of the most important economists of our time, and towards the end of this interview he summarizes Keynes's vision of a prosperous economy, a liberal socialism. He emphasized Keynes' economic council controlling national investment and planning. The alternative is our system of severe inequality, with ever powerful financial powers arbitrating the fate of our surplus solely for personal gain to the expense of general prosperity. Crotty brought that story to light. Crotty published papers at PERI, a platform for the University of Massachusetts Amherst, and his papers are still there. Great Britain after WWII had immense poverty with food shortages, but it elected the socialist Clement Atlee as Prime Minister who enacted many of Keynes' proposals -- national health system, railroads, coal production, steel, and improvements in education and housing. The Wikipedia article is informative, and Robert Kuttner's book Debtor's Prison has a good chapter about Atlee's tenure. Keynes' vision is much needed today as the financial powers are subverting the democratic forces that would create a more equal society with prosperity for all. "This book is a marvel of economic narrative, with Crotty's clarity and Keynes's elegance in stunning counterpoint, from Versailles through the Depression to the war and Bretton Woods, all bringing forth the great, neglected fact that Keynes's Liberal Socialism was far more radical than modern memory would have us think.", the comment by James K. Galbraith, for Keynes Against Capitalism.
You can centrally or non-centrally plan an economy all you want, but if you do not do the ONE thing that Keynes required with regard to debt, you always arrive at a corrupted society and a collapsed economy. The left will never go near accepting this. Soft words of left reassurance were are and always will be at bottom chimera, and if uttered by properly educated economists, then they will be dishonest words as well. Adam Sith is the mind that should direct most of our thinking. Hated by the left, usually because it is sophisticated and not subject to ludicrous Germanic weltanschauung concept nonsense, used to abuse the uneducated duped mass of the people across the globe, and now in traction in China. The left likes big statist ideas, massive overarching control, planning, direction, interlocking action and reaction stuff. Most of it simply bunk. Invented guff that sits on top of assertions that, time and again, have been found to be not true. That does not stop repeated deranged attempts though. How long before it is fully discredited? Based on the level of third rate non-education these days, I expect the poison will last for at least a thousand years. Like most religions, state socialist economics will die out but only by boredom, obvious irrelevance, exhaustion, and disinterest, not intellectual rejection.
Good summary. As noveau riche what strikes me is: Taxes cost a lot, but no matter what I'm left net ahead. Taxes are a 'good problem,' because it means you were successful. The political debate about taxes and benefits, like universal healthcare, is emotional, idiotic, and of no benefit to the world. (We don't need more billionaires, billionaires should be a product of great success at achieving goals, not a goal by itself. 'You're a billionaire?' 'Great, but what did you actually achieve?" (I've met a lot of stupid rich people, but I've never worked with a skilled carpenter who was stupid.) We also shouldn't think, let's take away all the wealth and distribute it equally. There's no planning for the future in this, it assumes an end of technical progress, (the USSR worked really hard to provide a good 1930s lifestyle for its citizens -- all the way to 1970 when it economically froze and on to 1989 when it collapsed). Also, a lot of people are poor or in debt because they're deeply dysfunctional. (Poverty makes dysfunction, so maybe they're not to blame. You'd never let someone drive a school bus who didn't learn to drive because of lack of opportunity. They do give people in this situation high school diplomas.) To 'be' something you need to acquire skills, to be rich you just have to have a lot of money. Often as not people develop great skills and make money. At it's core money is great, but only as utility -- what you can do with it, security, options, potential. By itself carpentry skills are useful and useful beyond building. Just having a million dollars under your bed, or a billion, or a box of old newspapers is the same thing. (In Donna Tartt's The Goldfinch, Theo unknowingly carries around a textbook wrapped in newspaper thinking it's the painting; because he only keeps it, but never tries to look at it, he has no clue. $20m masterpiece or $50 used textbook? Un utilized they have equal value.) I remember in the 1990s hearing on the news that in the previous ten years the wealth of the United States economy had grown Five times. I didn't have any of this, nor did my neighbors. I was driving to west L.A., Beverly Hills to photograph paintings; everywhere was construction. All the people who already had a lot of money were adding on to their already very nice homes. That helped the building sector, but why not eliminate poverty, fix the infrastructure (they did some of this at the time but not nearly enough). There's no universal healthcare in the U.S. because a handful of people make a great deal of money on it. There's also a huge population of people who work in healthcare but most of them are not doctors, nurses, pharmacists -- they're people who move paper around.
Keynes was not a socialist but believed that then orthodox views about macro economics were wrong and led to bad policies during the depression. FDR wasn't a Keynesian because he didn't understand Keynes ideas when Keynes tried to explain them to FDR. Some of FDR's behaviour was consistent with approach recommended by Keynes.
Keynes claimed that the existing economic theories were a special case and he was offering a 'general theory' hence the name of his book. Read Hazlitt's Failure of the New Economics for a complete refutation
FDR was the president who created the biggest level of depression and unemployment for an extended period ever in the US. He also depreciated the US dollar by a massive amount when he confiscated the savings of people via gold confiscation and his increased tariffs on may goods which made it more expensive for people live. His political responses to economics changes in the 1930's were a disaster.
@@j3i2i2yl7 The timeline was when hoover was in office and he made the mistake of putting tariffs on but then FDR s raised them and put other restrictions on. The collapse of credit during 1929 was a result of expanded credit over the late 1920's and later policies of both Hoover and FDR created the great depression . of the 1930's after the recovery had begun and unemployment had begun to fall . Government debt doubled between 1929 and 1935. Together with that tax revenues for the government doubled in 5 years in the 1930's. Incomes flatlined in the same period.
WW-1 represented a huge return to mercantilism, and that lingered after the war. This was not free-market capitalism. Matters were made worse by the central-bank manipulations attempting abolish the "business cycle" (itself a product of financial manipulation muddying the price signals). Also electrification represented just as dynamic an economic boost as the railways had been. Where neo-Keynsians get Keynes wrong is that he, at least, advocated running a government budget surplus in "good times".
How did we get Keynes so wrong? Keynes said something to the effect: Deficit spending is okay in the bad times, provided the debt is paid back in the good times. The politicians were cheering so loud after the first part of the statement, that they didn't hear the second part. Besides, there is never a good time to pay down the debt, even if there happens to be a windfall surplus. A windfall surplus is free money... We uninformed by omission; the political economists wouldn't bring up the second part of the statement.
Keynesianism relied on a strong technocratic state immune to the influences of capital or labour. Both tried to influence the state, but capital won out because their action could stop all other economic activity. Unless the state controlled the financial system, and was populated by those immune to lobbying or political capital, it was inevitable that capital would use its economic power to take over control of the economy. And the trigger was the failure to control inflation in commodities. And arguably, Keynesianism relied on the West's economic imperialism, to keep commodity prices low, so that profits could be large enough to fund the world he envisaged. But as the US was determined for philosophical and economic reasons to replace Britain as global hegemon, that left a vaccum where prices could climb. Inflation reduces profit, which in turn which limits the wage growth possible for labour. Lower profits means lower tax receipts in a non globalised world, which in turn means less money for public investment, and a smaller, less powerful state. So, Keynes' plan had a fatal flaw: it couldn't cope with high and sustained inflation. We'll see how long it takes for Neoliberalism to crash and burn.
When Japan went into a recession that lasted 15 years, monetarist were screaming zero interest rates was the cure. The monetarist effect could not even get into the economy with zero borrowers. It was the government that kept borrowing from banks that kept the economy afloat.
I have Keynes` book in my library, and while I read only half of it, I came upon the his rationale behind spending. It wasn`t even deficit spending. He advocated for budgetary excedents, even a bit of increased taxing, in boom years and after that you use the excess money in the years the economy slumped. He knew the economy was cyclical, he advocated shaving off the head of the boom so that we can spend it to cushion the landing in the bust years. What people say about Keynes today is so far off from the man himself preached.
@user-fz6bu6qd6c The state should absolutely NOT spend more in good times, that would drive up demand and exacerbate the boom and bust periods. The state should build a surplus in good times and spend it in bad time, basically making the economic cycle less extreme.
@@ThomasVWorm that’s how we have engineered it in the US/global financial system, but you don’t HAVE to sell treasuries (debt) to make money. That’s just how we do it, traditionally.
Keynes was actually far from being a socialist though (in any form). He was actively trying to keep the capitalist system well and alive. Calling him any form of socialist is kind of misleading when he didn't care at all about social ownership of means of production at all. You can 100% say that he opposed laissez-faire capitalism, but he was not against capitalism in general. Opposing unregulated capitalism doesn't make you a socialist to be honest. People often believe that he opposed capitalism because he was supporting government interventions. But keep in mind that just because a government does something, it is not socialism (some people who don't know anything about economics tend to believe that socialism is "when the government does something"). His theories/policies were made to make sure that the capitalist system will be running well even when it is under recession. The closest thing that he can be labeled as is a social democrat or more of a state capitalist.
The managed economy of China where capital is controlled is what he had in mind …but it is difficult to do with political leaders who are not scholars of economics …in generate the masses of Chinese have been controlled by allowing personal freedoms to raise a family and buy a residential unit and educate your children control freedom speech which goes against the benefit of the state. Allowed to travel the world..the average Chinese does not feel like their freedoms are curtailed. The system breaks down where there is uncontrolled capitalist greed of individuals start corrupting the political leaders… human behavioural charactistics and economics will near meet. Greed , envy, sloth and ego , human instinct to survive can 😂😂not be controlled..stop trying to predict out come based on numbers …maybe AI will model out the future more accurately in the future.
Some socialist! He made a quadrillion million dollars in the stock market! Quite at odds with his background as a moral philosopher. A complicated man, or maybe just crazy.
I vividly recall one of my teachers at grammar school talking confidently of "The special characteristics of the British people." He would have been a veteran of WW2, and I am sure he genuinely believed it. It took me years to understand that Britain got the industrial revolution earlier than other nations because it was an island with one government. Thus, after 1745, no armies smashing things and conscripting the young men. Britain also had coal and iron. Out of coal and iron came industry, and railways soon followed. Railways allowed larger polities to be governed effectively. Thus railways allowed Germany and later the USA to eclipse Britain. Slavery was a blight on European civilisation. That said, at the beginning of Europe's rise, slavery was ubiquitous. Samuel Pepyes was tasked with reorganising the Royal Navy to fight the Dutch and repel raids in the English Channel by Barbary Pirates seeking slaves. One of the key reasons that the British Empire could outlaw slavery was the diminished "utility" of slave labour in an industrialising world. Great stuff. Thank you for challenging the gross oversimplification so prevalent in politics today.
The trouble is ALL Economists are influenced by their political beliefs - but then aren't we all! You have conservative beliefs then they are different to those with socialist beliefs, as are the economics taught by these economists. So "you pays your money and you takes your choice" and hope you have backed the correct political horse!
That is because you can't do economy without having an end goal, without knowing what kind of society you'd like to see. The moment you set the rules or the moment you introduce a specific economic policy is the moment you chose to advance one segment of population over another. And if you don't - you're just counting numbers, you're an accountant. Ecconomists who pretend they're just mathematiicians with no ideological bias - piss me to no end. They're like high priests who belive that their teachings comes not from the belief in God but from the scientific method.
This is ridiculous. Keyen's contribution was not advocating socialism, but his economic system. And, we got that kind of right except we ignored the fact that wages and prices were sticky for quite rational reasons, and that this can lead to multiple equilibria. The bigger question is how can the state interfere with the economy to maximize production and distribution - while supporting it's population, technological change and the freedom and incentive to innovate and risk investment. China will soon dominate the Electric car industry by a combination of free market innovation and government regulation. And I think they will destroy Telsa. But that doesn't mean the government should make electric cars, or mandate only locally owned cars. It means it needs to support Telsa with incentives, research, export subsidies. And by the way, simply because Keynes advocated socialism, doesn't make it right. This guy seems to argue by authority.
12 minutes in and I still have no sense of why we were wrong about Keynes. (I write as one who has read Skidelsky's brilliant and very long biography of Keynes). Crotty has not told me anything I didn't already know.
@@jeromerex17 Sure you are more accurate. I guess I’m learning Keynes didn’t necessarily describe or endorse the 1 dimensional caricature of what “Keynesian” means today when criticized or defended by pundits. So much lost in translation the term is now more a meme than useful descriptor in casual parlance.
Economics without the analysis of power is a waste of time. Deficit/surplus budgets are meaningless if you control the world's oceans and force all significant transactions such as oil to be denominated in your currency (which replaced gold and is free to print). The Romans could have enforced the use of Roman paper currency if they had it. In the long run, the only thing that matters is the ability to impose your will and therefore your fiat currency on the world. Mining gold and printing money are ways of generating wealth if paper money is mandated legal tender. As long as the currency is stable the rest of this discussion is moot. The US can print money and blow deficits sky high if they force other nations to hold their currency. China, Japan, etc. have all fallen in line. Iraq was invaded when they went off the oil/dollar standard. Saudi Arabia just announced that they will accept other currencies for oil. If they persist with this approach I am guessing that there will be some excuse to turn Saudi Arabia into 1950's Iran or 1989 Iraq. Said another way. My kingdom for a horse / your money or your life trumps Pareto optimality
One wonders what is being referred to by Keynes (according to Crotty) that there were no transformational technologies after WWI. This was the time when air travel was coming into its own, radio became the first electronic mass medium, and advances in farming were raising output per person to astounding new heights. So either Keynes was very wrong, or Crotty's understanding of Keynes is very wrong.
Keynes was a proponent of eugenics. He served as director of the British Eugenics Society from 1937 to 1944. As late as 1946, shortly before his death, Keynes declared eugenics to be "the most important, significant and, I would add, genuine branch of sociology which exists."
