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Reminder about the uplifting of the third world from poverty by neoliberal globalization: http://www.aljazeera.com/indepth/opinion/2014/08/exposing-great-poverty-reductio-201481211590729809.html Goalposts moved by World Bank: 1. Halving the proportion rather than the absolute number of people living on under a dollar a day. 2. Excluding developed countries from the comparison and thus increasing the effect of 1. 3. Moving the baseline back from 2000 to 1990 so that prior Chinese poverty reduction efforts would count. 4. Moving the dollar itself forward in time, allowing inflation to dilute the goal. Even with all these dilutions, if China isn't factored, the amount of people living on under that dollar a day is actually increasing, meaning that the promising statistics are carried by China alone. And what is China? Definitely not a liberalized, open trade country. Yes, trade has been its new source of wealth, but it's a very different kind of trade from what mainstream economists advocate. And again, on average, in the countries that have been following economist advice, absolute poverty has been and is currently increasing.
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Feb 7, 2017 20:57
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Steve Keen has pretty wonderful youtube lectures on The Great Recession and financial crises in general. Basically it's not so much that people taking less credit caused the crisis, instead that itself *is* the crisis. Housing bubble bursts => people start taking less credit, banks stop giving easy credit => aggregate demand falls. They don't even have to start saving paying their debts down, just taking less credit yearly in a high private debt to GDP environment is enough. If you follow the data, we are actually in for a series of these serious crashes rather than the mild recessions of old, because the current widespread economic policy to beat recessions is to get corporations and people to take on more debt. Credit-fueled demand is the only type of demand that has historically had large enough fluctuations to cause this level of crisis, and we are still at 150%+ private debt to GDP ratio and it's not going down.
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Feb 14, 2017 06:56
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I'm frankly starting to believe that even credit as a public service would work better for all-around growth&stability than private banking. What you'd lose in efficiency of allocation you'd gain in less active subversion of regulations and some central control on how much we want to rely on private debt growth as an economy.
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Feb 14, 2017 21:11
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caps on caps on caps posted:I have some questions: 1. The company owes you money for your unpaid contributions to it. For example, your unpaid salary could be likened to credit, while your idea could be likened to voteless shares. This debt has to be paid, and there ought to be no legal way for your employees to decide to default on it if the company doesn't go bankrupt. Sort of like how the constitution sets limit on state democratic choices. There's also the possibility for founders to have a larger amount votes, or recent hires to have less, so that stability is preserved in the early phases of expansion. 2. These things are currently and also should be decided by the company itself. Typically people do not get the same wage (but the range is limited). Who and what the CEO is is voted on. The share of management and voting is decided on a practical basis, but there's a tendency to have way less managers than in the average capitalist company. And again, such a company cannot be legally taken over and its rules ignored by even a majority, much like a state cannot. 3. We can have capital markets, however we can't exchange power for money, only future profits. I'm pretty sure this is a solved problem already, since co-ops have no problems growing. You can take loans, sell voteless shares, agree among members to invest a certain amount each, get subsidized by the state and so on. 4. The workers together decide which work is worth which salary. It isn't historically terribly difficult to find a solution most can agree on. Profits are shared according to everyone's investment, which is often, but not always, considered equal either in an absolute sense or per labor-hour. Profit tends to have a smaller role than in capitalist companies though, because salary raises are a natural way to distribute surplus fairly. 5. The direct democratic ideal is that people decide on things that concern them. Something like CEO choice is probably decided by everyone, while everyday details of work are decided by the ones doing that work. People with skill tend to command certain respect since they're people who the voters personally know and their opinions are listened to. They're like lobbyists. And yeah, the company cannot be taken over by a rogue CEO because there are strict limitations on what a CEO can do without a majority vote. (There does not need to be a CEO at all, but it's the same with any governing entity.) I'm not an expert on what exactly those limitations tend to be, but it's a tried and tested thing in the real world.
