Sunday, July 31, 2016

American Liberal Hypocrisy on Muslims

The news today is full of Trump’s spat with Khizr Khan, who appeared at the Democratic national convention and who was the father of an American Muslim soldier who died in Iraq.

Here is what Trump said:

This has caused a media storm of hysteria, even though I think Trump’s comments are pretty subdued by his standards, and there is an obvious issue that really stinks here: Democratic and American liberal hypocrisy.

So let’s run through the list of Hillary and Obama’s record:
(1) Hillary Clinton supported the Iraq war – the illegal war that killed 100,000s of people, led to a Sunni versus Shiite civil war in Iraq, unleashed a catastrophic insurgency, and that has destabilised the Middle East and helped to fuel the global Islamist nightmare that is tearing many countries apart. Maybe if Democratic shills like Hillary Clinton hadn’t supported Bush’s war, then it wouldn’t have happened? Maybe, you know, Mr Khan’s son wouldn’t have died?

(2) Hillary supported a disastrous Libyan intervention that killed thousands and left that Muslim country in chaos.

(3) Hillary supported the destabilisation of Syria and America’s catastrophic support for mass murdering Islamist rebels in Syria (see also here).

Even now this vicious warmongering woman is calling for further military attacks on the Assad regime, which, as bad as it is (and nobody well-informed doubts it is a bad regime), is nevertheless the only thing holding back a tidal wave of genocidal Islamist mass murder in Syria.

(4) Even after Clinton left office as US Secretary of State in February 2013, later that year in August 2013, Barack Obama was on the point of launching a massive bloodbath in Syria, as Seymour M. Hersh has reported:
“In the aftermath of the 21 August attack Obama ordered the Pentagon to draw up targets for bombing. Early in the process, the former intelligence official said, ‘the White House rejected 35 target sets provided by the joint chiefs of staff as being insufficiently “painful” to the Assad regime.’ The original targets included only military sites and nothing by way of civilian infrastructure. Under White House pressure, the US attack plan evolved into ‘a monster strike’: two wings of B-52 bombers were shifted to airbases close to Syria, and navy submarines and ships equipped with Tomahawk missiles were deployed. ‘Every day the target list was getting longer,’ the former intelligence official told me. ‘The Pentagon planners said we can’t use only Tomahawks to strike at Syria’s missile sites because their warheads are buried too far below ground, so the two B-52 air wings with two-thousand pound bombs were assigned to the mission. Then we’ll need standby search-and-rescue teams to recover downed pilots and drones for target selection. It became huge.’ The new target list was meant to ‘completely eradicate any military capabilities Assad had’, the former intelligence official said. The core targets included electric power grids, oil and gas depots, all known logistic and weapons depots, all known command and control facilities, and all known military and intelligence buildings.”
Seymour M. Hersh, “The Red Line and the Rat Line,” London Review of Books 36.8 (17 April 2014): 21–24.
Fortunately, this was called off at the last minute, but the Democrats under Obama were about to unleash another criminal war in the Middle east that would have killed thousands.
So, wait a minute, Hillary Clinton – the corporate shill and neocon-lite warmongering queen of chaos – can support a really vile and grotesque foreign policy that tears the Middle East to shreds, and kills 100,000s of Muslims, but Trump is the hateful, racist bigot just for calling for a temporary halt to Muslim mass immigration?

I don’t even care what you think about Trump, but the US Democratic party is a cesspool of war, moral depravity and hypocrisy.

Saturday, July 30, 2016

Some Good Articles on Trump

See here:
Michael Lind, “The Neocons Are Responsible for Trumpism,” The National Interest, March 7, 2016.

Rod Dreher, “Trump: Tribune of Poor White People,” The American Conservative, July 22, 2016.

Michael Lind, “How Trump Exposed the Tea Party,” PoliticoMagazine, September 3, 2015.

Michael Lind, “Donald Trump, the Perfect Populist,” PoliticoMagazine, March 9, 2016.
I was particularly struck by Dreher’s article here, which describes the real and terrible experience of white working class Americans, the catastrophe of neoliberalism, and the vicious, elitist snobbery and hatred of the working class.

In fact, the title of this article says it all:

Yes, this is probably how a lot of poor white voters in America destroyed by neoliberalism and demonised by cultural leftism see Trump, even though Trump would have much less to offer them than a decent social democrat capable of making a clean break with the worst aspects of cultural leftist nonsense.

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Lord Keynes @Lord_Keynes2

Friday, July 29, 2016

Look at that Filthy Commie

No, the one **on the left.**

Yes, this is the new propaganda line over at the Weekly Standard, Neocon Central.

Seriously, dudes, Neoconservatism is dead. Get over it.

Steve Keen on Australia’s Economy

See the interview here.

Libertarianism Completely Explained in 8 Seconds

Thursday, July 28, 2016

The Strange Death of American Libertarianism in the GOP

See here.

This political collapse of libertarianism, quasi-libertarian and traditional consensus neoliberal economics in the GOP is the unnoticed story of the last year.

Now it may well be that Gary Johnson’s third party Libertarian run for president might attract more voters than usual (maybe all those Bernie Bros who are stoners?), but the pathetic Libertarian party has no chance of ever winning the presidency, and not just because one of the highlights of their Party National Convention was one fat dude called James Weeks (a Libertarian Party Chair Candidate) stripping nude on C-SPAN to the horror of millions nation wide:

The only serious party for a libertarian or quasi-libertarian President of the United States is the GOP. And Trump’s victory has killed this, given Trump’s hatred of free trade, his love of protectionism, and his abandonment of the standard quasi-libertarian GOP issues like privatisation of Social Security. Even the libertarianism of the Tea Party movement seems to be collapsing as the Tea Party people come to support Trump. Go figure.

It looks like the – umm, how shall I put it? – full-retard economics of libertarianism was never that popular with the Republican base. They just needed the right person to make them discover their love of Big Government and conservative socialism. That person was Trump.

It turns out too that the Republican base seems to be sick and tired of the endless Neoconservative warmongering that has been going on since 2000. See the excellent analysis of these issues by Michael Lind here with these criticisms here.

More astonishing still is that there seems to be some evidence that many former Ron Paul-style libertarians have morphed into Alt Right neo-fascists.

Greg Johnson, one of these Alt Righters, describes this process of political transformation of Ron Paul supporters in the following video (not for the faint-hearted):

But, as we see, the Alt Right “refutation” of libertarianism seems to have little to do with the economic flaws in libertarian theory. Rather, it seems to be more in line with Hans-Hermann Hoppe’s critique of standard libertarian theory along with intense white nationalism and identitarianism, anti-Semitism and racial issues peculiar to the United States.

So this is yet another story people have missed: the emergence of neo-fascism in America, even if it is just a fringe movement, seems to have come via libertarianism. Creepy.

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Lord Keynes @Lord_Keynes2

Wednesday, July 27, 2016

Monday, July 25, 2016

Trump’s Victory at the RNC sees the Neocons in Hysteria

Because Trump has broken decisively with the Neoconservatives, the warmongering faction of the GOP, who have been behind pretty much every US war since 2000. He has also pushed the GOP to the left on economics, even if this is a rhetorical play.

But it is strange how most people on the Left can’t see this or notice its significance, as Michael Hudson explains:

Note well: over at the Weekly Standard, which is pretty much Neocon Central, there is as much hatred of Trump as on the left.

Neocon warmonger-in-chief Bill Kristol, in his latest screed there, is now opining that Trump is the sock puppet of Putin.

Bill Kristol, you might remember, was behind the Neocon push for a third party candidate to run against Trump.

Kristol made noises about a third party candidate called David A. French. Unfortunately for Bill, that all collapsed when French decided not to run. Part of the reason may have been that French has a somewhat, err, “controversial” opinion: he agrees with Kevin Williamson that the American white working class should die.

And the Neocons wanted this guy to be president of the United States?!

