Saturday, July 21, 2012

Paul Davidson Interview

A great interview below with the American Post Keynesian Paul Davidson, by the INET (Institute for New Economic Thinking) Executive Director Robert Johnson. You can also view the videos here.

Davidson discusses a whole range of topics, but, above all, Post Keynesian theory, uncertainty, and financial markets. Video 2 has a very good discussion of fundamental uncertainty and Davidson’s own contribution to this concept, in terms of ergodic and non-ergodic stochastic systems.

See also this recent excellent article by Davidson:
Paul Davidson, “Restoring Trust in the American Economy: The Real World v. The Confidence Fairy,”, July 11, 2012.


  1. Out of curiosity, why do you give the time of day to Paul Davidson? You know from our correspondence that he has done some things that aren't exactly good things in scholarship...

  2. [RANT]

    The more I listen to and read Post-Keynesian and other heterodox authors, the more I despise the likes of mainstream pundits such as Krugman and Stiglitz. While not being an Austrian myself, I can now appreciate how frustrating it is to try and sway a mainstream ideologue.

    Why on Earth does Kroog call himself a Keynesian? He uses IS-LM models (a Hicksian monstrosity which was not even based on Keynes), thinks that markets tend towards equilibrium in the long run (a claim which Keynes pilloried), relies on the Representative Agent in his theories, abstracts away from banks, and so forth. He is shored up by an undeniably neoclassical foundation, with some bits of Keynesian theory lightly sprinkled around the edges. "New Keynesian" economists would look at a sandwich made of 9 parts shit and 1 part ham, and not hesitate to call it a ham sandwich.

    I am currently in the process of reading Debunking Economics 2nd ed. Halfway through, I have already been convinced, beyond a doubt, by Keen's watertight arguments and prose, that neoclassical economics is the biggest, most fictive pile of horseshit in the whole history of human thought. It has to be an indelible mark of embarrassment on our species. It's models and axioms are so specious as to be worse than the most grotesquely caricatured fantasy. Moreover, not only are all its domain assumptions laughably absurd and preposterous, it manages to repeatedly contradict its own disgustingly stupid logic, time and time again. The whole thing is a sham; a sick prank pulled on humanity. Neoclassical economists are not academics, scholars or scientists. They are vulgar class warriors for the 1%, masking their adulation for the wealthy with slick presentation, meaningless graphs, redundant jargon, intentional misdirection, and utter contempt for any other disciplines that try to point out their mistakes.

    [/END RANT]

  3. mojo.rhythm: Does Paul Davidson count as one of these Post Keynesian economists? Also, I think that as you are a heterodox economics advocate, you could be a little less hard on Stiglitz. He's working with non-orthodox economists for journal publications, including Mauro Gallegati.

    Lord Keynes: Could you please read the contents of the last e-mail that I sent to you and respond to what you've read?

    1. As to the business with Brady, it is indeed regrettable to see people who feel their work has been obstructed. I really couldn't comment on the specifics, for I don't feel confident enough about the details in dispute (e.g., the technical details of the D-Z model).

      Assume that certain Post Keynesians do not properly understand Keynes's D-Z model or the Treatise on Probability. It does not follow that all of Post Keynesian theory is without merit. It does not follow that Davidson's work has no important insights or merit.

    2. I would have preferred it had you responded via e-mail, but nevertheless, as you have discussed it here, so be it.

      I will agree with you that not everything in Post Keynesianism is bad. Even Dr. Michael Emmett Brady has acknowledged that Hyman P. Minsky was on the right track. But Davidson's deliberate efforts at obstruction don't reflect well on him...I think Dr. Michael Emmett Brady has important things to contribute and a very good understanding of the Treatise on Probability that could be used to further illuminate matters in the social sciences.

    3. BlueAurora,

      Dunno. Haven't read him.