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Feb 25, 2017 21:55
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caps on caps on caps posted:Say I own the majority of the company (up until contribution from workers, let's say the profits are equally split from when they enter but I retain my shares on existing capital and idea) but they have the same voting rights (so each gets one in my example?). Can I sell my shares if I don't agree with the votes? Or can I take my idea somewhere else? If not, can I quit and start a company doing the same thing? Or sell the idea and tech to a competitor and just wait until my company crashes? After all I still own the idea, right? The right to get the company to buy back your share depends on type of the share, but I think it would make sense for this sort of "founder share". Or you could just quit but keep your shares and enjoy the dividends. Your shares might not be as well protected as in a capitalist society however, maybe their value would be diluted as accumulating worker effort gets calculated into the pie, maybe the company could force you to sell them back at some rate that's deemed fair at the time. However, you can't just take your idea and run, privately owned patents probably wouldn't be a thing in an actual socialist society. So you'd have nothing to sell, at best you could start a competitor or begin working in one. caps on caps on caps posted:So l understand you right: The company sets a constitution like a state, that can not be changed? But that must be state regulated, right? If not, the early coalition would just write a constitution which is advantageous to the core workers and lovely for newer workers (see Mondragons issues). That means those things can not really decided by the company I'd say. Co-ops today set their own rules about how they do business and that's what I likened to a constitution. Changing those rules tends to be a lot easier than changing a constitution, but it usually still requires a universal vote and more than a simple majority. States would have to regulate minimal sanity check limitations on those rules, for example right now you can't legally define a nondemocratically ruled co-op. But yeah, I'm sure people in a free society would find ways to make unequitable rules anyway. Democratic but private companies are a market socialist thing, and market socialism still has many core weaknesses of capitalism that would have to be alleviated by centralized wealth transfers or a similar system. A public sector would have to act to maintain full employment so that workers would be able to realistically choose a workplace that they don't find unfair. What you're saying about a situation where exploitative structures are the most efficient is a huge reason why socialists including Marx tend to favor planning over markets. However, I still personally see having markets as the natural choice for now, since an early socialist state would still be in international competition with capitalist states and trading with them. caps on caps on caps posted:So if I buy the majority shares on your profits such that let's say I'll get 55% of future profits for myself, would that really solve the inequality problem? Clearly I have no obligation towards that company since I am not voting in its decisions (otherwise that would not make sense either). So then, voting rights are just about the distribution of non-share allocated profits, right? In the lifetime of many larger businesses there comes a time when a significant amount of shares have to be issued to progress or survive. But those shares don't usually need to give as high return, if at all, given that they come with voting rights. If they don't, returns obviously need to be higher for the same amount. I'd be worried that this pushes return-seeking investors into even more frenzied buying sprees and makes the capital markets more volatile. Another issue I see is that if workers vote, then they can decide the dividends (and if not, the company would just bankrupt itself by inflexible capital payments). Then, however, they have the incentive to push out investors who in return will need higher interest. What you say is true, the current style of capital markets would not combine well with socialist enterprise. It's questionable whether you could even have banking as free enterprise, since finance is pure rent-seeking and thus incompatible with socialist ethics. A working financial system is necessary, however, so it might end up as a publicly owned, centrally planned thing. If finance were free, there would definitely be accumulating economic inequality and that inequality would undermine democracy just like now. But if public finance was the default, that should tame the profit expectations of capital markets and also their importance as a part of the economy. Maybe they would not be needed at all. caps on caps on caps posted:I mean I understand that coops exist IRL, but they are not exactly the most successful companies and they are mostly prevalent in certain industries, and usually in countries which have co-ops also for historic reasons (Germany, France, Spain). Germany, for example, has a shitton of coops and they do really well for specific businesses which target the shareholders themselves. Everywhere else, they have less success. There is actually theory on coops based on transaction costs and principal agent to suggest that they have pro's and con's. Logically, a world with only coops would be inefficient then. The research you mentioned accurately describes consumer co-ops. Most of the existing big co-ops are consumer co-ops, which are different from worker co-ops and actually not very socialist. It's why socialists tend to mention Mondragon as opposed to other big co-ops in Europe. Actual worker co-ops are generally a tiny part of any economy and need more testing, but testing would require active state policy that helps worker co-ops