Sunday, July 24, 2016

Links for News Sites

For keeping track of the news, whether on politics and economics, with some other links of interest:
(1) General News
BBC News
Google News
Bloomberg News
American ABC
Vice News
Der Spiegel Online International
Le Monde diplomatique
The Economist
Times of Israel
Jerusalem Post
China Daily
Antiwar News Sources (a great, long list of news websites)

(2) British Newspapers and Journals
The Times
The Guardian
New Statesman
London Review of Books
The Telegraph
Sky News

(3) American Media
Neoconservative or Mainstream Conservative
Weekly Standard
National Review
Wall Street Journal
New Republic
American Spectator
New York Post
Washington Times
Frontpage Mag

American Conservative
Patrick J. Buchanan – Official Website

Liberal and Left-Wing
New York Times
New York Review of Books
The Nation
Huffington Post
American Prospect
Public Citizen
Mother Jones
Democracy Now (non-profit left-wing American news organization)
The Real News Network
Beat the Press. Dean Baker

Mises Institute (a great source for news on foreign policy of the US and its wars, although its opinion pieces have a strong libertarian bias)
Free Advice (Robert Murphy)
Stefan Molyneux
The Alex Jones Channel (if you want a good laugh at conspiracy theories!) (again, libertarian news with conspiracy theories)
Paul Joseph Watson
Rebel Media (Canadian)
TheRealNews YouTube Channel

(4) Financial and Economic News
The Economist
Financial Times
Wall Street Journal
Challenge: the Magazine of Economic Affairs
Dollars & Sense: Real World Economics
Left Business Observer

(5) Paleoliberal YouTube Channels
Sargon of Akkad
Gad Saad
The Rubin Report

(6) Marxist or Socialist
International Socialist Review
Monthly Review
New Left Review
World Socialist Website

(7) Foreign Policy and International Affairs
New Internationalist
Mondoweiss: The War of Ideas in the Middle East
Michael Scheuer’s

(8) Declassified Documents
National Security Archive, The George Washington University (a great site that is independent and non-governmental and publishes declassified US government documents)

(9) Science and Technology News
Scientific American
New Scientist
MIT Technology Review
Suggestions are welcome.

Michael Moore: Trump will Win

Whoa, could this be because
(1) Trump is speaking to ordinary people on issues that matter, e.g., the disaster of free trade, collapse of manufacturing, and pro-big business mass immigration (however much American liberals’ heads explode whenever you mention this to them), and

(2) Hillary Clinton is a corporate shill, neocon-lite warmonger, and historical supporter of most of the things people hate in (1)?
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Lord Keynes @Lord_Keynes2

Saturday, July 23, 2016

Yes, Virginia, Hayek was a Liquidationist in 1932

But you won’t know it from the weird Hayek apologists and Free Bankers who have essentially rewritten history to make it seem as if Hayek was in favour of MV stability by monetary stimulus and central bank intervention during the early years of the Great Depression (see here for a full discussion).

Not too long ago I had a run in with some of the Hayekian True Believers on Twitter.

One of them cited the second part of Hayek’s review of Keynes’ Pure Theory of Money (see Hayek 1932; the first part of the review is Hayek 1931), in order to prove that Hayek was definitely in favour of monetary stimulus and was not a nasty liquidationist.

Well, I checked this out and – lo and behold! – Hayek gives us his opinion:
“I do not deny that, during this process [viz., the slump], a tendency towards deflation will regularly arise; this will particularly be the case when the crisis leads to frequent failures and so increases the risks of lending. It may become very serious if attempts artificially to ‘maintain purchasing power’ delay the process of readjustment – as has probably been the case during the present crisis. This deflation is, however, a secondary phenomenon in the sense that it is caused by the instability in the real situation; the tendency will persist so long as the real causes are not removed. Any attempt to combat the crisis by credit expansion will, therefore, not only be merely the treatment of symptoms as causes, but may also prolong the depression by delaying the inevitable real adjustments. It is not difficult to understand, in the light of these considerations, why the easy-money policy which was adopted immediately after the crash of 1929 was of no effect.

It is, unfortunately, to these secondary complications that Mr. Keynes, in common with many other contemporary economists, directs most attention. This is not to say that he has not made
valuable suggestions for treating these secondary complications. But, as I suggested at the beginning of these Reflections, his neglect of the more fundamental ‘real’ phenomena has prevented him from reaching a satisfactory explanation of the more deep-seated causes of depression.” (Hayek 1932: 44).

That is very explicit: “Any attempt to combat the crisis by credit expansion will, therefore, not only be merely the treatment of symptoms as causes, but may also prolong the depression by delaying the inevitable real adjustments.” Crystal clear. As late as the second edition of Prices and Production (1935), Hayek was still saying that “we can do nothing to get out of ... [sc. a depression] before its natural end” (Hayek 2008 [1935]: 274–275).

Hayek is defending the Austrian Business Cycle Theory (ABCT) here, and its liquidationist solution to depressions.

In the same year (1932), Hayek signed a letter opposing British government intervention in the economy, as explained by Ludwig Lachmann:
AEN: In the early 30’s there had been great interest among the profession in the ‘Austrian’ or Hayekian theory of the trade cycle. Yet as the 1930’s progressed even those who had been adherents seemed to have given up their belief in its correctness. What reasons do you think were behind this?

Lachmann: Well, you presumably know about the two different letters to the London Times that appeared in October, 1932. This, of course, was before I came to London. In one of them, Keynes and some Cambridge economists who were not, in general, his friends, like Pigou and Dennis Robertson, demanded that the government should take steps against unemployment. And three days later, Hayek, Robbins and Arnold Plant sent another letter saying that anything the government did by way of public works or similar methods would only make things worse and would not have the affect that Keynes claimed it would have.

That is to say, the ‘Austrians’ seemed to be committed to a policy of continuous deflation whatever happened. Yes, I’m quite sure that the apparent insistence of the ‘Austrians’ that the depression must run its course in the sense that both prices and wages in general must fall seemed to make it increasingly difficult for most other economists to support it, because it was by then obvious that wages didn’t fall, not in the Britain of the 1930’s anyway. That is to say, there was an obvious difference between the point of view expressed by Hayek, Robbins and their letter of October, 1932, and their willingness to admit the following year that a secondary depression was possible.”
Ludwig Lachmann, “An Interview with Ludwig Lachmann,” The Austrian Economics Newsletter, Volume 1, Number 3 (Fall 1978)
So Hayek changed his mind after he started to believe in the existence of “secondary depressions,” and then came to advocate monetary and eventually even fiscal interventions as a correct response to “secondary depressions” or “secondary deflations,” particularly when he came to accept the severity of downwards nominal wage rigidity in modern capitalist nations.

We know this because Hayek explicitly said so later in life:
“Although I do not regard deflation as the original cause of a decline in business activity, such a reaction has unquestionably the tendency to induce a process of deflation – to cause what more than 40 years ago I called a ‘secondary deflation’ – the effect of which may be worse, and in the 1930s certainly was worse, than what the original cause of the reaction made necessary, and which has no steering function to perform. I must confess that forty years ago I argued differently. I have since altered my opinion – not about the theoretical explanation of the events, but about the practical possibility of removing the obstacles to the functioning of the system in a particular way” (Hayek 1978: 206).
And by the time of Hayek’s 1937 essay “The Gold Problem” (“Das Goldproblem” in German; see Hayek 1999: 169–185, and 184), Hayek is found actually endorsing, not just MV stability, but deficit-financed public works as a response to depression (see here).

I don’t think people appreciate the full extent of Hayek’s humiliation, volte face and capitulation to Keynes on these issues today (even if this was only a strategic move by Hayek at the time).

But Hayek clearly wasn’t saying these things in 1930, or 1931 or 1932. At that time, Hayek was indeed a liquidationist in any meaningful sense of the term.

Further Reading
“Hayek was originally a Liquidationist: Free Bankers are Wrong!,” August 13, 2013.

“Hayek the Stable MV Theorist?,” August 13, 2013.

“The Evidence for Hayek the Stable MV Theorist is still Feeble,” August 21, 2013.

Hayek, F. A. von. 1931. “Reflections on the Pure Theory of Money of Mr. J. M. Keynes,” Economica 33: 270–295.

Hayek, F. A. von. 1932. “Reflections on the Pure Theory of Money of Mr. J. M. Keynes (continued),” Economica 35: 22–44.

Hayek, F. A. von. 1978. New Studies in Philosophy, Politics, Economics, and the History of Ideas. Routledge & Kegan Paul, London.

Hayek, F. A. von. 1999. “The Gold Problem” (trans. G. Heinz), in S. Kresge (ed.), The Collected Works of F. A. Hayek. Volume 5. Good Money, Part 1. The New World. Routledge, London. 169–185.

Hayek, F. A. von, 2008 [1935]. Prices and Production and Other Works: F. A. Hayek on Money, the Business Cycle, and the Gold Standard. Ludwig von Mises Institute, Auburn, Ala.

