This is lecture 11 on behavioral finance by Steve Keen. In this last lecture, Keen deals with the financial crisis of 2008 and subsequent crisis of debt deflation. A great lecture.
Given that Milton Friedman and Edmund Phelps believed that there was an actual difference between expected inflation and actual inflation, would this mean that they too rejected rational expectations? Assuming they are not being self-contradictory.
If so, it means that even the neoclassical sister school of thought of the Chicago school still rejected some major fundamental neoclassical ideas.
LK, I haven't seen a post on this topic recently, can you please redirect me. Given that your strand of keynesianism advocates heavy deficit spending, what's your advice now to, say, Greece and Italy that have actually been doing that for the past decades and are now on the verge of bankruptcy?
"Given that your strand of keynesianism advocates heavy deficit spending, what's your advice now to, say, Greece and Italy that have actually been doing that for the past decades and are now on the verge of bankruptcy? "
The public debt problems of Greece and Italy are because there are in the Eurozone. They have given up their monetary independence to the ECB.
The UK, US, Australia and many other nations has been engaging in deficit spending too, but there is no public debt problem in these nations because they have monetary independence, with their own central banks.
Also LK, I remember some time ago you were arguing that deficit spending works such wonders in terms of GDP growth and tax revenue that paying off public debt of any size becomes a trifle. Now that Greece and Italy actually followed your policy you're saying they have problems merely because they can't print money. Where did the keynesian wonders go?
"LK, so basically your policy boils down to the old good keynesian money printing?"
Deficit spending can be done with $for$ bond issues, by which investors are perfectly free to purchase government bonds. That isn't "money printing".
But deficits could also be monetised. In an environment of high unemployment, low capacity utilization and idle resources, the primary effect of either measure is to increase output and employment, not inflation.
"I thought you were supposed to be somehow better than that."
The notion that FR banking is bad, that endogenous money supply that expands according to needs of trade or commerce, and the money creation by central banks is evil is all pure garbage peddled by libertarian cultists.
I have no idea what you "heard" about this blog, but it doesn't worry me at all if you wnat to have a childish libertarian rant about "money printing".
"Also LK, I remember some time ago you were arguing that deficit spending works such wonders in terms of GDP growth and tax revenue that paying off public debt of any size becomes a trifle. Now that Greece and Italy actually followed your policy you're saying they have problems merely because they can't print money."
Neither Greece and Italy have followed any Post Keynesian / MMT policy plan, you fool. Greece in fact has gone the route of austerity.
If Greece and Italy followed a Post Keynesian / MMT policy plan, they would have:
(1) left the euro (2) restored their domestic currency and own central banks (3) converted their euro debt into their own domestic currency (4) run large deficits to create high employment and robust economic growth
E.g, they would have done what Norway, South Korea etc did.
Deficit spending can be done with $for$ bond issues, by which investors are perfectly free to purchase government bonds.
Right, so diving deeper and deeper into debt, and Greece and Italy were doing precisely that, according to your specifications. So where are the keynesian wonders now? Why do they now need their own currency and money printing back to survive?
But deficits could also be monetised.
See, fraud right there again. Debt monetising is one of many fraudulent euphemisms you like to use to obscure what it really means. Money printing. Quantitative easing, I bet you like that one too. Money printing. Then you say, well, fractional reserve banking is "clear from the contract" to any Joe out there. Wow, what a fraud.
run large deficits to create high employment and robust economic growth
But they have already run large deficits, that's where their current debt and impending bankruptcy comes from, remember? Why, are euro-based deficits somehow keynesian-wonder-immune?
"But they have already run large deficits, that's where their current debt and impending bankruptcy comes from, remember? Why, are euro-based deficits somehow keynesian-wonder-immune? "
By this statement, you have shown that you are a ignoramus.
Ireland has also been running large deficits as a percentage of GDP for some years, but it was not practising Keynesian stimulus. Why?
Because Keynesian stimulus requires increases in discretionary spending to offset the contraction in private consumption/investment/export earnings.
Ireland and other nations have deficits because their tax revenues severely collapsed. They have in fact cut government spending. That is not Keynesian stimulus. This is the reverse: contractionary fiscal policy. Go and learn some basic facts about Keynesian economics, if you want to be taken seriously.
But deficits could also be monetised. In an environment of high unemployment, low capacity utilization and idle resources, the primary effect of either measure is to increase output and employment, not inflation.
That just kicks the can down the road.
1. Once the productionless consumers called the state go out and observe previously employed labor all slothily repairing roads that could be fixed voluntarily in just a few weeks, once the previously idle resources are all being put to some wasteful use, the state would presumably have to reduce back down the money printing and debt financed spending.
At that point, the consumer's real preferences will reassert themselves in determining where and how labor is profitably employed, and where and how scarce resources are profitably utilized. Since the consumers preferences are their own and not the state's preferences, then once again high unemployment and idle resources will return, this time worse than before, because now entrepreneurs and investors will have to reverse even more economic distortions brought about by more years of state-driven, anti-consumer choice allocations of labor and capital.
2. Government borrowing and spending, and government money printing, doesn't just go to where there is unemployment and doesn't just go to where resources are idle. This is because resources are not stripped away from the rest of the economy. Resources are like puzzle pieces, that require other resources, complimentary resources, in order to be useful.
In addition, if there is a surplus of labor, and idle resources, one has to ask WHY there is a surplus of labor and idle resources in the first place. This is something that you Post Keynesians never do. Why? Because you lack an adequate capital theory. You're just about garbage in, garbage out.
The argument that money printing and debt financed spending from productionless consumers are mainly "beneficial" during periods of high unemployment and low resource utilization, is thoroughly refuted by William Hutt in his book "Theory of Idle Resources", which you can download for free here:
The notion that FR banking is bad, that endogenous money supply that expands according to needs of trade or commerce, and the money creation by central banks is evil is all pure garbage peddled by libertarian cultists.
*Sigh*
The notion that FR banking is good, that endogenous money supply that expands according to whims of bankers, and the money creation by central banks is good is all pure garbage peddled by statist cultists.
"because now entrepreneurs and investors will have to reverse even more economic distortions brought about by more years of state-driven, anti-consumer choice allocations of labor and capit"
How on earth would you know that all public infrastructure/works spending, social spending, R&D spending etc, is a "anti-consumer choice allocation of labor and capital"? No doubt people just *love* badly maintained roads, bridges, highways, ports, etc, and (say, in the case of social security/transfer payments) starving when they can find no work on the market. Don't believe me? Try asking people if they prefer to starve rather have the government spending we call social security.
You are yet another libertarian buffoon.
(2) Government borrowing and spending, and government money printing, doesn't just go to where there is unemployment and doesn't just go to where resources are idle.
Correct. That is why inflation is a secondary effect. But the very same argument applies to private investment spending too.
If your argument that the secondary effect of inflation per se somehow rules out government stimulus as an activity, then all private sector investment would also be ruled out.
"Given that Milton Friedman and Edmund Phelps believed that there was an actual difference between expected inflation and actual inflation, would this mean that they too rejected rational expectations?"
I don't know about Phelps, but Friedman at least was never convinced by his colleagues' rational expectations theory, at least according to Paul Krugman's essay memorializing him: http://www.nybooks.com/articles/archives/2007/feb/15/who-was-milton-friedman/
How on earth would you know that all public infrastructure/works spending, social spending, R&D spending etc, is a "anti-consumer choice allocation of labor and capital"?
Because it wasn't the individual free consumers who made those things profitable. It was the arbitrary decrees of the individuals in the state.
You do know the difference between a consumer making a choice for where production of healthcare is profitable, and the government making a choice for where production of healthcare is politically expedient, don't you?
No doubt people just *love* badly maintained roads, bridges, highways, ports, etc
You're committing the same fallacy that Bastiat was talking about hundreds of years ago:
"Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain."
I wasn't denying that people value roads, bridges, highways and ports.
The mere fact that consumers like food, for example, does not mean that should the government decide which food to produce, where, in what quantity, using what means, is somehow going to magically match the voluntary consumer's desires and values.
You're conflating the state with non-state consumers. They are two separate groups of people, and within those groups, each individual has their own desires and values.
If consumers like roads, bridges, and highways, then their voluntary payments can determine where roads, bridges and highways are profitable, i.e. most urgently needed.
The high value on roads and bridges does not mean that only government can offer them. That's a silly jump in absurd logic.
and (say, in the case of social security/transfer payments) starving when they can find no work on the market.
Starving? Haha, no. If they can be sustained nutrition wise when they are unemployed, then obviously there must be enough food being produced by those who are employed. And food production can increase, and general production can increase, if the unemployed become employed.
You're not even asking or considering why the unemployed are not employed, and yet they are not starving. If you could live without working, because the state supports you at the expense of those who work and produce, then what incentive is there for you to work at all?
Don't believe me? Try asking people if they prefer to starve rather have the government spending we call social security.
This is a silly false dilemma fallacy.
You are yet another libertarian buffoon.
I'm not a libertarian.
Correct. That is why inflation is a secondary effect. But the very same argument applies to private investment spending too.
The very same effect applies, yes, but not the same argument I was making.
If your argument that the secondary effect of inflation per se somehow rules out government stimulus as an activity, then all private sector investment would also be ruled out.
No. It rules out the notion that government spending doesn't affect non-idle resources and non-unemployed labor, even if there is high unemployment and idle resources.
Are you "Pete" by yet another handle?
Am I supposed to sign up? I don't know who "Pete" is.
Lord Keynes, when I say "distortions" I only mean it in the strict economic sense of "not in line with voluntary individual consumer preferences." I don't mean it in the "consumers don't want roads or bridges or highways at all" kind of way.
Not all roads and bridges and highways are the same and valued the way they are now. An already built by government road could be worthless, less valuable, or equally valuable, compared to what voluntary individual consumer preference would judge if individual consumers had the choice instead.
If I knew you liked food, and then I financed what I think you want, how much you want, and where/when you want it, then my decision could be wrong, compared to if you had the ability to determine what I do based on your voluntary spending patterns.
Suppose that I continue to make food, and you eat it because I offer it to you "for free", meaning I take only some money from you, but lots from others, and then financed this food making facility. Once I take your money, the food I produce is "free of charge" to you, so you can walk right up and I'll give you food at no additional charge.
Suppose after some time of doing this, I no longer take people's money, I no longer take your money. Now, you and others have more money in your pockets, because I am no longer taking it.
Since you value particular food in your own way, in terms of what you eat, where, and in what quantity, what will happen is that your spending patterns on food will no longer make my food making enterprise viable. If it was viable, then I wouldn't need to have taken money from you and others, you'd just voluntarily give it to me.
Suppose I only took your money and other people's money to employ unemployed food making workers and put that food making facility into operation. Once everything is running, there is no longer any need to be spending that money, so I will reduce my spending back down, which means you and others will have more money to spend.
After all, the whole point of government stimulus during down times is temporary right?
So once I reduce my spending, you and others have more money to spend. And again, because your desires for what food you want, where, and what quantity, will necessarily be different that what I was doing according to my desires and my values, it means that the reassertion of your ability to choose your own food will require a re-allocation of labor and capital away from my food making facility and towards some other use.
The "distortion" I was referring to is only the difference between what you wanted for food production through market means, and what I was originally offering to you through political means.
