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Lord Keynes

Lord Keynes

Realist Left social democrat, left wing, blogger, Post Keynesian in economics, but against the regressive left, against Postmodernism, against Marxism

Articles by Lord Keynes

Austrians and Full Employment

October 31, 2020

In this video, the Austrian libertarian “Radical Liberation” claims that “full employment” is not a term used in Austrian economics:[embedded content]While it is true that Austrians rarely speak of “full employment” (which is a very low level of involuntary employment, and does not mean zero unemployment) as a policy goal, the claim that Austrians do not think in terms of the concept of “full employment” is actually rubbish, because Austrians just use expressions such as the “no involuntary unemployment,” “clearing of the labour market” or a “tendency to clearing of the labour market.”To see this, consider these passages from Austrian economists:(1) “Similarly, most economists would readily admit that keeping the price of any good above the amount that would clear the market will cause

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Relative Price Rigidity and Austrian Economics

September 24, 2020

The purpose of this post is to examine and provide a critique of Austrian price theory, and in particular the Austrian denial of relative price rigidity in the real world.In the Austrian economist Ludwig Lachmann’s book Capital, Expectations, and the Market Process (Kansas City, 1977) there is a section where Lachmann reviews John Hicks’s book Capital and Growth (Oxford, 1965).The significance of Hick’s discussion is described by Lachmann:“Two other matters of great significance are dealt with in the first part of the book. As others have done before him, Professor Hicks finds it necessary to stress, in his chapter on Marshall’s method, that our world differs from that which Marshall took for granted in that we live in a world of prices ‘administered’ by manufacturers, ‘but in those days

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Response to Academic Agent on Modern Monetary Theory (MMT) Part 2

April 28, 2020

Academic Agent had a livestream here criticising my blog post that was a critique of his original video against MMT:[embedded content]This stream is a train wreck. Academic Agent and his Austrian-school libertarians struggle to even accurately grasp Modern Monetary Theory (MMT).I will not correct all the errors and misrepresentations here, or bother to correct every strawman argument.But, first of all, let us just provide a knockout blow to Academic Agent and his minions. Throughout the earlier part of this stream, Academic Agent cannot understand how in a fiat money world, taxes and bonds do not, technically speaking, finance government spending. It appears that Academic Agent cannot imagine a state of affairs where a central bank directly monetised part of a government budget deficit,

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A Refutation of Academic Agent’s “Debunking Modern Monetary Theory (MMT)”

April 24, 2020

Academic Agent – a YouTube libertarian and unusually ignorant advocate of Austrian economics – tries to refute Modern Monetary Theory (MMT) in this video:[embedded content]Let us run through this video and refute Academic Agent’s arguments point by point:(1) Academic Agent fails to Refute the Three Core Principles of MMT
There are three fundamental principles in Modern Monetary Theory (MMT), as follows:(1) Most sovereign governments today are the monopoly issuers of their own fiat currencies (since the gold standard has been abolished);(2) Because of (1), the government is not revenue-constrained in the way it was under the gold standard, because it is the creator of its own fiat money; (3) In a fiat money world, taxes and bond issues do not, technically speaking, finance government

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Academic Agent on Excess Capacity

February 11, 2020

The libertarian “Academic Agent” examines the concept of excess capacity here:[embedded content]First, Academic Agent is utterly wrong to claim that Austrian theory is only looking at the “price of a good across a whole economy,” and that my analysis of how real-world individual firms behave is somehow irrelevant to Austrian theory.Austrian economics has a “Theory of the Firm,” just like Neoclassical economics, and Austrian theory says the average firm should be engaged in flexible pricing of its products, in order to clear markets and equate supply with demand. Academic Agent’s claim that “Austrian theory…. as regards price responsivity to supply and demand does not predict the behaviour of individual firms” (at 5:33–5:36 in the video) is a bizarre and blatant falsehood. While Austrian

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Steve Keen on Keynes and Keynesianism