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Friday, July 22, 2016

Friedrich List on English Free Trade and the Colonisation of Germany

Friedrich List saw right through the English argument for free trade in Germany in his National System of Political Economy:
“In our days the English legislation not having separated German agriculture from the British manufactures, Germany, with a progress of twenty years in an industrial career achieved at immense sacrifices, would he blind to allow herself to be diverted by the repeal of the English laws from the great national object she is now pursuing. We have, indeed, a firm conviction that Germany, in that case, ought to increase her duties as compensation for the advantage which the repeal of the corn laws would give to the English over the German manufacturers. For a long time to come, Germany can adopt no other policy toward England than that of a manufacturing nation yet far behind, but exerting all her energy to overtake, if not surpass her rival. Any other policy would endanger German nationality. If the English need corn or timber from abroad, whether they import from Germany or any other country, Germany must not strive less to preserve the advantages which her industry has already obtained, and to secure a greater progress in time to come. If the English are unwilling to receive the wheat and the timber of Germany, so much the better; her industry, her shipping, her foreign trade will increase the faster, her system of internal communication will be improved the sooner, and the German nationality will acquire the more certainly its natural basis. It may be that corn and timber in the Baltic provinces of Prussia will not advance in price as promptly in this case as if the British markets were immediately opened; but the improvement of the means of communication at home, and the demand for agricultural products, created by home manufactures, will proceed with a degree of rapidity far from unsatisfactory, in a market established in the very centre of Germany, a market not only established, but made permanent forever no longer oscillating, as heretofore, from one decennial period to another, between famine and abundance. With respect to power, Prussia, in pursuing that policy, will gain a real influence in the interior of Germany, of an hundred times greater value than the sacrifices made in her Baltic provinces; but she will merely have made a loan to the future at a heavy interest.

It is obvious that by means of this report the English ministry meant to obtain admission into Germany for the common articles of wool and cotton, either by the suppression or the modification of our specific duties, or a diminution of the rates, or by the admission into the English market of German corn and timber; this would be making the first breach in the protective system of Germany. The articles of general consumption are, as we have shown, by far the most important: they constitute the basis of the national industry. With a duty of ten per cent. ad valorem, as demanded by England, and the undervaluations which always attend the ad valorem system, German industry would be almost wholly sacrificed to English competition, especially in times of commercial crisis, when the English manufacturers are obliged to dispose of their goods at almost any price. There is no exaggeration in averring that the propositions of England tend to nothing less than the overthrow of the whole system of German protection, with a view to reduce Germany to the condition of an agricultural colony of England.” (List 1856: 469–470).
Now it is true that tariff protectionism, while it was used in Germany in the early and middle 1800s, was used to a far lesser extent than in America, nevertheless German protectionism in the18th and 19th centuries that forced industrialisation was significant.

First, the foundation for German industry had been laid in the late 18th century by a Prussian program of creation of cartels and monopoly rights, export subsidies, bringing in of experts on industry as well as skilled labour, and the outright conquest of Silesia from Austria, a stronghold of industry (Chang 2002: 33). The Prussian state program of industrialisation was continued in the early 19th century, under the Minister of Mines Friedrich Wilhelm von Reden (1752–1815) and Christian Peter Wilhelm Friedrich Beuth (1781–1853) (Chang 2002: 34).

Even the Prussian-led Zollverein (1834–1919), although it created a free trade zone within the area that would become the German empire, had a distinctly protectionist phase in the 1840s and 1850s (Bairoch 1989: 30–31).

After the 1840s and the proclamation of the German empire in 1871, Prussia continued its program of industrial subsidies, promotion of cartels and a highly successful system of higher education focussed on the sciences and engineering (Chang 2002: 35).

Despite a free trade interlude between 1862 and 1878 (Henderson 1975: 213), it was actually the case that the new German empire increased tariffs from 1879 until 1885, especially on iron and steel (Skarstein 2007: 358, n. 11; Chang 2002: 33; Feldenkirchen 1999: 98–99), once these industries started to feel the effects of free trade.

Other notable policies were that, between 1879 and 1895, the Prussian state nationalised nearly all its railways, and nationalised railways existed in seven other German states (Henderson 1975: 210–212); the profits from nationalised railways were an important part of government revenue, and so of public investment.

Bairoch, Paul. 1989. “European Trade Policy, 1815–1914,” in Peter Mathias and Sidney Pollard (eds.), The Cambridge Economic History of Europe. Volume VIII. The Industrial Economies: The Development of Economic and Social Policies. Cambridge University Press, Cambridge. 1–160.

Chang, Ha-Joon. 2002. Kicking Away the Ladder: Development Strategy in Historical Perspective. Anthem Press, London.

Feldenkirchen, W. 1999. “Germany: The Invention of Interventionism,” in J. Foreman- Peck and G. Federico (eds.), European Industrial Policy: The Twentieth Century Experience. Oxford University Press, Oxford and New York. 98–123.

Henderson, William Otto. 1975. The Rise of German Industrial Power, 1834–1914. University of California Press, Berkeley.

List, Friedrich. 1856. National System of Political Economy. J. B. Lippincott & Co. Philadelphia.

Skarstein, Rune. 2007. “Free Trade: A Dead End for Underdeveloped Economies,” Review of Political Economy 19.3: 347–367.

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Wednesday, July 20, 2016

Mass Immigration for Thee, but not for Me

That is, if you are a highly paid, middle class professional in the West, as Dean Baker notes:
“The trade agreements that the United States has negotiated over the last three decades have been about getting low cost auto workers, steel workers, and textile workers. In addition, immigration policy has been designed to ensure that custodians, farmworkers, and dishwashers all work for low wages. These policies have been successful in pushing down wages for large segments of the work force, not only those who were directly displaced by trade or immigrant workers, but also those who face heightened competition from workers who were displaced by trade or immigration.

But trade does not have to depress the wages of less-skilled workers. Trade agreements can also be structured to get us low cost doctors, lawyers, accountants, economists, reporters, and editorial writers. There are tens of millions of smart and energetic people in the developing world who could do these jobs better than most of the people who currently hold these positions in the United States. And they would be willing to do these jobs for a fraction of the wage. Real free traders would be jumping at this opportunity to increase economic growth and aid consumers in the United States, while at the same time increasing prosperity in developing countries.

But the economists, editorialists, and political pundits are not likely to raise the call for eliminating the barriers that prevent competition from professionals in the developing world. The truth is that the ‘free traders’ don’t want free trade – they want cheap nannies – but ‘free trade’ sounds much more noble.” (Baker 2006: 26–27).
Of course, even some of these people are starting to feel the effects of mass immigration on their employment prospects too, but Dean Baker’s general point still stands.

Logically, free movement of people and open borders are the natural corollary of free trade, as Ha-Joon Chang has noted here. But your average idiot neoclassical economist has nothing to say about this. The small fringe of hard libertarians and anarcho-capitalists love open borders, not least of all because they see (correctly) that it would destroy the welfare state.

Unlike Baker, however, who does seem at one point to endorse mass immigration of some Third World professionals to the West (Baker 2006: 103) to lower costs and increase supply, I don’t think this can be a sensible solution. The long-term solution is: educating more people in the West to overcome any supply issues with, say, doctors or health care professionals.

Baker, Dean. 2006. The Conservative Nanny State: How the Wealthy use the Government to Stay Rich and Get Richer. Center for Economic and Policy Research, Washington, DC.

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Tuesday, July 19, 2016

TheIllusionist on the Cultural Left and Neoliberalism

Once again TheIllusionist has written a thought-provoking comment about the cultural left and neoliberalism:
“Here’s an interesting something that I’ve been talking about with people recently: maybe the cultural left is actually PART OF neoliberalism.

I started thinking this after the Brexit debate. I hang around in London finance circles and what struck me was that the exact same rhetoric that was being used by the cultural left types on my Facebook feed was being used by the finance people. It was 100% identical. Right from the anti-democratic tone to the complaints about racism and all that.

I think that both of these groups are actually the same people. They’re sort of embodied in that person who you actually see an awful lot: the Guardian reader who voted Thatcher/Major/Blair/Cameron. There are literally tons of these people.

They care about the ‘environment.’ They want open borders and free trade (although they’ll buy fair trade coffee to boost their egos). They strongly dislike high taxes – especially when they are at the stage in their careers (aged 35+) when those higher tax rates impact them. They dislike poor people and think that anyone who works for a living is a racist. But they generally support welfare handouts much in the same way as Victorian snobs supported soup kitchens; so long as the poor stay poor and exercise no social control they make nice pets.

Maybe this is the key. Maybe we’re wrong to think about the ‘contradiction’ between cultural leftism and leftism. Maybe cultural leftism is actually the IDEOLOGY OF NEOLIBERALISM.”
Now I assume these people are a few late Baby Boomers (the old ones), Generation Xers, and some early Millennials (born in the 1980s and early 1990s).