"You're committing the same fallacy that Bastiat was talking about hundreds of years ago:
There is no fallacy. If in fact proeple dreive utility from privately provided roads, bridges, highways, ports, etc., then they also derive it from publicly supplied ones.
"If consumers like roads, bridges, and highways, then their voluntary payments can determine where roads, bridges and highways are profitable, i.e. most urgently needed."
Garbage. The private sector is not necessarily capable of supplying public infrastucture when it has to be for profit.
Also, it is precisely like health care: not all people will be able to afford the privately provided service/good. Public provision cutting out the profit markup - and using progressive taxation - benefits more people.
"If they can be sustained nutrition wise when they are unemployed, then obviously there must be enough food being produced by those who are employed. And food production can increase, and general production can increase, if the unemployed become employed. etc
"It rules out the notion that government spending doesn't affect non-idle resources and non-unemployed labor, even if there is high unemployment and idle resources."
I don't deny that government spending, like private investment spending, can have secondary inflationary effects even when you have an economy running well below full capacity. Either both are acceptable or they are not.
Otherwise your objection to Keynesian stimulus just reduces to the "tax is theft!" mantra.
There is no fallacy. If in fact proeple dreive utility from privately provided roads, bridges, highways, ports, etc., then they also derive it from publicly supplied ones.
That's another logical fallacy in addition to the one I previously identified.
That I like hamburgers more than the prices I pay for them, where I pay for them, does not mean I will like YOUR particular hamburgers, what you call "public" hamburgers, for the costs you incur on me, and where you produce and give them.
You can only know if I like your hamburgers by passively observing my voluntary actions based on my free choice.
By your logic, the fact that people like ANYTHING would somehow prove that communist states can and should produce everything, just by calling every good a "public" good.
You're not making any sense.
"If consumers like roads, bridges, and highways, then their voluntary payments can determine where roads, bridges and highways are profitable, i.e. most urgently needed."
The private sector is not necessarily capable of supplying public infrastucture when it has to be for profit.
Nonsense. If "public infrastructure" is VALUABLE to people, then it will necessarily be profitable, because people would be willing to pay a high enough price relative to their other purchases, that covers the costs of production that are themselves derived from consumer preferences for scarce resource allocation.
Yes, this would even be the case for people who spend relatively little money because they make relatively little money. See Wal-Mart and their serving of MILLIONS of poor people. How many are you serving? Other than ranting on the internet, probably at the expense of the productive taxpayers? LOL
Is this blog one giant self-affirmation that allows you to sleep at night?
There is no basis for concluding that "public" goods that are actually valued by people, would not be profitable.
It is a myth that there is a difference between "public" goods and "private" goods. All goods are scarce and incur costs, so all goods can be and should be economized under a rubric of market exchanges.
Also, it is precisely like health care: not all people will be able to afford the privately provided service/good.
And? Nothing follows from this. It is, currently, a fact of reality. You're just smuggling in a particular violent ethic that is unjustified.
Not everyone can afford everything, because desires always outstrip the ability to produce.
Not everyone can afford food, so does that mean that food production should be communized and put under state control? No.
Not everyone can afford shelter, so does this mean that shelter production should be communized and put under state control? No.
Not everyone can afford a car, so does this mean that car production should be communized and put under state control? No.
Again, you're not making any sense.
And you're completely ignoring voluntary charity. If a democratic state is representative of the majority's values, and you say that the democratic state should ask the majority to give enough money and resources to give to those who can't afford the healthcare they want, then that would mean that the state is not even necessary, because the majority have already displayed their willingness to give money to help the needy, and not only that, but the state would just be an additional overhead cost that reduces what could be given to the poor by the majority.
If you deny that the majority of people would give to charity without the state, such that the state has to go against the majority's desires, then you're against democracy.
If you say that without the state, not everyone will give money to help the poor, then you're not concerned with the poor so much as you just want everyone to obey and pay the state. Not only would you be calling for naked aggression against people who did no wrong, but you would also be denying the fact that the people would have more money to give to the poor in general if they weren't taxed.
Furthermore, people give to charity even WITH the state taking their money to give to the poor! In other words, the state isn't even doing its job of doing what IT can possibly do to help the poor. If people still give to the poor voluntarily, then the state should be taxing people more because that would enable the state to give more to the poor.
That sounds weird doesn't it? You're probably thinking, if the people are already giving to the poor, then there's no need to tax them. Well, THAT'S MY POINT. Clearly people are giving to the poor without being forced. So what's the purpose of the state's guns? Clearly they are only to aggrandize the state for the sake of itself. If the democratic state, which represents the majority, no longer takes from the rich and gives to the poor, then do you really think the majority will stop giving to the poor, and millions of poor people will die in the streets? That makes no sense. If the state represents the majority, then the majority are proving that they want to help the poor.
At any rate, how much charity do you give? I volunteer at the local women's shelter twice a month, and I give to a foster child in Kenya. And I'm not even wealthy!
Why do you call for guns to be pointed at my head? Where did you get this mentality that such things are proper and ethical? You're not ethical in the way you're describing unless you are going out and helping people on your own recognizance. You're not moral or ethical by calling for others to be forced to pay to help others. You'd only be a sniveling coward who only wants to APPEAR as ethical in the eyes of others, while not actually practising ethical behavior.
Anyone can call for others to be forced to help at gunpoint. That's way too easy.
I find your posts highly offensive and indecent. I wandered into this blog thinking that I could engage in mature discourse, but you're nothing but just another internet Keynesian fake ethics rabble rouser. Pshaw!
Public provision cutting out the profit markup - and using progressive taxation - benefits more people.
Profit is what's left over after expenses have been paid. It's not an extraction.
If there were no private capitalist producers, all revenues earned would be all profit, because there would be no money costs of production to deduct from sales revenues.
The onset of capitalist producers is the onset of money costs of production and a reduction in profits, not the onset of profits.
Progressive taxation helps more people? That's a big false. Progressive taxation takes the most money away from those who are the world's largest employers and charity givers. That harms everyone because it reduces production and what can be given by charity.
What would help the most people is the most individual freedom. That would enable people to be the most charity driven. You can't be generous with money if you're taxed of it.
As Aristotle noted, humans cannot act benevolently and philanthropically unless they own something to give. Take away what they own, and you take away their ability to act benevolently, and you breed a society of selfish cynical assholes.
"If they can be sustained nutrition wise when they are unemployed, then obviously there must be enough food being produced by those who are employed. And food production can increase, and general production can increase, if the unemployed become employed. etc"
What gibberish.
You know, these silly one liners that are really nothing but hand waving denials, don't reflect positively on you. Shame.
You're insulting poor people and viewing them as lower animals who can't help themselves.
"It rules out the notion that government spending doesn't affect non-idle resources and non-unemployed labor, even if there is high unemployment and idle resources."
I don't deny that government spending, like private investment spending, can have secondary inflationary effects even when you have an economy running well below full capacity.
What about the primary effects of economic distortions away from true consumer preferences? Why are you ignoring that?
Otherwise your objection to Keynesian stimulus just reduces to the "tax is theft!" mantra.
Well, there's both a moral and an economics case to be made against Keynesianism.
Morally, it is wrong to use violence to take property (money, resources) away from their rightful owners, even if it is for the purposes of helping others.
Economically, the Keynesian school reduces productivity, and not just one time, but progressively so. It only has short term positive effects for some people, and negative short term effects for other people, but long term, everyone suffers, and progressively so.
Public provision cutting out the profit markup - and using progressive taxation - benefits more people.
Profit isn't a markup. Profit is what's left over after expenses have been paid.
Progressive taxation helps more people? That's false. Progressive taxation takes the most money away from those who are the world's largest employers and charity givers.
What would help the most people is the most individual freedom. That would enable people to be the most charity driven. You can't be generous with money if you're taxed of it.
As Aristotle noted, humans cannot act benevolently and philanthropically unless they own something to give.
"If they can be sustained nutrition wise when they are unemployed, then obviously there must be enough food being produced by those who are employed. And food production can increase, and general production can increase, if the unemployed become employed. etc"
What gibberish.
You know, these silly one liners that are really nothing but hand waving denials, don't reflect positively on you. Shame.
"It rules out the notion that government spending doesn't affect non-idle resources and non-unemployed labor, even if there is high unemployment and idle resources."
I don't deny that government spending, like private investment spending, can have secondary inflationary effects even when you have an economy running well below full capacity.
What about the primary effects of economic distortions away from true consumer preferences? Why are you ignoring that?
Otherwise your objection to Keynesian stimulus just reduces to the "tax is theft!" mantra.
Well, there's both a moral and an economics case to be made against the Keynesian school.
Morally, it is wrong to use violence to take property (money, resources) away from their rightful owners, even if it is for the purposes of helping others.
Economically, Keynesian school reduces productivity, and not just one time, but progressively so. It only has short term positive effects for some people, and negative short term effects for other people, but long term, everyone suffers, and progressively so.
"There is no basis for concluding that "public" goods that are actually valued by people, would not be profitable."
(1) They do not need to be profitable. E.g., universal health care provided by the state is done so not to make profit, but for the ethical reason that it is immoral to allow people who cannot afford it to go without when they costs for a wealthy industrial society are not particularly high.
(2) So no human being derives utility from a universal health care system, free at the point of delivery? There is not one person in any Western European state, Canada, Japan, South Korea, Taiwan, Australia, New Zealand etc. who values universal health care system?
Go back to genuflected in front of a photo of Rothbard and stop bothering people in real world.
"Morally, it is wrong to use violence to take property (money, resources) away from their rightful owners, even if it is for the purposes of helping others"
Only under idiotic ethical theories incapable of rational justification:
"Economically, Keynesian school reduces productivity, and not just one time, but progressively so."
Utter rubbish. You have no empirical evidence for any such assertion.
During the era of Classical Keynesianism 1945-1973, productivity growth in many countries was outstanding.
E.g., in America from 1945-1973 in the era the era of Classical Keynesianism of productivity growth was 3%. When Keynesianism was abandoned and we got monetarism/the (neoclassical) new consensus macroeocnomics, it fell from this level, for a variety of reasons. There is no empirical evidence for what you say.
"There is no basis for concluding that "public" goods that are actually valued by people, would not be profitable."
(1) They do not need to be profitable.
That doesn't respond to my point. I am not saying it ought to be profitable, I am saying it will be profitable if it's valuable.
Universal health care is provided by the state is done so not to make profit, but for the ethical reason that it is immoral to allow people who cannot afford it to go without when they costs for a wealthy industrial society are not particularly high.
Then why aren't you helping them, rather than wasting time on some internet blog? You say it's immoral to "allow" people who cannot afford healthcare, to go without healthcare, and yet you're not practising what you're preaching.
You're clearly an intelligent enough person, so why aren't you helping people who need healthcare by going out and volunteering and donating your money and opening up a website on collecting charity? Why are you talking crap on the internet and moralizing on others?
Helping the poor is one thing. How is identifying that it is immoral NOT to help the poor (which you're clearly also not doing) justify the state's violence? Why doesn't it necessitate private charity only? You're ignoring private charity!