November 30, 2019

This is an older and short video in which Steve Keen is interviewed, and gives a short summary of Keynes’ economic ideas:[embedded content]An important issue is Steve Keen’s point that Neoclassical synthesis Keynesianism was a misguided and distorted development of the General Theory and Keynes’ later articles, even though Keynes did allow this to happen in Chapter 18 of the General Theory, where he played down the role of uncertainty (as had been stressed in Chapter 12). As King notes, if Keynes had strongly maintained the crucial role of uncertainty, this would simply have “ruled out any stable functional relationship between investment and the interest rate” (King 2002: 14). The door was thereby left open for neoclassical synthesis Keynesians to reformulate the General Theory as a

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Keynes’ Life: 1931

July 19, 2019

I give an account below of Keynes life in 1931.January–May 1931
On 27 January 1931, Friedrich Hayek arrived in London at the London School of Economics (LSE). Hayek gave four evening lectures at 5 p.m. from 27 to 30 January 1931 on “Prices and Production” (Howson 2011: 196), and these lectures were later published in England as the book Prices and Production (September 1931), an exposition of the Austrian Business Cycle Theory (ABCT). Hayek himself had returned to Austria by 14 February 1930, but he moved to Britain to take up a visiting professorship at the LSE in October 1931. Keynes did not attend Hayek’s LSE lectures, but Nicholas Kaldor had been at the LSE since April 1927 (to undertake a BSc. in economics), and presumably attended.From winter 1930–1931 and the spring of 1931, Keynes

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Keynes’ Life: 1930

July 17, 2019

I give an account below of Keynes life in 1930, the second year of the Great Depression.January–May 1930
In January 1930, the second Hague Conference adopted the Young Plan on German reparations, and, as we saw in the last post, Keynes had corresponded with the leading members on the issue of German reparations. By early 1930, Keynes was beginning to think that an international slump was a possibility (Moggridge 1992: 483).On 19 January 1930, Keynes’ friend Frank Plumpton Ramsey died after an operation for jaundice, which deeply saddened Keynes (Skidelsky 1992: 380).On 24 January 1930, the British government established an “Economic Advisory Council (EAC),” chaired by the Prime Minister, which included the Chancellor of the Exchequer, the President of the Board of Trade, the Minister of

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Keynes’ Life: 1929

July 13, 2019

I give an account below of Keynes life in 1929, the year in which the Great Depression began.January–May 1929
Keynes taught at Cambridge in the first half of the year. The teaching periods at Cambridge were divided into three terms:October–December – Michaelmas
January–March – Lent or January term
April–June – Easter term.On 18 January 1929, Ludwig Wittgenstein returned to Cambridge, and Keynes met him when he arrived, and allowed Wittgenstein to share his rooms at Cambridge until February 1929 (Skidelsky 1992: 291).From 9 February to 7 June 1929, an international committee met to propose changes to the German reparations system, which was chaired by Owen D. Young, and called the Young Committee (Moggridge 1992: 476). Keynes corresponded with the leading members on German reparations and

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Proto-Keynesians in the Last Years of Weimar Republic Germany

January 18, 2019

It is well known that the Great Depression hit Weimar Republic Germany particularly hard. There was severe unemployment, and the wage and price deflation was also severe, as can be seen in these graphs (with data from Mitchell 1992):
Moreover, the wage and price deflation did not bring about a rapid or effective recovery. Austerity policies clearly failed in the Weimar Republic, and a number of German businessmen, bureaucrats, journalists, and unorthodox economists were driven to advocate the only real policy solution that had not been tried: namely, unemployment relief and stimulus of the economy by large-scale deficit spending and public works programs.Proto-Keynesian ideas were already being advocated in Germany before 1933 by the following people:(1) Wilhelm Grotkopp (a business

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Three Cheers for Tucker Carlson!: Heroic Economic Populist

November 21, 2018

Tucker Carlson channels left-wing economics in this debate with the free market, Neoconservative charlatan Ben Shapiro: [embedded content]You have to admire Tucker Carlson for this, despite the gushing praise for the ill-defined concept of “capitalism.” Shapiro, in response, mouths utterly dumb, empty, meaningless drivel.Tucker Carlson is easily the best thing to ever happen to the brain-dead Conservative media in America, probably in living memory. Tucker has morphed from a pointless beltway libertarian (who even supported the Iraq war!) into a Nationalist, anti-war, economic populist, broadcast on – of all places – Fox News.Tucker has discovered the magic formula that actually represents what the majority of people in the Western world want, which is as follows:(1) closed borders and an