The trouble is that the same cultural leftism infects the Millennial generation too, and they seem more left-wing on economics. And I have a hard time believing the extreme SJW mentality that many of the Millennials have is found amongst these middle class, elite Baby Boomers and the younger Generation Xers.

But at the same time it seems difficult to deny that a kind of cultural liberalism/leftism is also prevalent amongst middle class, elite professionals, who are the natural supporters of neoliberalism. Many of these people are well educated, are doing well, and in good jobs, and probably deeply ignorant of the economic consequences of neoliberalism, because they mainly don’t see it. (Except perhaps when they complain bitterly about the high cost of rent or housing in London?)

So I think it is better to say: the people whom TheIllusionist is talking about here are one important wing of the cultural left/liberal cultural left, the neoliberal wing. They are no doubt a natural constituency for neoliberal economics.

The other wing is the millennial generation, who, by contrast, are more left-wing on economics.

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Lord Keynes @Lord_Keynes2

Monday, July 18, 2016

Those Corporate Welfare Bums

In one respect, it’s true there’s an awful lot of hypocrisy about welfare from big business, since wasteful corporate welfare is pervasive in our societies.

On the other hand, some aspects of business welfare are actually sensible and justifiable, even in a social democratic nation. E.g., agricultural protectionism.

It is well known that you simply cannot have a productive, stable agricultural sector in a true free market, because wild and violent swings in the prices of commodities destroy agriculture and send farmers bankrupt, a process which smashes up and ruins your agricultural sector and forces you to rely on imports.

The truth is: a real free market in agriculture for most nations is stark, raving mad – and everybody sensible knows this perfectly well (even conservatives).

So what you generally need for agriculture is: sensible protectionism (when needed), commodity stabilisation programs, and production quotas and so on, in order to stabilise markets, supply and profits. Perhaps even subsidies if things get bad for farmers.

Bottom line: not all business welfare is bad. Some of it is actually OK, e.g., like agricultural protection, certain industrial subsidies, and a large stock of government debt that is actually a good thing that stabilises the financial sector and provides a safe asset for banks and corporations to buy.

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Lord Keynes @Lord_Keynes2

Steve Keen on Money for Nothing

Actually lots of issues discussed as well:

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Lord Keynes @Lord_Keynes2

Saturday, July 16, 2016

Trump and his Conservatives just Stole our Economics, People!

Well, partially, anyway.

Just look at Pat Buchanan and Sean Hannity on – WTF?? – Fox News partially steal the Left’s agenda on economics, as they talk about the poisonous disaster of free trade, outsourcing, loss of manufacturing, the decline of the middle class, and mass unemployment in America. Just listen to Pat Buchanan praise Bernie and Ralph Nader at the end!

The world has turned upside down. This is why we need a reformed left, friends.

I’m on Twitter:
Lord Keynes @Lord_Keynes2

Sick of the Neoliberal Left and Regressive Left?

Friends, do you self-identify as leftist, but find yourself answering “yes” to many of these questions?:
(1) do you think left-wing politics is fundamentally about good economics? Do you think we need full employment, Keynesian macroeconomic management of our economies, a high wage economy, and an end to offshoring of our manufacturing and service jobs to the Third World by treasonous corporations and neoliberal governments?

(2) are you a Bernie Bro who loved Bernie’s economic policies but thought the Social Justice Warriors (SJWs) were unhinged?

(3) are you tired of Postmodernist B.S. and being told that there is no such thing as objective truth or that “all cultures are equal”?

(4) are you tired of making excuses for SJW insanity and the craziness of identity politics?

(5) are you tired of Postmodernist leftists bashing “white male science”?

(6) do you think leftists who conflate culture with race and who then scream “racist” at any sensible criticism of bad cultural ideas are really stupid?

(7) are you tired of hearing how wearing sombreros, “culturally insensitive” Halloween costumes, or doing yoga are supposedly “racist” and “cultural appropriation”?

(8) have you had enough of hearing bizarre anti-white conspiracy theories from the regressive left that blame all our problems on the capitalist, white-male patriarchy and universal “institutional racism”?

(9) are you fed up with the hostility to free speech on the Left and its quasi-McCarthyite culture of political correctness?

(10) do you think some of the ideas of vicious, man-hating Third Wave Feminism have become unhinged?

(11) are you tired of hearing that Islamist terrorism has “nothing to do with Islam”? Are you getting sick and tired of the excesses of fundamentalist Islam in our societies?

(12) do you think – just like Bernie Sanders – that open borders is a lunatic, libertarian idea?

(13) do you think endless mass immigration to the West is ridiculous, out of control and not in our interests?

(14) at the same time, do you also hate those crazy libertarians, anarcho-capitalist nutjobs and conservative neoliberal vandals?
My friends, not only are you not alone, but there’s nothing wrong with you!

YOU are the future of the Left, not the regressive left or SJW loonies.

We need to take back control of the Left, reform it, and in the process rebuild the power and popularity of the Left – and so that the populist Conservatives do not sweep into power in the coming years.

Time to speak out and challenge other Leftists on their B.S. I bet we can convert most of these people too once they see sense.

Try speaking out on the issues one small step at a time. Do it diplomatically, in a measured, friendly way, and in a way that shows how we can defend our beliefs on perfectly good left-wing grounds.

I’m on Twitter:
Lord Keynes @Lord_Keynes2

Thomas Palley on Post Keynesian Economics

Thomas I. Palley gives a lecture on Post Keynesian economics below, a talk which he gave at the FMM Conference, The Spectre of Stagnation? Europe in the World Economy, in October 2015 in Berlin.

Friday, July 15, 2016

Ha-Joon Chang: Economics Is For Everyone!

Good fun. The comments on Singapore are also very interesting.

Another Day, Another Atrocity

So once again Europeans have seen another vicious, grotesque terrorist attack in the heart of Europe. Even one picture here speaks a thousand words about this monstrous horror.

See here and here. If things go on like this, it seems France may well face a permanent state of emergency. If it gets much worse, it will be more like low level civil war in a major European country. As Europe descends into chaos, even millennial cultural leftists and other regressive left lunatics will have to face reality, and this is the issue that will bring many of them to their senses.

Brace yourself for a torrent of regressive left insanity and vile apologetics which will ignore all the serious issues:
(1) isn’t EU open borders, or open borders of any kind, insanity at this point?

(2) why does the West need mass immigration of people whose communities are breeding grounds of this extremism? Why on earth should Europe continue to let in 100,000s of people, whether they are refugees or mere economic migrants, when this will inevitably let in more terrorists? (In case you thought the migrant crisis ended, it hasn’t; it just shifted to some extent to Italy: see here, here, and here.)

(3) why do Western governments tolerate Islamism in their nations and the endless promotion of this extremism by Saudi and Arab gulf state funding? (And we also may finally be about to see the full extent of the involvement of figures in the Saudi government in 9/11.)
I imagine even many left-wing people, even some of the regressive left, must be quietly asking these questions.

Regressive leftism will implode over the coming years as people, especially the young, see how catastrophic cultural leftism and multiculturalism have been. Many will no doubt feel angry and betrayed when their utopian delusions implode.

When this happens, I honestly hope these people will not defect to the right. They will need a sensible but hard-headed left-wing politics to fall back on. People who can intelligently point out what went wrong, without pushing conservative economics or the standard right-wing agenda.

It’s time to build that alternative leftism. And, yes, I hope it will look like the version I have outlined at the end of this post.

Thursday, July 14, 2016

TheIllusionist on Millennial Regressive Leftists

TheIllusionist recently wrote this interesting analysis of millennial cultural leftists and the current political situation in the comments section, as follows:

I fear that the identity stuff will actually proliferate more and more [sc. amongst millennial cultural leftists]. It probably won’t take over the economic radicalisation that is occurring. I think that will stay. But it will greatly impair their ability to govern. They will hold fast to fringe causes that will alienate the rest of the population. As I think is happening in Canada.

The question of the commitments to these causes is interesting. Many started as genuine issues that, while I won’t go as far as to say they were civil rights issues as they are currently advertised, were pretty close to. So, gay rights pre-1967 was a genuine issue. I think it remained an issue during the AIDs pandemic of the 1980s. But today it has morphed into something else. It now seems to be an ideology in and of itself. Strangely it does not appear to be an ideology designed to do anything except hassle people who don’t conform. So we see all these stunts about wedding cakes in the US.