form. Basically you just can't get adequate free market money to aggressively expand a beginning worker co-op when there are so many more lucrative options out there. caps on caps on caps posted:Let me look at that in two contexts. First, how do you attract good workers to your company? Let's say you are drilling in the Baltic Sea and you need a geologist specialized in water and rock movement around drilling platform supports. There's not so many of those in Europe, so the usual thing to do is to hire him for a lot of money. But now this guy makes a significant amount more than normal workers because his skill is scarce. And if not, the guy will just start a single-person consulting business and make millions anyways. Or consider the case of hiring a CEO. The guy is a decent leader but not really worth all that much, except without his network it's difficult to get leads and new customers. Workers are clearly unwilling to give up wages to pay for such a person, nevertheless a company may be out-competed by another who has this guy. I think that the workers would have to compromise on wage equality to attract foreign talent, and they would end up doing it for the sake of their own job security. If they're a truly special person, they would be reasoned to be in a job category of their own, vital enough to deserve greater salary. And really, when talking about regular experts rather than pampered CEOs, their salary expectations aren't unsustainably huge. 200k compared to 20k is just 10x difference. I don't think they could compete in the international CEO market though, for better or worse. They would have to use other avenues of finding "leads and customers". caps on caps on caps posted:Second, we know to illicit honest work without endless shirking (see GDR for the negative case here), compensation needs to have at least two components - a fixed part and a performance based part (possibly more). The performance based part can be very rough, like getting fired, but that's just a trade-off between efficiency and difficulty of implementation. Empirically, better compensation schemes increase productivity. Paying everyone the same wage would obviously lead to terrible productivity - some performance based measure needs to exist. We have to remember that money is not the most important motivation for most people to do their work well. The soviet communist system of employment was equivalent to mediocre capitalist companies' system of employment, meaning that aside from lack of monetary motivation, there was also a lack of any other kind of motivation to work hard. I would actually look at how modern low hierarchy capitalist companies motivate their employees. There are a lot of methods that workers will find acceptable, given that in low hierarchy companies most ideas are provided by the workers themselves. Also, salaries that include a performance based part tend to be found equitable as long as the base salary is large enough not to be stressful. Psychologically people tend to like rewards for winning and hate punishment for losing, and socialism's concern is not punishing the losers rather than not rewarding the winners. About relying on worker votes, it's been noticed that people vote for their employment to be as secure as possible, so the aggregate tends to vote in favor of company stability and success. That is, as long as the company is sure to guarantee new jobs for workers that its decisions displace, because otherwise people are likely to vote for stagnancy, which would cause instability. That guarantee might be a core motivation for Mondragon to have grown so huge, since obviously the profit motive doesn't really explain it.
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Feb 26, 2017 12:04
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While it's true that optimal economic planning is computationally infeasible, there are a lot of computationally infeasible problems which have feasible approximate solutions. In a market economy, people's spending and production decisions form an algorithm that "plans" the economy. If we knew enough about the behavior that makes market-based resource allocation work, it could be simulated with a randomness-using algorithm. Or if we studied economies in general, we might identify general rules that could be used as parts of a partial planning algorithm, and leave the rest to people's organic decisions, extending the reach of the planned section of the economy whenever science advances. Currently though, we don't know enough about why exactly economies work to form a good approximation, because we have wasted the greatest mathematical minds in economics by heavy-handedly encouraging them to study macroeconomics by generalizing from microeconomic fiction rather than working like actual mathematicians do when tackling complexity. Identifying the central, most significant processes that form the complex system, modeling them, and working downward from there. I do think we will move toward that direction during my lifetime, because our monetarist crisis responses are setting us up for one unpredicted crash after another. There will be a point where mainstream economists and their employers won't be able to stand the humiliation anymore.
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Feb 27, 2017 18:18
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JeffersonClay posted:Have you ever heard of mainstream economist John Maynard Keynes? Keynes was a humble beginning in the right direction that was almost immediately (starting from 1937!) pissed away by starting to integrate keynesianism into mainstream macro as a special case that is not at odds with the common theory. Post-keynesians got Keynes-derived economic research back on the right track, but there was a long dark age between initial keynesian ideas and the beginning of post-keynesian research, so we didn't actually advance that much in the last 80 years.