Correct. It is a story untold. As is that of Schumpeter, Keynes' one great rival. Schumpeter died depressed and defeated because he lost the battle for control of the economic narrative. He lost that battle to Keynes and he said so. He thought Keynes was economically (in terms of theory) a hypocrite and that Keynes' policy prescribtions would lead to economic stagnation and the end of innovation. Schumpeter was right but being right is not enough, Schumpeter did not realise that those making the decisions in the UK and USA wanted simple solutions. Money printing was that simple solution. To this day, right now, this simpleton's blunt tool of money printing and manipulation of the price of money has prevailed. Has it worked? Hard to say. Alternative history is a fool's game. Schumpeter, however, was partly to blame. His vanity and fear meant that he never properly explained how Capitalism was superior to Socialism. Deep down, I think he realised that lassai faire was too brutal and too unstable to be tolerated, recognised the danger of the Robber Barons and he was part of the German state that created the welfare state that followed. Schumpeter's story has been told. Read "Prophet of Innovation" by Thomas K McCraw. The story of Keynes vs Schumpeter, however, remains barely recorded, let alone widely known.
@@christianlibertarian5488 You are not wrong, you are just late. The timelines are slightly out. Mises arrived in the USA in 1940 and went to NY, while Schumpeter had been famous in the USA since 1913 and was ensconced in Harvard when Mises fled to the USA. At the outbreak of WW2 (also 1940) Schumpeter and his wife were blackballed because his wife, Elizabeth Boody, had been studying the Japanese economy. This was part of the battle he lost. Schumpeter was President of the American Economists Society and was anti-Socialist but also anti_Austrian School as he took the Historical School side in the Methodenstriet that split the Austrians. You will note that Mises' views to this day remain overshadowed by the blunt tools Keynes popularised. The Historical School has more or less been wiped from history as economists withdrew to the abstraction and safety of mathematics high above things like industry policy, human agency or innovation. From Schumpeter's p.o.v. the friction between the Mises side and the Keynesians was an internal battle of abstract modelling that rarely made itself relevant to every day life beyond Keynes blunt apparatus designed to negate the very Business Cycles Schumpeter believed drove economic progress.
Capitalism is awesome! However it is a workhorse. The workhorse is only useful in a harness pulling a plow. The horse always wants to convince the farmer that it is better to have him run free in the field unemcombered by bridles and carts. The farm always fails and the horse dies of starvation because no grain was harvested and the farmer eats the horse. The root of the problem is that the wealthy have too much power and control. They are under the misconception that by reenforcing their advantages and resisting change that they will be able to maintain their wealth. I feel like they are caught in a trap like a monkey that is hanging on to a banana in a jar that they can't pull a closed fist out of. They won't let go of the banana even though the hunters are getting closer. Wealth Gap: I'm going to assume you know what I'm talking about when talking about the wealth gap. It seems to me that we are approaching a tipping point with regards to this. The wealth gap isn't bad because it is unfair but because once it gets too obscene then the economy will no longer work. They don't make 46" tvs to sell to 10 people they need to sell millions of them. I am in the upper middle class (maybe in the very bottom of the 10 percent) and my lifestyle is much better than JD Rockfeller or Howard Huges. They didn't have MRIs or big screen TVs or a cell phone or a million other things. What really matters is your standard of living. It seems like the people in power would be more happy in the best mud hut in the neighborhood and extremely unhappy in the worst mansion on the block. (This is where I wish I had all kinds of research to reference but I don't). Historically mankind has seen the fastest growth in innovation when there has been a more equitable distribution of wealth throughout society. The Egyptians were probably the wealthiest and strongest nation for thousands of years. What did they do? They made several very impressive piles of rocks. They were a very rigid society with the Pharaohs and priests controlling most of the wealth. Where would they be today if instead of tombs and temples they had built schools and roads? Where would they be if they had seen the kind of technology explosion we have seen in the last 500 years? Would they be the single world government right now? Science and technology is what has been driving the rising standard of living. Wealth equality is what drives science and technology. I bet Steve Jobs wishes someone had cured pancreatic cancer. All his money didn't find a cure. There are problems that need more resources than one person can bring to bear on it, and probably breakthroughs in areas of science that today seem totally unrelated. The plan: Convince the wealthy and powerful that the path we are on must be radically changed. It doesn't take Nostradamus to see that the endgame will be much worse for the wealthy than the poor. History has many examples of revolutions and typically the people in power don't fare well. I feel like it will be like teaching the Luddites that the machinery that was replacing workers now is actually setting them on the path to have a better life for themselves and their children and grandchildren. (I know this isn't exactly what happened with the Luddites but it is a good analogy) The people in power need to be shown that a little personal economic insecurity now will not only lead to a better standard of living for them in the future but might get them on a path that doesn't end with a mob and a guillotine. Capitalism fixes: Maximum Work Week: Minimum wage is really dumb. I get that it's easy but it doesn't really help to redistribute wealth. We seem to watch unemployment very carefully but we don't seem to know how much labor we really need. What we really need is a maximum work week. Labor shortages have driven every boom. This is why war used to drive economic booms and don't anymore. The military just doesn't need the bodies it used to need to deliver bombs to foreign lands. Unions were good because it drove up the cost of labor. Unions were bad because they were run by people and people screw up everything. Knowing how much labor we need and how many eligible workers there are you can easily calculate how long the work week should be. I'm guessing we should be around 30 hours right now. Wages would go up as employers had to compete to get employees and they would have to offer benefits like pensions and health care. This could be recalculated every quarter and adjusted annually to give labor the power they need to demand wages making minimum wage irrelevant. It is crazy that we have half the people working themselves to death and the other half getting aid to eat. Average weekly wage: This number would be calculated from actual wages and used for taxes. A progressive tax that would adjust automatically annually based on what the average weekly wage was. There should also be a punishing estate tax. The first amount of money equivalent to 100 years at average weekly wage would be taxed normally and then at a rate of 90% or so after that. No tax breaks: Taxes should be punitive only. If you want to encourage wind and solar, tax gas and coal. You shouldn't give tax breaks or rebates for solar and wind. Tax the problem, there might be better solutions not just the ones you are giving breaks to. Getting rid of all tax breaks would simplify the tax code and you could still use taxes to influence industries. Hey you made it here! Thanks for reading.
Keynes is famous for saying that when the facts change, then his opinions change. (What do you do, Sir, when the facts change?). Keynes should rightly be famous for inventing the "macro" view of the world-economy, but the statistics needed to properly analyze it *such as what should be included in the money supply, how many workers are there, measuring imports, exports, the effect of taxes and tariffs, how much is being produced now, how much last year, and previous years etc, etc* took shape slowly. So, Keynes had a fine idea, but it couldn't come to fruition until a "relatively complete" set of statistics could be developed to adequately assess the "health and attributes" of any individual economy, and then analyze the dynamic interconnections between all the various countries of the world. Today, the world has 197 or 198 countries, and the growth of the world population has long been slowing down. In the 1980s, the US fertility rate was 2.2 children-per-couple. But now women are waiting longer to have children, and having fewer children probably due to scarce jobs and meager wages. The US fertility rate is now *below* 2.0 children-per-woman, which is called the Replacement Rate, which means that the two children "replace" the two parents, which results in -0- growth in population. So, the world has been undergoing changes that economists were hard pressed to properly understand, and that rate of change has been recognized as increasing since the book, Future Shock, was published in the 1960s or 1970s. Japan's GDP in 1994 was $4.9 Trillion, when it was a world-beater with new ideas just as Just-In-Time deliveries. But Japan's GDP has stagnated since then, and even today it's still roughly $4.9 Trillion, and that seems to be due its falling population. Japan has been using QE (unsuccessfuly) for years before the US started QE, and continued for years after the US "stopped" QE. However, the money supply is still bloated, but that can probably be blamed on COVID-19 pandemic. in 1930s, Keynes knew that the US money supply had been severely reduced (due to multiple bank failures, caused by panics, i.e., bank runs) but Keynes never believed that that destruction of the money supply could've created such a widespread and uncontrollable effect. Keynes thought the problem was depressed "animal spirits", people simply didn't want to spend, but if you could get them to spend (as in government spending) everything would be OK. Today, many economists believe that Keynes' depressed animal spirits was a symptom, not a cause, and that deficit-spending in FDR's New Deal actually slowed the recovery. So, Keynes mis-diagnosed our ills, and we were prescribed a solution that was toxic.
Keynes ideas were of his time: the society and the economy under control of the State, Mussolini, Hitler and Roosevelt agreed with these ideas, sometimes called Fascism.
While you had only to read Keynes, Keynes was right. What you think is from no importance. How could you get him wrong, by not reading him. It's as simple, read the text and not the comments. Same for Nietzsche.
I am a Keynesian but I was born in the '50s and a middle class until reagan destroyed it. UK adopted a Tudor plan after kicking Rome out. Alexander Hamilton set US's industrial economy based on the Tudor plan according to Thom Hartmann. A democratic economy based on demand instead of supply side trickle down begat the 1st US middle class which had power and brought voting rights to blacks. That doomed the middle class as the rich tolerated a white middle class but they ain't gonna have no coloreds movin' into their suburbs!
The Industrial Revolution started in the Black Country of the English Midlands where coke made from wood was used to smelt iron ore and coal drove the machinery. Until WWII approximately million people were directly or indirectly employed in the UK coal industry.
Keynes believed n a mixed economy. He was a supporter of the Liberal party but his aim of full employment shared Labour values. He certainly didn't agree that the market is the answer to most economic questions.
Why is central control so attractive when evidence is that central control fails over and over. Is it envy driven? Or is it the arrogance of believing a complex system can be controlled from the top dowm.
Glad you enjoyed it! If you want to check out more, this is from a huge conversation we had with him in 2016: www.ineteconomics.org/perspectives/blog/james-crotty-and-the-responsibilities-of-the-heterodox The playlist is also available without text here: ruclips.net/p/PLmtuEaMvhDZaiIQUQbWWc5Qk98rdsklhM
I would add that, in addition to the free labor [slaves] driving the British Industrial Revolution, there was effectively free energy [e.g., the kinetic energy of flowing water]. I don't see many people talking about the energy part of this equation. In modern terms, I would suggest the economic power of the UK during this period was predicated on what we would now see as two significant cost components of manufacturing being essentially zero.
Respectfully, I would disagree. Slave and indentured labour was in the colonies, specifically in the New World for mainly cotton and sugar. Slavery was never a source of production labour in Britain. The British population garnered the benefits of Industrial development within Britain during the 18th and early 19th centuries, and was funded by the profits of the colonies. The acceptance of Abolition occurred because industrial development has escalated to the extent that a transition away from it to industrialisation was economically tenable. But efforts to industrial production were limited to Britain. It funded the final transition to full enclosure of agricultural land in Britain, and urban population moves from country to the cities and towns to work within the mills, factories, and ironworks. There was hardly any industrialisation in the colonies, until Britain was trying to outrun its rivals in the late 19th and early 20th centuries, long after Slavery had been abolished, and those former slaves transitioned to day labourers in the colonies. It was established And it was restricted to Crown colonies mainly, Canada, South Africa, and Australia. Elsewhere it was limited to infrastructure and for resource extraction and agriculture. In fact, it is arguable that if the British Empire had industrialised more of its colonies, it would have been even wealthier. By limiting economic development largely to Britain, and maintaining protectionism through its imperial markets system, it impoverished those colonies and hindered their efficient operation. Was the cost of Slavery zero? Not really. Chattel property needs to purchased, housed, and maintained. Not only that, but the military and civil infrastructure supporting colonisation across the globe has to be paid for. Even India, was mostly profitable from the expropriation of its riches, taxation, tea, and protectionism. One finds that after that neither the East India Company nor the British Government who took over after the EIC went broke, could make India as profitable as it could have been if it had been industrialised.
@@BigHenFor I would point out the British Industrial Revolution was based on cotton. Until recently, growing cotton was very labor intensive. But cotton does not grow in the UK. The raw cotton was produced on the backs of slaves in the colonies. My point is not only was the raw material produced with zero labor costs, but the finished product [cotton cloth] was produced in mills using free energy [flowing water].
Not totaly sure what you are getting at. LoL nothing free about it, slavery is antithetical to Capitalism read Adam Smith again. And that goes for physics too. No such such as free energy it take capital investment to turn flowing water into energy .
No, FDR was a capitalist and sought to save capitalism, however, he would not be pro the capitalism of today which is severely skewed toward the few , thus vastly dysfunctional and intentionally damaging, so that there remains a servitude class.
@@Arbognire There is lots on the internet on Peirce and Pragmatism but you need to realize that economics is a tool not a purpose. Keynes understood that when he tried to run a theater for his wife. He had to confront the psycho-pursuit of values in the human system and not just who gets ahead of someone else. Today's economists preach rather than solving societal problems and finding purposes in things like culture, religion, commerce, education, government, science and health. Instead they just go for solutions that only serve commerce and the rest falls apart. That's not pragmatism, nor is it what Hegal learned from the Iroquois and Lewis Henry Morgan. It is also not what Jefferson found when he tied liberty to birth. "the God who gave us life gave us liberty at the same time." Yet, the child is not free not matter how wealthy, the child needs education and competence to truly be free. Money does not make you free, it enslaves you until you die and hope someone will remember. Money is like any other energy source, it is what you choose to serve the whole with. That's what Keynes pragmatism meant to me. It wasn't whether he was this or that. You need both hands to play the piano and patterns are irrelevant if you have no music. Keynes' methods weren't working. No one's were. it ended up in genocide and mass death. Like Peter Drucker said:, think an orchestra not an army. Money is irrelevant if you can't play the music. Economics is not "purpose", it is a tool to do "purpose." Peirce learned something up there on the Delaware River living with that Gypsy woman who saved all of his stuff for us when he died when everyone else would have put it in the river and sold his house.