As this is pushed to its limits the cultural left start to try to find ever more fringe ‘identities’ and promote these, also misleadingly as civil rights issues.

The question is: why? I’ve come to think that this is a new form of morality. It really is about separating society into ‘good’ and ‘bad’. The ‘good’ support these causes. The ‘bad’ are painted as evil, hateful people – usually racist, misogynistic, backward and so on. They are not just wrong. But actively evil.

By this reading the causes that are sought out don’t matter much in and of themselves. So long as they annoy the ‘bad’ Other they should be actively pursued. The ideology seems designed to be divisive and is really all about painting the adherent as (i) virtuous and (ii) engaged in something resembling a ‘moral war’. I’m sure that these sorts of politics lift peoples’ self-esteem but they are anti-political in the sense that they are geared toward alienation of the Other.

I do not think that the left will be able to move away from this. The Brexit result brought that out to me particularly strongly. And since they won’t be able, they will not be capable of governing. I think that what will largely happen is that left economic ideas will permeate the right and be deployed by them. We’re seeing this now with Theresa May calling for an end to austerity and a promotion of industrial policy and worker involvement on company boards. I think that we must basically get used to the fact that this is what victory looks like. To my mind, it could be a lot worse.”
Yes, there is a lot of truth to this. TheIllusionist has put his finger on a lot of good points here that need to be said.

I only disagree on one point: I think the regressive left is doomed to collapse, and the Left will radically reform soon, maybe within the next 10 years. As young leftists age, they will come to see how stupid, petty, irrelevant and even unhinged most of their current cultural leftist concerns are now.

To be clear: I think the Old Left from the 1940s to the 1950s had a lot of things right (certainly on economics), and only needed moderate reform on certain social and cultural issues.

Take gay rights: the active persecution and criminalisation of gay people was cruel and immoral. Take the case of Alan Turing.

But now the regressive left has turned gay rights into obsessive gay identity politics, and totally trivial things – like the refusal of some conservative Christian baker to bake a gay wedding cake – are treated as the second coming of Adolf Hitler.

The regressive cultural left is often about virtue signalling and a Stalinist culture of political correctness to demonise not just conservatives, but even leftists who profoundly disagree with the excesses of cultural leftism.

This is especially pronounced in Third Wave Feminism, in which last year we had the comical spectacle of the regressive left turning around and eating members of the old 1960s New Left, as Germaine Greer discovered:

But TheIllusionist raises another issue about the possibility that the Right might capitalise on the inability of the cultural left to govern:
I think that what will largely happen is that left economic ideas will permeate the right and be deployed by them. We’re seeing this now with Theresa May calling for an end to austerity and a promotion of industrial policy and worker involvement on company boards. I think that we must basically get used to the fact that this is what victory looks like. To my mind, it could be a lot worse.”
This is certainly a possibility, and the new populist Right has clearly taken a lurch in this direction.

It’s well known that, say, Marine Le Pen has transformed the French National Front (FN) into anti-EU, anti-neoliberal, protectionist party. I think perhaps other populist European parties could be described as broadly social democratic on economics (e.g., the Danish People’s Party or Sweden Democrats?), though I could be wrong on this.

But the rest of them seem to be neoliberal or even libertarian on economics, e.g., UKIP or Alternative for Germany (AfD). I’m not holding my breath for these parties or even the mainstream Conservative parties to come around to sensible interventionist economics, or to speak sense on economics given their libertarian fringes.

In the end, I think it might be quite likely that the left can and will reform itself. That means throwing out all the regressive left insanity.

A reformed Left would look more like this:
(1) it would abandon neoliberalism. Return to strong Keynesian, full employment, and social democratic economic policies. It would become protectionist, and promote some kind of industrial policy to rebuild manufacturing. Labour market protectionism for our citizens in the First World, and of course no matter would their ethnic background is;

(2) it will abandon regressive left nonsense: ditch cultural relativism, identity politics, race-baiting leftism, identifying culture with race, and the incredible abuse of the word “racism,” which is applied to trivial things that are not racist, such as wearing sombreros or “culturally insensitive” Halloween costumes. End the witch hunting which inevitably accompanies cultural leftism. Abandon the extreme social constructivism and the “blank slate” view of human beings, because it is simply not true: e.g., there are only two natural genders in genetically normal human beings, male and female, and encouraging this type of thing is neither healthy nor desirable;

(3) to put it bluntly, it will ditch the bizarre anti-white racism that characterises the cultural left in its the endless cultural leftist conspiracy theories that blame the capitalist, white-male patriarchy or universal “institutional racism” for all the West’s problems;

(4) it will end open borders and mass immigration, and end the bizarre cult of “diversity,” which seems to think that multiculturalism is some great good in and of itself (which it most certainly is not);

(4) it will promote the strong assimilation of immigrants who are here in the West, and abandon failed multiculturalism. Also, there is nothing wrong with sensible, liberal cultural nationalism. And, yes, even though it might provoke slanderous screams of abuse from the usual suspects, it will be strongly but sensibly anti-Islamist, and reject all regressive and illiberal values promoted by the conservatives and fundamentalists in that religion;

(5) it will totally re-assess the ideas of Third Wave Feminism, many of whose ideas will have to go.

(6) do something about rebuilding the nuclear family. This might require redesigning the welfare system to encourage stable marriages, and discouraging single parent families. No hateful rhetoric or demonising of single mothers, however. That B.S. belongs on the Right;

(7) it will be anti-imperialist and non-interventionist on foreign policy, but not isolationist. Anyone proposing any military intervention in the Third World would require a brutally strong burden of proof and anything proposed must be legal under international law. Paradoxically, anti-imperialism would require confronting and countering the brutal aspects of Chinese imperialism in the Third World.
I would be happy to see a Left like this by the 2020s.

Wednesday, July 13, 2016

An Empirical Discussion of Falling Birth Rates

See here.

Amongst the graphs is this one here:

As we can see, the really significant fall in the birth rate in Western nations like Germany and Britain happened from c. 1875 to the early 1920s.

This was long before the social and cultural revolution of the 1960s. So what caused the fall from the late 19th century?

Millennial Youth Unemployment Catastrophe

That is, youth unemployment defined as the number of unemployed people from 15 to 24 years old as a percentage of the youth labour force.

Have a look at the figures for European nations in 2015:
Greece | 49.8%
Italy | 40.3%
Spain | 48.4%
Portugal | 31.9%
Slovak Republic | 26.4%
France | 24.7%
Belgium | 22.1%
Finland | 22.0%
Ireland | 20.9%
Poland | 20.8%
Sweden | 20.3%
Hungary | 17.3%
Luxembourg | 17.3%
Slovenia | 16.4%
Latvia | 16.3%
Austria | 10.6%
United Kingdom | 14.6%
United States | 11.6%
Czech Republic | 12.6%
Netherlands | 11.3%
Denmark | 10.8%
Germany | 7.3%
This is truly catastrophic, and under our present system is likely to get worse and worse.

These people are the generation called millennials.

Now it could be that these millennials will become disillusioned, useless and totally politically disengaged as their plight gets worse. But I doubt it. Under current neoliberalism, they will see their societies implode, as manufacturing and services continue to be outsourced, automation and robotics cause mass unemployment (even if some manufacturing is re-shored), housing prices are much too high to allow them to have homes or have families (even if they wanted children), private debt drives them to debt slavery, and the social cohesion of their countries is shattered by Third World mass immigration.

More likely, as these people’s lives become increasingly hopeless and they become politically engaged, there will be tremendous backlash and millennial political movements will emerge in the coming decades. I imagine that their current propensity for cultural leftism and open borders will be shattered by reality, and one of the first casualties of their political development. Economics will be one of their major concerns, not cultural leftism.

The million dollar question: will that political movement be mainly left-wing or right-wing? What will it look like?

Those Free Trading British Cotton Textile Manufacturers

Here is one called John Wright in 1785:
“The minister cannot be ignorant that an alleviation of duties on India muslins and callicos, or giving encouragement to them by laying a heavier tax upon the cotton goods of this country, especially upon the infant manufacture of muslins and fine callicos, must depress and discourage the industry and ingenuity of our manufacturers at home, and have the strongest tendency to promote the sale of such foreign fabrics, in preference to those of Britain; that such a preference must soon be attended with evident injury to the public interest, as well as to the private trader, is too conspicuous, to admit of the verbosity of ratiocination.” (Wright 1785: 9–10).
By the 1840s and 1850s, these British cotton textile manufacturers had become converted to the religion of free trade, under the influence of Classical Political Economy, and had forgotten that they or their ancestors had been vehement protectionists.

