The Return of the Very Cruel Economic System

This chapter is divided into three sections.  The first section examines the origins of the neoliberal policy consensus at the OECD.  The fist major rupture in the hegemony of the Keynesianism (neoclassical synthesis MKI) at the OECD came with the publication of the McCracken Report in 1977.  Some left critics have come to regard the Report as the first truly neoliberal policy document sponsored by the OECD.  I intend to challenge this interpretation somewhat by arguing that the Report is better understood as a rupture in the Keynesian consensus and not necessarily a fully worked-out alternative and certainly not evidence of a coherent neoliberal paradigm.  The second section, attempts to clarify the relationship between monetarism and neoliberalism.  After a brief theoretical presentation, I will then examine the conference proceedings from the 1978 Boston Federal Reserve’s After The Phillips Curve: Persistence of High Inflation and High Unemployment conference.  This conference is interesting because within its proceedings it is apparent the degree to which Keynesians like Robert Solow and Barry Bosworth (more so) were beginning to cross over from the demand to the supply side.    The third section examines the OECD Jobs Study released in 1994.  I argue that the publication of this document signals the hegemony of the neoliberal policy consensus.

The rest can be read here

Trying to get burned at the stake: heretical Easter edition

Me, I like heretics.  Sure hanging out with heretics and being a heretic is fraught with danger: a certain tendency towards a merely reactionary or contrarian stance, a pension for wasting time by reinventing the wheel and merely convincing yourself that a perfectly round shape really is the optimum form.  But often there is something to be learned from reverse engineering models and propositions.  Many economists like to argue that workers and consumers ultimately pay for corporate taxes either in lower wages and higher prices or both.

read the rest here

Discredited economics and the revered economist

In the wake of the financial crisis of 2007-2008 there was much talk from within and without the economics profession about what went wrong.  Many on the outside of the profession viewed the crisis as the result of the slavish devotion of policy makers to the advice of academic and private sector economists.  The outsiders continue to be astonished that economists are taken seriously any more.

The rest of this post is here.

I can’t spell: the phonetic problem with homonyms

I can’t, and it has gotten worse.  Sure I used to get my i’s and e’s backwards frequently but the difference between there and their or lose and loose almost never.  It is now a pathological subterfuge on my part.  I can only beg my readers’ forgiveness.  Technically, though, I don’t think I am having spelling problems because I am spelling the wrong word correctly.  Something deeper has gotten fried.  I wonder if it is the French language training and immersion.  Perhaps it is a deep reversion to phonetics.

Thanks for the comment on the last post.

Gallery

Mulcair Wins. Who Loses?

It is official the NDP now has a former Liberal as the head of their party.  Not so bad.  The Liberals have a former dipper as the head of their party.  I think the loser in all of this is Canadians who are not conservative.  True the distance between the major parties, on economic policy, has gone from wide to vanishingly small over the last 30 years.  Recall that Layton ran on balanced budgets the day after the crisis.  From a social cultural perspective there is now almost nothing that separates the Liberals from the NDP.  Under Mulcair the NDP’s foreign policy stance will go in a hawkish direction if his position on Israel (right or wrong) is anything to go by.

What, then, keeps the two parties from merging?  Technically, at this point, nothing save for history.  There are simply too many Dippers and too many Liberals that cannot contemplate a conversation let alone a merger.  My prediction is that the NDP and Liberals will continue to fight over official opposition status.  The irony here is that neither party under their existing leaders is sufficiently different at this point to sustain the façade of choice between centre and centre-left.  The centre left has collapsed.  It would be remiss to blame Mulcair for this.  He is simply the recipient of exhausted social democratic (and nationalism in both English and French Canada) fortunes.