Economists have to be the most frustrating people on earth. Economics is a field built on reliable failure. Economists, as a profession, can’t predict anything, can’t agree on the present, certainly can’t agree on the near past, and here we see have trouble analyzing the distant past. The only “successful” economists are those who step out of the profession and use their knowledge for self enrichment, usually in trading. Here is a clue for you, economics attempts to develop understanding through relationship and formulas. The only way to study economies with a view to improving and preventing missteps is through agile, adaptive, iteration. In the engineering world this is called finite element analysis. I’ve seen this at work through a friend, who was an economist, and who, beginning in about 1975, you know the year when the West handed its balls to China in the Lima agreement, took a small lease finance firm whose biggest success was a $3 million mining dredge, in a small number of years to where they were financing Jumbo Jets for Qantas 6 at a time 1n 1.2 billion dollar deals. How was this small company able to win lease finance deals against all global players? through the power of iteration. Very pivotal the very first Jumbo Jet deal ($70 million) was evaluated on the fore runner of the XT computer, the IBM 51-10 computer. That particular computer and its progression is vital to understanding the present day. James mentioned Keynes and working class housing (massive failures there), and that is vitally important right now where affordable housing has become a brick wall for the young of today. Zero solutions from today’s ideologies. The problem? Every one rich and poor are competing for products in the same market, a market that is structured as a luxury market where those with money get what they want, and what they don’t want they take anyway as an “investment”. Thinking Jared Kushner here whose company owns some 10,000 low end units. For a different solution to affordable housing see www.cgrpt.com where what is proposed is a secondary property market organized for low income people and based on a special property title that delivers much lower cost properties and protects their value at a stable inflation linked (CPI) property title. ELSE: the only solution to the West’s wealth excesses is through Trickle Down Economics. The only time in history when trickle down economics has worked for the betterment of the people en masse was from the French Revolution when wealth trickled down as those who had stolen the wealth of the nation were adjusted. Russia right now is a prime target for a time of adjustment. Recommended further reading: Watch “Ready Player One”.
For pretty much everybody. Most people were very power but nowhere near as poor as they used to be. Scandinavian social democracy did not build the rich scandinavia we have today… and it is arguably the main reason why we are 2-4 times poorer today than we could have been.
Workhouses did not exist, children were not working in the mills and pits, industrial injury was rife, pollution was rife, water supplies were dangerous, waste was not effectively and safely cleared, healthcare almost non existent, education limited to little more than learning to read and write for most people. Transport was expensive, most people never moved more than a few miles, et cetera, et cetera. These were good times, for a very select few.
And that's ALMOST the policy they took, they just didn't go as far as Keynes suggested, the Post war era was almost that just under the guidance of the rich and landed.
In my economics 101 at Boston University in 1983 I was introduced to Keynesian economics. On being told that wages are perfectly inelastic until full employment is reached, at which point they become perfectly elastic, I raised my hand. "This makes absolutely no sense" I objected. Why was he ever taken seriously? Ever?
Exactly, anyone reading him now (if they know any history) should see he's full of krap. Of course the same goes for Smith & Marx, it could be said they're influential but mostly wrong.
Considering we only ever dealt with what economists call, "Bastard Keynes," and considering it was economics 101, it's easy to imagine you were misinformed. Bastard Keynes is based off a book about Keynes written by some guy who didn't understand Keynes.🤣This is why 'first sources' is a thing
@@bradbell4022 OK, in more depth then, did Keynes believe that moving wealth to consumption increases wealth, as though investment has no value? I'm pretty sure the legitimate Keynes did.
Slavery has been illegal in Britain since the Norman Conquest (1066). Before that, the Anglo-Saxons had slaves, as did most countries - but not African slaves, of course. The Slave Trade was actually implemented by private enterprise buying people already enslaved in Africa (through tribal conflicts) and transporting them to America to work in plantations. In the late 18th century and early 19th, the British Navy was tasked with intercepting slave ships and sending them back.
@@ohgosh5892 It's all a matter of perspective. To a Soviet socialist, one more dead kulak is an achievement. To the dead kulak, socialism looked like a bad deal right up to the final moment.
@@scambammer6102 I'm confused. Stalin wasn't Russian. The USSR wasn't Russia. Beria, Bush, Yezhov, and Dzershinsky weren't Russians. Either socialism works, to help everyone,or it works only for people who aren't in Russia or who aren't in Russia. That's a new idea for me. Pls explain or refer me to other sources.
@@arturosuarez-silverio5983 different countries have different experiences with socialism and everything else. This is obviously beyond your grasp. Enjoy the stupid life.
@@ohgosh5892 What is the goal of working? What do we work for? What would you say if I told you that our productivity is so high, that for a contemporary middle class lifestyle it takes about 8 hours per week of work to achieve it? You think you'd have a use for the other 6 days of the week you don't need to work for that lifestyle and could do something with that time, that you like more than working (without getting on the nerves of the people around you)? Hm?
@@ohgosh5892 Not sure about that one. A small minority just might. Anyway, you might do as you like, if it wouldn't be for that specific kind of people, whose work should be considered damage. If you look at the current western economies, my take on it is: at least 30 % maybe up to 60 % is for recreational purposes, some of them extremely damaging. Some people should be chained in their chairs with a stack of books at their side, so they don't produce/consume drugs or cause outrageous injuries and energy consumption while executing their fancy sports.
Keynes was a 19th Century intellect who NEVER had to work a day in his life. Not that he was one of idle rich, but the idle rich were his neighbors. His economic theories are the Apple II of computing, in a smartphone world that lives in 5G on the electronic superhighway. The world that produced Keynes is a relic of the distant, if not ancient, in computer terms, colonial past.
@@21dolphin123 Really? Which part? That he was born into great wealth, or that he never had to work? He was born in 1883, nearly 17 when the century changed. My great-grandmother was born nearby in 1886. She never grasped the totality of the late-20th Century, bright and educated as she was. I'm in my 70s, and easily as distanced from the realities of the 21st Century. My sons are in Keynes' position, a part of this time, but already being left behind in the tech race to infinity. Sorry if I snubbed your hero, but he has feet of clay, like any other idol. If you can't see a need for a new economic model, just wait for the surprise waiting in the wings. You'll come around, long before I'm "proven wrong"!
So, is the Professor's argument, essentially, that Keynes is used to legitimate capitalism, when in fact he saw capitalism as likely to create crises it can't fix?
@@scambammer6102 It sounds like he's saying (as someone below suggests) that we often focus on Keynes' justification of state spending during economic downturns, and taking on debt, but ignore his general observation that capitalism isn't self-repairing, and some of his other, more radical ideas?
Sounds like you know nothing about Sraffa. Also read Steedman, Marx after Sraffa. Also, you know nothing about the biparty (as opposed to triparty) eurodollar. Check out Jeff Snider's Eurodollar University blog. Here are current questions: 1. What are direct measures (as opposed to proxies) for biparty eurodollar? 2. What is notional outstanding biparty eurodollar?
The real source of underserved inequality of distribution is the Cantillon effect whereby those closest to the new money spigot get all the benefit at the expense of those further down the trading-exchange chain. I think one should generalise Cantillon to include the spending of money by the government (previously concentrated to it via taxation). I would also generalise to any centralised money disbursement system. Those closest to those money spigot benefit disproportionately. It is one reason why all our institutions (eg. universities and the UK National Health Service) have bloated administrations dictating to, and impoverishing, the actual workers rather than serving them.
The demographics of the mid to late 20th century and now in 2020's, is showing an exponential fall in population, which affects not only employment like it was pre ww2 and then afterwards in the late 50's and into the 60's but also trade. Mankind is collapsing. No political shenanigans that I have witnessed has any clue as to what to do next, so it looks like the leadership (professional liars club) are lining their vaults with the proceeds of the final collapse and retreating to their bunkers, besides all this, the era we call the digital age is artificial, just as it has always been and that is 'created' not reality, simply because not one single 'cognosentient being' who reside in any institution of authority has any idea what reality is. There is no manual to existence, life, living or the future, because every millennium throws up the sickness of the populous that drags itself into another try. I say again, there is no manual. "So what do we do about this dilemma Tom?" That is the question that no one can answer. Love always
It also impacts the whole of social care; with an ageing, bigoted, population, encouraging inward migration is difficult. This result in a lack of tax revenue to pay for pensions, healthcare and so on, in spite of the ever increasing costs. For tories, this is a reason to scrap social provision.
Look at how wrong Keynes was about the economy and socialism when his theory of government monetary expansion in the US being necessary after the end of WW2. His theory they supported the continuation of massive deficits after the end of the war because roughly 13 million who served overseas during the conflict were returning home and would need jobs which did not exist so unemployment would follow. The fact is despite this fear government ignored his warning then cut their massive budget by almost half and the feared unemployment did not even result but the economy boomed. It was a massive punch in the face to his theory. Nobody interested in economics should be unaware of this failure of Keynes theory.
Dude. Wtf do you think happened in post war US? You think its economy grew the way it did with out monetary expansion? Credit is credit. Maybe reread ole mr. keynes. After that slap a Neo in front of it and read a bit of that. If you’re gonna argue, at least argue with people who lived in your own century.
@@williambrasky3891 What was the government induced monetary expansion after WW2. You seem to know but maybe not. The facts are the balance sheet of the Fed fell in the period after ww2 and that continued for several decades until leveling out in 1984. That means less borrowing by government from the Fed . The Federal deficits also fell to a few percent from 1947 for the whole decade and did not rise much until the 1970's . Of course the money supply grew but that was private sector borrowing which resolves itself withing the private sector to be a net result over time which contrasts with government expansion via the Federal reserve money creation process which is always a debt obligation for the private sector alone.
It matters nothing what century we live in in regard to understanding the principles of the way the economy operates. Do you really think that the date on a calendar makes any difference to economics or any science. Is that what you are getting at? If anyone does then their state of mind is just badly skewed.
Trolling? Or Asking? Keynes never promoted forced labor, Stalin filled his gulags with forced laborers. Keynes never advocated collectivism, Stalin enforced collectivism. Now you know!
@@parrotraiser6541 Not at all. I suggest to look up "Planned economy" in Wikipedia, so you are sure, that I'm not making this up. In short, the mechanism suggested by Keynes do not even make sense in a planned economy, they are utterly without purpose there. In a planned economy, price and number of the products, are matched to the perceived need and are fixed in plans, beforehand, as well as the wages made available to the workers. Contrast this with Keynes, whose rules are applied to market economies, where prices, wages, and amount of products are negotiated between consumers, producers and employees. Keynesian policies influence the market by adjusting the market balance with a collection of tools, such as: causing additional demand, when demand is lacking for fear of recession, restricting public demand, when approaching full employment, influencing the interest rates, in order to spur or curb investment and inflation as needed. The bane of Keynesianism is, that it works 'a posteriory': the actual state of the economy has to be evaluated, the measure to be taken. The timelag until the effects set in cause problems. But in essence, _there is no plan_. Conversely, planned economies work 'a priory'. The plans are fixed, maybe based on the results of the previous cycle, but essentially before any of the products is even placed as an order to the producer. This is an even tougher, hard computational problem, that soviet economists and scientists never managed to solve. So the economic systems are really different, even before we start speaking about the political system. Both types of economy may exist in despotic hellholes as bad as North Korea (planned economy) or Iran (market economy), as well as in free democratic countries: most western countries are market economies, while Chile in 1970-1973, was a rare example of a democratic planned economy, before Pinochets coup d'etat turned it into a gangster paradise. The examples given demonstrate, that in the manifold of human societies, the dimensions 'economic system' and 'political system' are orthogonal, and can be selected independent of each other.
Isn't Information Technology and its implications for industrial production, warmongering, social control etc. as much a "transformative" revolution as railroads? Also population is steadily increasing in the US (although there is a decline in the rate of increase) even if it's not in other western countries.
@@scambammer6102 True, but is the source of the population increase relevant? As long as brain and muscle power keeps feeding the industries, does it matter for those in control whether it's produced locally or imported? US has a history of strategic immigration policies.
It is very misleading when one speaks about the '1700's' and the '1800's', when referring to the 18th and 19th centuries. In the former terms, the speaker could mean either centuries OR decades!
@ML6103 “The class war... will find me on the side of the educated bourgeoisie.” - John Maynard Keynes Keynes’ efforts were motivated by a strong desire to maintain the liberal capitalist order, yet he sought a compromise. "Whilst, therefore, the enlargement of the functions of government, involved in the task of adjusting to one another the propensity to consume and the inducement to invest, would seem to a nineteenth-century publicist or to a contemporary American financier to be a terrific encroachment on individualism, I defend it, on the contrary, both as the only practicable means of avoiding the destruction of existing economic forms in their entirety and as the condition of the successful functioning of individual initiative." - John Maynard Keynes Why is there this desire to deny the importance of Keynesian theory coming from the political right? Perhaps it is precisely because monetary policy is necessary to ensure aggregate demand is neither excessive nor deficient. Monetary policy is state intervention: by setting a market price, an arm of the state ensures the macroeconomy works. When this particular procedure fails to work, in a liquidity trap for example, state intervention of another kind is required (fiscal policy). While these statements are self-evident to many mainstream economists, to someone of a neoliberal or ordoliberal persuasion they are discomforting. At the macroeconomic level, things only work well because of state intervention. This was so discomforting that New Classical economists attempted to create an alternative theory of business cycles where booms and recessions were nothing to be concerned about, but just the optimal response of agents to exogenous shocks. I would argue that Keynesian theory is not left wing, because it is not about market failure - it is just about how the macroeconomy works. On the other hand anti-Keynesian views are often politically motivated, because the pivotal role the state plays in managing the macroeconomy does not fit the ideology. "Fascism entirely agrees with Mr. Maynard Keynes, despite the latter's prominent position as a Liberal. In fact, Mr. Keynes' excellent little book, The End of Laissez-Faire (l926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud." - Benito Mussolini Keynes also argues that it is "preferable" to regard labour as the sole factor of production. According to Keynes, the purpose of capital is to provide the 'environment' within which labor can become productive, i.e., 'create jobs.' Thus, the more capital there is, the more jobs should be created. For some strange reason, however, it doesn’t seem to work out that way. As more capital is added, jobs start to decrease. As this amazing paradox works its bizarre magic, you can actually end up with an environment in which there are no jobs at all! The paradox is easily resolved, however, the moment we realize that capital is productive in the same way as labor. By that I mean that capital doesn’t merely provide the 'environment' within which labor becomes productive but can - and does - produce marketable goods and services in tandem with, or independent of direct human input (labor). That being the case, it necessarily follows that as capital becomes more efficient and cost effective than human labor, human labor will be displaced by capital . . . which leads to a problem. Say’s Law of Markets ceases to function. To summarize, Say’s Law is that production equals income, therefore supply (production) generates its own demand (income), and demand, its own supply. Reading an expanded explanation of Say’s Law (as in Say’s Letters to Mister Malthus), we realize that Jean-Baptiste Say simply assumed that if your labor was displaced by advances in technology, you would purchase the new technology to generate income, instead of being limited to labor alone. Both sides of Say’s Law are essential, because you have to take both production and consumption into consideration. Focusing only on either production or consumption is a disaster for an economy, given Adam Smith’s first principle of economics from The Wealth of Nations: 'Consumption is the sole end and purpose of all production.'
