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Steve Keen & Michael Hudson – Keen, Hudson Unpick Historical Path to Global Recovery

Link to a discussion between economists Steve Keen and Michael Hudson:

“Keen, Hudson Unpick Historical Path to Global Recovery”

 

Selected excerpts:

Michael Hudson: “America did something that has relevance for America for today. After the North won the Civil War, they thought how are we going to teach protectionist, non-Ricardian, non- Malthusian economics. And they say, most of the economic courses were taught at prestige universities, and most universities in America were founded by religious orders to train the priesthood. And the political economy course was taught in the seniorly years, you know, the final one, and it’s all, markets are great.

“So the solution was that you can’t reform these academics. They’re hopelessly tunnel visioned. So America founded state colleges with a different faculty, new people teaching rational, protectionist economics, and the business schools. And the first business school professor was Simon Patten at the University of Pennsylvania, the Wharton School, which was funded by industrial protectionists. And so you had in America this whole body of theory that now has been whitewashed out of textbooks into a kind of Orwellian memory hole.”

***

Steve Keen: “Whereas the top universities are reproducing the religion [neo-classical economics]. And the thing is this is quite a successful strategy when you’re fighting an ideological war. But it’s not a successful strategy when you’re trying to manage a capitalist economy. And, unfortunately, they’re trying to do both at once. And, of course, what that leads to is the debt deflation episode we’re seeing now. Because according to the theories of this high priesthood, such things can’t happen.”

***

Michael Hudson: “When the graduates, who learn what you and I are talking about money, graduate, they can’t get jobs, because jobs are conditional upon being able to publish in prestigious economic reviews, and they’re all controlled by University of Chicago and by neoliberals.

“And the genius of Chicago free market theory is you can’t have a free market Chicago style unless you have a totalitarian state that will prevent any alternative to the theory. When they went to Chile, Harberger is said to have sat in a hotel room saying, here are the professors you have to kill. Pinochet and the American embassy said, here are the labor leaders you have to kill. And here are the intellectuals you have to kill.

“You cannot have a free market neoliberal style unless you are willing to either kill or exile or suppress or censor any alternative to your theory, because the theory doesn’t work. It’s fiction. It’s junk economics.”

***

Steve Keen: “So what they’ve had by the purge they’ve managed to achieve – not quite as drastically as Chile, thank god – but the purge they managed to achieve in intellectual economics to make them just that the sole mainstream and knock out any alternative arguments meant that they took over economic policy as well as economic theory. And pushing it forward led them to the financial crisis that they could not see coming, because they didn’t even include the variables that cause the financial system in their models.

***

“Now what you’re seeing 10 years after the crisis is, finally, some awareness coming through that our models are completely at variance with the real world.”

 

Missing from this discussion, which labels Keen and Hudson’s opponents as ideologues, is that Keen and Hudson are also ideologues.  Philosophy tells us that there is no “reality” free from ideology.  What these two should be saying is that their ideology is more scientific, and it benefits a wide proportion of the population.  Hudson says, “You know, every economic theory begins with a conclusion and they work back from the conclusion is what kind of logic is going to lead to this.”  But that is nearly a definition of “legal realism” in jurisprudence — in other words, it is not some special method that applies to certain (neo-classical) economists, it is the way most people work in any situation, including Keen and Hudson!  There is a partial acknowledgement of this when Hudson says, “And all of the reformers, including you and me, look at the – we have a picture of the overall economy, because we’re showing how something whether it’s bad or good will affect the overall economy. The anti-reformers have something in common – a methodology.”

Yarden Katz – Cheerleading With an Agenda

Link to an article by Yarden Katz:

“Cheerleading With an Agenda: How the Press Covers Science”

Bonus links: Stanisław Lem, Solaris and “Economics as Ideology: Challenging Expert Political Power” and Thorstein Veblen, The Higher Learning in America: A Memorandum on the Conduct of Universities by Business Men and Universities and the Capitalist State

Reviews of Anwar Shaikh’s “Capitalism”

Links to reviews of reviews of Anwar Shaikh‘s Capitalism: Competition, Conflict, Crises (2016):

Bonus links: Video lectures by Shaikh and “Innocuous Proclaimations” (this short interview probably renders reading Shaikh’s book unnecessary)

Bias in Favor of Reckless Drivers

Another example of misguided priorities:

SHAILA DEWAN: Rebecca Horting was a woman who was charged with texting while driving, and reckless endangerment, I believe, was the charge. She hit a girl who was riding her bicycle down the side of the road, causing brain damage and the loss of a leg. And she was offered pretrial diversion. She paid about $1,200, I believe, and is on course to have her case dismissed outright. So, this is a deal that the prosecutor will make with you: “Fulfill these conditions, and we’ll dismiss your case.” And, in general, it’s a pretty good, progressive idea to give defendants a way out of the huge consequences of getting a record.

“The Price of a Second Chance”: NY Times Exposé on How the Rich Pay to Expunge Criminal Records

There is nothing “pretty good” or “progressive” about letting drivers essentially get away with destroying the lives of bicyclists and pedestrians through reckless behavior (easily avoidable texting while driving).  There currently exists a major problem in terms of prosecutors refusing to charge drivers who injure cyclists and pedestrians (aside from more general problems with prosecutorial discretion).  Relatively speaking, such drivers are much more deserving of long prison sentences than most current prison inmates….people should not be able to injure or even kill someone with almost no consequences merely as long as they are driving cars when they do it.  So, aside from the contrast drawn in the linked interview between the reckless driver and a completely different scenario, isn’t it more accurate so say that this is regressive?  At the very least, this is a terrible example to use, because it holds up a terrible problem as some kind of model outcome.

Links to Articles on Liberal Reaction to Trump’s Election

A collection of links to articles critiquing the liberal reaction to the election of Donald Trump as President of the United States, and the related hacking allegations: