Post-Keynesian

The Growing Importance of Finance in the Post-War U.S. Economy As I understand it, Marco Rubio takes from Post Keynesians the idea that, during the post-war golden age, investment decisions were dominated by industrial firms. But now, they are dominated by financial corporations. This change has been accompanied by deleterious effects on economic growth, stagnant wages, and an upward shift in the distribution of income and wealth. The increasing importance of finance in the economy in the...

Ezra Klein writes about John Kenneth Galbraith's concept of countervailing power. Ingrid Kvangraven and Carolina Alves are busting myths about heterodox economics. I have written before about economics as a study of the reproduction of society. Ben Holland, of Bloomberg News, writes an article, Marco Rubio puts out a paper citing obscure left-wing economists. Rubio's position paper is here. I do not find, say, Wynne Godlay, Hyman Minsky, Mariana Mazzucato, and many proponents of Modern...

1.0 Summary of Defense Last month, Mike Munger purports to "summarize the basic argument for capitalism" (emphasis added). He acknowledges his argument is superficial. I find it excessively so. Munger argues that capitalism: Supports the division of labor Provides price signals so as to direct production appropriately Promotes economies to scale Ultimately, this defense is that capitalism delivers the goods. Here's a well-expressed, simple defense that, partially, argues along these...

Figure 1: Wage-Rate of Profits Curves Consider a comparison of comparison of stationary states. Net output is taken as given, and a unit of net output is the numeraire. Technology consists of a finite set of techniques. In each technique, net output is produced from inputs of labor and produced circulating capital goods. No fixed capital is used, and land of the best quality is in such abundance that it is free. Also assume constant returns to scale. One can find a wage-rate of profits...

Readers are probably aware that there is quite a lot of discussion of Modern Monetary Theory (MMT) and the potential for fiscal experimentation batting around at the moment. Others have weighed in on this already, and I have little to add. It is striking, however, that most of the push-back — where there is push-back — is not focused on trying to discredit the idea that we should engage in fiscal experimentation. Indeed, the notion that we should engage in fiscal experimentation seems...

Many years ago, I used to argue, on Usenet, about the Cambridge Capital Controversy. Many mainstream economists used to ignorantly assert, when pretending to respond, that an application of the CCC to labor economics was my idea alone. So I used to demonstrate that this was false by quoting from the literature. As far as I can see, mainstream economists are still mostly trained into ignorance. P. Garegnani: "The idea that demand and supply for factors of production determine...

Fact: If you use the word "carceral" instead of "prison" your argument immediately becomes more persuasive. Good praxis is to use words like "praxis" that nobody understands. -- Matthew Yglesias (5 April 2019, on Twitter) A large academic literature exists around Antonio Gramsci's Prison Notebooks. Topics discussed include the relationship of civil society to the state, hegemony, the contrast between consent and coercion, class alliances in political parties, Fordism, the contrast...

1.0 Introduction This post is on current events. The plane crashes of the Boeing 737 Max 8 airplane is arguably about more than a software bug. I point out in this post that you can read about how the United States' Federal Aviation Administration (FAA) is supposed to certify software and electronic hardware in airplanes yourself. In some sense, this post is not about software bugs, but rather about software engineering certification processes that fit into a larger systems engineering...

Arindrajit Dube writes an obituary for Alan Krueger, in Slate. Maria Cristina Marcuzzo, at INET, highlights Krishna Bharadwaj's contributions to economics. Longtime commentator Emil Bakkum's web page, collecting a variety of resources, is here. An advocate of Modern Monetary Theory, Brian Romanchuk is apparently writing a book about models supposedly of Dynamic Stochastic General Equilibrium. Some recent posts include: Questions about time scales in DSGE models. Anticipations have a time...

1.0 Introduction By "libertarianism", I mean propertarianism, a right-wing doctrine. In this post, I want to outline some ways of arguing against this set of ideas. (On this topic, Mike Huben has much more extensive resources than I can allude to.) 2.0 On Individual Details I like to use certain policy ideas as a springboard for arguments that they have no coherent justification in economic theory. Unsurprisingly, the outdated nonsense market fundamentalists push does not have empirical...