(2) So no human being derives utility from a universal health care system, free at the point of delivery? There is not one person in any Western European state, Canada, Japan, South Korea, Taiwan, Australia, New Zealand etc. who values universal health care system?
If everyone values universal healthcare, such that they are willing to pay for it, then what's the use of the state's violent threats if people don't pay?
You're proving my case and refuting your own!
If everyone values universal healthcare, then clearly everyone would pay into it voluntarily! The state's guns are totally unnecessary, and represent unnecessary added overhead and administrative costs, which drains resources away and reduces the amount of healthcare that could be given!
You're not making ANY sense!
Go back to genuflected in front of a photo of Rothbard and stop bothering people in real world.
This is not the demeanor of an intellectual who is seriously trying to understand the world around him.
And real world? You call running a blog, which appears to be full time, moralizing and judging others, while not practising what he is preaching, to be "the real world"? LOL
You're a textbook example of what happens to morally weak people when the state deprives people of their wealth, thus preventing them from acting benevolently with it.
You claim to be all moral about helping the poor, but you spend your time and energy and resources running a blog about the Keynesian school? Seriously?
How can you expect to earn respect when you act like this? You need to do less judging and moralizing, and more action that matches your rhetoric.
"As Aristotle noted, humans cannot act benevolently and philanthropically unless they own something to give."
(1) Appeal to (ancient) authority fallacy, huh?
(2) the state does not take away all the wealth of the rich at all. Even the premise of your comment is wrong. Prgressive taxation will leave society with many rich people and middle class people and even poor people with resources to donate to charity, if they so wish. They are free to do so.
"I find your posts highly offensive and indecent. I wandered into this blog thinking that I could engage in mature discourse, but you're nothing but just another internet Keynesian fake ethics rabble rouser."
Then kindly find something else to do with your time than posting your garbage on my blog.
"If everyone values universal healthcare, such that they are willing to pay for it, then what's the use of the state's violent threats if people don't pay?"
The vast majority are willing to pay for it by taxes:
“The IRS Oversight Board conducted an independent poll in 2005 that found 96 percent of the respondents agreed ‘it is every American’s civic duty to pay their fair share of taxes.’
The Pew Research Center in a similar study in 2006 found 79 percent of the respondents said that cheating Uncle Sam was ‘morally objectionable.’ (Maxwell, S. 2000. The Price is Wrong: Understanding What Makes a Price Seem Fair and the True Cost of Unfair Pricing, John Wiley & Sons, Hoboken, N.J. p. 146).
Coercion for those unwilling to pay (e.g., free riders, the selfish, libertarian cultists) for something moral like helath care and any number of other morally right stae programs is fully justified by consequentialist ethics.
"Progressive taxation takes the most money away from those who are the world's largest employers and charity givers."
False. E.g., financial institutions do not employ large nunbers of peopel at all, yet these institutions are very welathy.
LOL, you honestly think that one example refutes my argument?
One example does not refute my argument about wealthy people employing the most people and giving the most charity.
All you're saying is that SOME wealthy people employ relatively fewer people than other wealthy people.
How many people do you employ? Zero? Are you wealthy? No? Do you see my point?
The banking industry is a terrible example, because they can print their own money. They will always have more money than can be taxed. If they're taxed more, then they'll print more.
"Morally, it is wrong to use violence to take property (money, resources) away from their rightful owners, even if it is for the purposes of helping others"
Only under idiotic ethical theories incapable of rational justification:
Actually it is precisely rational justifications that enable us to conclude that it is immoral to harm and sacrifice the individual for the sake of others.
Egad, I reject Rothbard's natural rights ethics. What makes you think that Rothbard has a monopoly on protecting the individual from violence type ethics?
"Economically, Keynesian school reduces productivity, and not just one time, but progressively so."
Utter rubbish. You have no empirical evidence for any such assertion.
Of course I don't have empirical data. I can't observe an economy that doesn't exist empirically because the Keynesian school is being adopted there.
My lord, it's like if the entire world was enslaved, and I said ending slavery would boost people's standards of living, you'd come along and say "Utter rubbish. You have no empirical evidence for any such assertion."
Of COURSE I can't give you empirical data of a counter-factual!
I can only use logic and philosophical science.
Understanding human life to its fullest extent is not, and cannot be, based solely on empirical data. Empirical data is important, but there's also experiencing one's own mind and one's own sense of self. That cannot be an empirical science. It must be self-reflective and cognitive, using empiricism where necessary, but not denying the validity of self-reflection that cannot be empirical.
Suppose that we were living in a world of universal slavery in the year 1000 AD, and that historically, there was always slavery. How could we come up with an argument for slave emancipation if we have no empirical data for it?
We can't. We must use philosophical science, while using empiricism where applicable.
During the era of Classical Keynesianism 1945-1973, productivity growth in many countries was outstanding.
No doubt. But how can you be sure that it was BECAUSE of the Keynesian school, rather than DESPITE the Keynesian school?
Both theories are internally logical, and both are consistent with the data.
How can you solve which theory is correct, if we agree on the data, but disagree on interpreting the data?
E.g., in America from 1945-1973 in the era the era of Classical Keynesianism of productivity growth was 3%. When Keynesianism was abandoned and we got monetarism/the (neoclassical) new consensus macroeocnomics, it fell from this level, for a variety of reasons. There is no empirical evidence for what you say.
In the 19th century, in many years, growth was higher than 3 percent per year.
There is no empirical evidence that Keynesian school improves economies. We have data that we can all agree on, but I adhere to the theory that economies grew DESPITE the Keynesian school.
My theory is just as good as yours when it comes to being consistent with historical data.
"As Aristotle noted, humans cannot act benevolently and philanthropically unless they own something to give."
(1) Appeal to (ancient) authority fallacy, huh?
What? That makes no sense. I was agreeing with Aristotle, I did not say it is right because he said it, or because it's ancient.
Cripes, like if a math guy refers to Pythagoras' theorem, by saying "As Pythagoras has shown..." then that's an "appeal to authority"?
(2) the state does not take away all the wealth of the rich at all.
Correct. But where it does take, it removes people's ability to act benevolent with it.
Even the premise of your comment is wrong.
How so?
Prgressive taxation will leave society with many rich people and middle class people and even poor people with resources to donate to charity, if they so wish. They are free to do so.
I didn't deny that.
"I find your posts highly offensive and indecent. I wandered into this blog thinking that I could engage in mature discourse, but you're nothing but just another internet Keynesian fake ethics rabble rouser."
Then kindly find something else to do with your time than posting your garbage on my blog.
DONE. This will be my last series of posts.
Wow, you're worse than DeLong.
"I am not saying it ought to be profitable, I am saying it will be profitable if it's valuable."
That is utter nonsense.
Again with these worthless one liners.
WHY is it "utter nonsense"?
Do you honestly believe that merely shouting these one liners will refute what I am saying? Sorry, only arguments can do that.
If that were true, you are saying that a private charity cannot provide anything valauble because it is not profitable.
Non sequitur. Private charity is profitable, in the true sense of profitable, which is gains, material or otherwise, exceeds the costs, material or otherwise.
Every charity given to people is also profitable in the market. NOTHING that is given via charity is not making a profit in the market. Food, clothes, shelter, healthcare, etc.
"If everyone values universal healthcare, such that they are willing to pay for it, then what's the use of the state's violent threats if people don't pay?"
The vast majority are willing to pay for it by taxes:
If the vast majority are willing to pay for healthcare, why the taxes and unnecessary overhead and logistical costs?
Coercion for those unwilling to pay (e.g., free riders, the selfish, libertarian cultists) for something moral like helath care and any number of other morally right stae programs is fully justified by consequentialist ethics.
I am not a libertarian, but I do act in ways that one could call libertarian, but as I said, I give to charity and I volunteer to help those in special need.
What are you doing to help people with their healthcare, other than writing on a blog proselytizing and calling for others to pay by force?
You're calling libertarians selfish, and yet you are ACTING contrary to your own moral pronouncement you have set for others.
And consequentialist ethics? How can a rational ethics be based on outcomes, if I need to know what I ought to do now in the present, where I exist and must behave, before the outcomes are reached? Shouldn't a rational ethics tell me what I ought to do NOW in the present, before the future is reached?
Egad, if consequentialist ethics is right, then you must be open to having people do ANYTHING THEY WANT to others, including torturing them, because we can only judge all actions according to outcomes in the future.
You cannot say that any action right now in the present is morally wrong, because as a consequentialist, you'd have to wait for the outcomes in the future.
When is the correct future anyway where we can say OK, THIS is the outcome and THIS is where we must make an ethical judgment?
Consequentialist ethics is a religion. It is taking a non-existent future, where people can think anything they want, and then DO anything they want in the present.
"Are you actually saying that if I hold that the individual ought not be harmed with violence, I must adhere to either Rothbard or Hoppe's ethics?"
No. State what ethical theory do you advocate.
To anwser your question, I adhere to a version of consequentialism that holds we should aim at more ends than just utility/happiness such as
(1) preservation of human life where the people in question wish to continue to live and we can clearly ascertain this (e.g., the man dying of disease in a privatised system of health care, the starving human being who is unemployed and who finds no private charity).
(this has precedents in 20th century forms of consequentialism)
(2) minimising suffering, especially where this can be done with redistribution of resources that are relatively abundant (on this point, I wish to take Karl Popper's negative consequentialism and make it part of a larger consequentialist system)
(3) aiming at the end of respecting certain individual rights where not doing so would harm the fucntioning of society significantly. (on this I think notions of justice and fairness are legitimate ends, as in Rawls' critiques of some crude utilitarian theories).
These additions to consequentialist ends aimed at overcome most of the traditional objections to utilitarianism.
There is in fact a high degree of compatiblity between a number of modern consequentialist theories.
E.g., preference consequentialism (held by Peter Singer) combines easily to two-level preference consequentialism as held by R. M. Hare.
And even the incompatiblity of consequentialism with other theories is exagerrated. Many forms of consequentialism are compatible with the difference principle of Rawls.
"You cannot say that any action right now in the present is morally wrong, because as a consequentialist, you'd have to wait for the outcomes in the future"
Nonsense. One can do one's best to think about future outcomes when taking actions.
E.g., if I walk past a lake with a man drowning calling for help and save him, that is the right thing to do and it only takes seconds to foresee that consequence.
"It is taking a non-existent future, where people can think anything they want, and then DO anything they want in the present."
Jesus. If I walk past a lake with a man drowning calling for help and save him, that is the right thing to do and it only takes seconds (if that) to foresee that consequence.
"In the 19th century, in many years, growth was higher than 3 percent per year.
Cite me a source for this.
I thought you wanted me to stop posting here? OK, if you want me to stay, I'll stay for a little while longer.
This is easily verifiable data, Lord Keynes.
"From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873.[34] The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled."
To anwser your question, I adhere to a version of consequentialism that holds we should aim at more ends than just utility/happiness such as
(1) preservation of human life where the people in question wish to continue to live and we can clearly ascertain this (e.g., the man dying of disease in a privatised system of health care, the starving human being who is unemployed and who finds no private charity).
(this has precedents in 20th century forms of consequentialism)
(2) minimising suffering, especially where this can be done with redistribution of resources that are relatively abundant (on this point I wish to take Karl Popper's negative consequentialism and make it part of a larger consequentialist system)
(3) aiming at the end of respecting certain individual rights where not doing so would harm the fucntioning of society significantly. (on this I think notions of justice and fairness are legitimate ends, as in Rawls' critiques of some crude utilitarian theories).