@@DrSanity7777777 "The paradox is easily resolved, however, the moment we realize that capital is productive in the same way as labor. By that I mean that capital doesn’t merely provide the 'environment' within which labor becomes productive but can - and does - produce marketable goods and services in tandem with, or independent of direct human input (labor)." This is incorrect. Capital is incapable of producing anything without labor.
@advisorrook "independent of direct human input" simply refers to automation. Yes, labor is the primary agent in supplying human wants; even the spontaneous productions of the earth cannot be utilized without it. "Labour was the first price, the original purchase - money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased." - Adam Smith The only manner in which man can act upon nature is by motion. In this respect John Stuart Mill observed: “Man moves a seed into the ground; he moves an axe through a tree; he moves a spark to fuel; he moves water into a boiler over a fire; the properties of matter do the rest.” In other words, “This one operation of putting things into fit places for being acted upon each other by their own internal forces is all that man does, or can do, with matter.” The problem, of course, is that economics is defined as 'a social science concerned with the production, distribution, and consumption of goods and services.' Socialism (and its evil twin capitalism . . . unless you’re a capitalist, then socialism is the evil twin), however, assumes that all production is due to labor - 'productivity' is, after all, defined as 'output per labor hour' - so the only problems that need to be addressed are distribution and consumption, mostly consumption. Louis Kelso, investor of the ESOP, discovered a vital fact that the classical economists had somehow overlooked. This fact was the key to understanding why the private property, free market economy was notoriously unstable, pursuing a roller coaster of exhilarating highs and terrifying descents into economic and financial collapse. This missing fact, which Kelso had uncovered over years of intensive reading, research and thought, drastically modifies the classical paradigm that has dominated formal economics since Adam Smith. It concerns the effect of technological change on the distributive dynamics of a private property, free market economy. Technological change, Kelso concluded, makes tools, machines, structures and processes ever more productive while leaving human productiveness largely unchanged. The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor. The technology problem exposes a flaw in the capitalist system. Capitalism, as it is currently practiced, tends to separate capital and labor. Companies provide the capital (i.e. the buildings, machines, tools, etc.) and employees provide the labor. Most people support themselves financially through employment, as opposed to business ownership or investment income. The problem with this is that it creates a entire class of non-owners. When disruption strikes, employees suffer the consequences. They have no choice but to continually strive to make themselves useful. But despite their best efforts, many workers find that they are indeed replaceable. When capital and labor are separate, profits tend to be prioritized over people. The less expensive option will always win, even if it means eliminating jobs or shipping them overseas. But when capital and labor are united in worker-owned enterprises, then new technologies can be applied wisely and in ways that benefit the community. Without ownership, technology threatens our livelihood. With ownership, technology has the potential to make our lives better off. When capital (aka technology) is successfully employed, it makes our lives easier because now we can work less. However, we only benefit from this if we are owners of that capital and receive a portion of the profit that it creates. So when people argue about the merits of labor-saving technology, they are really exposing the vulnerability of the traditional employment contract. "In his discussion on slavery Aristotle said that when the shuttle wove by itself and the plectrum played by itself chief workmen would not need helpers nor masters slaves. At the time he wrote, he believed that he was establishing the eternal validity of slavery; but for us today he was in reality justifying the existence of the machine. Work, it is true, is the constant form of man's interaction with his environment, if by work one means the sum total of exertions necessary to maintain life; and the lack of work usually means an impairment of function and a breakdown in organic relationship that leads to substitute forms of work, such as invalidism and neurosis. But work in the form of unwilling drudgery or of that sedentary routine which... the Athenians so properly despised-work in these forms is the true province of machines. Instead of reducing human beings to work-mechanisms, we can now transfer the main part of burden to automatic machines. This potentially... is perhaps the largest justification of the mechanical developments of the last thousand years." - Lewis Mumford
@DrSanity7777777 Automation doesn't even happen without labor. You can't make a big enough pile of money that it will spontaneously create machines. Automation is built- and maintained- by labor. Capital does not produce anything by itself.
As an economist I of course read Keynes during my undergraduate years, but unlike many I also read him in the original. The issue of Keynes is a simple one. Leaving aside his injunction to pump rime an economy at the n=bottom of a depression when fiscal and monetary policy are relatively ineffective - hence the need for direct employment schemes - Keynes was crystal clear about the debt cycle. He insisted that the debt undertaken by government to finance direct labour and related stimulatory project intervention be REPAID during the FOLLOWING UPCYCLE in FULL, such that, at the end of the following economic cycle maximum, and not after during the downswing - that incurred debt was entirely REPAID. Find any socialist on earth, of any stripe, who does or advocates doing that! I have never found one, nor heard one accept it. Thus money value degrades, capital degrades, and economic activity is distorted and damaged. Human relationships are perverted. Unsound money from unrepaid debt poisons everything it contacts. And the debt mountain becomes what it is today. Beyond grotesque, and as interest rates rise, uttering a budget becomes all but impossible without slashing immense quantities of state social and other spending. Hence political paralysis that is seen in the US Congress. Now, centre-stage Aristotle, a mere 2500 years ago, who connected this corruption of debt issuance to the seven distinct cycles of a society moving from impoverished autocracy through mass universal suffrage democracy, which itself forces corrupt 'politicians to always offer debt fueled pork barrel politics - finally leading to gross instability and collapse. Look at Britian now for the best example I know of that dismal reality. Proceeding before our eyes to simple ungovernability by democracy and accepting the vicious reality of populism and autocratic cultural social and economic violence. And ask any socialist politician there to acknowledge the Keynsian injunction. But do not hold your breath.
As far as I understood, Keynes never labeled him self a socialist. A term, that has a very specific meaning in Marxist theory, but is also reused by conservative authoritarians for shaming everybody who is not bowing to the demented idea of the 'invisible hand' and the 'laissez-faire' approach to economy, as brought on by Adam Smith, then recanted by Milton Friedman, and recanted again by the Neoliberals. The real connection between 'socialist' governments and Keynes is, that some of the actually sported ministers and central bank leads, that understood Keynes well enough, to at least try to implement the suggested policies. I place 'socialist' in quotes, because parties like the SPD (Germany) or Labor (Britain) are not exactly 'socialist', some are not even close.
@@Misophist Obviously he did not! That is my entire point! Wake up. And stop trying to patronise. it is childish. Your definition of socialist is sectarian, and frankly pretty silly as well.
@@terencefield3204 ??? It's not my definition, and given the number of people, that throw it around as an insult against anything that has the word 'social' in it, without even so much as knowing the difference, it has become rather useless. So what? The observation is simply, that it has become a deplorable habit of right leaning/conservatives/neoliberals, to denounce any sort of government control over trade and economy as 'Socialism', to scare people. OTOH, for the lack of words: 'left-leaning' using the American map - you'll find a lot of people understanding Keynes objectives, and _some_ of them are actually calling themselves socialists. It's hardly sectarian, to recognize this.
@@Misophist the deplorable habit of the left is to lie about the central observation of Keynes. You choose to define socialist in some arcane way; your problem, not mine.Deal with the simple matter under discussion here, not your arcane version of definitions.
@@terencefield3204 OK. Ignore the fact, that I didn't pick a particular definition for 'socialist', so it might be really difficult to know which one it is, that it is 'arcane' - instead, let's go with yours, that should be the safe and sound one: Would you please explain in your words, what are the unmistakable signs of a socialist, so that we are on the same page? And further: would you please explain, what you mean by 'lie about the central observation of Keynes'
Not sure that they've won the right to speak loudly regarding their beautiful accomplishment.. remember the Von mises explanation of 29 crisis ? How Hayek managed the Mont Pellerin ? Yeah let's do the spontaneous order and make everything in competition because centralization is bad by principle. cannot be a faillure.. oh wait
Kinda spreads the risk though doesn’t it? Lots of smaller failures rather than one deathblow is central control gets it wrong. Unless you envision some sort or perfectly self-correcting progressive consensus.
There is validity to an Austrian critique - without market discipline what's to prevent this national investment board from massively mal-investing on poor quality projects?
@@torpedospurs yeah and how to inpose this so called market discipline ? We saw a retreat of the state functions and the result is a era au fraud. Not to say that gov is the solution to all. But it's clearly a falsh way to view the world
"I discovered that the Keynes that I had been taught was not the right Keynes historically. This is one of the two or three most famous economists in history. So how could we have gotten him so wrong?"
The same way that you got Adam Smith wrong.
Kinda surprisingly Adam Smith could be seen as proto Marxist in some respects... He was constant about his hatred for land lords specifically because of their relationship to the means of production.
Mr Crotty pretends to have never heard of Axel's Leonhujvud book "On Keynesian economics and the economics "
@@lonelyone69 What the fuck are you talking about. Optimization and good allocation of resources is the reason Adam Smith had those issues. If you have gold and don't exploit you are losing an implicit advantage with other countries. If you don't use land, in the time of history which was more important to life subsistence, then is logically to think about fucking killing people who are slowing the progress of everyone. Working and produce value is the way in which everyone gets out of poverty.
Keynes was actually far from being a socialist though (in any form). He was actively trying to keep the capitalist system well and alive. Calling him any form of socialist is kind of misleading when he didn't care at all about social ownership of means of production at all. You can 100% say that he opposed laissez-faire capitalism, but he was not against capitalism in general. Opposing unregulated capitalism doesn't make you a socialist to be honest. People often believe that he opposed capitalism because he was supporting government interventions. But keep in mind that just because a government does something, it is not socialism (some people who don't know anything about economics tend to believe that socialism is "when the government does something"). His theories/policies were made to make sure that the capitalist system will be running well even when it is under recession. The closest thing that he can be labeled as is a social democrat or more of a state capitalist.
Glad we are all agreed on the desirability of abolishing the rentier class, now we actually need to do it!
Keynes said ‘Empires make you poor’. Well, it certainly didn’t benefit the ordinary working class, who in many cases, lived in as miserable conditions as their counterparts around the empire.
No, the counterparts were immensely more impoverished
@@cathaldeveney7488 No bills in a hut your legally allowed to be in and police are not trying to push you out for existing seems pretty wealthy to me.
The “poor” who farm a small garden and eat fish and rice all day own their lives.
I rent the right to exist every day. Or else I become gypsy scum living in my car getting kicked out of parking lots by boot lickers.
I paid for my parking pass, there are cars covered in dust with slashed tires that have been in the garage for years. But because I sleep it my car, i’m arrested, my car impounded, then the cops realize… oh this is isn’t a crime… and then I gotta pay to get my car back.
It was an observation made of conditions he saw, but that doesn't establish cause & effect.
The working class who manned the factories were much better off than those who stayed working on the land.
@@andrewnelson3681 that's why s few went to the US, Canada, Mexico, and other places to get land for themselves /s
Unfortunately, he died yesterday. Is the book still going to be published?
Yes this is from a larger series published in 2016, which we are resurfacing in memoriam of his life-
Here is the original article: www.ineteconomics.org/perspectives/blog/james-crotty-and-the-responsibilities-of-the-heterodox
And the playlist: ruclips.net/p/PLmtuEaMvhDZaiIQUQbWWc5Qk98rdsklhM
I believe the book has already been published. It's called "Keynes Against Capitalism".
@@JonathanMooretufts thanks
:Deficit spending is okay in the bad times, provided the debt is paid back in the good times. The politicians were cheering so loud after the first part of the statement, that they didn't hear the second part.
Debt doesn't matter, as long as it's public debt.
Cheney notoriously said debt doesn't matter. This made clear that corporate dominated democracy is funded by public debt.
@@TheMahayanist Totally wrong !. The public debt becomes the debt of the private sector and the lowest income earners. Why because there is nobody else to pay for it when the money borrowed by government via bond sales to pay for it's budget deficits becomes mature.
@@Rob-fx2dwbut doesnt that debt just get refianced or wrote down, I cant thing of a country thats ever really had to pay its debt. Look at japan or the many country bailed out by the IMF they never really had to pay it back. If we ever really had to pay it back every single devloped country would be doomed
@@jimpaddy79 You better start thinking again because you have not thought it through. The national debt is comprised of the sum of Treasury securities that were sold to the public or the Federal Reserve bank (central bank) or foreign entities. Those securities mature in time and on maturity are paid out with interest to the people who invested in them initially or the people who bought them from those initial buyers. It is all paid out but what you may see when comparing what it was some years ago compared to today is the yearly sum of more recently sold treasuries compared with older treasuries most of which no longer exist.
I commend the work of Anwar Shaikh to help get a handle on the history of the interpretation and misinterpretation of the great figures in economics. Thanks for posting.
The working class won't tolerate it, unless some effective means to mind-manage them (the masses) is achieved. I think that means has, for some time, been achieved. And even so, it doesn't seem to be doing much to prevent decline. But I guess that's not a concern.
Beg to differ. If Linux were real competition to Microsoft, the latter would have faded from the market. Moreover, my point is that oligopoly is just as bad and exists in almost all areas of the economy
New Economic Thinking is Soros funded think tank, they are not against capitalism but are afraid of crisis.
@Boi98 Soros was one of our founding donors but did not run the organization and did not renew his funding.
Keynes was actually far from being a socialist though (in any form). He was actively trying to keep the capitalist system well and alive. Calling him any form of socialist is kind of misleading when he didn't care at all about social ownership of means of production at all. You can 100% say that he opposed laissez-faire capitalism, but he was not against capitalism in general. Opposing unregulated capitalism doesn't make you a socialist to be honest. People often believe that he opposed capitalism because he was supporting government interventions. But keep in mind that just because a government does something, it is not socialism (some people who don't know anything about economics tend to believe that socialism is "when the government does something"). His theories/policies were made to make sure that the capitalist system will be running well even when it is under recession. The closest thing that he can be labeled as is a social democrat or more of a state capitalist.