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Feb 27, 2017 20:08
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Confounding Factor posted:Yep I totally agree. That's where we should start. We gotta get these fuckers to start paying their taxes, it's only fair. But according to MMT-types there is no such thing as a "fair" tax plan so... If by MMT you mean modern monetary theory, what it actually says is that you shouldn't raise taxes to finance balanced budgets. The idea is that issuing currency creates money and taxation simply destroys the issued money, exactly like paying down debt destroys the money created when private banks issue credit. Public deficit in a country that issues its own currency is never bad unless it's financed with high-interest/foreign-currency debt or it starts causing problems consistent with excess demand, like accelerating inflation. However, taxation in and of itself is good. Most importantly, it creates the demand for your currency. Secondly, it gives democratic control over whose money it is that should be destroyed. Since poor people having more money is better both morally and for aggregate demand than rich people having more money, there's no way to conclude that taxing the rich is bad. I can see why someone would say that there's no fair tax plan though, since MMT basically denies that we should strive toward some sort of equilibrium-enabling tax policy and instead says that who we tax is best left for the people to decide. As an aside, one interesting consequence of MMT is that government bonds are, first and foremost, welfare for the rich.
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Mar 3, 2017 07:37
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By most of the rest of the world, do you mean... The Eurozone? Because it seems to me that USA has been pretty average among first-world countries that have currency sovereignty and haven't enacted or haven't been politically able to enact full austerity.
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Apr 9, 2017 14:19
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Paradoxish posted:I think employment in general is a super lovely metric because its usefulness is more or less limited to the question "is the economy currently in recession right now y/n." Even then you need to be looking at some kind of rolling average and not just a single month's jobs figures to be sure that you aren't seeing noise. Quality of jobs (however you want to define that), wages, etc. are definitely way more useful if you're interested in answering the question of whether or not an economic expansion is actually working to benefit a large number of people. Most of that data from the last eight or so years is much less optimistic. Seconded. In an ideal keynesian world employment is a pretty useful metric because it informs how much a state can productively deficit spend and also how much unused production potential (potential extra GDP growth) there is. In a monetarist world it just informs central bank interest policy and there ain't nothing politicians can do except pray to the free market fairy and beat up labor into more flexibility. As long as unemployment is fought almost exclusively with supply-side measures and sub-5% unemployment is immediately countered with central bank policy, the connection between reducing unemployment and improving lives is severed.
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Apr 10, 2017 16:36
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Krugman is a neoclassical hack that constantly shifts his beliefs to be firmly mainstream or an acceptable level of radical depending on who's asking. New Keynesian is just a brand name for neoclassicals that believe in fiscal policy during crises, but only for a very limited window. The Obama stimulus is a great example of New Keynesian policy: You had humongous deficit spending for a single year that concentrated on bailouts, and calls for making a full shift from fiscal to monetary policy before hyperinflation or whatever hits right after the stock market was safe. I'm almost certain that Trump and the rise of nationalist populism, rather than any actual intellectual discovery on his part, was what made him shift opinion this time. I recommend Steve Keen and Bill Mitchell for blogging economists that actually seem to understand (and be able to explain with math&stats if you're into that) what has been happening post-2007. Coincidentally though, at least Mitchell is in fact calling for an end to the free movement of capital (and nationalization of banking, because over 90% of money creation is done by private rather than central banks and only when it's profitable for them) and both think that economic policy should be decided on the same scale as currencies are used, no smaller or larger.
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Apr 11, 2017 14:08
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BrandorKP posted:Appealing to the consensus of reasonable experts is a different beast than an appeal to authority. To paraphrase Steve Keen, mainstream economists aren't experts on the economy, they're experts on a model of the economy that doesn't apply to the real economy.