These additions to consueqnetialist ends aimed at overcome most of the traditional objections to utilitarianism.
There is in fact a high degree of compatiblity between a number of modern consequentialist theories.
E.g., preference consequentialism (held by Peter Singer) combines easily to two-level preference consequentialism as held by R. M. Hare.
And even the incompatiblity of consequentialism with other theories is exagerrated. Many forms of consequentialism are compatible with the difference principle of Rawls.
Wow. That's quite the laundry list.
So in other words, you don't adhere to any ethics in particular, either someone else's or your own discovery, but rather you cling to a hodge-podge of various defense mechanisms to justify your arbitrary, non-rationalist ethical preference of calling for violence against the individual to help poor people, while refraining from actually devoting your life to helping poor people.
Is that about right?
How can you seriously abide by this? It's all over the place. This is an ethics of a man who has no clear conception of what he should believe.
"You cannot say that any action right now in the present is morally wrong, because as a consequentialist, you'd have to wait for the outcomes in the future"
One can do one's best to think about future outcomes when taking actions.
OK, but mere thinking about the future still means I can do anything in the present! There's no limitations to what people ought to be doing in the present if the only requirement is that they think of the future!
I am asking you how can I know what I ought to do NOW.
What should I do and not do NOW?
E.g., if I walk past a lake with a man drowning calling for help and save him, that is the right thing to do and it only takes seconds to foresee that consequence.
But we're still in the present. If you see a drowning man in a lake, how do you know what you ought to do now, given the fact that the outcome of you actually saving him has not occurred yet? After all, there is a possibility that you might drown too, or there is a chance that you are running by the lake on your way to trying to save your family member.
Given that I cannot predict the future, since I'm not God, given that there are various possible outcomes I cannot foresee, what am I supposed to do and not do NOW in the present, before the outcomes are reached?
Your thinking is actually more crude than I thought.
"It is taking a non-existent future, where people can think anything they want, and then DO anything they want in the present."
Jesus.
Wow.
If I walk past a lake with a man drowning calling for help and save him, that is the right thing to do and it only takes seconds (if that) to foresee that consequence.
False. You cannot foresee the future. Something might go wrong.
Give I cannot know what exactly will happen, how in the world can you say that my actions in the present ought to be guided by a single possible outcome out of many, before the outcomes are actually reached? Why that possible outcome, but not the one where my life might end?
You're not answering my question using logic. You're just giving an example and essentially asking "Really? You really don't get it? I mean come on!"
Indeed. I have no idea how you can tell me that I ought to do something now, based on only one possible future outcome, and not others.
Why does your ethics say that I ought to act consistent with the one possible outcome where I might die, rather than another possible outcome?
Sounds to me like you're calling for nothing but straight up human sacrifice.
"If you see a drowning man in a lake, how do you know what you ought to do now, given the fact that the outcome of you actually saving him has not occurred yet?
You aksing how do you know what to do now when you can clearly foresee the right thing to do with its consequence in seconds?
Let's moveon form this idiocy.
After all, there is a possibility that you might drown too, or there is a chance that you are running by the lake on your way to trying to save your family member."
This is called shifting the goal posts. I take you can't refute the original example.
"there is a possibility that you might drown too,
There might be. In that case, you judge whether you want to take the risk. If not, you can try other means: throwing something for man to grab onto.
"or there is a chance that you are running by the lake on your way to trying to save your family member"
Again: you use your best judgement. If there is a terrible moral choice (impossible to save both) to be made it is indeed unreasonable to expect a normal being to choose a stranger over a family member
""From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita"
Real GDP is not a measure of productivity. Different thing.
Lord Keynes, pardon me for saying this, but you are a seriously dishonest blogger.
You wrote:
"E.g., in America from 1945-1973 in the era the era of Classical Keynesianism of productivity growth was 3%. When Keynesianism was abandoned and we got monetarism/the (neoclassical) new consensus macroeocnomics, it fell from this level, for a variety of reasons. There is no empirical evidence for what you say."
The source you cited is "Bad old days": the myth of the 1950s By Alan J. Levine"
in that book, he Levine writes:
"In terms of percentage growth of the growth domestic product, the American economy had grown an average of 3 percent per year from 1945-1973,"
After I showed you that THE SAME METRIC for productivity was HIGHER in many years of the 19th century, before the onset of the Keynesian school, you say "Real GDP is not a measure of productivity. Different thing."
And this is AFTER you referenced a GDP statistic of 3%, all bragging about the Keynesian school?!?!?!
That's really, really sad Lord Keynes. I mean I hope you will admit that you either lied or goofed here. Wow dude.
"Give I cannot know what exactly will happen, how in the world can you say that my actions in the present ought to be guided by a single possible outcome out of many, before the outcomes are actually reached?"
You have destroyed the basis for nay human action.
If inability to foresee precisely what will happen in the future ruled out action now, nobody would be capable of any action of any type for fear of unknown, unpredictable consequences.
I will give one chance to correct this charge of "seriously dishonest blogger." Read the page again. If you are in fact honest, you will admit you have failed to read it properly.
"In terms of percentage growth of the growth domestic product, the American economy had grown an average of 3 percent per year from 1945-1973,"
Correct.
Look closer on the same page: it also says annual productivity growth in America was also 3% from WWII to 1973.
What's the difference between productivity growth, and real GDP growth?
At any rate, as Keynesian, you do realize that the metric that is used to judge the economic effectiveness of it is GDP, right? You do make arguments that defend the Keynesian school on the basis of GDP, do you not?
Yes, I assumed that you were looking at the 3% GDP growth, and not the productivity growth of 3%. What's the difference?
Since you were looking at the 3% productivity growth, and not the 3% GDP growth, it means that:
I will give one chance to correct this charge of "seriously dishonest blogger." Read the page again. If you are in fact honest, you will admit you have failed to read it properly.
is conceded. I take it back.
But if real GDP grew by 6.8% per year during the 1870s, and government intervention was almost non-existent, doesn't it stand to reason that productivity growth increased by way more than 3% during that time as well?
If the metric used is real GDP growth, then the late 19th beats 1945-1973 hands down.
If the metric is productivity growth rates, then look no further than Friedman and Schwartz, who quote R.W. Goldsmith, in their book "A Monetary History of the United States":
"The highest decadal rate [of growth of real reproducible, tangible wealth per head from 1805 to 1950] for periods of about ten years was apparently reached in the eighties with approximately 3.8 percent."
GDP almost doubled between 1869–1878: $11.6 billion (1929 dollars) and 1879–1888: $21.2 billion (1929 dollars).
A far larger percentage jump decade-on-decade than any before or since.
As for labor productivity, of output per man hour, (1958 = 100):
1869 14.7 1879 16.2 1889 20.5
The 26.5% increase in productivity here ranks among the best in US history.
Labor productivity reflects increased capital investment.
As for purchases of structures and equipment (total, 1958 prices, in billions of dollars):
1870 $0.4 1880 $0.4 1890 $2.0
This is a 500% decade on decade increase, never before rivaled before or since.
Productivity during the 19th century, especially the 1880s, stands as the most productive period in US history, BY FAR. I mean it's not even close. It literally dwarfs the 1945-1973 period.
Actually I already posted the growth in productivity data Lord Keynes. You're confusing the crap out of me!
I said above, in addition to the real GDP data:
"The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled."
That 3.8% growth rate is a productivity growth rate.
Which means you did with my post what I did with your post! We read only the first few lines of our respective citations, ignoring the latter part, which is what we were both referring to!
"There are several Austrian economists who come to this blog now: Pete/Major Freedom Prateek Sanjay Dave At least three anonymous posters.
LK should have an "austrian economics commenter" post. All comments to Austrians go in there and all Austrians post in there."
Oh ho ho.
Oh ho ho.
I am an "Austrian" now. That is rich. I am suddenly a FRB-hating, Rothbard-loving, Hoppe-ethics-thumping Austrian. GOOD TO KNOW!
Man, I only started visiting blogs like this one, because ***I was already starting to get highly convinced by MMT and Post-Keynesian thought***, and I am now far more accepting of those heterodox ideas, because ***I saw the empirical data proving it***. The postwar experience of United States has fully vindicated Abba Ptatchya Lerner's views on public financing, for example.
Given that Milton Friedman and Edmund Phelps believed that there was an actual difference between expected inflation and actual inflation, would this mean that they too rejected rational expectations? Assuming they are not being self-contradictory.
ReplyDeleteIf so, it means that even the neoclassical sister school of thought of the Chicago school still rejected some major fundamental neoclassical ideas.
LK, I haven't seen a post on this topic recently, can you please redirect me. Given that your strand of keynesianism advocates heavy deficit spending, what's your advice now to, say, Greece and Italy that have actually been doing that for the past decades and are now on the verge of bankruptcy?
ReplyDelete"Given that your strand of keynesianism advocates heavy deficit spending, what's your advice now to, say, Greece and Italy that have actually been doing that for the past decades and are now on the verge of bankruptcy? "
ReplyDeleteThe public debt problems of Greece and Italy are because there are in the Eurozone. They have given up their monetary independence to the ECB.
The UK, US, Australia and many other nations has been engaging in deficit spending too, but there is no public debt problem in these nations because they have monetary independence, with their own central banks.
LK, so basically your policy boils down to the old good keynesian money printing? I thought you were supposed to be somehow better than that.
ReplyDeleteAlso LK, I remember some time ago you were arguing that deficit spending works such wonders in terms of GDP growth and tax revenue that paying off public debt of any size becomes a trifle. Now that Greece and Italy actually followed your policy you're saying they have problems merely because they can't print money. Where did the keynesian wonders go?
ReplyDelete"LK, so basically your policy boils down to the old good keynesian money printing?"
ReplyDeleteDeficit spending can be done with $for$ bond issues, by which investors are perfectly free to purchase government bonds. That isn't "money printing".
But deficits could also be monetised. In an environment of high unemployment, low capacity utilization and idle resources, the primary effect of either measure is to increase output and employment, not inflation.
"I thought you were supposed to be somehow better than that."
The notion that FR banking is bad, that endogenous money supply that expands according to needs of trade or commerce, and the money creation by central banks is evil is all pure garbage peddled by libertarian cultists.
I have no idea what you "heard" about this blog, but it doesn't worry me at all if you wnat to have a childish libertarian rant about "money printing".
"Also LK, I remember some time ago you were arguing that deficit spending works such wonders in terms of GDP growth and tax revenue that paying off public debt of any size becomes a trifle. Now that Greece and Italy actually followed your policy you're saying they have problems merely because they can't print money."
ReplyDeleteNeither Greece and Italy have followed any Post Keynesian / MMT policy plan, you fool. Greece in fact has gone the route of austerity.
If Greece and Italy followed a Post Keynesian / MMT policy plan, they would have:
(1) left the euro
(2) restored their domestic currency and own central banks
(3) converted their euro debt into their own domestic currency
(4) run large deficits to create high employment and robust economic growth
E.g, they would have done what Norway, South Korea etc did.