Crotty may turn out to be one of the most important economists of our time, and towards the end of this interview he summarizes Keynes's vision of a prosperous economy, a liberal socialism. He emphasized Keynes' economic council controlling national investment and planning. The alternative is our system of severe inequality, with ever powerful financial powers arbitrating the fate of our surplus solely for personal gain to the expense of general prosperity. Crotty brought that story to light. Crotty published papers at PERI, a platform for the University of Massachusetts Amherst, and his papers are still there. Great Britain after WWII had immense poverty with food shortages, but it elected the socialist Clement Atlee as Prime Minister who enacted many of Keynes' proposals -- national health system, railroads, coal production, steel, and improvements in education and housing. The Wikipedia article is informative, and Robert Kuttner's book Debtor's Prison has a good chapter about Atlee's tenure. Keynes' vision is much needed today as the financial powers are subverting the democratic forces that would create a more equal society with prosperity for all. "This book is a marvel of economic narrative, with Crotty's clarity and Keynes's elegance in stunning counterpoint, from Versailles through the Depression to the war and Bretton Woods, all bringing forth the great, neglected fact that Keynes's Liberal Socialism was far more radical than modern memory would have us think.", the comment by James K. Galbraith, for Keynes Against Capitalism.
@benleet417 is that what the Japanese had with their Ministry of International Trade and Industry?
What a thoughtful breakdown thank you
You can centrally or non-centrally plan an economy all you want, but if you do not do the ONE thing that Keynes required with regard to debt, you always arrive at a corrupted society and a collapsed economy. The left will never go near accepting this. Soft words of left reassurance were are and always will be at bottom chimera, and if uttered by properly educated economists, then they will be dishonest words as well.
Adam Sith is the mind that should direct most of our thinking. Hated by the left, usually because it is sophisticated and not subject to ludicrous Germanic weltanschauung concept nonsense, used to abuse the uneducated duped mass of the people across the globe, and now in traction in China.
The left likes big statist ideas, massive overarching control, planning, direction, interlocking action and reaction stuff.
Most of it simply bunk. Invented guff that sits on top of assertions that, time and again, have been found to be not true. That does not stop repeated deranged attempts though.
How long before it is fully discredited?
Based on the level of third rate non-education these days, I expect the poison will last for at least a thousand years.
Like most religions, state socialist economics will die out but only by boredom, obvious irrelevance, exhaustion, and disinterest, not intellectual rejection.
Good summary. As noveau riche what strikes me is: Taxes cost a lot, but no matter what I'm left net ahead. Taxes are a 'good problem,' because it means you were successful. The political debate about taxes and benefits, like universal healthcare, is emotional, idiotic, and of no benefit to the world. (We don't need more billionaires, billionaires should be a product of great success at achieving goals, not a goal by itself. 'You're a billionaire?' 'Great, but what did you actually achieve?" (I've met a lot of stupid rich people, but I've never worked with a skilled carpenter who was stupid.) We also shouldn't think, let's take away all the wealth and distribute it equally. There's no planning for the future in this, it assumes an end of technical progress, (the USSR worked really hard to provide a good 1930s lifestyle for its citizens -- all the way to 1970 when it economically froze and on to 1989 when it collapsed). Also, a lot of people are poor or in debt because they're deeply dysfunctional. (Poverty makes dysfunction, so maybe they're not to blame. You'd never let someone drive a school bus who didn't learn to drive because of lack of opportunity. They do give people in this situation high school diplomas.)
To 'be' something you need to acquire skills, to be rich you just have to have a lot of money. Often as not people develop great skills and make money. At it's core money is great, but only as utility -- what you can do with it, security, options, potential. By itself carpentry skills are useful and useful beyond building. Just having a million dollars under your bed, or a billion, or a box of old newspapers is the same thing. (In Donna Tartt's The Goldfinch, Theo unknowingly carries around a textbook wrapped in newspaper thinking it's the painting; because he only keeps it, but never tries to look at it, he has no clue. $20m masterpiece or $50 used textbook? Un utilized they have equal value.)
I remember in the 1990s hearing on the news that in the previous ten years the wealth of the United States economy had grown Five times. I didn't have any of this, nor did my neighbors. I was driving to west L.A., Beverly Hills to photograph paintings; everywhere was construction. All the people who already had a lot of money were adding on to their already very nice homes. That helped the building sector, but why not eliminate poverty, fix the infrastructure (they did some of this at the time but not nearly enough). There's no universal healthcare in the U.S. because a handful of people make a great deal of money on it. There's also a huge population of people who work in healthcare but most of them are not doctors, nurses, pharmacists -- they're people who move paper around.
@John Ashtone You have no knowledge of English history and your facts are wrong? Hmmm, that’s not exactly persuasive.
Unemployment was a horrific situation in the1930s.His ideas got us through WW2. This let the economic boom of the 1950s & 1060s.
Keynes was not a socialist but believed that then orthodox views about macro economics were wrong and led to bad policies during the depression. FDR wasn't a Keynesian because he didn't understand Keynes ideas when Keynes tried to explain them to FDR. Some of FDR's behaviour was consistent with approach recommended by Keynes.
Keynes claimed that the existing economic theories were a special case and he was offering a 'general theory' hence the name of his book.
Read Hazlitt's Failure of the New Economics for a complete refutation
"The General Theory of Income, Investment and Employment" - by JM Keynes?
FDR was the president who created the biggest level of depression and unemployment for an extended period ever in the US. He also depreciated the US dollar by a massive amount when he confiscated the savings of people via gold confiscation and his increased tariffs on may goods which made it more expensive for people live. His political responses to economics changes in the 1930's were a disaster.
@@Rob-fx2dw your premis doesn't match the timeline. The depression was well underway in the US before FDR took office, and was a worldwide event.
@@j3i2i2yl7 The timeline was when hoover was in office and he made the mistake of putting tariffs on but then FDR s raised them and put other restrictions on.
The collapse of credit during 1929 was a result of expanded credit over the late 1920's and later policies of both Hoover and FDR created the great depression . of the 1930's after the recovery had begun and unemployment had begun to fall . Government debt doubled between 1929 and 1935. Together with that tax revenues for the government doubled in 5 years in the 1930's. Incomes flatlined in the same period.
Prof Crotty has missed the point here. What he advocates is what we have and - look around you - it's failed.
Excellent
WW-1 represented a huge return to mercantilism, and that lingered after the war. This was not free-market capitalism. Matters were made worse by the central-bank manipulations attempting abolish the "business cycle" (itself a product of financial manipulation muddying the price signals). Also electrification represented just as dynamic an economic boost as the railways had been. Where neo-Keynsians get Keynes wrong is that he, at least, advocated running a government budget surplus in "good times".
How did we get Keynes so wrong? Keynes said something to the effect: Deficit spending is okay in the bad times, provided the debt is paid back in the good times. The politicians were cheering so loud after the first part of the statement, that they didn't hear the second part. Besides, there is never a good time to pay down the debt, even if there happens to be a windfall surplus. A windfall surplus is free money...
We uninformed by omission; the political economists wouldn't bring up the second part of the statement.
Keynesianism relied on a strong technocratic state immune to the influences of capital or labour. Both tried to influence the state, but capital won out because their action could stop all other economic activity. Unless the state controlled the financial system, and was populated by those immune to lobbying or political capital, it was inevitable that capital would use its economic power to take over control of the economy. And the trigger was the failure to control inflation in commodities. And arguably, Keynesianism relied on the West's economic imperialism, to keep commodity prices low, so that profits could be large enough to fund the world he envisaged. But as the US was determined for philosophical and economic reasons to replace Britain as global hegemon, that left a vaccum where prices could climb. Inflation reduces profit, which in turn which limits the wage growth possible for labour. Lower profits means lower tax receipts in a non globalised world, which in turn means less money for public investment, and a smaller, less powerful state. So, Keynes' plan had a fatal flaw: it couldn't cope with high and sustained inflation. We'll see how long it takes for Neoliberalism to crash and burn.
When Japan went into a recession that lasted 15 years, monetarist were screaming zero interest rates was the cure. The monetarist effect could not even get into the economy with zero borrowers. It was the government that kept borrowing from banks that kept the economy afloat.
I have Keynes` book in my library, and while I read only half of it, I came upon the his rationale behind spending. It wasn`t even deficit spending. He advocated for budgetary excedents, even a bit of increased taxing, in boom years and after that you use the excess money in the years the economy slumped. He knew the economy was cyclical, he advocated shaving off the head of the boom so that we can spend it to cushion the landing in the bust years.
What people say about Keynes today is so far off from the man himself preached.
@user-fz6bu6qd6c
The state should absolutely NOT spend more in good times, that would drive up demand and exacerbate the boom and bust periods.
The state should build a surplus in good times and spend it in bad time, basically making the economic cycle less extreme.
@@ThomasVWorm that’s how we have engineered it in the US/global financial system, but you don’t HAVE to sell treasuries (debt) to make money. That’s just how we do it, traditionally.
Keynes was actually far from being a socialist though (in any form). He was actively trying to keep the capitalist system well and alive. Calling him any form of socialist is kind of misleading when he didn't care at all about social ownership of means of production at all. You can 100% say that he opposed laissez-faire capitalism, but he was not against capitalism in general. Opposing unregulated capitalism doesn't make you a socialist to be honest. People often believe that he opposed capitalism because he was supporting government interventions. But keep in mind that just because a government does something, it is not socialism (some people who don't know anything about economics tend to believe that socialism is "when the government does something"). His theories/policies were made to make sure that the capitalist system will be running well even when it is under recession. The closest thing that he can be labeled as is a social democrat or more of a state capitalist.
The managed economy of China where capital is controlled is what he had in mind …but it is difficult to do with political leaders who are not scholars of economics …in generate the masses of Chinese have been controlled by allowing personal freedoms to raise a family and buy a residential unit and educate your children control freedom speech which goes against the benefit of the state. Allowed to travel the world..the average Chinese does not feel like their freedoms are curtailed. The system breaks down where there is uncontrolled capitalist greed of individuals start corrupting the political leaders… human behavioural charactistics and economics will near meet. Greed , envy, sloth and ego , human instinct to survive can 😂😂not be controlled..stop trying to predict out come based on numbers …maybe AI will model out the future more accurately in the future.
Some socialist! He made a quadrillion million dollars in the stock market! Quite at odds with his background as a moral philosopher. A complicated man, or maybe just crazy.
I vividly recall one of my teachers at grammar school talking confidently of "The special characteristics of the British people." He would have been a veteran of WW2, and I am sure he genuinely believed it.
It took me years to understand that Britain got the industrial revolution earlier than other nations because it was an island with one government. Thus, after 1745, no armies smashing things and conscripting the young men. Britain also had coal and iron.
Out of coal and iron came industry, and railways soon followed. Railways allowed larger polities to be governed effectively. Thus railways allowed Germany and later the USA to eclipse Britain.
Slavery was a blight on European civilisation. That said, at the beginning of Europe's rise, slavery was ubiquitous. Samuel Pepyes was tasked with reorganising the Royal Navy to fight the Dutch and repel raids in the English Channel by Barbary Pirates seeking slaves.
One of the key reasons that the British Empire could outlaw slavery was the diminished "utility" of slave labour in an industrialising world.
Great stuff. Thank you for challenging the gross oversimplification so prevalent in politics today.
The trouble is ALL Economists are influenced by their political beliefs - but then aren't we all! You have conservative beliefs then they are different to those with socialist beliefs, as are the economics taught by these economists. So "you pays your money and you takes your choice" and hope you have backed the correct political horse!
That is because you can't do economy without having an end goal, without knowing what kind of society you'd like to see.
The moment you set the rules or the moment you introduce a specific economic policy is the moment you chose to advance one segment of population over another.
And if you don't - you're just counting numbers, you're an accountant.
Ecconomists who pretend they're just mathematiicians with no ideological bias - piss me to no end. They're like high priests who belive that their teachings comes not from the belief in God but from the scientific method.
This is ridiculous. Keyen's contribution was not advocating socialism, but his economic system. And, we got that kind of right except we ignored the fact that wages and prices were sticky for quite rational reasons, and that this can lead to multiple equilibria.
The bigger question is how can the state interfere with the economy to maximize production and distribution - while supporting it's population, technological change and the freedom and incentive to innovate and risk investment. China will soon dominate the Electric car industry by a combination of free market innovation and government regulation. And I think they will destroy Telsa. But that doesn't mean the government should make electric cars, or mandate only locally owned cars. It means it needs to support Telsa with incentives, research, export subsidies.
And by the way, simply because Keynes advocated socialism, doesn't make it right. This guy seems to argue by authority.
Well said
He does have a problem getting to or making his point
12 minutes in and I still have no sense of why we were wrong about Keynes. (I write as one who has read Skidelsky's brilliant and very long biography of Keynes). Crotty has not told me anything I didn't already know.
I agree it takes the guy forever to say anything. It took 15 minutes to say that British capitalism dominated the 19th century.
I suspect this is a very American perspective - 'they' probably have not read Skidelsky!
i learned a few things when i watched.
China is pretty Keynesian, Private enterprise alone cannot look far enough or wide enough ..
@@kevanbodsworth9868 keynes isn't against private enterprise dope. and china isn't keynesian lol
I've go a lot of time for Keynes - but God you waffle.
Even Keynes wasn’t Keynesian…
😆 Heh, while I was listening, I was going: is this John Maynard Keynes he's talking about ? Now I have to get hold of that book...
Keynes thought was the definition of Keynesian. What you might mean is that Keynes' ideas weren't what you had thought they were.
@@jeromerex17 Sure you are more accurate. I guess I’m learning Keynes didn’t necessarily describe or endorse the 1 dimensional caricature of what “Keynesian” means today when criticized or defended by pundits. So much lost in translation the term is now more a meme than useful descriptor in casual parlance.
@@jeromerex17 "Keynes thought was the definition of Keynesian." Not if everyone misunderstood him.
Economics without the analysis of power is a waste of time. Deficit/surplus budgets are meaningless if you control the world's oceans and force all significant transactions such as oil to be denominated in your currency (which replaced gold and is free to print).
The Romans could have enforced the use of Roman paper currency if they had it. In the long run, the only thing that matters is the ability to impose your will and therefore your fiat currency on the world.
Mining gold and printing money are ways of generating wealth if paper money is mandated legal tender. As long as the currency is stable the rest of this discussion is moot.
The US can print money and blow deficits sky high if they force other nations to hold their currency. China, Japan, etc. have all fallen in line.
Iraq was invaded when they went off the oil/dollar standard.
Saudi Arabia just announced that they will accept other currencies for oil. If they persist with this approach I am guessing that there will be some excuse to turn Saudi Arabia into 1950's Iran or 1989 Iraq.