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Apr 11, 2017 18:43
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BrandorKP posted:Pointing this out is like pointing out everyone has an rear end in a top hat. It's true, but not a particularly earth shattering arguement. Assholes (like models, or ideologies) do vary by quality and condition. That's the place to do real meaningful criticism. Things like that hemmroid is sticking out or you need to wipe more (this or that assumption is garbage). Actually models are supposed to apply to the thing they're describing. Like, it's completely different when your model produces slightly incorrect predictions due to some simplifications and when your model predicts the opposite of reality. (For example, seeing "The Great Moderation" as a sign of increasing stability instead of an incoming debt crisis, or predicting that austerity increases private spending) Another thing is that "serious" economics is currently married to a single family of models (DSGE) and does not accept that non-DSGE assholes can be judged on the same terms as DSGE assholes. DSGE cannot fail or be replaced, it must simply be fitted to new data by introducing new magical variables as needed. That is what makes macroeconomists experts on a model rather than the economy, they religiously avoid modeling reality when it's not internally consistent with their false understanding of the economy and consider choosing reality over consistency not to be "serious" economics, Accretionist posted:The dirty little secret of models is that all models are wrong. But they're useful so we keep them around. Obviously. My point was that all that mainstream macro models are useful for is keeping up the reputation of professors and paying their salaries. And enabling policy choices that might not work for the general public but certainly benefit some people. uncop fucked around with this message at 20:03 on Apr 11, 2017 |
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Apr 11, 2017 19:53
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Nice piece of fish posted:That's quite the claim. I'm not going to pretend to be an economist or in a particularly good position to criticize economics, but my gut feeling is to not disagree. However, I try to not use my gut for drawing conclusions. https://www.theguardian.com/commentisfree/2016/sep/19/its-time-to-junk-the-flawed-economic-models-that-make-the-world-a-dangerous-place https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble.pdf The first link is a Guardian article on the paper that's behind the second link. The paper is pretty well written and darkly humorous, I've read it. Paul Romer is a long-time insider on academic economics and all of a sudden went public with this scathing review of the state of macroeconomics. Abstract posted:For more than three decades, macroeconomics has gone backwards. The treatment of identification now is no more credible than in the early 1970s but escapes challenge because it is so much more opaque. Macroeconomic theorists dismiss mere facts by feigning an obtuse ignorance about such simple assertions as "tight monetary policy can cause a recession." Their models attribute fluctuations in aggregate variables to imaginary causal forces that are not influenced by the action that any person takes. A parallel with string theory from physics hints at a general failure mode of science that is triggered when respect for highly regarded leaders evolves into a deference to authority that displaces objective fact from its position as the ultimate determinant of scientific truth. EDIT: Gotta add to this that Steve Keen, a man who predicted 2007 in the 1990's, and a respected university professor in the middle of producing a mathematical model based on a bunch of observable macroeconomic truths and the principles of complexity theory, is currently begging for money on Patreon, because that sort of macroeconomic research does not get actual funding. The model is real btw, he shows it off during lectures that have been recorded on Youtube. uncop fucked around with this message at 20:25 on Apr 11, 2017 |
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Apr 11, 2017 20:12
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BrandorKP posted:It's interesting that you pick this example: "predicting that austerity increases private spending" when we were taking about Krugman. That might have been a bad choice. But the truth is I don't disagree about the problems with the basic underlying assumptions of the models. But I think there are other things going on and the larger problem are economists that ignore data and reality and stick to the model in the face of data that disagrees. Again this is to say I don't nesissarily disagree with you about economics in general. But again one will find Krugman had quite a bit too say about that particular issue too. I think I was too hasty writing that part, since DSGE models are associated with New Keynesianism (although everyone uses them now) but NKs like Krugman have never thought that crisis-time austerity works. As far as I know, they do believe the opposite though, that increasing government spending outside crisis time crowds out private spending. And that's why it was so important for them to roll back fiscal stimulus right after 2008. I guess a lot of the historical flip-flopping in Krugman's policy opinions has been related to whether he thinks at the time that the Great Recession is over or not. One thing he's been consistently right about is calling out idiotic European ordoliberals. I'll attack him on the content of his writing rather than his person next time.