Deficit spending can be done with $for$ bond issues, by which investors are perfectly free to purchase government bonds.
ReplyDeleteRight, so diving deeper and deeper into debt, and Greece and Italy were doing precisely that, according to your specifications. So where are the keynesian wonders now? Why do they now need their own currency and money printing back to survive?
But deficits could also be monetised.
See, fraud right there again. Debt monetising is one of many fraudulent euphemisms you like to use to obscure what it really means. Money printing. Quantitative easing, I bet you like that one too. Money printing. Then you say, well, fractional reserve banking is "clear from the contract" to any Joe out there. Wow, what a fraud.
run large deficits to create high employment and robust economic growth
But they have already run large deficits, that's where their current debt and impending bankruptcy comes from, remember? Why, are euro-based deficits somehow keynesian-wonder-immune?
"But they have already run large deficits, that's where their current debt and impending bankruptcy comes from, remember? Why, are euro-based deficits somehow keynesian-wonder-immune? "
ReplyDeleteBy this statement, you have shown that you are a ignoramus.
Ireland has also been running large deficits as a percentage of GDP for some years, but it was not practising Keynesian stimulus. Why?
Because Keynesian stimulus requires increases in discretionary spending to offset the contraction in private consumption/investment/export earnings.
Ireland and other nations have deficits because their tax revenues severely collapsed. They have in fact cut government spending. That is not Keynesian stimulus. This is the reverse: contractionary fiscal policy. Go and learn some basic facts about Keynesian economics, if you want to be taken seriously.
http://www.levyinstitute.org/news/?event=32
ReplyDeleteFrom the Levy Institute at Bard College: the 2011 Minsky conference audio is up. Randall Wray is listed, along with lots of names I don't yet know.
Surprise guests Joe Nocera and John Cassidy.
Thanks, those talks are excellent. I have linked to them in the next post.
ReplyDeleteRegards
But deficits could also be monetised. In an environment of high unemployment, low capacity utilization and idle resources, the primary effect of either measure is to increase output and employment, not inflation.
ReplyDeleteThat just kicks the can down the road.
1. Once the productionless consumers called the state go out and observe previously employed labor all slothily repairing roads that could be fixed voluntarily in just a few weeks, once the previously idle resources are all being put to some wasteful use, the state would presumably have to reduce back down the money printing and debt financed spending.
At that point, the consumer's real preferences will reassert themselves in determining where and how labor is profitably employed, and where and how scarce resources are profitably utilized. Since the consumers preferences are their own and not the state's preferences, then once again high unemployment and idle resources will return, this time worse than before, because now entrepreneurs and investors will have to reverse even more economic distortions brought about by more years of state-driven, anti-consumer choice allocations of labor and capital.
2. Government borrowing and spending, and government money printing, doesn't just go to where there is unemployment and doesn't just go to where resources are idle. This is because resources are not stripped away from the rest of the economy. Resources are like puzzle pieces, that require other resources, complimentary resources, in order to be useful.
In addition, if there is a surplus of labor, and idle resources, one has to ask WHY there is a surplus of labor and idle resources in the first place. This is something that you Post Keynesians never do. Why? Because you lack an adequate capital theory. You're just about garbage in, garbage out.
The argument that money printing and debt financed spending from productionless consumers are mainly "beneficial" during periods of high unemployment and low resource utilization, is thoroughly refuted by William Hutt in his book "Theory of Idle Resources", which you can download for free here:
http://mises.org/resources/6116/The-Theory-of-Idle-Resources
The notion that FR banking is bad, that endogenous money supply that expands according to needs of trade or commerce, and the money creation by central banks is evil is all pure garbage peddled by libertarian cultists.
*Sigh*
The notion that FR banking is good, that endogenous money supply that expands according to whims of bankers, and the money creation by central banks is good is all pure garbage peddled by statist cultists.
What fun :| No arguments, just baseless vitriol.
"because now entrepreneurs and investors will have to reverse even more economic distortions brought about by more years of state-driven, anti-consumer choice allocations of labor and capit"
ReplyDeleteHow on earth would you know that all public infrastructure/works spending, social spending, R&D spending etc, is a "anti-consumer choice allocation of labor and capital"? No doubt people just *love* badly maintained roads, bridges, highways, ports, etc, and (say, in the case of social security/transfer payments) starving when they can find no work on the market. Don't believe me? Try asking people if they prefer to starve rather have the government spending we call social security.
You are yet another libertarian buffoon.
(2) Government borrowing and spending, and government money printing, doesn't just go to where there is unemployment and doesn't just go to where resources are idle.
Correct. That is why inflation is a secondary effect. But the very same argument applies to private investment spending too.
If your argument that the secondary effect of inflation per se somehow rules out government stimulus as an activity, then all private sector investment would also be ruled out.
Are you "Pete" by yet another handle?
Prateek Sanjay said,
ReplyDelete"Given that Milton Friedman and Edmund Phelps believed that there was an actual difference between expected inflation and actual inflation, would this mean that they too rejected rational expectations?"
I don't know about Phelps, but Friedman at least was never convinced by his colleagues' rational expectations theory, at least according to Paul Krugman's essay memorializing him: http://www.nybooks.com/articles/archives/2007/feb/15/who-was-milton-friedman/
-Will
How on earth would you know that all public infrastructure/works spending, social spending, R&D spending etc, is a "anti-consumer choice allocation of labor and capital"?
ReplyDeleteBecause it wasn't the individual free consumers who made those things profitable. It was the arbitrary decrees of the individuals in the state.
You do know the difference between a consumer making a choice for where production of healthcare is profitable, and the government making a choice for where production of healthcare is politically expedient, don't you?
No doubt people just *love* badly maintained roads, bridges, highways, ports, etc
You're committing the same fallacy that Bastiat was talking about hundreds of years ago:
"Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain."
I wasn't denying that people value roads, bridges, highways and ports.
The mere fact that consumers like food, for example, does not mean that should the government decide which food to produce, where, in what quantity, using what means, is somehow going to magically match the voluntary consumer's desires and values.
You're conflating the state with non-state consumers. They are two separate groups of people, and within those groups, each individual has their own desires and values.
If consumers like roads, bridges, and highways, then their voluntary payments can determine where roads, bridges and highways are profitable, i.e. most urgently needed.
The high value on roads and bridges does not mean that only government can offer them. That's a silly jump in absurd logic.
and (say, in the case of social security/transfer payments) starving when they can find no work on the market.
Starving? Haha, no. If they can be sustained nutrition wise when they are unemployed, then obviously there must be enough food being produced by those who are employed. And food production can increase, and general production can increase, if the unemployed become employed.
You're not even asking or considering why the unemployed are not employed, and yet they are not starving. If you could live without working, because the state supports you at the expense of those who work and produce, then what incentive is there for you to work at all?
Don't believe me? Try asking people if they prefer to starve rather have the government spending we call social security.
This is a silly false dilemma fallacy.
You are yet another libertarian buffoon.
I'm not a libertarian.
Correct. That is why inflation is a secondary effect. But the very same argument applies to private investment spending too.
The very same effect applies, yes, but not the same argument I was making.
If your argument that the secondary effect of inflation per se somehow rules out government stimulus as an activity, then all private sector investment would also be ruled out.
No. It rules out the notion that government spending doesn't affect non-idle resources and non-unemployed labor, even if there is high unemployment and idle resources.
Are you "Pete" by yet another handle?
Am I supposed to sign up? I don't know who "Pete" is.
Milton Friedman did not subscribe to rational expectations doctrine; his concept was "adaptive expectations."
ReplyDeleteLord Keynes, when I say "distortions" I only mean it in the strict economic sense of "not in line with voluntary individual consumer preferences." I don't mean it in the "consumers don't want roads or bridges or highways at all" kind of way.
ReplyDeleteNot all roads and bridges and highways are the same and valued the way they are now. An already built by government road could be worthless, less valuable, or equally valuable, compared to what voluntary individual consumer preference would judge if individual consumers had the choice instead.
If I knew you liked food, and then I financed what I think you want, how much you want, and where/when you want it, then my decision could be wrong, compared to if you had the ability to determine what I do based on your voluntary spending patterns.
Suppose that I continue to make food, and you eat it because I offer it to you "for free", meaning I take only some money from you, but lots from others, and then financed this food making facility. Once I take your money, the food I produce is "free of charge" to you, so you can walk right up and I'll give you food at no additional charge.
Suppose after some time of doing this, I no longer take people's money, I no longer take your money. Now, you and others have more money in your pockets, because I am no longer taking it.
Since you value particular food in your own way, in terms of what you eat, where, and in what quantity, what will happen is that your spending patterns on food will no longer make my food making enterprise viable. If it was viable, then I wouldn't need to have taken money from you and others, you'd just voluntarily give it to me.
Suppose I only took your money and other people's money to employ unemployed food making workers and put that food making facility into operation. Once everything is running, there is no longer any need to be spending that money, so I will reduce my spending back down, which means you and others will have more money to spend.
After all, the whole point of government stimulus during down times is temporary right?
So once I reduce my spending, you and others have more money to spend. And again, because your desires for what food you want, where, and what quantity, will necessarily be different that what I was doing according to my desires and my values, it means that the reassertion of your ability to choose your own food will require a re-allocation of labor and capital away from my food making facility and towards some other use.
The "distortion" I was referring to is only the difference between what you wanted for food production through market means, and what I was originally offering to you through political means.
"You're committing the same fallacy that Bastiat was talking about hundreds of years ago:
ReplyDeleteThere is no fallacy. If in fact proeple dreive utility from privately provided roads, bridges, highways, ports, etc., then they also derive it from publicly supplied ones.
"If consumers like roads, bridges, and highways, then their voluntary payments can determine where roads, bridges and highways are profitable, i.e. most urgently needed."
Garbage. The private sector is not necessarily capable of supplying public infrastucture when it has to be for profit.
Also, it is precisely like health care: not all people will be able to afford the privately provided service/good. Public provision cutting out the profit markup - and using progressive taxation - benefits more people.
"If they can be sustained nutrition wise when they are unemployed, then obviously there must be enough food being produced by those who are employed. And food production can increase, and general production can increase, if the unemployed become employed. etc
ReplyDeleteWhat gibberish.
There are several Austrian economists who come to this blog now:
ReplyDeletePete/Major Freedom
Prateek Sanjay
Dave
At least three anonymous posters.
LK should have an "austrian economics commenter" post. All comments to Austrians go in there and all Austrians post in there.
"It rules out the notion that government spending doesn't affect non-idle resources and non-unemployed labor, even if there is high unemployment and idle resources."
ReplyDeleteI don't deny that government spending, like private investment spending, can have secondary inflationary effects even when you have an economy running well below full capacity. Either both are acceptable or they are not.
Otherwise your objection to Keynesian stimulus just reduces to the "tax is theft!" mantra.
There is no fallacy. If in fact proeple dreive utility from privately provided roads, bridges, highways, ports, etc., then they also derive it from publicly supplied ones.
ReplyDeleteThat's another logical fallacy in addition to the one I previously identified.
That I like hamburgers more than the prices I pay for them, where I pay for them, does not mean I will like YOUR particular hamburgers, what you call "public" hamburgers, for the costs you incur on me, and where you produce and give them.