Said another way. My kingdom for a horse / your money or your life trumps Pareto optimality
Interesting
If this guy could speak concisely and make his point, then people might listen to what he has to say.
Keynsian economics never worked. Just accept Von Mises and Hayek.
Keynes was no more an economist than Marx was. They understood zero about economics. Apparently this guy can't figure this out... Sigh...
When people say Keynes was wrong they usually mean Andrew Melon was right,
Hyman Minsky wrote an article about this side of Keynes
One wonders what is being referred to by Keynes (according to Crotty) that there were no transformational technologies after WWI. This was the time when air travel was coming into its own, radio became the first electronic mass medium, and advances in farming were raising output per person to astounding new heights. So either Keynes was very wrong, or Crotty's understanding of Keynes is very wrong.
Hayek vs. Keynes, compare and contrast." Hayek is good when things go smoothly. When in crisis, get Keynes.
Funny, I've read books analyzing Keynes but no books written by Keynes.
his erotic tales in the congo really are something else
@@marvin19966 JMK was a rascal, that's for sure!
Keynes was a proponent of eugenics. He served as director of the British Eugenics Society from 1937 to 1944. As late as 1946, shortly before his death, Keynes declared eugenics to be "the most important, significant and, I would add, genuine branch of sociology which exists."
Keynes is a tough read; his sentences are packed with thought and/or information. So set some time away.
Correct. It is a story untold. As is that of Schumpeter, Keynes' one great rival. Schumpeter died depressed and defeated because he lost the battle for control of the economic narrative. He lost that battle to Keynes and he said so. He thought Keynes was economically (in terms of theory) a hypocrite and that Keynes' policy prescribtions would lead to economic stagnation and the end of innovation. Schumpeter was right but being right is not enough, Schumpeter did not realise that those making the decisions in the UK and USA wanted simple solutions. Money printing was that simple solution. To this day, right now, this simpleton's blunt tool of money printing and manipulation of the price of money has prevailed.
Has it worked? Hard to say. Alternative history is a fool's game.
Schumpeter, however, was partly to blame. His vanity and fear meant that he never properly explained how Capitalism was superior to Socialism. Deep down, I think he realised that lassai faire was too brutal and too unstable to be tolerated, recognised the danger of the Robber Barons and he was part of the German state that created the welfare state that followed.
Schumpeter's story has been told. Read "Prophet of Innovation" by Thomas K McCraw. The story of Keynes vs Schumpeter, however, remains barely recorded, let alone widely known.
I have always thought it was Keynes vs. Mises. Silly me.
@@christianlibertarian5488 You are not wrong, you are just late. The timelines are slightly out. Mises arrived in the USA in 1940 and went to NY, while Schumpeter had been famous in the USA since 1913 and was ensconced in Harvard when Mises fled to the USA. At the outbreak of WW2 (also 1940) Schumpeter and his wife were blackballed because his wife, Elizabeth Boody, had been studying the Japanese economy. This was part of the battle he lost. Schumpeter was President of the American Economists Society and was anti-Socialist but also anti_Austrian School as he took the Historical School side in the Methodenstriet that split the Austrians. You will note that Mises' views to this day remain overshadowed by the blunt tools Keynes popularised. The Historical School has more or less been wiped from history as economists withdrew to the abstraction and safety of mathematics high above things like industry policy, human agency or innovation. From Schumpeter's p.o.v. the friction between the Mises side and the Keynesians was an internal battle of abstract modelling that rarely made itself relevant to every day life beyond Keynes blunt apparatus designed to negate the very Business Cycles Schumpeter believed drove economic progress.
@@damienmills293 I have learned more from your post than the last 10 videos I have watched. Thanks.
Capitalism is awesome! However it is a workhorse. The workhorse is only useful in a harness pulling a plow. The horse always wants to convince the farmer that it is better to have him run free in the field unemcombered by bridles and carts. The farm always fails and the horse dies of starvation because no grain was harvested and the farmer eats the horse.
The root of the problem is that the wealthy have too much power and control. They are under the misconception that by reenforcing their advantages and resisting change that they will be able to maintain their wealth. I feel like they are caught in a trap like a monkey that is hanging on to a banana in a jar that they can't pull a closed fist out of. They won't let go of the banana even though the hunters are getting closer.
Wealth Gap:
I'm going to assume you know what I'm talking about when talking about the wealth gap. It seems to me that we are approaching a tipping point with regards to this. The wealth gap isn't bad because it is unfair but because once it gets too obscene then the economy will no longer work. They don't make 46" tvs to sell to 10 people they need to sell millions of them. I am in the upper middle class (maybe in the very bottom of the 10 percent) and my lifestyle is much better than JD Rockfeller or Howard Huges. They didn't have MRIs or big screen TVs or a cell phone or a million other things. What really matters is your standard of living.
It seems like the people in power would be more happy in the best mud hut in the neighborhood and extremely unhappy in the worst mansion on the block.
(This is where I wish I had all kinds of research to reference but I don't).
Historically mankind has seen the fastest growth in innovation when there has been a more equitable distribution of wealth throughout society. The Egyptians were probably the wealthiest and strongest nation for thousands of years. What did they do? They made several very impressive piles of rocks. They were a very rigid society with the Pharaohs and priests controlling most of the wealth. Where would they be today if instead of tombs and temples they had built schools and roads? Where would they be if they had seen the kind of technology explosion we have seen in the last 500 years? Would they be the single world government right now?
Science and technology is what has been driving the rising standard of living. Wealth equality is what drives science and technology. I bet Steve Jobs wishes someone had cured pancreatic cancer. All his money didn't find a cure. There are problems that need more resources than one person can bring to bear on it, and probably breakthroughs in areas of science that today seem totally unrelated.
The plan:
Convince the wealthy and powerful that the path we are on must be radically changed. It doesn't take Nostradamus to see that the endgame will be much worse for the wealthy than the poor. History has many examples of revolutions and typically the people in power don't fare well. I feel like it will be like teaching the Luddites that the machinery that was replacing workers now is actually setting them on the path to have a better life for themselves and their children and grandchildren. (I know this isn't exactly what happened with the Luddites but it is a good analogy) The people in power need to be shown that a little personal economic insecurity now will not only lead to a better standard of living for them in the future but might get them on a path that doesn't end with a mob and a guillotine.
Capitalism fixes:
Maximum Work Week:
Minimum wage is really dumb. I get that it's easy but it doesn't really help to redistribute wealth. We seem to watch unemployment very carefully but we don't seem to know how much labor we really need. What we really need is a maximum work week. Labor shortages have driven every boom. This is why war used to drive economic booms and don't anymore. The military just doesn't need the bodies it used to need to deliver bombs to foreign lands. Unions were good because it drove up the cost of labor. Unions were bad because they were run by people and people screw up everything. Knowing how much labor we need and how many eligible workers there are you can easily calculate how long the work week should be. I'm guessing we should be around 30 hours right now. Wages would go up as employers had to compete to get employees and they would have to offer benefits like pensions and health care. This could be recalculated every quarter and adjusted annually to give labor the power they need to demand wages making minimum wage irrelevant. It is crazy that we have half the people working themselves to death and the other half getting aid to eat.
Average weekly wage:
This number would be calculated from actual wages and used for taxes. A progressive tax that would adjust automatically annually based on what the average weekly wage was. There should also be a punishing estate tax. The first amount of money equivalent to 100 years at average weekly wage would be taxed normally and then at a rate of 90% or so after that.
No tax breaks:
Taxes should be punitive only. If you want to encourage wind and solar, tax gas and coal. You shouldn't give tax breaks or rebates for solar and wind. Tax the problem, there might be better solutions not just the ones you are giving breaks to. Getting rid of all tax breaks would simplify the tax code and you could still use taxes to influence industries.
Hey you made it here! Thanks for reading.
so basically welfare capitalism or even social democracy
About Keynes, and generally. Economists are the shamans of the developed world.
Internet shills are the evil daemons of the whole world.
I would prefer Democratic Socialism but......
Blair Phillips
Retired
Canada
Keynes is famous for saying that when the facts change, then his opinions change. (What do you do, Sir, when the facts change?). Keynes should rightly be famous for inventing the "macro" view of the world-economy, but the statistics needed to properly analyze it *such as what should be included in the money supply, how many workers are there, measuring imports, exports, the effect of taxes and tariffs, how much is being produced now, how much last year, and previous years etc, etc* took shape slowly. So, Keynes had a fine idea, but it couldn't come to fruition until a "relatively complete" set of statistics could be developed to adequately assess the "health and attributes" of any individual economy, and then analyze the dynamic interconnections between all the various countries of the world.
Today, the world has 197 or 198 countries, and the growth of the world population has long been slowing down. In the 1980s, the US fertility rate was 2.2 children-per-couple. But now women are waiting longer to have children, and having fewer children probably due to scarce jobs and meager wages. The US fertility rate is now *below* 2.0 children-per-woman, which is called the Replacement Rate, which means that the two children "replace" the two parents, which results in -0- growth in population. So, the world has been undergoing changes that economists were hard pressed to properly understand, and that rate of change has been recognized as increasing since the book, Future Shock, was published in the 1960s or 1970s.
Japan's GDP in 1994 was $4.9 Trillion, when it was a world-beater with new ideas just as Just-In-Time deliveries. But Japan's GDP has stagnated since then, and even today it's still roughly $4.9 Trillion, and that seems to be due its falling population. Japan has been using QE (unsuccessfuly) for years before the US started QE, and continued for years after the US "stopped" QE. However, the money supply is still bloated, but that can probably be blamed on COVID-19 pandemic.
in 1930s, Keynes knew that the US money supply had been severely reduced (due to multiple bank failures, caused by panics, i.e., bank runs) but Keynes never believed that that destruction of the money supply could've created such a widespread and uncontrollable effect. Keynes thought the problem was depressed "animal spirits", people simply didn't want to spend, but if you could get them to spend (as in government spending) everything would be OK. Today, many economists believe that Keynes' depressed animal spirits was a symptom, not a cause, and that deficit-spending in FDR's New Deal actually slowed the recovery. So, Keynes mis-diagnosed our ills, and we were prescribed a solution that was toxic.
Keynes ideas were of his time: the society and the economy under control of the State, Mussolini, Hitler and Roosevelt agreed with these ideas, sometimes called Fascism.
While you had only to read Keynes, Keynes was right. What you think is from no importance. How could you get him wrong, by not reading him. It's as simple, read the text and not the comments. Same for Nietzsche.
I am a Keynesian but I was born in the '50s and a middle class until reagan destroyed it. UK adopted a Tudor plan after kicking Rome out. Alexander Hamilton set US's industrial economy based on the Tudor plan according to Thom Hartmann. A democratic economy based on demand instead of supply side trickle down begat the 1st US middle class which had power and brought voting rights to blacks. That doomed the middle class as the rich tolerated a white middle class but they ain't gonna have no coloreds movin' into their suburbs!
The Industrial Revolution started in the Black Country of the English Midlands where coke made from wood was used to smelt iron ore and coal drove the machinery. Until WWII approximately million people were directly or indirectly employed in the UK coal industry.
Keynes believed n a mixed economy. He was a supporter of the Liberal party but his aim of full employment shared Labour values. He certainly didn't agree that the market is the answer to most economic questions.
Why is central control so attractive when evidence is that central control fails over and over. Is it envy driven? Or is it the arrogance of believing a complex system can be controlled from the top dowm.
Correct understanding of Keynes, very good, thank you.
My gosh, what sort of economic terra-planism is this?
Keynes is taken out of context so often that he would agree with nothing that has been done using his words as justification.
Did he actually mean kill the property owners or was euthanise a euphemism for dispossess?
Modern China does lot of what Keynes proposed
Or you need interest and inflation based money. The ideas of Gesell
Thanks from Ukraine !
What a shock. More Fabian revisionism.
Really enjoyed this video!
Glad you enjoyed it! If you want to check out more, this is from a huge conversation we had with him in 2016: www.ineteconomics.org/perspectives/blog/james-crotty-and-the-responsibilities-of-the-heterodox
The playlist is also available without text here: ruclips.net/p/PLmtuEaMvhDZaiIQUQbWWc5Qk98rdsklhM
@@NewEconomicThinking thank you
I would add that, in addition to the free labor [slaves] driving the British Industrial Revolution, there was effectively free energy [e.g., the kinetic energy of flowing water]. I don't see many people talking about the energy part of this equation. In modern terms, I would suggest the economic power of the UK during this period was predicated on what we would now see as two significant cost components of manufacturing being essentially zero.
Respectfully, I would disagree. Slave and indentured labour was in the colonies, specifically in the New World for mainly cotton and sugar. Slavery was never a source of production labour in Britain. The British population garnered the benefits of Industrial development within Britain during the 18th and early 19th centuries, and was funded by the profits of the colonies. The acceptance of Abolition occurred because industrial development has escalated to the extent that a transition away from it to industrialisation was economically tenable. But efforts to industrial production were limited to Britain. It funded the final transition to full enclosure of agricultural land in Britain, and urban population moves from country to the cities and towns to work within the mills, factories, and ironworks. There was hardly any industrialisation in the colonies, until Britain was trying to outrun its rivals in the late 19th and early 20th centuries, long after Slavery had been abolished, and those former slaves transitioned to day labourers in the colonies. It was established And it was restricted to Crown colonies mainly, Canada, South Africa, and Australia. Elsewhere it was limited to infrastructure and for resource extraction and agriculture. In fact, it is arguable that if the British Empire had industrialised more of its colonies, it would have been even wealthier. By limiting economic development largely to Britain, and maintaining protectionism through its imperial markets system, it impoverished those colonies and hindered their efficient operation. Was the cost of Slavery zero? Not really. Chattel property needs to purchased, housed, and maintained. Not only that, but the military and civil infrastructure supporting colonisation across the globe has to be paid for. Even India, was mostly profitable from the expropriation of its riches, taxation, tea, and protectionism. One finds that after that neither the East India Company nor the British Government who took over after the EIC went broke, could make India as profitable as it could have been if it had been industrialised.