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Austerity in Pre-1938 Fascist Austria

September 26, 2018

From 1933 to 11 March 1938, Austria was ruled by the clerical fascist Fatherland Front in a regime called the Austrian Federal State.The two dictators of Austria in this period were as follows:Dictators of the Austrian Federal State
5 March 1933–25 July 1934 – Engelbert Dollfuss
29 July 1934–11 March 1938 – Kurt SchuschniggAlthough the Fatherland Front had some anti-capitalist elements, the fact is that in power Engelbert Dollfuss and Kurt Schuschnigg pursued spending cuts, austerity, budget balancing and wage and price deflation.In this period, Ludwig von Mises had a fascinating relationship with the clerical Austro-fascist regime.Already around 1930, before the Austrian fascists seized power, Mises joined an Austrian government economic commission to study the causes of the depression

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Academic Agent versus Reality on the US Industrial Recession of 1873–1878

September 21, 2018

In this recent stream on economics, Academic Agent attempts to defend Rothbard’s views on the American economy in the 1870s.[embedded content]In my Twitter debates on this issue with Academic Agent – who is an unusually ignorant libertarian – I directed him to my post here.I said explicitly in that post that, while Rothbard was correct that there was no depression in the sense of a fall of GDP/GNP of 10% or more, Rothbard was nevertheless wrong to claim that the 1873–1878 period saw “extraordinarily large expansion of industry.”Here is what Rothbard said: “Orthodox economic historians have long complained about the ‘great depression’ that is supposed to have struck the United States in the panic of 1873 and lasted for an unprecedented six years, until 1879. Much of the stagnation is

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Academic Agent on Herbert Hoover: A Critique

September 13, 2018

Academic Agent’s video on Herbert Hoover is below:[embedded content]First of all, it is true that Hoover was not a strict liquidationist. He supported limited interventionism, and was – for his time – a type of corporatist Republican. But was Hoover an “interventionist” relative to the interventions that became commonplace in Western mixed economies after 1933 and certainly after 1945? The answer is: no, Hoover was relatively non-interventionist in relation to the mixed economies of the post-1945 period. Hoover himself rejected effective Keynesian economics, which was the key to escaping the Great Depression.What is wrong in this video?Let us break it down as follows:1. Hoover’s “high wage” policy
Hoover’s “high wage” policy was largely limited to certain industrial markets, and was not

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Ludwig M. Lachmann on the History of the Austrian School of Economics

September 6, 2018

An interesting talk on the history of the Austrian School by Ludwig M. Lachmann:[embedded content]For more on the history of the Austrian school, see here:“Why are there no Austrian Socialists?,” June 3, 2011.“The Neoclassical Wing of the Austrian School,” June 5, 2011.“Vaughn on the Early History of the Austrian School,” June 23, 2013.“The Early Austrians and Walrasianism,” November 7, 2013.“Axel Leijonhufvud Interviews Hayek on the History of the Austrian School,” April 25, 2013.

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Darwin, Evolution, the pre-1960s Left and Human Races

August 11, 2018

Charles Darwin – the discover of evolution by natural selection – wrote a book called The Descent of Man and Selection in Relation to Sex (1871), with a second edition of the book published in 1874.Chapter 7 of The Descent of Man is called “On the Races of Man.”There is no doubt that Darwin thought evolution applied to human beings, and that all humans descended from a common ancestry and species. But he also thought that there were distinct races or sub-species of man (Darwin 1874: 162, 176).Darwin is of course worshipped by much of the modern Liberal and even radical Left, but his actual views about evolution and human beings would probably get him arrested for “hate speech” in much of Western Europe.Shockingly for the modern Left, Darwin also accepted racial differences:“There is,

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Dinesh D’Souza as a Charlatan

August 5, 2018

Could there be anything more absurd than the spectacle of Dinesh D’Souza? His new movie is called Death of a Nation: Can We Save America a Second Time?.Some videos below give us a summary of his ideas:[embedded content][embedded content][embedded content]The fundamental thesis of Dinesh D’Souza is, in essence, that the Democratic Party and American progressive Liberalism are linked to Nazism and are, by implication, on a moral level with Nazism. Furthermore, D’Souza thinks that Nazism (or German National Socialism) was a fundamentally left-wing ideology. D’Souza’s narrative and his “arguments” plumb the depths of idiocy. Dinesh D’Souza is really nothing more than a free market Classical Liberal, as are much of the so-called American “Conservatives” who represent the pre-Trump GOP.