Wright, John. 1785. An Address to the Members of Both Houses of Parliament on the Late Tax laid on Fustian and Other Goods. W. Eyres, Warrington, UK.

Tuesday, July 12, 2016

Britain’s Protectionism against Indian Cotton Textiles

From the late 17th century, Indian cotton textile imports – such as white calicoes, muslins, printed and striped cotton goods – flowed into Europe in ever larger volumes.

Local manufacturers, seeing the lightness and superior nature of cotton, started to create new cotton textile industries.

But they faced a serious problem: they could not compete with the Indian imports in terms of price or even quality (Parthasarathi 2011: 89).

The centre of the world’s cotton textile production was in India in the 18th century; by the mid-19th century, it had shifted to Europe (Parthasarathi 2011: 89).

How did this happen?

Parthasarathi (2011) examines this question, and the answer he provides (which as we will see below is incomplete) is as follows:
(1) technical knowledge on how to dye and print on cotton was obtained from the Middle East and India by Europeans: that is to say, Europe imitated and borrowed the technical knowledge (Parthasarathi 2011: 90–93).

(2) however, despite the technical knowledge of (1), domestically-made cotton textiles in Europe still could not compete in price or quality with Indian goods, either at home or in export markets (Parthasarathi 2011: 89, 96).

(3) if we take the case of Britain, whose cotton textile industry became dominant by the mid-19th century, we find that Britain industrialised in this sector by imposing massive protectionism and tariff barriers to Indian cotton goods, as follows:
1685 – 10% import tariff on Indian goods;

1690 – tariff doubled to 20%;

1701 – First Calico Act, legislation banning imports of dyed, painted or printed fabric;

1707 – British textiles manufacturers obtained further tariffs on Indian textiles;

1721 – Second Calico Act, which further banned imports of Indian textiles.
Some of these early acts of protection were imposed to protect the woollen, silk and linen textile producers of Britain, but their consequence was also to protect the cotton manufacturers, who in the 18th century mainly concentrated on the production of a new hybrid fustian cloth, a mixture of cotton and linen (Parthasarathi 2011: 93).

(4) With a protected home market, British manufacturers were able to develop and apply the following technologies to production:
(1) Hargreaves’s spinning jenny (invented c. 1764; patented 1770), which was later made obsolete by 1800 by mules;

(2) Arkwright’s spinning frame, which was later developed into the water frame (patented 1769);

(3) Crompton’s mule (1779).
Hargreaves’s spinning jenny greatly increased the quality of cotton goods and lowered costs (Parthasarathi 2011: 98), but it was Arkwright’s water frame that allowed the production of higher-quality all-cotton cloth (Parthasarathi 2011: 98).

Crompton’s mule allowed the spinning of all-cotton muslins as fine as those of India (Parthasarathi 2011: 98).

The idea that shortages in yarn were the main driver of these innovations is not supported by the evidence (Parthasarathi 2011: 98) which rather shows that the desire to match the quality of Indian cloths was the major factor (Parthasarathi 2011: 109).

(5) However, despite the 18th century technological developments by Kay, Hargreaves, and Arkwright, British cotton textiles could still not compete in price with Indian goods. In the 1780s, there was vehement demand for protection by cotton manufacturers (Parthasarathi 2011: 112), which the government readily supported.
As far as I can see, all these points are true, but Parthasarathi seems to have missed further very important points about British protectionism.

As Parthasarathi notes, even with the invention and gradual use of Crompton’s mule in the 1780s, British textiles still could not compete with Indian calicoes (Alavi 1982: 56).

The British producers were protected with more tariffs, and by 1813 the import duty on Indian cotton goods stood at 85% (Alavi 1982: 56). As Alavi argues:
“It was the wall of protection that made possible the survival and growth of the British cotton textile industry in the face of Indian competition and facilitated large capital investments in the industry. Without it, the English industry would have found it impossible to get a foothold in the home market, let alone abroad.” (Alavi 1982: 56).
From 1797–1819 British cotton textile manufacturers were still unable to compete. In 1815, the value of all Indian cotton goods coming into England was 1.3 million pounds (from 1741–1750, it had stood at 1.2 million points annually, at a time when domestic cotton textile competition was still largely non-existent). British producers asked for and obtained tariff increases on Indian cottons on 7 separate occasions in the years from 1797–1819.

Even with the technological innovations, by the beginning of the 19th century, Indian silk and cotton goods
“… could be sold in the British market at a price between 50% and 60% lower than those fabricated in England. It consequently became necessary to protect the latter by duties of 70% to 80% on their value.” (Das 1946: 313, quoting Mukerjee 1967).
It was only the application of steam power in the period between 1815 to 1830 that allowed English textile goods to be competitive globally (Marks 2002: 100). The power loom, for instance, was initially limited by relying on water power, but by the beginning of the 19th century was able to use steam power (Moe 2007: 34).

The cost of British-made cotton cloth fell by 85%, but only from 1780 to 1850, and it was only in 1835 that steam power fuelled 75% of the British cotton industry (Moe 2007: 35).

British textile goods probably became internationally competitive by the mid-1820s (when tariffs were still in place). The British protectionism that lasted until the 1820s allowed British goods to become competitive.

It is estimated that by 1820, about 53% of Britain’s exports were cotton textile goods (Bairoch 1993: 85). These exports displaced India’s textile exports in world markets. Thus Britain itself had an “export-led” model of economic growth even in the early stages of the industrial revolution, by taking away the market share of India through technological innovation allowed by protectionism and tariffs.

Yet, according to classical free trade theory, India had the comparative advantage in production of cotton textiles even around 1810 when the British textile industry was developing. If real free trade had been implemented, the protective tariff would have been abolished and the market for British-made textiles at home would have collapsed.

Yet nobody can seriously deny that having a large productive textile industry was the foundation of Britain’s industrial revolution and in the long run good for the economy.

After the successful decades of tariff protection and shelter from competition, British goods succeeded in global markets at the expense of India’s exports. Bengal and the textile manufacturers were ruined and the resultant de-industrialization impoverished the previously prosperous towns.

Contemporary 19th-century British advocates of free trade actually noticed this state of affairs and criticised it. Robert Montgomery Martin (1801–1868) was a historian of Irish descent and wrote about twenty-six books on history and the British empire (including a History of the British Colonies). In 1844 he was Treasurer of Hong Kong. He appears to have been a free trader, though admittedly a member of the unconventional, proto-Keynesian “Birmingham School” of economists.

Robert Montgomery Martin was called upon to give evidence in 1840 during a British parliamentary inquiry about India:
“[Before a British Parliamentary Committee in 1840] Montgomery Martin stated that he . . . was convinced that an outrage had been committed ‘by reason of the outcry for free trade on the part of England without permitting India a free trade herself.’ After supplying statistical data of Indian textile exports to Great Britain, he pointed out that between 1815–1832 prohibitive duties ranging from 10 to 20, 30, 50, 100 and 1,000 per cent were levied on articles from India. ... ‘Had this not been the case,’ wrote Horace Wilson in his 1826 History of British India, ‘the mills of Paisley and Manchester would have been stopped in their outset, and could scarcely have been again set in motion, even by the power of steam. They were created by the sacrifice of Indian manufacture. Had India been independent, she could have retaliated, would have imposed prohibitive duties on British goods and thus have preserved her own productive industry from annihilation. This act of self-defence was not permitted her.’” (Clairmonte 1960: 86-87).
Thus some British apostles of free trade noticed this double standard. They were appalled at the hypocrisy of British protectionism and the destruction of India’s prosperous cities built on textile exports.

But they of course failed to notice that the protectionism had been a major cause of Britain’s industrial revolution and that, without it, the UK would have been much poorer. In other words, the success of the cotton textile industry in the early industrial revolution in Britain was an example of infant industry protectionism, or modern import substitution industrialization (ISI).

The great Ricardian lie spun by modern free-trading cultists that free trade was always good for Britain and that British industrialisation was the result of free trade by comparative advantage stands exposed by historical reality.

Alavi, H. 1982. “India: The Transition to Colonial Capitalism,” in H. Alavi et al. (eds), Capitalism and Colonial Production, Croom Helm, London.

Bairoch, Paul. 1993. Economics and World History: Myths and Paradoxes. Harvester Wheatsheaf, New York and London.

Clairmonte, F. 1960. Economic Liberalism and Underdevelopment: Studies in the Disintegration of an Idea, Asia Publishing House, New York.

Das, T. 1946. Review of The Economic History of India: 1600–1800, American Historical Review 51.2 (January): 312–314.