@@BigHenFor I would point out the British Industrial Revolution was based on cotton. Until recently, growing cotton was very labor intensive. But cotton does not grow in the UK. The raw cotton was produced on the backs of slaves in the colonies. My point is not only was the raw material produced with zero labor costs, but the finished product [cotton cloth] was produced in mills using free energy [flowing water].
Not totaly sure what you are getting at.
LoL nothing free about it, slavery is antithetical to Capitalism read Adam Smith again. And that goes for physics too. No such such as free energy it take capital investment to turn flowing water into energy .
That's insane, you need to get yourself checked.
@@lloydgush ad hominem attacks are always a good counter-argument
Keynes Economics are literally the best most equitable way to implement into a society looking to progress without massive inequality.
If this is true and FDR was a Keynesian, it means FDR was a socialist which completely makes sense.
Did your little American brain just blow a fuse?
No, FDR was a capitalist and sought to save capitalism, however, he would not be pro the capitalism of today which is severely skewed toward the few , thus vastly dysfunctional and intentionally damaging, so that there remains a servitude class.
FDR was an American Pragmatist in the vein of CS Peirce.
@@rayevansharrell9773 …OK, but what does that mean per his economic platform❔
@@Arbognire There is lots on the internet on Peirce and Pragmatism but you need to realize that economics is a tool not a purpose. Keynes understood that when he tried to run a theater for his wife. He had to confront the psycho-pursuit of values in the human system and not just who gets ahead of someone else. Today's economists preach rather than solving societal problems and finding purposes in things like culture, religion, commerce, education, government, science and health. Instead they just go for solutions that only serve commerce and the rest falls apart. That's not pragmatism, nor is it what Hegal learned from the Iroquois and Lewis Henry Morgan. It is also not what Jefferson found when he tied liberty to birth. "the God who gave us life gave us liberty at the same time." Yet, the child is not free not matter how wealthy, the child needs education and competence to truly be free. Money does not make you free, it enslaves you until you die and hope someone will remember. Money is like any other energy source, it is what you choose to serve the whole with. That's what Keynes pragmatism meant to me. It wasn't whether he was this or that. You need both hands to play the piano and patterns are irrelevant if you have no music. Keynes' methods weren't working. No one's were. it ended up in genocide and mass death. Like Peter Drucker said:, think an orchestra not an army. Money is irrelevant if you can't play the music. Economics is not "purpose", it is a tool to do "purpose." Peirce learned something up there on the Delaware River living with that Gypsy woman who saved all of his stuff for us when he died when everyone else would have put it in the river and sold his house.
Marx was an amatuer economist
Wrong about lil Minty Milton too
As we were wrong about marx too
What a clown Crotty is.
Get to the point already.
Economists have to be the most frustrating people on earth. Economics is a field built on reliable failure. Economists, as a profession, can’t predict anything, can’t agree on the present, certainly can’t agree on the near past, and here we see have trouble analyzing the distant past. The only “successful” economists are those who step out of the profession and use their knowledge for self enrichment, usually in trading.
Here is a clue for you, economics attempts to develop understanding through relationship and formulas. The only way to study economies with a view to improving and preventing missteps is through agile, adaptive, iteration. In the engineering world this is called finite element analysis. I’ve seen this at work through a friend, who was an economist, and who, beginning in about 1975, you know the year when the West handed its balls to China in the Lima agreement, took a small lease finance firm whose biggest success was a $3 million mining dredge, in a small number of years to where they were financing Jumbo Jets for Qantas 6 at a time 1n 1.2 billion dollar deals. How was this small company able to win lease finance deals against all global players? through the power of iteration. Very pivotal the very first Jumbo Jet deal ($70 million) was evaluated on the fore runner of the XT computer, the IBM 51-10 computer. That particular computer and its progression is vital to understanding the present day.
James mentioned Keynes and working class housing (massive failures there), and that is vitally important right now where affordable housing has become a brick wall for the young of today. Zero solutions from today’s ideologies. The problem? Every one rich and poor are competing for products in the same market, a market that is structured as a luxury market where those with money get what they want, and what they don’t want they take anyway as an “investment”. Thinking Jared Kushner here whose company owns some 10,000 low end units.
For a different solution to affordable housing see www.cgrpt.com where what is proposed is a secondary property market organized for low income people and based on a special property title that delivers much lower cost properties and protects their value at a stable inflation linked (CPI) property title.
ELSE: the only solution to the West’s wealth excesses is through Trickle Down Economics. The only time in history when trickle down economics has worked for the betterment of the people en masse was from the French Revolution when wealth trickled down as those who had stolen the wealth of the nation were adjusted. Russia right now is a prime target for a time of adjustment.
Recommended further reading: Watch “Ready Player One”.
The 19th century was an incredibly prosperous period. For whom? Give me Scandinavian social democracy any day.
For pretty much everybody. Most people were very power but nowhere near as poor as they used to be. Scandinavian social democracy did not build the rich scandinavia we have today… and it is arguably the main reason why we are 2-4 times poorer today than we could have been.
Workhouses did not exist, children were not working in the mills and pits, industrial injury was rife, pollution was rife, water supplies were dangerous, waste was not effectively and safely cleared, healthcare almost non existent, education limited to little more than learning to read and write for most people. Transport was expensive, most people never moved more than a few miles, et cetera, et cetera.
These were good times, for a very select few.
And that's ALMOST the policy they took, they just didn't go as far as Keynes suggested, the Post war era was almost that just under the guidance of the rich and landed.
So long Jim
Isn't socialism the necessary intermediary step from capitalism to communism? Is communism to far left for socialists?
Great video.
In my economics 101 at Boston University in 1983 I was introduced to Keynesian economics. On being told that wages are perfectly inelastic until full employment is reached, at which point they become perfectly elastic, I raised my hand. "This makes absolutely no sense" I objected. Why was he ever taken seriously? Ever?
Exactly, anyone reading him now (if they know any history) should see he's full of krap. Of course the same goes for Smith & Marx, it could be said they're influential but mostly wrong.
Considering we only ever dealt with what economists call, "Bastard Keynes," and considering it was economics 101, it's easy to imagine you were misinformed. Bastard Keynes is based off a book about Keynes written by some guy who didn't understand Keynes.🤣This is why 'first sources' is a thing
@@bradbell4022 OK, in more depth then, did Keynes believe that moving wealth to consumption increases wealth, as though investment has no value? I'm pretty sure the legitimate Keynes did.
The only reason I can conjure is he was politically useful to the tyrannical-minded
What the response from your professor?
Slavery has been illegal in Britain since the Norman Conquest (1066).
Before that, the Anglo-Saxons had slaves, as did most countries - but not African slaves, of course.
The Slave Trade was actually implemented by private enterprise buying people already enslaved in Africa (through tribal conflicts) and transporting them to America to work in plantations.
In the late 18th century and early 19th, the British Navy was tasked with intercepting slave ships and sending them back.
Keynes - good friend of Ludwig Wittgenstein.
Keynes seemed to overlook the dangers of socialism. Wasn't he favorably impressed by socialist achievements in the USSR?
If socialism be dangerous, how can it have had achievements..?
Russia's problem was/is Russia. Socialism has been successful in many countries.
@@ohgosh5892 It's all a matter of perspective. To a Soviet socialist, one more dead kulak is an achievement. To the dead kulak, socialism looked like a bad deal right up to the final moment.
@@scambammer6102 I'm confused. Stalin wasn't Russian. The USSR wasn't Russia. Beria, Bush, Yezhov, and Dzershinsky weren't Russians. Either socialism works, to help everyone,or it works only for people who aren't in Russia or who aren't in Russia. That's a new idea for me. Pls explain or refer me to other sources.
@@arturosuarez-silverio5983 different countries have different experiences with socialism and everything else. This is obviously beyond your grasp. Enjoy the stupid life.
It worked so well for the British car industry. Control freaks destroy everything they touch.
And the us car industry
Question: What do you need full employment for? Employment.. labor.. is a means to an end. Nobody wants to labor just for labors sake.
Nobody wants nothing to do, either.
@@ohgosh5892 What is the goal of working? What do we work for?
What would you say if I told you that our productivity is so high, that for a contemporary middle class lifestyle it takes about 8 hours per week of work to achieve it?
You think you'd have a use for the other 6 days of the week you don't need to work for that lifestyle and could do something with that time, that you like more than working (without getting on the nerves of the people around you)? Hm?
@@ohgosh5892 Not sure about that one. A small minority just might. Anyway, you might do as you like, if it wouldn't be for that specific kind of people, whose work should be considered damage. If you look at the current western economies, my take on it is: at least 30 % maybe up to 60 % is for recreational purposes, some of them extremely damaging. Some people should be chained in their chairs with a stack of books at their side, so they don't produce/consume drugs or cause outrageous injuries and energy consumption while executing their fancy sports.
Keynes was a 19th Century intellect who NEVER had to work a day in his life. Not that he was one of idle rich, but the idle rich were his neighbors. His economic theories are the Apple II of computing, in a smartphone world that lives in 5G on the electronic superhighway. The world that produced Keynes is a relic of the distant, if not ancient, in computer terms, colonial past.
Not true
@@21dolphin123
Really? Which part? That he was born into great wealth, or that he never had to work? He was born in 1883, nearly 17 when the century changed. My great-grandmother was born nearby in 1886. She never grasped the totality of the late-20th Century, bright and educated as she was. I'm in my 70s, and easily as distanced from the realities of the 21st Century. My sons are in Keynes' position, a part of this time, but already being left behind in the tech race to infinity.
Sorry if I snubbed your hero, but he has feet of clay, like any other idol. If you can't see a need for a new economic model, just wait for the surprise waiting in the wings. You'll come around, long before I'm "proven wrong"!
So, is the Professor's argument, essentially, that Keynes is used to legitimate capitalism, when in fact he saw capitalism as likely to create crises it can't fix?
no
@@scambammer6102 It sounds like he's saying (as someone below suggests) that we often focus on Keynes' justification of state spending during economic downturns, and taking on debt, but ignore his general observation that capitalism isn't self-repairing, and some of his other, more radical ideas?
An interesting series of "switcheroos".
Brilliant.
Hitotsubashi Bridge is a pons assinorum 😅
I have heard that by the end of the 19th century, half of all manufacturing production in the world is in the US.
If you thought Keynesian economics was anything more that a complex version of the "Broken Window Fallacy" then yes, you were wrong.
Keynes declared eugenics to be "the most important, significant and, I would add, genuine branch of sociology which exists."
Yeah and Walt Disney was a weirdo and Henry Ford was a huge bigot and anti semite
@@danlhendl They were also big eugenicists. That's where h# got his eugenics ideas. This whole tran humanist push isjust eugenics rebranded
Darwinism was intellectual robbery written for the capital/aristocrat class in that era.
Was he wrong?
Tu quoque this be. arrggghh Im a pirate.
Sounds like you know nothing about Sraffa. Also read Steedman, Marx after Sraffa.
Also, you know nothing about the biparty (as opposed to triparty) eurodollar. Check out Jeff Snider's Eurodollar University blog. Here are current questions:
1. What are direct measures (as opposed to proxies) for biparty eurodollar?
2. What is notional outstanding biparty eurodollar?
"We're all Keynesian's now" - Milton Freidman
In a kind of “knock-off” way, maybe, apparently.
@@kmcq692 or you could just google and see what he meant
The real source of underserved inequality of distribution is the Cantillon effect whereby those closest to the new money spigot get all the benefit at the expense of those further down the trading-exchange chain. I think one should generalise Cantillon to include the spending of money by the government (previously concentrated to it via taxation). I would also generalise to any centralised money disbursement system. Those closest to those money spigot benefit disproportionately. It is one reason why all our institutions (eg. universities and the UK National Health Service) have bloated administrations dictating to, and impoverishing, the actual workers rather than serving them.
The demographics of the mid to late 20th century and now in 2020's, is showing an exponential fall in population, which affects not only employment like it was pre ww2 and then afterwards in the late 50's and into the 60's but also trade.
Mankind is collapsing.
No political shenanigans that I have witnessed has any clue as to what to do next, so it looks like the leadership (professional liars club) are lining their vaults with the proceeds of the final collapse and retreating to their bunkers, besides all this, the era we call the digital age is artificial, just as it has always been and that is 'created' not reality, simply because not one single 'cognosentient being' who reside in any institution of authority has any idea what reality is.
There is no manual to existence, life, living or the future, because every millennium throws up the sickness of the populous that drags itself into another try.
I say again, there is no manual.
"So what do we do about this dilemma Tom?"
That is the question that no one can answer.
Love always
It also impacts the whole of social care; with an ageing, bigoted, population, encouraging inward migration is difficult. This result in a lack of tax revenue to pay for pensions, healthcare and so on, in spite of the ever increasing costs. For tories, this is a reason to scrap social provision.
@@ohgosh5892 Bigoted?.....
Look at how wrong Keynes was about the economy and socialism when his theory of government monetary expansion in the US being necessary after the end of WW2.
His theory they supported the continuation of massive deficits after the end of the war because roughly 13 million who served overseas during the conflict were returning home and would need jobs which did not exist so unemployment would follow. The fact is despite this fear government ignored his warning then cut their massive budget by almost half and the feared unemployment did not even result but the economy boomed.
It was a massive punch in the face to his theory.
Nobody interested in economics should be unaware of this failure of Keynes theory.
Dude. Wtf do you think happened in post war US? You think its economy grew the way it did with out monetary expansion? Credit is credit. Maybe reread ole mr. keynes. After that slap a Neo in front of it and read a bit of that. If you’re gonna argue, at least argue with people who lived in your own century.
@@williambrasky3891 What was the government induced monetary expansion after WW2. You seem to know but maybe not.
The facts are the balance sheet of the Fed fell in the period after ww2 and that continued for several decades until leveling out in 1984. That means less borrowing by government from the Fed . The Federal deficits also fell to a few percent from 1947 for the whole decade and did not rise much until the 1970's .
Of course the money supply grew but that was private sector borrowing which resolves itself withing the private sector to be a net result over time which contrasts with government expansion via the Federal reserve money creation process which is always a debt obligation for the private sector alone.
@@williambrasky3891 Which century do you think i lived in? 20th. 21st? mostly what?
It matters nothing what century we live in in regard to understanding the principles of the way the economy operates. Do you really think that the date on a calendar makes any difference to economics or any science. Is that what you are getting at? If anyone does then their state of mind is just badly skewed.