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Apr 11, 2017 23:57
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Confounding Factor posted:I completely agree on Krugman, although he is still pretty important when it comes to trade. Agreed, although I wouldn't die on the MMT hill if the roles were to reverse. It makes bold statements on a tiny research budget, and no government has yet tested which of those statements hold. But we should be going with whatever that respects the observable truths of economies, like fiat money being endogenous and created by private banks, and that all private sector spending money comes from public deficits, trade deficits, and credit. So likely something within the Post-Keynesian family, which MMT also belongs in. I guess economic schools of thinking in general are developed by people with something in common: e.g. The Chicago School, Austrian Economics. I'd ironically call MMT Australian Economics, but apparently their education is no different from everywhere else. If you check the backgrounds of those who saw 2007 coming, they tend to be people that studied something else entirely on undergrad and graduate levels and became macroeconomics buffs later. Keen studied math, Mitchell statistics, Michael Hudson studied arts, worked in banking and became a political economist focusing on the history of debt and so on. Bank economists were probably the best equipped people to see what was coming, since they had to know how credit actually works to work in banking. The private debt growth starting from the 1980's was so obvious that by the 90's you could tell by the graph that nothing like that had happened since right before Great Depression. The classically educated economists had just been trained not to look at that graph, because debt doesn't matter, as it's just banks acting as intermediaries for lending out people's savings, and the only way that would affect growth was by increasing the rate of circulation of money. I'm on a bit of a personal crusade against economists that piss away the years of my youth by simply deferring to authority against the evidence that has been mounting for 10 years now. I live in the Eurozone, and there will be something on my grave stone about monetarism and ordoliberalism. uncop fucked around with this message at 10:22 on Apr 12, 2017 |
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Apr 12, 2017 10:06
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Helsing posted:That depends on whether the economy is already fully employing its available resources. If the government doesn't raise taxes and if the need to service the new demand of all those low-income UBI recipients by putting idle resources to work then the net result would be a boost to economic growth. For the UBI to have a re-distributive effect it would either have to be accompanied by a tax increase (as opposed to, say, trimming some fat out of the military budget or simply running up the deficit) or economy would have to be near enough to full employment already that the additional demand just inflates prices. What is the definition of redistribution that you're working with here? Common sense says that if money is given to people, it has to have come from somewhere, i.e. it has been redistributed. Finance UBI through income tax and you give from the middle class to the poor. Finance it through a wealth tax and you give from the rich to the poor and middle class. Use both and you give from the rich to the poor. Finance it through overt monetary financing and either economic growth or inflation will pay for it, which is eventually a redistribution from owners of currency to the people who don't own much of it. Finance it through cutting the military and you redistribute income from the military-industrial complex to people. The only way you'd avoid doing any kind of redistribution would be if every UBI dollar caused the amount of economic growth that leads to one more state dollar, without any added inflation.
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Apr 14, 2017 19:01
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Helsing posted:The money could simply be printed by the government without raising any new taxes to "pay" for it. Unless the economy is already at or close to full employment this wouldn't automatically lead to inflation, it might simply cause idle resources to be put to work to service this increase in demand. Or you could eliminate anti-poverty and welfare programs and convert that money to an equivalent cash payment, which is something a number of conservative commentators have advocated for. The UBI has a strong potential to be re-distributive in nature (and I think that would be a strength and not a weakness) but it's not true by definition that it redistributes anything. It really depends on the larger context in which it is implemented and the exact manner in which it is designed. It's fallacious to think that there's a fixed supply of money that the US government has to tax away from the population first before it can spend on programs. You cannot fund UBI through overt monetary financing without eventually doing redistribution, because if (at full resource utilization) the state doesn't cut spending when the private sector increases it, you get inflation. And the size of the UBI cannot adjust to private spending, since that would make no sense. So you would either shift part of the cost to taxes at that point, resulting in redistribution, or redistribute through inflation. I don't disagree with you on there being forms of redistribution that aren't desirable, that could also result from a badly designed UBI.