You can only know if I like your hamburgers by passively observing my voluntary actions based on my free choice.
By your logic, the fact that people like ANYTHING would somehow prove that communist states can and should produce everything, just by calling every good a "public" good.
You're not making any sense.
"If consumers like roads, bridges, and highways, then their voluntary payments can determine where roads, bridges and highways are profitable, i.e. most urgently needed."
The private sector is not necessarily capable of supplying public infrastucture when it has to be for profit.
Nonsense. If "public infrastructure" is VALUABLE to people, then it will necessarily be profitable, because people would be willing to pay a high enough price relative to their other purchases, that covers the costs of production that are themselves derived from consumer preferences for scarce resource allocation.
Yes, this would even be the case for people who spend relatively little money because they make relatively little money. See Wal-Mart and their serving of MILLIONS of poor people. How many are you serving? Other than ranting on the internet, probably at the expense of the productive taxpayers? LOL
Is this blog one giant self-affirmation that allows you to sleep at night?
There is no basis for concluding that "public" goods that are actually valued by people, would not be profitable.
It is a myth that there is a difference between "public" goods and "private" goods. All goods are scarce and incur costs, so all goods can be and should be economized under a rubric of market exchanges.
Also, it is precisely like health care: not all people will be able to afford the privately provided service/good.
ReplyDeleteAnd? Nothing follows from this. It is, currently, a fact of reality. You're just smuggling in a particular violent ethic that is unjustified.
Not everyone can afford everything, because desires always outstrip the ability to produce.
Not everyone can afford food, so does that mean that food production should be communized and put under state control? No.
Not everyone can afford shelter, so does this mean that shelter production should be communized and put under state control? No.
Not everyone can afford a car, so does this mean that car production should be communized and put under state control? No.
Again, you're not making any sense.
And you're completely ignoring voluntary charity. If a democratic state is representative of the majority's values, and you say that the democratic state should ask the majority to give enough money and resources to give to those who can't afford the healthcare they want, then that would mean that the state is not even necessary, because the majority have already displayed their willingness to give money to help the needy, and not only that, but the state would just be an additional overhead cost that reduces what could be given to the poor by the majority.
If you deny that the majority of people would give to charity without the state, such that the state has to go against the majority's desires, then you're against democracy.
If you say that without the state, not everyone will give money to help the poor, then you're not concerned with the poor so much as you just want everyone to obey and pay the state. Not only would you be calling for naked aggression against people who did no wrong, but you would also be denying the fact that the people would have more money to give to the poor in general if they weren't taxed.
Furthermore, people give to charity even WITH the state taking their money to give to the poor! In other words, the state isn't even doing its job of doing what IT can possibly do to help the poor. If people still give to the poor voluntarily, then the state should be taxing people more because that would enable the state to give more to the poor.
That sounds weird doesn't it? You're probably thinking, if the people are already giving to the poor, then there's no need to tax them. Well, THAT'S MY POINT. Clearly people are giving to the poor without being forced. So what's the purpose of the state's guns? Clearly they are only to aggrandize the state for the sake of itself. If the democratic state, which represents the majority, no longer takes from the rich and gives to the poor, then do you really think the majority will stop giving to the poor, and millions of poor people will die in the streets? That makes no sense. If the state represents the majority, then the majority are proving that they want to help the poor.
At any rate, how much charity do you give? I volunteer at the local women's shelter twice a month, and I give to a foster child in Kenya. And I'm not even wealthy!
Why do you call for guns to be pointed at my head? Where did you get this mentality that such things are proper and ethical? You're not ethical in the way you're describing unless you are going out and helping people on your own recognizance. You're not moral or ethical by calling for others to be forced to pay to help others. You'd only be a sniveling coward who only wants to APPEAR as ethical in the eyes of others, while not actually practising ethical behavior.
Anyone can call for others to be forced to help at gunpoint. That's way too easy.
I find your posts highly offensive and indecent. I wandered into this blog thinking that I could engage in mature discourse, but you're nothing but just another internet Keynesian fake ethics rabble rouser. Pshaw!
Public provision cutting out the profit markup - and using progressive taxation - benefits more people.
ReplyDeleteProfit is what's left over after expenses have been paid. It's not an extraction.
If there were no private capitalist producers, all revenues earned would be all profit, because there would be no money costs of production to deduct from sales revenues.
The onset of capitalist producers is the onset of money costs of production and a reduction in profits, not the onset of profits.
Progressive taxation helps more people? That's a big false. Progressive taxation takes the most money away from those who are the world's largest employers and charity givers. That harms everyone because it reduces production and what can be given by charity.
What would help the most people is the most individual freedom. That would enable people to be the most charity driven. You can't be generous with money if you're taxed of it.
As Aristotle noted, humans cannot act benevolently and philanthropically unless they own something to give. Take away what they own, and you take away their ability to act benevolently, and you breed a society of selfish cynical assholes.
"If they can be sustained nutrition wise when they are unemployed, then obviously there must be enough food being produced by those who are employed. And food production can increase, and general production can increase, if the unemployed become employed. etc"
ReplyDeleteWhat gibberish.
You know, these silly one liners that are really nothing but hand waving denials, don't reflect positively on you. Shame.
You're insulting poor people and viewing them as lower animals who can't help themselves.
"It rules out the notion that government spending doesn't affect non-idle resources and non-unemployed labor, even if there is high unemployment and idle resources."
I don't deny that government spending, like private investment spending, can have secondary inflationary effects even when you have an economy running well below full capacity.
What about the primary effects of economic distortions away from true consumer preferences? Why are you ignoring that?
Otherwise your objection to Keynesian stimulus just reduces to the "tax is theft!" mantra.
Well, there's both a moral and an economics case to be made against Keynesianism.
Morally, it is wrong to use violence to take property (money, resources) away from their rightful owners, even if it is for the purposes of helping others.
Economically, the Keynesian school reduces productivity, and not just one time, but progressively so. It only has short term positive effects for some people, and negative short term effects for other people, but long term, everyone suffers, and progressively so.
Public provision cutting out the profit markup - and using progressive taxation - benefits more people.
ReplyDeleteProfit isn't a markup. Profit is what's left over after expenses have been paid.
Progressive taxation helps more people? That's false. Progressive taxation takes the most money away from those who are the world's largest employers and charity givers.
What would help the most people is the most individual freedom. That would enable people to be the most charity driven. You can't be generous with money if you're taxed of it.
As Aristotle noted, humans cannot act benevolently and philanthropically unless they own something to give.
"If they can be sustained nutrition wise when they are unemployed, then obviously there must be enough food being produced by those who are employed. And food production can increase, and general production can increase, if the unemployed become employed. etc"
What gibberish.
You know, these silly one liners that are really nothing but hand waving denials, don't reflect positively on you. Shame.
"It rules out the notion that government spending doesn't affect non-idle resources and non-unemployed labor, even if there is high unemployment and idle resources."
I don't deny that government spending, like private investment spending, can have secondary inflationary effects even when you have an economy running well below full capacity.
What about the primary effects of economic distortions away from true consumer preferences? Why are you ignoring that?
Otherwise your objection to Keynesian stimulus just reduces to the "tax is theft!" mantra.
Well, there's both a moral and an economics case to be made against the Keynesian school.
Morally, it is wrong to use violence to take property (money, resources) away from their rightful owners, even if it is for the purposes of helping others.
Economically, Keynesian school reduces productivity, and not just one time, but progressively so. It only has short term positive effects for some people, and negative short term effects for other people, but long term, everyone suffers, and progressively so.
"There is no basis for concluding that "public" goods that are actually valued by people, would not be profitable."
ReplyDelete(1) They do not need to be profitable. E.g., universal health care provided by the state is done so not to make profit, but for the ethical reason that it is immoral to allow people who cannot afford it to go without when they costs for a wealthy industrial society are not particularly high.
(2) So no human being derives utility from a universal health care system, free at the point of delivery? There is not one person in any Western European state, Canada, Japan, South Korea, Taiwan, Australia, New Zealand etc. who values universal health care system?
Go back to genuflected in front of a photo of Rothbard and stop bothering people in real world.
"Progressive taxation takes the most money away from those who are the world's largest employers and charity givers."
ReplyDeleteFalse. E.g., financial institutions do not employ large nunbers of peopel at all, yet these institutions are very welathy.
"Morally, it is wrong to use violence to take property (money, resources) away from their rightful owners, even if it is for the purposes of helping others"
ReplyDeleteOnly under idiotic ethical theories incapable of rational justification:
http://socialdemocracy21stcentury.blogspot.com/2011/08/rothbards-argument-for-natural-rights.html
http://socialdemocracy21stcentury.blogspot.com/2011/10/hoppe-on-argumentation-ethics.html
Natural rights do not exist and Hoppe's argumentation ethics are a joke.
"Economically, Keynesian school reduces productivity, and not just one time, but progressively so."
ReplyDeleteUtter rubbish. You have no empirical evidence for any such assertion.
During the era of Classical Keynesianism 1945-1973, productivity growth in many countries was outstanding.
E.g., in America from 1945-1973 in the era the era of Classical Keynesianism of productivity growth was 3%. When Keynesianism was abandoned and we got monetarism/the (neoclassical) new consensus macroeocnomics, it fell from this level, for a variety of reasons. There is no empirical evidence for what you say.
http://books.google.com.au/books?id=IzCg3w2eP2UC&pg=PA165&lpg=PA165&dq=productivity+growth+1945-1973&source=bl&ots=kmPR1CsKZZ&sig=uRLq5Ru5b5lotPLK14UlVZbHCe8&hl=en&ei=__68Ttb4FImfiAezguijBQ&sa=X&oi=book_result&ct=result&resnum=7&ved=0CEQQ6AEwBg#v=onepage&q=productivity%20growth%201945-1973&f=false
"There is no basis for concluding that "public" goods that are actually valued by people, would not be profitable."
ReplyDelete(1) They do not need to be profitable.
That doesn't respond to my point. I am not saying it ought to be profitable, I am saying it will be profitable if it's valuable.
Universal health care is provided by the state is done so not to make profit, but for the ethical reason that it is immoral to allow people who cannot afford it to go without when they costs for a wealthy industrial society are not particularly high.
Then why aren't you helping them, rather than wasting time on some internet blog? You say it's immoral to "allow" people who cannot afford healthcare, to go without healthcare, and yet you're not practising what you're preaching.
You're clearly an intelligent enough person, so why aren't you helping people who need healthcare by going out and volunteering and donating your money and opening up a website on collecting charity? Why are you talking crap on the internet and moralizing on others?
Helping the poor is one thing. How is identifying that it is immoral NOT to help the poor (which you're clearly also not doing) justify the state's violence? Why doesn't it necessitate private charity only? You're ignoring private charity!
(2) So no human being derives utility from a universal health care system, free at the point of delivery? There is not one person in any Western European state, Canada, Japan, South Korea, Taiwan, Australia, New Zealand etc. who values universal health care system?
If everyone values universal healthcare, such that they are willing to pay for it, then what's the use of the state's violent threats if people don't pay?
You're proving my case and refuting your own!
If everyone values universal healthcare, then clearly everyone would pay into it voluntarily! The state's guns are totally unnecessary, and represent unnecessary added overhead and administrative costs, which drains resources away and reduces the amount of healthcare that could be given!
