The problem of Capitalism

You still have no content. To understand capitalism it would be folly to ignore Marxism. Indeed, orthodox labour economics has had to adopt Marxist ideas to explain phenomena. It's a little obvious that we should refer to all schools of thought: from Marxist to Austrian.

The problem you have is that you're banging on about human nature, but failing to recognise that- once human nature is genuinely considered in economic analysis- it typically derives heterodox outcomes consistent with left wing thought. We see that with the application of economic psychology, providing a more detailed account of the utter foolishness of the 'first best' optimality of the free market.

 

This is a ridiculous comment. The only aspect of Keynesianism proved wrong was neo-Keynesianism based on IS-LM and the Phillip's Curve. Of course that also had nothing to do with Keynes.

And Hayek's contribution? Other than the socialist calculation debate, we have very little impact. He did help to inspire Thatcherism, but that led to quadrupling of unemployment and destruction of the industrial base. Simple concepts such as hysteresis in unemployment destroy any chance, for example, of a coherent Austrian understanding of labour markets.

 

Stagflation proves Keynes' theory is wrong.

And it was Mises that proved the socialist calculation problem.

 

Also ridiculous! Stagflation, for example, is easily understood within the post-Keynesian perspective (which arguably is much closer to Keynes' analysis than the neo-Keynesian nonsense. A nonsense which merely attempted to ensure consistency with orthodox microeconomics). You've merely referred to what I said: neo-Keynesianism, based on IS-LM and the Phillip's Curve, was only demolished. Of course most Keynesians are happy with that!

You miss the point. That was his only real input. Of course he actually did the socialists a service. They easily embedded his concepts of distributed and tacit knowledge within a market socialist context.

 

Keynesianism is just an excuse for government corruption. Instead of buying votes and paying back supporters they're "stimulating growth" with government spending.

 

This is a soundbite of no merit. Real corruption is seen in areas such as the Military Industrial Complex, as nicely detailed by the modern liberals. Capitalism is prone to economic crisis. To ignore that is folly.

A healthy economy of course generates positive electoral outcomes. However, that's a spillover. You ignore the business cycle and you destroy human capital. You destroy human capital and you force the economy into an inferior equilibrium. 'Free market economics' is destructive for the many, but a godsend for the 'elite' few (as illustrated by the extreme inequalities it creates and the utter stupidity of 'trickle down')

 

The military industrial complex is Keynesianism in action. Government intervention causes the business cycle. Prices are signals that entrepreneurs read to make decisions. When the government manipulates the interest rate, which is a price, it causes malinvestment which eventually results in the business cycle. Governments have always helped the elite at the expense of the masses, and you are just giving them more justification for doing so. The only way to help the common man is to take away the power from the state.

 

You can say that I "don't understand Communism" and I agree
Who wants to.
And I am not much into Adam Smith's Wealth of Nations either.
What I do like is the full expression of
private property
genuine suffrage
genuine political choices
liberal thought.

As seen in Western Europe, America, Australia and now emerging
developed nations of Asia - this "liberal democratic" philosophy is
the one most of the world's poor vote with their feet to live under.

 

The use of armed-force is a bit more subtle than that. I doubt the powers-that-be ever really-'n-truly loved the same family that has run Saudi Arabia since the get-go of oil-findings in 1938.

But Uncle Sam needed the oil, and Europe now does as well - even more so than Uncle Sam.

So, why is the West being so indulgent to the family thought responsible for the murder&dissection of Jamal Khashoggi, a prominent Saudi dissident, given so much protective support?

Because it is a key energy-supplier ... !

 

You continue to make very basic error. Military Industrial Complex analysis is based on influence costs and constructed around liberal political economy. It is essentially a call for accountability, given 'greed' leads to rent seeking behaviour. The closest you'll get to Keynesian comment is the 'Military Keynesianism' of Reaganomics. However, Keynesians do not support such expenditure as they acknowledge that military expenditure is less effective at demand management.

Its these type of comments that only show what a sham 'free market economics' really is. Business cycles are a natural part of capitalism. Government can, however, achieve two aspects. First, reduce the peak and trough. Second, eliminate the risk of being stuck in an inferior position.

Get the Austrian guff right. It is a means to avoid error associated with distributed knowledge.

If you bother with economic history, you'll notice that instability has intensified through 'free market economics'. That instability reflects rent seeking outcomes that are allowed to run riot.

 

You need to think 'bigger'. I've stated that you don't understand Marxism, nor do you understand how economic psychology leads to an emphasis on heterodox economics alien to the assumption-ridden textbook nonsense required for 'free market economics'.

Adam Smith's egalitarianism would certainly be inconsistent with your stance.

Still no economics here mind you! Private property, for example, is consistent with market socialism. Indeed, taking an Austrian perspective, it actually is consistent with the protection of property rights (i.e. democracy within the firm ensuring that labour receives the value of their endeavour).

This really doesn't say anything. We know that poverty is lower in liberal democracies, in comparison with 'free market economics' Anglo-Saxon economies.

 

Business cycles are caused through government intervention in the free market through the mechanism I briefly explained. The state cannot reduce the peak and the trough through interventionism because it is that very intervention that causes the peaks and troughs. The Keynesian theory of the business cycle being caused by demand decreases is easily disproven. In every recession the industries that experience the biggest dips are always those farthest from the final customers. Retail, for example, barely takes a hit during recessions. Like I said, Keynesianism was disproven long ago for very simple reasons such as this.