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Apr 14, 2017 19:57
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I couldn't honestly attribute other types of recession than debt crises to monetarism. Monetarism's idea is that recessions could always be fixed with essentially central bank -backed credit-fueled spending, and 2007 was when the first monetarist credit bubble popped. If you discount the bubble and simultaneously happening but not explicitly monetarist stuff like wage suppression, monetarism was pretty good at ending recessions, and those recessions were just as organic as any. Even 2007 was semi-organic in the sense that it was the private profit motive that made banks create the bad debt, you could eventually have had the same outcome with just deregulation and no monetarism. And I feel like calling the consequences of deregulation products of ideology is a slippery slope, you could as well call private profit-motive-based banking as a whole ideological (because at this moment in history it is economically counterintuitive and exists only to serve bankers) and after that, nothing that banks cause could be considered truly organic. The existence of both is the result of organic profit-driven lobbying, we just had ideologues explaining why those would actually be good things for the economy.
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Jun 28, 2017 08:20
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MiddleOne posted:Monetarism explicitly favors the interest of creditors over those of debtors by curbing inflation and therefore drives income inequality, by depressing wages as you mentioned, which leads to wealth inequality in the long-term. Since high earners spend less and save more then low-income earners an overabundance of capital is created within the economy. With nowhere productive for that capital to go (due to the aforementioned wage supression and its effects on demand) speculation bubbles pop up (either domestically as in the US or exported abroad as with Germany) that inflate asset values and when they pop we inevitably find ourselves in a recession. I feel like you're conflating monetarism with the neoliberal political climate. Monetarism is just the idea that fiscal policy responses to recessions are undesirable and everything should be left in the hands of central banks. Obviously there is very significant overlap, down to central bankers being neoliberals, but I see central banks enacting pro-creditor policy as a political choice rather than an inevitability of monetarism. When fiddling with interest rates fails (this is already a crisis for monetarism, QE is definitely not a standard tool), one can have QE for the banks or QE for the people, and you're describing the results of fully supply-side QE. I'm also not trying to decouple monetarism from ideology, all macroeconomic tendencies so far represent an ideology. The question of whether a crisis has been caused by ideological or "natural" reasons is to me about whether the ideology made something happen that the natural forces would not lead to by themselves. The 1970's stagflation is very easy to tie into keynesian full-employment targeting, and it's absolutely clear that full-employment targeting is a product of ideology and not markets. Tying any of the recessions (edit: except the ones caused by a buildup of debt, which is likewise very easy to tie into monetarism) during the monetarist era to interest rate or inflation targets is a lot harder. The problems they have caused are a result of complex interactions with policies monetarism takes no stance for or against, like deregulation drives. And those policies have tended to let the "natural" market forces show their ugly face rather than trying to work against them like keynesian-era policies did. By taking a step back and letting markets do as they like, you don't create ideologically driven crises, you let capitalism naturally create its crises. uncop fucked around with this message at 10:53 on Jun 28, 2017 |
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Jun 28, 2017 10:40
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MiddleOne posted:Both neo-liberalism and monetarism flow from the same base assumption that economics should be de-politicized. Independent central banks and de-regulation might be motivated differently politically but the end result is the same. The state decreases its role in the economy in favour of a laissez faire market. To curb inflation above all else is to protect debt, there is no such thing as a non neo-liberal monetarism because the two are intertwined in their goals. Protection of property rights and voluntary contracts. What I'm doing is trying to give monetarism some credit as a product of academia rather than right wing pundits' wet dreams like neoliberalism is. That monetarism is a tool neoliberals chose. But yeah, if we assume that current macroeconomics is essentially irredeemable as science, then you are right. I don't think asserting that capitalism creates its own crises is in any way accelerationist. Like, we were talking about creating crises, not just failing to roll them back quickly after they start. No branch of macro I know dreams of actually preventing recessions, so you can't even create one by virtue failing to prevent it, you have to actively create the mechanism through which the crisis happens for it to be attributable to you and not just markets themselves. If our disagreement was about semantics, I'm sorry. Uranium Phoenix posted:Just to clarify, markets are an ideology, as are all the different ideas about controlling them; they are not natural or a force of nature. A lot of time strong ideological proponents of markets and capitalism like to assert that markets are a natural force or some sort of way-things-are-supposed to be, rather