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Robert P. Murphy on Rothbardians versus Free Bankers

July 30, 2018

Robert P. Murphy recently gave a talk on fractional reserve banking and free banking:[embedded content]Listening to this video really brings home what a lame cult of losers American libertarians actually are.Murphy repeats the same tired lies about fractional reserve banking we have all heard before: e.g., that a demand deposit involves two entities (the bank and depositor) owning the same money (when this is a blatant falsehood), and the fake legal history of fractional reserve banking peddled by Rothbard and Huerta de Soto.A bank is, by nature, an institution that borrows money from “depositors” (a misleading word) by means of the mutuum contract, so that the bank becomes the legal owner of all money “deposited.” The bank client legally forfeits all property rights in the money. In

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No War on Syria!

April 13, 2018

Stephen Cohen points out how dangerous the current drive to military action in Syria is:[embedded content]Fortunately, there are signs that, if any US missile strikes happen, it will essentially be a PR stunt with the Russians being warned in advance of the targets, as Russia Insider has reported. If true, the real danger is that mistakes can be made and things could get out of control quickly, especially if wider Middle East tension erupts and military intervention is taken by Israel, Iran or Hezbollah in Lebanon, which could ignite a regional war. We are approaching the moment of truth.

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Clement Attlee on Immigration into Britain in 1948

March 13, 2018

As noted in this post here, even in 1948 low level immigration into the UK from its colonies caused a number of Labour Party MPs to oppose mass immigration, and they sent a letter to Clement Attlee, as follows:“This country may become an open reception centre for immigrants not selected in respect to health, education, training, character, customs and above all, whether assimilation is possible or not.The British people fortunately enjoy a profound unity without uniformity in their way of life, and are blest by the absence of a colour racial problem. An influx of coloured people domiciled here is likely to impair the harmony, strength and cohesion of our public and social life and to cause discord and unhappiness among all concerned.In our opinion colonial governments are responsible for

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Academic Agent on “Six Key Lessons from Classical Economics”: A Critique

March 2, 2018

“The Academic Agent” has a video here on what he calls “Six Key Lessons from Classical Economics” (but actually from both Classical and Neoclassical economics):[embedded content]Of course, not all of his points are wrong. And, since I assume various followers of “Academic Agent” will read this, let me state: I support Post Keynesian economics, a non-neoclassical version of Keynesianism.But let us break this down as follows, point by point:(1) “Wealth is not Money”.This is true. Money is clearly not wealth (if we understand by “wealth” the good and services we consume). Money cannot be consumed in the way that commodities can. Libertarians are fond accusing Keynesians of saying that “money is wealth” or that “money creation is wealth creation.” But I can’t even recall seeing any left

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The Catastrophic Failure of Multiculturalism

February 23, 2018

Explained in this interesting and concise video:[embedded content]In reality, human beings evolved to have ethnic identity and ethnocentric cooperation. This is the real basis of socialism as a political or economic form of political organisation within a modern nation state. Multiculturalism and multi-ethnic mass immigration will undermine and destroy a society that has a strong level of social and ethnic cohesion with democratic “socialism” in the non-Marxist sense (that is, a welfare state, generous social security, universal health care, and interventionist government policies to promote the common social and economic well-being of the community).The modern left is too stupid and deranged to understand that (1) ethnic nationalism must be the basis of progressive liberalism,

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Opposition to Mass Immigration in the British Labour Party of 1948

February 17, 2018

In 1948 after World War II, Britain started to receive low-level immigration from its colonies. But – even within the British Labour party of that era – there were those who sensed that this could be the beginning of mass immigration on a scale likely to cause serious problems in Britain.For example, the Prime Minister Clement Attlee was sent a letter on 22 June, 1948 signed by eleven Labour members of parliament who opposed mass immigration into Britain.This letter said the following:“This country may become an open reception centre for immigrants not selected in respect to health, education, training, character, customs and above all, whether assimilation is possible or not.The British people fortunately enjoy a profound unity without uniformity in their way of life, and are blest by

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