 

You start with a clear red herring. There is no such thing as the free market. Capitalism itself evolved through intervention. The only question is the optimal rate of interventionism.

There's only soundbites in your comments. Let's set you a task. For general Keynesian analysis, reject hysteresis effect in unemployment. For more specific Keynesian analysis, reject cost-plus pricing. Good luck!

 

I accept your concession of the argument.

 

A very weak dodge. You stated that Keynesianism had been rejected. I've made two simple requests. Can you reject hysteresis effects in unemployment? If you can't then demand management is key. Can you reject cost-plus pricing? If you can't then you have to accept that Keynesianism can predict both stagflation and economic crisis.

Try!

 

Yes. And some who sit around thinking can defend their thoughts against criticism, and others can't. The ones who can are responsible for all human progress. The ones who can't are responsible for impeding and even reversing human progress. You are one of the latter. That's why you have decided you had better attack me personally, by calling my commitment to justice into question. But your consistently despicable blame-the-victim filth puts the lie to your claims of lofty motives.

 

The discussion between you and 'Liberty_One' shows the contradictions inherent in classical liberalism -
the idea that the individual is supreme.

An international rules-based system would be the rational means to manage international affairs, obviously.

But rationality in the international sphere, consistent with our co-operative and creative capacities, has yet to be attained.

[For an explanation of this sad reality, see "the human condition" described at:

https://www.humancondition.com/

The promise of a transformed world is held out].

Historical background re development of international law:
In 1946 Dr. Evatt among others resisted adoption of the veto in the proposed new UN Security Council, but he lost that debate owing to great power rivalry, along with classical liberal theory positing individual liberty (and absolute national sovereignty) over rule of law, resulting in the reduction of the UN to observer status - with the US acting as the de facto world policeman.

Now poor Trumpy wants to extricate himself from the economic burden of that role; but many on both sides of the political divide disagree with him* He has my sympathy.

* but not Tulsi, an actual veteran; her antiwar stance is a breath of fresh air in standard US politics.

 

Comes across like a David Icke site. Its a shame you folk can't construct economic argument.

 

I love this "anti war" activist stuff.
Grew up with the "anti war" movement of the 1960's.
It wasn't "anti war" it was "anti war for America" which is an altogether different animal.
It's an animal that is a part of "anti Americanism."
After America withdrew from Sth Vietnam we had the next war between North and South
Vietnam. And then the Cambodian war. And I think Laos just didn't fight Hanoi at all.
And then we had the second Cambodian war when Hanoi invaded with Sth Viet troops.
Then first Viet China war, followed by the second Viet China war.

Not a single "anti war" protestor took the streets. More people died in these wars than
in all the American component. Nixon marveled at the hypocrisy of it all. Hypocrisy is
too mild a word for these dogs.

 

Cor Blimey, I didn't expect that from you - after all the recent material I have provided about MMT, and Prof. Harvey's refutation of the orthodox neo-Keynesian stance of the likes of Krugman, Summers and Rogoff (post #2104).

As a matter of fact I was thinking of asking you about your thoughts on an international rules based system, since Liberty_One and Poohbear are arguing it out on the Conservative side.

As to prof. Griffith's explanation of the human condition, I mentioned it only for
pointing to the issues confronting establishment of an international rules based system. (His economic conclusions are 'confronting' at first - but in the end he sees the world becoming "left Wing").

Perhaps you don't like the concept of an international rules based system? That would explain your reaction.

 

Security council veto or no veto. I have no illusions that the UN was not going to
work in the sphere of international wars.
There's never going to be a unified world.
War is even entering the space arena now.
The world is vastly more dangerous than it was in the 1980's and 1990's.
Imagine Saudi Arabia or Russia signing up to world government, or even
America. Tomorrow, when we have no more use for oil I can Saudi and
many other Arab nations falling to nuclear Jihadis - and backed with the
sympathies of a bankrupt Russia.

 

While Reiver's reaction to my comment about establishing an international rules based system surprised me, your response above is entirely predictable, given your empty nationalist stance.

The anti-war protests in the US AND Australia and elsewhere were not anti-American, they were anti the pro war branch of the administration - a pro war stance resulting in part from the self appointed, and ridiculous, role of the US as world policeman.

You are in effect saying the six kids who lost their lives protesting on US campuses - murdered by the so-called US 'national guard' - were anti-American...….

 

Again entirely predictable, given your classical liberal stance - so you cannot begin to contemplate the implications of a UNSC without veto...

You anti war? Sure....

OTOH, Tulsi Gabbard is an anti war American patriot.

 

Those six were simply kids in the wrong place, wrong time.
The same "anti-war" stance in the Viet war did not extend to most
other wars in the world, nor did it extend to the wars in Vietnam
after American withdrawal. They therefor cannot be called
"Anti War"
Furthermore, many of these activists (think Fonda) were Pro
War in that they sympathized or supported the Communist
regime in Nth Vietnam, and most other Communist regimes.
JIHADIS, COMMUNISTS AND FASCISTS ARE THE ONES
WHO MOST DON'T WANT AN AMERICAN POLICEMAN.

 

Tell that to Liberty_One...

But the very concept of one SELF-INTERESTED nation adopting the role of world policeman is ridiculous.

Hence the "endless wars" Trump is complaining about.