Marks, R. 2002. The Origins of the Modern World: A Global and Ecological Narrative, Rowman & Littlefield, Lanham, MD.

Moe, E. 2007. Governance, Growth and Global Leadership: The Role of the State in Technological Progress, 1750–2000, Ashgate Publishing, Aldershot, UK.

Mukerjee, R. 1967. The Economic History of India: 1600–1800, Kitab Mahal, Allahabad.

Parthasarathi, Prasannan. 2011. Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600–1850. Cambridge University Press, Cambridge.

Wright, John. 1785. An Address to the Members of Both Houses of Parliament on the Late Tax laid on Fustian and Other Goods. W. Eyres, Warrington, UK.

Monday, July 11, 2016

Some More Historical Glimpses of Clement Attlee

Here he is talking before the UK general election of 23 February 1950:

In this election the Labour party won 1.5 million more votes than the Conservatives and received more votes than in the 1945 election, but owing to the first past the post system only won a majority of 5 seats.

A priceless anecdote from David Hunt, Private Secretary to Attlee:

The Stupid Speech that Ruined Sensible Debate on Immigration in Britain for a Generation

It was undoubtedly Enoch Powell’s hateful, race-baiting “Rivers of Blood” speech, delivered on 20 April, 1968 to the General Meeting of the West Midlands Area Conservative Political Centre in Birmingham, as spoken in full below (but not by Powell):

To be perfectly clear: I don’t like Enoch Powell or the politics he represented, but surely people on the left can look carefully at this piece of history and learn something from it.

It seems pretty clear that to me that the “Rivers of Blood” speech poisoned any rational or sensible debate about immigration in Britain for years and years by focussing on race, and perhaps Britain is only just coming out of this now.

In this sense, Enoch Powell was a disaster for British politics.

However, what is quite stunning about this event in British history is how much support there was for Powell’s demand for an end to immigration from the British population at large and, above all, the British working class (see Lindop 1998), as can be seen from this part of a BBC documentary about Powell:

Admittedly, the fears about immigration in this period were exaggerated, given how little actual immigration was going on in the 1960s and given how low unemployment was. Yet even the low levels of immigration provoked an intense backlash back then.

However, some evidence exists that the immigration fear was also partly a symptom of the discontent with the Labour party’s incomes policy and wage freeze from 1966–1967 (Lindop 1998: 84), which was seen as unfair.

What can be said about Enoch Powell? I think he is a warning from history. If you have an elite grossly out of touch with what the majority of people want, people like Enoch Powell will step in.

Was there anything positive about him? It’s clear that Powell – like Tony Benn – was a vocal opponent of Britain entering the EEC on democratic grounds, and you can’t really fault him for that. But that’s about it.

But it is also quite clear that Powell was a vulgar free marketeer, supporter of the Mont Pelerin Society, and proto-monetarist, who supported what, for his time, were radical laissez faire policies. Indeed, his brand of proto-monetarism seems to have inspired and prefigured Thatcherism, as Thatcher herself admitted:

I would regard this as another deeply troubling aspect of Enoch Powell: to what degree did he prepare the ground for Thatcherism and even shift some working class votes from the Labour party to the Tories?

Astonishingly, Enoch Powell even got a thumbs up from Murray Rothbard, who said this of him:
“Decades of horrific British policies have created a rigid, stratified, and cartellized economy, a set of frozen power blocs integrated with Big Government: namely, Big Business and Big Labor. Even the most cautious and gradualist of English libertarians now admit that only a radical political change can save England. Enoch Powell is the only man on the horizon who could be the sparkplug for such a change. It is true, of course, that for libertarians Enoch Powell has many deficiencies. For one thing he is an admitted High Tory who believes in the divine right of kings; for another, his immigration policy is the reverse of libertarian. But on the critical issues in these parlous times: on checking the inflationary rise in the money supply, and on scuttling the disastrous price and wage controls, Powell is by far the soundest politician in Britain. A sweep of Enoch Powell into power would hardly be ideal, but it offers the best existing hope for British freedom and survival.”
Libertarian Forum, March 1974
This also damns Enoch Powell in my book: a race-baiting disaster of a man who destroyed any hope for serious debate on mass immigration and a crackpot free marketeer to boot.

Lindop, Fred. 1998. “Racism and the Working Class: Strikes in Support of Enoch Powell in 1968,” Labour History Review 66.1: 79–100.

Saturday, July 9, 2016

Erik S. Reinert on Heterodox Development Economics

The Norwegian heterodox economist Erik S. Reinert, author of the excellent book How Rich Countries Got Rich, and Why Poor Countries Stay Poor (New York, 2007), talks about his career and about heterodox development economics in the videos below. Informal but very enjoyable discussion.

One point, however: in the first video Reinert says that Ricardo’s comparative advantage argument assumes diminishing returns. Surely, he made a slight mistake here: the argument assumes constant returns.

Note the very important point that Reinert makes at the beginning of this second video: Ricardo’s comparative advantage argument for free trade actually uses a naive labour theory of value assumption in its argument! (see also Reinert 2007: 301–304 for discussion).

You can also download Alexander Hamilton’s famous Report on the Subject of Manufactures here:
Hamilton, Alexander. 1827. Alexander Hamilton’s Report on the Subject of Manufactures: Made in His Capacity of Secretary of Treasury on the Fifth of December, 1791. (6th edn.). William Brown, Philadelphia.
I’ve been reading it, and it is simply amazing how much Alexander Hamilton understood.

See also these studies of the role of the state in industrialisation:
Reinert, Erik S. 1999. “The Role of the State in Economic Growth,” Journal of Economic Studies 26.4–5: 268–321.

de Vries, P. H. H. 2002. “Governing Growth: A Comparative Analysis of the Role of the State in the Rise of the West,” Journal of World History 13.1: 67–138.

Parthasarathi, Prasannan. 2011. Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600–1850. Cambridge University Press, Cambridge.
Reinert, Erik S. 2007. How Rich Countries Got Rich, and Why Poor Countries Stay Poor. Carroll & Graf, New York.

Friday, July 8, 2016

Was the Old Left Socially Conservative?

TheIllusionist challenges me in a cutting comment here, which deserves a response.

First, what do I mean by the “Old Left”? I mean the pre-1960s Left dominated by trade unions, socialist organisations, and the labour-based political parties like the British Labour party, Continental Social Democrats or other Christian labour-based parties of the Left.

I happen to think the historical role of Christian socialism has been grossly underestimated by the modern secular Left. For example, on the Continent of Europe there were powerful Catholic social parties and Catholic or Christian trade unions or working class movements, which people in the English-speaking world generally don’t study or know much about.

Even someone like Clement Attlee, for example, was heavily influenced by Christian socialism, as can be seen here.

Secondly, I think it is straightforwardly true that by modern standards this Old Left was, more or less, socially conservative.

But were they socially conservative by the standards of their own time?

TheIllusionist has the following complaint about the Fabians:
“The Old Left – in its Fabian guise in the case of the UK – were culturally radical. But they were culturally radical in the way that radicalism then expressed itself: mainly in the form of a scientistic worldview that ended up promoting eugenics and mass abortion. This was a view of society that should not be dominated by ‘tradition’ or ‘old-fashioned moral principles’ (mainly Christian moral principles) but should instead be run in a pseudo-scientific, technocratic way to ‘better the species’.”
And yet as late as the time of Clement Attlee’s premiership, Britain’s Labour party continued to support the illegality of abortion and homosexual acts, and the government itself did not even abolish the death penalty (despite a movement within the party for the abolition of capital punishment).

Furthermore, the Fabians were only one subset of the Left, and precisely a middle class, elitist wing whose opinions did not necessarily reflect other left-wing political movements or indeed the mass of left-wing people who have voted for reforming Liberals, Labour parties or left-wing Christian social parties down to the mid-20th century.

The Fabians certainly had some odd views. E.g., some of the Fabians supported vegetarianism. But this never became any kind of core belief of the Old Left.

At the same time, the Fabians had some clearly puritan moral ideas, e.g., at various times they disapproved of smoking (Cole 1961: 60) and were involved in the temperance organisations.