You're not making ANY sense!
Go back to genuflected in front of a photo of Rothbard and stop bothering people in real world.
This is not the demeanor of an intellectual who is seriously trying to understand the world around him.
And real world? You call running a blog, which appears to be full time, moralizing and judging others, while not practising what he is preaching, to be "the real world"? LOL
You're a textbook example of what happens to morally weak people when the state deprives people of their wealth, thus preventing them from acting benevolently with it.
You claim to be all moral about helping the poor, but you spend your time and energy and resources running a blog about the Keynesian school? Seriously?
How can you expect to earn respect when you act like this? You need to do less judging and moralizing, and more action that matches your rhetoric.
"As Aristotle noted, humans cannot act benevolently and philanthropically unless they own something to give."
ReplyDelete(1) Appeal to (ancient) authority fallacy, huh?
(2) the state does not take away all the wealth of the rich at all. Even the premise of your comment is wrong. Prgressive taxation will leave society with many rich people and middle class people and even poor people with resources to donate to charity, if they so wish. They are free to do so.
"I find your posts highly offensive and indecent. I wandered into this blog thinking that I could engage in mature discourse, but you're nothing but just another internet Keynesian fake ethics rabble rouser."
ReplyDeleteThen kindly find something else to do with your time than posting your garbage on my blog.
"I am not saying it ought to be profitable, I am saying it will be profitable if it's valuable."
ReplyDeleteThat is utter nonsense.
If that were true, you are saying that a private charity cannot provide anything valauble because it is not profitable.
"If everyone values universal healthcare, such that they are willing to pay for it, then what's the use of the state's violent threats if people don't pay?"
ReplyDeleteThe vast majority are willing to pay for it by taxes:
“The IRS Oversight Board conducted an independent poll in 2005 that found 96 percent of the respondents agreed ‘it is every American’s civic duty to pay their fair share of taxes.’
The Pew Research Center in a similar study in 2006 found 79 percent of the respondents said that cheating Uncle Sam was ‘morally objectionable.’ (Maxwell, S. 2000. The Price is Wrong: Understanding What Makes a Price Seem Fair and the True Cost of Unfair Pricing, John Wiley & Sons, Hoboken, N.J. p. 146).
Coercion for those unwilling to pay (e.g., free riders, the selfish, libertarian cultists) for something moral like helath care and any number of other morally right stae programs is fully justified by consequentialist ethics.
"Progressive taxation takes the most money away from those who are the world's largest employers and charity givers."
ReplyDeleteFalse. E.g., financial institutions do not employ large nunbers of peopel at all, yet these institutions are very welathy.
LOL, you honestly think that one example refutes my argument?
One example does not refute my argument about wealthy people employing the most people and giving the most charity.
All you're saying is that SOME wealthy people employ relatively fewer people than other wealthy people.
How many people do you employ? Zero? Are you wealthy? No? Do you see my point?
The banking industry is a terrible example, because they can print their own money. They will always have more money than can be taxed. If they're taxed more, then they'll print more.
"Morally, it is wrong to use violence to take property (money, resources) away from their rightful owners, even if it is for the purposes of helping others"
Only under idiotic ethical theories incapable of rational justification:
Actually it is precisely rational justifications that enable us to conclude that it is immoral to harm and sacrifice the individual for the sake of others.
There is no rational justification to do it.
http://socialdemocracy21stcentury.blogspot.com/2011/08/rothbards-argument-for-natural-rights.html
Egad, I reject Rothbard's natural rights ethics. What makes you think that Rothbard has a monopoly on protecting the individual from violence type ethics?
http://socialdemocracy21stcentury.blogspot.com/2011/10/hoppe-on-argumentation-ethics.html
Egad, more ethics I don't adhere to.
Are you actually saying that if I hold that the individual ought not be harmed with violence, I must adhere to either Rothbard or Hoppe's ethics?
That makes no sense!
Natural rights do not exist and Hoppe's argumentation ethics are a joke.
How so?
And what ethics do you adhere to?
"Economically, Keynesian school reduces productivity, and not just one time, but progressively so."
ReplyDeleteUtter rubbish. You have no empirical evidence for any such assertion.
Of course I don't have empirical data. I can't observe an economy that doesn't exist empirically because the Keynesian school is being adopted there.
My lord, it's like if the entire world was enslaved, and I said ending slavery would boost people's standards of living, you'd come along and say "Utter rubbish. You have no empirical evidence for any such assertion."
Of COURSE I can't give you empirical data of a counter-factual!
I can only use logic and philosophical science.
Understanding human life to its fullest extent is not, and cannot be, based solely on empirical data. Empirical data is important, but there's also experiencing one's own mind and one's own sense of self. That cannot be an empirical science. It must be self-reflective and cognitive, using empiricism where necessary, but not denying the validity of self-reflection that cannot be empirical.
Suppose that we were living in a world of universal slavery in the year 1000 AD, and that historically, there was always slavery. How could we come up with an argument for slave emancipation if we have no empirical data for it?
We can't. We must use philosophical science, while using empiricism where applicable.
During the era of Classical Keynesianism 1945-1973, productivity growth in many countries was outstanding.
No doubt. But how can you be sure that it was BECAUSE of the Keynesian school, rather than DESPITE the Keynesian school?
Both theories are internally logical, and both are consistent with the data.
How can you solve which theory is correct, if we agree on the data, but disagree on interpreting the data?
E.g., in America from 1945-1973 in the era the era of Classical Keynesianism of productivity growth was 3%. When Keynesianism was abandoned and we got monetarism/the (neoclassical) new consensus macroeocnomics, it fell from this level, for a variety of reasons. There is no empirical evidence for what you say.
In the 19th century, in many years, growth was higher than 3 percent per year.
There is no empirical evidence that Keynesian school improves economies. We have data that we can all agree on, but I adhere to the theory that economies grew DESPITE the Keynesian school.
My theory is just as good as yours when it comes to being consistent with historical data.
So who's right, and why?
"In the 19th century, in many years, growth was higher than 3 percent per year.
ReplyDeleteCite me a source for this.
"As Aristotle noted, humans cannot act benevolently and philanthropically unless they own something to give."
ReplyDelete(1) Appeal to (ancient) authority fallacy, huh?
What? That makes no sense. I was agreeing with Aristotle, I did not say it is right because he said it, or because it's ancient.
Cripes, like if a math guy refers to Pythagoras' theorem, by saying "As Pythagoras has shown..." then that's an "appeal to authority"?
(2) the state does not take away all the wealth of the rich at all.
Correct. But where it does take, it removes people's ability to act benevolent with it.
Even the premise of your comment is wrong.
How so?
Prgressive taxation will leave society with many rich people and middle class people and even poor people with resources to donate to charity, if they so wish. They are free to do so.
I didn't deny that.
"I find your posts highly offensive and indecent. I wandered into this blog thinking that I could engage in mature discourse, but you're nothing but just another internet Keynesian fake ethics rabble rouser."
Then kindly find something else to do with your time than posting your garbage on my blog.
DONE. This will be my last series of posts.
Wow, you're worse than DeLong.
"I am not saying it ought to be profitable, I am saying it will be profitable if it's valuable."
That is utter nonsense.
Again with these worthless one liners.
WHY is it "utter nonsense"?
Do you honestly believe that merely shouting these one liners will refute what I am saying? Sorry, only arguments can do that.
If that were true, you are saying that a private charity cannot provide anything valauble because it is not profitable.
ReplyDeleteNon sequitur. Private charity is profitable, in the true sense of profitable, which is gains, material or otherwise, exceeds the costs, material or otherwise.
Every charity given to people is also profitable in the market. NOTHING that is given via charity is not making a profit in the market. Food, clothes, shelter, healthcare, etc.
"If everyone values universal healthcare, such that they are willing to pay for it, then what's the use of the state's violent threats if people don't pay?"
The vast majority are willing to pay for it by taxes:
If the vast majority are willing to pay for healthcare, why the taxes and unnecessary overhead and logistical costs?
Coercion for those unwilling to pay (e.g., free riders, the selfish, libertarian cultists) for something moral like helath care and any number of other morally right stae programs is fully justified by consequentialist ethics.
I am not a libertarian, but I do act in ways that one could call libertarian, but as I said, I give to charity and I volunteer to help those in special need.
What are you doing to help people with their healthcare, other than writing on a blog proselytizing and calling for others to pay by force?
You're calling libertarians selfish, and yet you are ACTING contrary to your own moral pronouncement you have set for others.
And consequentialist ethics? How can a rational ethics be based on outcomes, if I need to know what I ought to do now in the present, where I exist and must behave, before the outcomes are reached? Shouldn't a rational ethics tell me what I ought to do NOW in the present, before the future is reached?
Egad, if consequentialist ethics is right, then you must be open to having people do ANYTHING THEY WANT to others, including torturing them, because we can only judge all actions according to outcomes in the future.
You cannot say that any action right now in the present is morally wrong, because as a consequentialist, you'd have to wait for the outcomes in the future.
When is the correct future anyway where we can say OK, THIS is the outcome and THIS is where we must make an ethical judgment?
Consequentialist ethics is a religion. It is taking a non-existent future, where people can think anything they want, and then DO anything they want in the present.
"Are you actually saying that if I hold that the individual ought not be harmed with violence, I must adhere to either Rothbard or Hoppe's ethics?"
ReplyDeleteNo.
State what ethical theory do you advocate.
To anwser your question, I adhere to a version of consequentialism that holds we should aim at more ends than just utility/happiness such as
(1) preservation of human life where the people in question wish to continue to live and we can clearly ascertain this (e.g., the man dying of disease in a privatised system of health care, the starving human being who is unemployed and who finds no private charity).
(this has precedents in 20th century forms of consequentialism)
(2) minimising suffering, especially where this can be done with redistribution of resources that are relatively abundant (on this point, I wish to take Karl Popper's negative consequentialism and make it part of a larger consequentialist system)
(3) aiming at the end of respecting certain individual rights where not doing so would harm the fucntioning of society significantly. (on this I think notions of justice and fairness are legitimate ends, as in Rawls' critiques of some crude utilitarian theories).
These additions to consequentialist ends aimed at overcome most of the traditional objections to utilitarianism.
There is in fact a high degree of compatiblity between a number of modern consequentialist theories.
E.g., preference consequentialism (held by Peter Singer) combines easily to two-level preference consequentialism as held by R. M. Hare.
http://socialdemocracy21stcentury.blogspot.com/2011/06/ethical-theories-classification.html
And even the incompatiblity of consequentialism with other theories is exagerrated. Many forms of consequentialism are compatible with the difference principle of Rawls.
"You cannot say that any action right now in the present is morally wrong, because as a consequentialist, you'd have to wait for the outcomes in the future"
ReplyDeleteNonsense. One can do one's best to think about future outcomes when taking actions.
E.g., if I walk past a lake with a man drowning calling for help and save him, that is the right thing to do and it only takes seconds to foresee that consequence.
"It is taking a non-existent future, where people can think anything they want, and then DO anything they want in the present."
ReplyDeleteJesus.
If I walk past a lake with a man drowning calling for help and save him, that is the right thing to do and it only takes seconds (if that) to foresee that consequence.