than yet another societal construct created by people to serve a purpose. I think its a bad idea to refer to anything about markets as natural, because it tacitly accepts the idea (usually implied, but sometimes stated outright) that markets cannot/should not be controlled (and therefore deregulation is a pure, natural state), rather than the reality, which is that markets on every level are created by people and controlled by people. You are pretty radically misunderstanding what it means that markets are a system secured through state action. What you are correct about is that the state is needed to actively try to make markets act more like the idealized perfect market so that it could produce the results we expect from perfect markets, while market forces themselves act against that goal. But an illegal black market is still a market, and not a product of market ideology, but a tool created out of need. Same with other markets, they aren't products of ideology, but products of not having available non-market alternatives that would satisfy the demand the market exists to fill. And market forces are akin to a force of nature as long as you live in a capitalist society. They just are not anything like what the free market ideal would like you to think. My position is essentially that if you manage to prevent crises, that's great, but it's also fully artificial and there will be organic forces out to destroy that kind of artificial protection. Just like they drove a stake into the heart of keynesian institutions worldwide the first moment they looked weak. The reason i call this kind of political action "organic" is because it is distributed and rises straight out of the profit motive rather than any ideological motive alone. In the real world, market forces aren't just limited to fiddling with prices, but they will use every legal and sometimes illegal means to gain an edge. I will applaud whoever discovers a policy set that simultanously stabilises markets and prevents market actors from crushing it. I expect it will include far more than economic policies, and more of a full overhaul of democratic decisionmaking itself.
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Jun 28, 2017 19:33
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namaste faggots posted:Thanks for the great post. I don't mean to be trite or render your post trivial but isn't that what progressive taxation is for? Progressive taxation is a sort of babby version of downward redistribution that doesn't actually work by itself. It's impossible to tax a poor person so little that they can afford a lot more stuff. And you need progressivity across the tax system rather than just income taxes to get the rich to pay proportionally more than the middle class. Most nordic countries, for example, have almost flat income tax rates because they just direct actual government spending at people with low incomes. Anyway, like i think you implied, spending-based downward redistribution acts as an automatic stabiliser for the economy, which should make recessions milder. But on the one hand you could say that the automatic stabilisers we had even in Europe before austerity weren't nearly enough, and on the other that markets don't actually seem to want demand-side stabilisation since corporations are at the very least passively supporting austerity and gutting benefits. If they thought they'd be better off with slightly milder recessions than the downward pressure on wages caused by harsher recessions, at least non-labor-intensive industries would be lobbying for benefits for people to spend on their stuff. But I feel like the actual strategy every big player is going for is getting governments to subsidise them directly during times of trouble. And the small and medium companies don't have a voice in a system where your amount of votes is proportional to your capacity to spend. uncop fucked around with this message at 09:25 on Jun 29, 2017 |
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Jun 29, 2017 09:05
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MiddleOne posted:No we don't. Our income taxes are anything but flat. Now capital taxes on the other hand... Are there tax deductions on the bottom end that heavily change it from the numbers listed on the internet? On paper, nordic-style progression looks very different from, say, US-style.
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Jun 29, 2017 09:28
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The conclusion of the article seems sensationalist. The just result of an artificial interest rate being replaced with a real market rate would be a ton of loans being forcibly renegotiated to a lower interest rate, and money lost by people through artificially high rates being recompensated to them. What the article seems to be warning about is how the sheer scale of this virtual economy is so large that it's unlikely that the lost money can actually be recompensated. Who knows what would happen to a lot of financial institutions' books if the loans were just renegotiated like that, a lot of them could turn insolvent overnight. Which would lead to a massive crash. The sensationalism comes in when one considers that there is the other option: screw justice, do absolutely nothing about the fraud, just quietly get rid of LIBOR. That seems like it would be unlikely to have results noticeable to the regular person. And it is also the option which is by far the most likely. Have you ever seen judges order a large corporation to pay for damages large enough to absolutely cripple them? It would have been just in cases such as many negligently caused environmental disasters, but it is simply not done.
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Aug 12, 2017 15:01
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