Gallery

The ubiquitous economist, the media, and Plato

It is odd.  No other discipline in the social science gets away with being considered by the media as a jack of all trades as the economist does.  Think about it.  If you go to a neurosurgeon with a question about pancreatic cancer he or she may giggle but they will not answer your question.  Why would you ask an econometrician about say for example a provincial budget?  You would think at the very least the journalist in question would ask if there expert really was an expert in the field of public finance. It is pretty easy to figure that out.  Go to their website and look at their CV and try to answer a series of simple questions:

Does the economist in question of the relevant training in public finance?

Did they write their dissertation on public finance?

Do they teach courses on public finance?

Are any of their peer reviewed papers on public finance?

Do other experts in the field of public finance consider them to be experts on public finance?

I would humbly suggest that the economist in question needs to score at least two out of five on the questionnaire.  And it won’t take any more than 30 minutes of your googling time to get the picture.

If the only answer that you can come with is he or she must know more than yourself because they are a prof and you are not then what you are probing is rhetoric not a considered effort at the truth of the matter.  Punditry, in short.  Which is fine, but then introduce your favourite ubiquitous economist as a pundit not an economist.

So here is one of my favourite passages from Plato’s the Gorgias:

Soc. But if he is to have more power of persuasion than the physician, he will have greater power than he who knows?

Gor. Certainly.

Soc. Although he is not a physician:-is he?

Gor. No.

Soc. And he who is not a physician must, obviously, be ignorant of what the physician knows.

Gor. Clearly.

Soc. Then, when the rhetorician is more persuasive than the physician, the ignorant is more persuasive with the ignorant than he who has knowledge?-is not that the inference?

Gor. In the case supposed:-Yes.

Soc. And the same holds of the relation of rhetoric to all the other arts; the rhetorician need not know the truth about things; he has only to discover some way of persuading the ignorant that he has more knowledge than those who know?

Gor. Yes, Socrates, and is not this a great comfort?-not to have learned the other arts, but the art of rhetoric only, and yet to be in no way inferior to the professors of them?

Soc. Whether the rhetorician is or not inferior on this account is a question which we will hereafter examine if the enquiry is likely to be of any service to us; but I would rather begin by asking, whether he is as ignorant of the just and unjust, base and honourable, good and evil, as he is of medicine and the other arts; I mean to say, does he really know anything of what is good and evil, base or honourable, just or unjust in them; or has he only a way with the ignorant of persuading them that he not knowing is to be esteemed to know more about these things than some. one else who knows? Or must the pupil know these things and come to you knowing them before he can acquire the art of rhetoric? If he is ignorant, you who are the teacher of rhetoric will not teach him-it is not your business; but you will make him seem to the multitude to know them, when he does not know them; and seem to be a good man, when he is not. Or will you be unable to teach him rhetoric at all, unless he knows the truth of these things first? What is to be said about all this? By heavens, Gorgias, I wish that you would reveal to me the power of rhetoric, as you were saying that you would.

Gor. Well, Socrates, I suppose that if the pupil does chance not to know them, he will have to learn of me these things as well.

Soc. Say no more, for there you are right; and so he whom you make a rhetorician must either know the nature of the just and unjust already, or he must be taught by you.

Gor. Certainly.

Anyway I realise I have lost my audience by this point, but on the slim chance you are still here, will you just please read it again.

Dutch Disease and Oil

CBC’s the Current had an excellent segment on Dutch Disease and what to do about it.  The set-up was quite good.  First they interviewed an economist about what Dutch disease actually is and to what extent it applies to Canada.  Then they interviewed my favourite gliberal economist.  His response was boilerplate: there was ‘nothing to be done’ (Lenin’s mirror).  Then the Current did something really interesting, they actually interviewed an expert.  You know, someone with the relevant training for the subject at hand and with direct and detailed experience: one of the architects of Norway’s oil sector.  Imagine that.

The interesting point he made is that revenue generated out of the resource sector (and Norwegian government generates as a percent of the total take almost more than anywhere else) and plough some of it back into productivity enhancing investment in other non-oil related sectors of the economy.  All very standard anti-staples trap theory thinking.

http://www.cbc.ca/video/news/audioplayer.html?clipid=2210373565