What was the difference between Keynes' proposal and Stalinism?
Trolling? Or Asking? Keynes never promoted forced labor, Stalin filled his gulags with forced laborers. Keynes never advocated collectivism, Stalin enforced collectivism. Now you know!
@@Misophist Centralised control of the economy amd state plans are common to both. Forced labour and gulags are merely implentation details.
@@parrotraiser6541 Not at all. I suggest to look up "Planned economy" in Wikipedia, so you are sure, that I'm not making this up.
In short, the mechanism suggested by Keynes do not even make sense in a planned economy, they are utterly without purpose there. In a planned economy, price and number of the products, are matched to the perceived need and are fixed in plans, beforehand, as well as the wages made available to the workers.
Contrast this with Keynes, whose rules are applied to market economies, where prices, wages, and amount of products are negotiated between consumers, producers and employees. Keynesian policies influence the market by adjusting the market balance with a collection of tools, such as: causing additional demand, when demand is lacking for fear of recession, restricting public demand, when approaching full employment, influencing the interest rates, in order to spur or curb investment and inflation as needed.
The bane of Keynesianism is, that it works 'a posteriory': the actual state of the economy has to be evaluated, the measure to be taken. The timelag until the effects set in cause problems. But in essence, _there is no plan_.
Conversely, planned economies work 'a priory'. The plans are fixed, maybe based on the results of the previous cycle, but essentially before any of the products is even placed as an order to the producer. This is an even tougher, hard computational problem, that soviet economists and scientists never managed to solve.
So the economic systems are really different, even before we start speaking about the political system.
Both types of economy may exist in despotic hellholes as bad as North Korea (planned economy) or Iran (market economy), as well as in free democratic countries: most western countries are market economies, while Chile in 1970-1973, was a rare example of a democratic planned economy, before Pinochets coup d'etat turned it into a gangster paradise.
The examples given demonstrate, that in the manifold of human societies, the dimensions 'economic system' and 'political system' are orthogonal, and can be selected independent of each other.
Isn't Information Technology and its implications for industrial production, warmongering, social control etc. as much a "transformative" revolution as railroads? Also population is steadily increasing in the US (although there is a decline in the rate of increase) even if it's not in other western countries.
population is not increasing in the US other than through immigration, and it will continue to decline
@@scambammer6102 True, but is the source of the population increase relevant? As long as brain and muscle power keeps feeding the industries, does it matter for those in control whether it's produced locally or imported? US has a history of strategic immigration policies.
It is very misleading when one speaks about the '1700's' and the '1800's', when referring to the 18th and 19th centuries. In the former terms, the speaker could mean either centuries OR decades!
Did Keynes ever meat Stalin ?
Keynes is not a socialist.
Keynes literally said he envisioned liberal socialism.
@ML6103 “The class war... will find me on the side of the educated bourgeoisie.” - John Maynard Keynes
Keynes’ efforts were motivated by a strong desire to maintain the liberal capitalist order, yet he sought a compromise.
"Whilst, therefore, the enlargement of the functions of government, involved in the task of adjusting to one another the propensity to consume and the inducement to invest, would seem to a nineteenth-century publicist or to a contemporary American financier to be a terrific encroachment on individualism, I defend it, on the contrary, both as the only practicable means of avoiding the destruction of existing economic forms in their entirety and as the condition of the successful functioning of individual initiative." - John Maynard Keynes
Why is there this desire to deny the importance of Keynesian theory coming from the political right? Perhaps it is precisely because monetary policy is necessary to ensure aggregate demand is neither excessive nor deficient. Monetary policy is state intervention: by setting a market price, an arm of the state ensures the macroeconomy works. When this particular procedure fails to work, in a liquidity trap for example, state intervention of another kind is required (fiscal policy). While these statements are self-evident to many mainstream economists, to someone of a neoliberal or ordoliberal persuasion they are discomforting. At the macroeconomic level, things only work well because of state intervention. This was so discomforting that New Classical economists attempted to create an alternative theory of business cycles where booms and recessions were nothing to be concerned about, but just the optimal response of agents to exogenous shocks.
I would argue that Keynesian theory is not left wing, because it is not about market failure - it is just about how the macroeconomy works. On the other hand anti-Keynesian views are often politically motivated, because the pivotal role the state plays in managing the macroeconomy does not fit the ideology.
"Fascism entirely agrees with Mr. Maynard Keynes, despite the latter's prominent position as a Liberal. In fact, Mr. Keynes' excellent little book, The End of Laissez-Faire (l926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud." - Benito Mussolini
Keynes also argues that it is "preferable" to regard labour as the sole factor of production. According to Keynes, the purpose of capital is to provide the 'environment' within which labor can become productive, i.e., 'create jobs.' Thus, the more capital there is, the more jobs should be created.
For some strange reason, however, it doesn’t seem to work out that way. As more capital is added, jobs start to decrease. As this amazing paradox works its bizarre magic, you can actually end up with an environment in which there are no jobs at all!
The paradox is easily resolved, however, the moment we realize that capital is productive in the same way as labor. By that I mean that capital doesn’t merely provide the 'environment' within which labor becomes productive but can - and does - produce marketable goods and services in tandem with, or independent of direct human input (labor).
That being the case, it necessarily follows that as capital becomes more efficient and cost effective than human labor, human labor will be displaced by capital . . . which leads to a problem. Say’s Law of Markets ceases to function.
To summarize, Say’s Law is that production equals income, therefore supply (production) generates its own demand (income), and demand, its own supply. Reading an expanded explanation of Say’s Law (as in Say’s Letters to Mister Malthus), we realize that Jean-Baptiste Say simply assumed that if your labor was displaced by advances in technology, you would purchase the new technology to generate income, instead of being limited to labor alone.
Both sides of Say’s Law are essential, because you have to take both production and consumption into consideration. Focusing only on either production or consumption is a disaster for an economy, given Adam Smith’s first principle of economics from The Wealth of Nations: 'Consumption is the sole end and purpose of all production.'
@@DrSanity7777777 "The paradox is easily resolved, however, the moment we realize that capital is productive in the same way as labor. By that I mean that capital doesn’t merely provide the 'environment' within which labor becomes productive but can - and does - produce marketable goods and services in tandem with, or independent of direct human input (labor)."
This is incorrect. Capital is incapable of producing anything without labor.
@advisorrook "independent of direct human input" simply refers to automation. Yes, labor is the primary agent in supplying human wants; even the spontaneous productions of the earth cannot be utilized without it.
"Labour was the first price, the original purchase - money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased." - Adam Smith
The only manner in which man can act upon nature is by motion. In this respect John Stuart Mill observed: “Man moves a seed into the ground; he moves an axe through a tree; he moves a spark to fuel; he moves water into a boiler over a fire; the properties of matter do the rest.” In other words, “This one operation of putting things into fit places for being acted upon each other by their own internal forces is all that man does, or can do, with matter.”
The problem, of course, is that economics is defined as 'a social science concerned with the production, distribution, and consumption of goods and services.' Socialism (and its evil twin capitalism . . . unless you’re a capitalist, then socialism is the evil twin), however, assumes that all production is due to labor - 'productivity' is, after all, defined as 'output per labor hour' - so the only problems that need to be addressed are distribution and consumption, mostly consumption.
Louis Kelso, investor of the ESOP, discovered a vital fact that the classical economists had somehow overlooked. This fact was the key to understanding why the private property, free market economy was notoriously unstable, pursuing a roller coaster of exhilarating highs and terrifying descents into economic and financial collapse.
This missing fact, which Kelso had uncovered over years of intensive reading, research and thought, drastically modifies the classical paradigm that has dominated formal economics since Adam Smith. It concerns the effect of technological change on the distributive dynamics of a private property, free market economy. Technological change, Kelso concluded, makes tools, machines, structures and processes ever more productive while leaving human productiveness largely unchanged. The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.
The technology problem exposes a flaw in the capitalist system. Capitalism, as it is currently practiced, tends to separate capital and labor. Companies provide the capital (i.e. the buildings, machines, tools, etc.) and employees provide the labor. Most people support themselves financially through employment, as opposed to business ownership or investment income.
The problem with this is that it creates a entire class of non-owners. When disruption strikes, employees suffer the consequences. They have no choice but to continually strive to make themselves useful. But despite their best efforts, many workers find that they are indeed replaceable.
When capital and labor are separate, profits tend to be prioritized over people. The less expensive option will always win, even if it means eliminating jobs or shipping them overseas. But when capital and labor are united in worker-owned enterprises, then new technologies can be applied wisely and in ways that benefit the community.
Without ownership, technology threatens our livelihood. With ownership, technology has the potential to make our lives better off. When capital (aka technology) is successfully employed, it makes our lives easier because now we can work less. However, we only benefit from this if we are owners of that capital and receive a portion of the profit that it creates. So when people argue about the merits of labor-saving technology, they are really exposing the vulnerability of the traditional employment contract.
"In his discussion on slavery Aristotle said that when the shuttle wove by itself and the plectrum played by itself chief workmen would not need helpers nor masters slaves. At the time he wrote, he believed that he was establishing the eternal validity of slavery; but for us today he was in reality justifying the existence of the machine. Work, it is true, is the constant form of man's interaction with his environment, if by work one means the sum total of exertions necessary to maintain life; and the lack of work usually means an impairment of function and a breakdown in organic relationship that leads to substitute forms of work, such as invalidism and neurosis. But work in the form of unwilling drudgery or of that sedentary routine which... the Athenians so properly despised-work in these forms is the true province of machines. Instead of reducing human beings to work-mechanisms, we can now transfer the main part of burden to automatic machines. This potentially... is perhaps the largest justification of the mechanical developments of the last thousand years." - Lewis Mumford
@DrSanity7777777 Automation doesn't even happen without labor. You can't make a big enough pile of money that it will spontaneously create machines. Automation is built- and maintained- by labor. Capital does not produce anything by itself.
As an economist I of course read Keynes during my undergraduate years, but unlike many I also read him in the original.
The issue of Keynes is a simple one. Leaving aside his injunction to pump rime an economy at the n=bottom of a depression when fiscal and monetary policy are relatively ineffective - hence the need for direct employment schemes - Keynes was crystal clear about the debt cycle.
He insisted that the debt undertaken by government to finance direct labour and related stimulatory project intervention be REPAID during the FOLLOWING UPCYCLE in FULL, such that, at the end of the following economic cycle maximum, and not after during the downswing - that incurred debt was entirely REPAID.
Find any socialist on earth, of any stripe, who does or advocates doing that!
I have never found one, nor heard one accept it.
Thus money value degrades, capital degrades, and economic activity is distorted and damaged. Human relationships are perverted.
Unsound money from unrepaid debt poisons everything it contacts.
And the debt mountain becomes what it is today.
Beyond grotesque, and as interest rates rise, uttering a budget becomes all but impossible without slashing immense quantities of state social and other spending. Hence political paralysis that is seen in the US Congress.
Now, centre-stage Aristotle, a mere 2500 years ago, who connected this corruption of debt issuance to the seven distinct cycles of a society moving from impoverished autocracy through mass universal suffrage democracy, which itself forces corrupt 'politicians to always offer debt fueled pork barrel politics - finally leading to gross instability and collapse.
Look at Britian now for the best example I know of that dismal reality. Proceeding before our eyes to simple ungovernability by democracy and accepting the vicious reality of populism and autocratic cultural social and economic violence.
And ask any socialist politician there to acknowledge the Keynsian injunction.
But do not hold your breath.
As far as I understood, Keynes never labeled him self a socialist. A term, that has a very specific meaning in Marxist theory, but is also reused by conservative authoritarians for shaming everybody who is not bowing to the demented idea of the 'invisible hand' and the 'laissez-faire' approach to economy, as brought on by Adam Smith, then recanted by Milton Friedman, and recanted again by the Neoliberals. The real connection between 'socialist' governments and Keynes is, that some of the actually sported ministers and central bank leads, that understood Keynes well enough, to at least try to implement the suggested policies. I place 'socialist' in quotes, because parties like the SPD (Germany) or Labor (Britain) are not exactly 'socialist', some are not even close.
@@Misophist Obviously he did not! That is my entire point!
Wake up. And stop trying to patronise. it is childish.
Your definition of socialist is sectarian, and frankly pretty silly as well.
@@terencefield3204 ??? It's not my definition, and given the number of people, that throw it around as an insult against anything that has the word 'social' in it, without even so much as knowing the difference, it has become rather useless. So what?
The observation is simply, that it has become a deplorable habit of right leaning/conservatives/neoliberals, to denounce any sort of government control over trade and economy as 'Socialism', to scare people. OTOH, for the lack of words: 'left-leaning' using the American map - you'll find a lot of people understanding Keynes objectives, and _some_ of them are actually calling themselves socialists.
It's hardly sectarian, to recognize this.
@@Misophist the deplorable habit of the left is to lie about the central observation of Keynes. You choose to define socialist in some arcane way; your problem, not mine.Deal with the simple matter under discussion here, not your arcane version of definitions.
@@terencefield3204 OK. Ignore the fact, that I didn't pick a particular definition for 'socialist', so it might be really difficult to know which one it is, that it is 'arcane' - instead, let's go with yours, that should be the safe and sound one: Would you please explain in your words, what are the unmistakable signs of a socialist, so that we are on the same page?
And further: would you please explain, what you mean by 'lie about the central observation of Keynes'
Austrians would vehemently disagree with this and rightly so.
Not sure that they've won the right to speak loudly regarding their beautiful accomplishment.. remember the Von mises explanation of 29 crisis ? How Hayek managed the Mont Pellerin ?
Yeah let's do the spontaneous order and make everything in competition because centralization is bad by principle. cannot be a faillure.. oh wait
Kinda spreads the risk though doesn’t it? Lots of smaller failures rather than one deathblow is central control gets it wrong. Unless you envision some sort or perfectly self-correcting progressive consensus.
There is validity to an Austrian critique - without market discipline what's to prevent this national investment board from massively mal-investing on poor quality projects?
@@torpedospurs yeah and how to inpose this so called market discipline ? We saw a retreat of the state functions and the result is a era au fraud. Not to say that gov is the solution to all. But it's clearly a falsh way to view the world
@D R Well neither Keynes nor the Austrians would want to do that. The politicians will do it no matter what.