"In the 19th century, in many years, growth was higher than 3 percent per year.
ReplyDeleteCite me a source for this.
I thought you wanted me to stop posting here? OK, if you want me to stay, I'll stay for a little while longer.
This is easily verifiable data, Lord Keynes.
"From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873.[34] The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled."
http://en.wikipedia.org/wiki/Economic_history_of_the_United_States#The_Gilded_Age:_1865.E2.80.931900
"Are you actually saying that if I hold that the individual ought not be harmed with violence, I must adhere to either Rothbard or Hoppe's ethics?"
State what ethical theory do you advocate.
Non-Rothbardian, non-Hoppean, individual freedom ethics.
To anwser your question, I adhere to a version of consequentialism that holds we should aim at more ends than just utility/happiness such as
(1) preservation of human life where the people in question wish to continue to live and we can clearly ascertain this (e.g., the man dying of disease in a privatised system of health care, the starving human being who is unemployed and who finds no private charity).
(this has precedents in 20th century forms of consequentialism)
(2) minimising suffering, especially where this can be done with redistribution of resources that are relatively abundant (on this point I wish to take Karl Popper's negative consequentialism and make it part of a larger consequentialist system)
(3) aiming at the end of respecting certain individual rights where not doing so would harm the fucntioning of society significantly. (on this I think notions of justice and fairness are legitimate ends, as in Rawls' critiques of some crude utilitarian theories).
These additions to consueqnetialist ends aimed at overcome most of the traditional objections to utilitarianism.
There is in fact a high degree of compatiblity between a number of modern consequentialist theories.
E.g., preference consequentialism (held by Peter Singer) combines easily to two-level preference consequentialism as held by R. M. Hare.
And even the incompatiblity of consequentialism with other theories is exagerrated. Many forms of consequentialism are compatible with the difference principle of Rawls.
Wow. That's quite the laundry list.
So in other words, you don't adhere to any ethics in particular, either someone else's or your own discovery, but rather you cling to a hodge-podge of various defense mechanisms to justify your arbitrary, non-rationalist ethical preference of calling for violence against the individual to help poor people, while refraining from actually devoting your life to helping poor people.
Is that about right?
How can you seriously abide by this? It's all over the place. This is an ethics of a man who has no clear conception of what he should believe.
""From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita"
ReplyDeleteReal GDP is not a measure of productivity.
Different thing.
"Non-Rothbardian, non-Hoppean, individual freedom ethics."
ReplyDelete"How can you seriously abide by this? It's all over the place. This is an ethics of a man who has no clear conception of what he should believe."
"You cannot say that any action right now in the present is morally wrong, because as a consequentialist, you'd have to wait for the outcomes in the future"
ReplyDeleteOne can do one's best to think about future outcomes when taking actions.
OK, but mere thinking about the future still means I can do anything in the present! There's no limitations to what people ought to be doing in the present if the only requirement is that they think of the future!
I am asking you how can I know what I ought to do NOW.
What should I do and not do NOW?
E.g., if I walk past a lake with a man drowning calling for help and save him, that is the right thing to do and it only takes seconds to foresee that consequence.
But we're still in the present. If you see a drowning man in a lake, how do you know what you ought to do now, given the fact that the outcome of you actually saving him has not occurred yet? After all, there is a possibility that you might drown too, or there is a chance that you are running by the lake on your way to trying to save your family member.
Given that I cannot predict the future, since I'm not God, given that there are various possible outcomes I cannot foresee, what am I supposed to do and not do NOW in the present, before the outcomes are reached?
Your thinking is actually more crude than I thought.
"It is taking a non-existent future, where people can think anything they want, and then DO anything they want in the present."
Jesus.
Wow.
If I walk past a lake with a man drowning calling for help and save him, that is the right thing to do and it only takes seconds (if that) to foresee that consequence.
False. You cannot foresee the future. Something might go wrong.
Give I cannot know what exactly will happen, how in the world can you say that my actions in the present ought to be guided by a single possible outcome out of many, before the outcomes are actually reached? Why that possible outcome, but not the one where my life might end?
You're not answering my question using logic. You're just giving an example and essentially asking "Really? You really don't get it? I mean come on!"
Indeed. I have no idea how you can tell me that I ought to do something now, based on only one possible future outcome, and not others.
Why does your ethics say that I ought to act consistent with the one possible outcome where I might die, rather than another possible outcome?
Sounds to me like you're calling for nothing but straight up human sacrifice.
Why my sacrifice and not the drowning man?
"If you see a drowning man in a lake, how do you know what you ought to do now, given the fact that the outcome of you actually saving him has not occurred yet?
ReplyDeleteYou aksing how do you know what to do now when you can clearly foresee the right thing to do with its consequence in seconds?
Let's moveon form this idiocy.
After all, there is a possibility that you might drown too, or there is a chance that you are running by the lake on your way to trying to save your family member."
This is called shifting the goal posts. I take you can't refute the original example.
"there is a possibility that you might drown too,
There might be. In that case, you judge whether you want to take the risk.
If not, you can try other means: throwing something for man to grab onto.
"or there is a chance that you are running by the lake on your way to trying to save your family member"
Again: you use your best judgement. If there is a terrible moral choice (impossible to save both) to be made it is indeed unreasonable to expect a normal being to choose a stranger over a family member
"You cannot foresee the future. Something might go wrong."
ReplyDeleteThis does not require 100% prediction of the future with prefect accuracy. Only a reasonable best guess. Something might go wrong. Or might not.
""From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita"
ReplyDeleteReal GDP is not a measure of productivity.
Different thing.
Lord Keynes, pardon me for saying this, but you are a seriously dishonest blogger.
You wrote:
"E.g., in America from 1945-1973 in the era the era of Classical Keynesianism of productivity growth was 3%. When Keynesianism was abandoned and we got monetarism/the (neoclassical) new consensus macroeocnomics, it fell from this level, for a variety of reasons. There is no empirical evidence for what you say."
The source you cited is "Bad old days": the myth of the 1950s By Alan J. Levine"
in that book, he Levine writes:
"In terms of percentage growth of the growth domestic product, the American economy had grown an average of 3 percent per year from 1945-1973,"
After I showed you that THE SAME METRIC for productivity was HIGHER in many years of the 19th century, before the onset of the Keynesian school, you say "Real GDP is not a measure of productivity. Different thing."
And this is AFTER you referenced a GDP statistic of 3%, all bragging about the Keynesian school?!?!?!
That's really, really sad Lord Keynes. I mean I hope you will admit that you either lied or goofed here. Wow dude.
"Give I cannot know what exactly will happen, how in the world can you say that my actions in the present ought to be guided by a single possible outcome out of many, before the outcomes are actually reached?"
ReplyDeleteYou have destroyed the basis for nay human action.
If inability to foresee precisely what will happen in the future ruled out action now, nobody would be capable of any action of any type for fear of unknown, unpredictable consequences.
You have now exhausted my patience.
"in that book, he Levine writes:
ReplyDelete"In terms of percentage growth of the growth domestic product, the American economy had grown an average of 3 percent per year from 1945-1973,"
Correct.
Look closer on the same page: it also says annual productivity growth in America was also 3% from WWII to 1973.
http://books.google.com.au/books?id=IzCg3w2eP2UC&pg=PA165&lpg=PA165&dq=productivity+growth+1945-1973&source=bl&ots=kmPR1CsKZZ&sig=uRLq5Ru5b5lotPLK14UlVZbHCe8&hl=en&ei=__68Ttb4FImfiAezguijBQ&sa=X&oi=book_result&ct=result&resnum=7&ved=0CEQQ6AEwBg#v=onepage&q=productivity%20growth%201945-1973&f=false
I will give one chance to correct this charge of "seriously dishonest blogger." Read the page again. If you are in fact honest, you will admit you have failed to read it properly.
"in that book, he Levine writes:
ReplyDelete"In terms of percentage growth of the growth domestic product, the American economy had grown an average of 3 percent per year from 1945-1973,"
Correct.
Look closer on the same page: it also says annual productivity growth in America was also 3% from WWII to 1973.
What's the difference between productivity growth, and real GDP growth?
At any rate, as Keynesian, you do realize that the metric that is used to judge the economic effectiveness of it is GDP, right? You do make arguments that defend the Keynesian school on the basis of GDP, do you not?
Yes, I assumed that you were looking at the 3% GDP growth, and not the productivity growth of 3%. What's the difference?
Since you were looking at the 3% productivity growth, and not the 3% GDP growth, it means that:
I will give one chance to correct this charge of "seriously dishonest blogger." Read the page again. If you are in fact honest, you will admit you have failed to read it properly.
is conceded. I take it back.
But if real GDP grew by 6.8% per year during the 1870s, and government intervention was almost non-existent, doesn't it stand to reason that productivity growth increased by way more than 3% during that time as well?
If the metric used is real GDP growth, then the late 19th beats 1945-1973 hands down.
If the metric is productivity growth rates, then look no further than Friedman and Schwartz, who quote R.W. Goldsmith, in their book "A Monetary History of the United States":
"The highest decadal rate [of growth of real reproducible, tangible wealth per head from 1805 to 1950] for periods of about ten years was apparently reached in the eighties with
approximately 3.8 percent."
GDP almost doubled between 1869–1878: $11.6 billion (1929 dollars) and 1879–1888: $21.2 billion (1929 dollars).
A far larger percentage jump decade-on-decade than any before or since.
As for labor productivity, of output per man hour, (1958 = 100):
1869 14.7
1879 16.2
1889 20.5
The 26.5% increase in productivity here ranks among the best in US history.
Labor productivity reflects increased capital investment.
As for purchases of structures and equipment (total, 1958 prices, in billions of dollars):
1870 $0.4
1880 $0.4
1890 $2.0
This is a 500% decade on decade increase, never before rivaled before or since.
Productivity during the 19th century, especially the 1880s, stands as the most productive period in US history, BY FAR. I mean it's not even close. It literally dwarfs the 1945-1973 period.
Actually I already posted the growth in productivity data Lord Keynes. You're confusing the crap out of me!
ReplyDeleteI said above, in addition to the real GDP data:
"The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled."
I made that post here:
http://socialdemocracy21stcentury.blogspot.com/2011/11/steve-keen-on-behavioral-finance.html?showComment=1321012037113#c8547860161660478584
That 3.8% growth rate is a productivity growth rate.
Which means you did with my post what I did with your post! We read only the first few lines of our respective citations, ignoring the latter part, which is what we were both referring to!
Come on, that's pretty funny.
"There are several Austrian economists who come to this blog now:
ReplyDeletePete/Major Freedom
Prateek Sanjay
Dave
At least three anonymous posters.
LK should have an "austrian economics commenter" post. All comments to Austrians go in there and all Austrians post in there."
Oh ho ho.
Oh ho ho.
I am an "Austrian" now. That is rich. I am suddenly a FRB-hating, Rothbard-loving, Hoppe-ethics-thumping Austrian. GOOD TO KNOW!
Man, I only started visiting blogs like this one, because ***I was already starting to get highly convinced by MMT and Post-Keynesian thought***, and I am now far more accepting of those heterodox ideas, because ***I saw the empirical data proving it***. The postwar experience of United States has fully vindicated Abba Ptatchya Lerner's views on public financing, for example.