And the actual British Labour party of, say, the Edwardian era had a decidedly socially conservative outlook:
“Despite a ‘libertarian’ fringe among the Fabians, leading members of the Labour Party were actively involved in movements for public enforcement of private morals – in the Temperance movement, the Purity movement, and campaigns against betting and gambling. Most Labour apologists in Edwardian Britain unashamedly equated liberty with decency, self-discipline, social control, and active fostering of private and public virtue: as Sidney Ball (citing Plato) put it, ‘Can there be anything better for the interests of the State .. . than that its men and women should be as good as possible?’” (Harris 2000: 22).
And this is before we get to the social or cultural opinions of Old Left Catholic social parties or Christian labour-based parties, which, I am betting, were far from being out of touch even with the social conservatism of their own day.

Harris, Jose. 2000. “Labour’s Political and Social Thought,” in Duncan Tanner, Pat Thane, Nick Tiratsoo (eds.), Labour’s First Century. Cambridge University Press, Cambridge. 8–45.

Cole, Margaret. 1961. The Story of Fabian Socialism. Heinemann, London.

Some Forgotten Truths about Politics

Things to ponder on:
(1) Classical liberalism of the 19th century was a left-wing movement, when placed on the political spectrum of that era. It follows that a major strand of the left was strongly in favour of laissez faire capitalism in the 19th century.

(2) 19th century Conservatism had a strong protectionist and anti-laissez faire capitalist strand: think of the British Tory Paternalists, Tory Radicals and High Tories, some of whom led the Parliamentary reforms that regulated working conditions and child labour. (Admittedly, they had no coherent economic program to put in place of laissez faire capitalism, and often had naively Romantic views of the medieval and rural world of orders, hierarchy, monarchy and aristocracy.) Some of the more substantive, early attempts to implement welfare state measures were taken by Conservatives (even if supported by progressive liberals): think of Otto von Bismarck and Benjamin Disraeli. As the 19th century progressed, conservatives were gradually taken over by economic liberalism, until by the early 20th century the process was complete as many pro-free trade Classical liberals defected to conservativism, as the Left was increasing taken over by socialist, social democratic and labour-based political movements. There was a reversal from about 1945 to the early 1970s, as even most mainstream Conservatives accepted the Keynesian, mixed economy consensus. (For a fine discussion of British Victorian political movements, see Jones 2000.)

(3) The Old Left of the early and mid-20th century was, more or less, socially conservative (with a Bohemian fringe) and strongly opposed to mass immigration. In fact, outside of Europe, in Canada, America, Australia and New Zealand, the trade unions and labour-based parties were easily the most vocal and hostile to mass immigration precisely because it undermined labour rights, working conditions, and wages in the colonies.
In our time, things have reversed:
(1) old-style, laissez-faire capitalism is associated with the Right and what used to be called Classical liberalism is essentially a form of libertarianism, which is generally grouped with the political Right.

(2) Conservatism has been largely taken over by the neoliberal or Thatcherite vision of capitalism since the 1970s, and the left-wing political parties have been converted to neoliberal-lite economic policies since the 1970s.

(3) The Left is now extremely liberal or even quasi-libertarian on cultural and social issues and, at least amongst the elite and middle class representatives of it, strongly in favour of mass immigration.
Jones, H. S. 2000. Victorian Political Thought. Macmillan, Basingstoke.

Thursday, July 7, 2016

A Heterodox and Post Keynesian Bibliography on Trade Theory

I include the odd useful and relevant neoclassical work too.

I will update on a regular basis:
Baiman, R. 2010. “The Infeasibility of Free Trade in Classical Theory: Ricardo’s Comparative Advantage Parable has No Solution,” Review of Political Economy 22.3: 419–437.

Bairoch, Paul. 1993. Economics and World History: Myths and Paradoxes. Harvester Wheatsheaf, New York and London.

Brewer, A. 1985. “Trade with Fixed Real Wages and Mobile Capital,” Journal of International Economics 18: 177–186.

Chang, Ha-Joon. 2002. Kicking Away the Ladder: Development Strategy in Historical Perspective. Anthem Press, London.

Chang, Ha-Joon. 2008. Bad Samaritans: Rich Nations, Poor Policies, and the Threat to the Developing World. Random House Business, London.

Cripps, Francis and Wynne Godley. 1978. “Control of Imports as a Means to Full Employment and the Expansion of World Trade: The UK’s Case,” Cambridge Journal of Economics 2.3: 327–334.

Davidson, Paul. 2011. Post Keynesian Macroeconomic Theory: Foundation for Successful Economic Policies for the Twenty-First Century (2nd edn). Edward Elgar Publishing, Cheltenham. pp. 249–256.

Davidson, Paul. 2015. “Is International Free Trade always Beneficial?,” in Paul Davidson, Post Keynesian Theory and Policy: A Realistic Analysis of the Market Oriented Capitalist Economy. Edward Elgar, Cheltenham, UK. 124–135.

Duffield, J. 2010. ‘Ricardian ‘Comparative Advantage’ is Illusory,” Real-World Economics Review 54 (27 September). 62–78.

Fletcher, Ian. 2011. Free Trade Doesn’t Work: What Should Replace It and Why (2nd edn.). Coalition for a Prosperous America, Sheffield, MA.

Hudson, Michael. 2010. America’s Protectionist Takeoff, 1815–1914: The Neglected American School of Political Economy (new edn.). Islet, Dresden.

Kaldor, Nicholas. 1978. “The Nemesis of Free Trade,” in N. Kaldor, Further Essays on Applied Economics. Duckworth, London. 234–241.

Kaldor, Nicholas. 1980. “The Foundations of Free Trade Theory and their Implications for the Current World Recession,” in E. Malinvaud and J. P. Fitoussi (eds), Unemployment in Western Countries. MacMillan Press, London. 85–100.

Kaldor, Nicholas. 1981. “The Role of Increasing Returns, Technical Progress and Cumulative Causation in the Theory of International Trade and Economic Growth,” Économie Appliquée 34.4: 593–617.

Kaldor, Nicholas. 1985. Economics Without Equilibrium. M.E. Sharpe, Armonk, N.Y. pp. 68–75.

Kaldor, Nicholas. 1996. Causes of Growth and Stagnation in the World Economy. Cambridge University Press, Cambridge.

King, John Edward. 2013. David Ricardo. Palgrave Macmillan, Basingstoke, UK. pp. 81–88, 104–106.

Lavoie, Marc. 2014. Post-Keynesian Economics: New Foundations. Edward Elgar, Cheltenham. pp. 507–512.

Norman, Neville R. 1996. “A General Post Keynesian Theory of Protection,” Journal of Post Keynesian Economics 18.4: 509–531.

Palley, Thomas I. “The Free Trade Debate: A Left Keynesian Gaze.”

Palley, Thomas I. 2008. “Institutionalism and New Trade Theory: Rethinking Comparative Advantage and Trade Policy,” Journal of Economic Issues 42.1: 195–208.

Parrinello, S. 2006. “National Competitiveness and Absolute Advantage in a Global Economy,” Dipartimento di Economia pubblica, Working paper 95, University of Rome “La Sapienza.”

Prasch, Robert E. 1995. “Reassessing Comparative Advantage: The Impact of Capital Flows on the Argument for Laissez-Faire,” Journal of Economic Issues 29.2: 427–433.

Prasch, Robert E. 1996. “Reassessing the Theory of Comparative Advantage,” Review of Political Economy 8.1: 37–56.

Pullen, John. 2006. “Did Ricardo really have a Law of Comparative Advantage? A Comparison of Ricardo’s Version and the Modern Version,” History of Economics Review 44: 59–75.

Robinson, Joan. 1973. “The Need for a Reconsideration of the Theory of International Trade,” in M. B. Connolly and A. K. Swoboda (eds.), International Trade and Money: The Geneva Essays. Allen and Unwin, London. 15–25.

Robinson, Joan. 1974. Reflections on the Theory of International Trade. The University Press, Manchester.

Robinson, Joan. 1977. “What Are the Questions?,” Journal of Economic Literature 15.4: 1318–1339, at 1333–1336.

Robinson, Joan. 1979. Aspects of Development and Underdevelopment. Cambridge University Press, Cambridge and New York.

Ruffin, Roy J. 2002. “David Ricardo’s Discovery of Comparative Advantage,” History of Political Economy 34.4: 727–748.

Shaikh, A. 2007. “Globalization and the Myth of Free Trade,” in A. Shaikh (ed.), Globalization and the Myths of Free Trade: History, Theory, and Empirical Evidence. Routledge, London 50–68.
Some other work that looks interesting:
Meoqui, Jorge Morales. 2011. “Comparative Advantage and the Labor Theory of Value,” History of Political Economy 43.4: 743–763.

Steedman, I. 1999. “Production of Commodities by Means of Commodities and the Open Economy,” Metroeconomica 50.3: 260–276.

Meoqui, Jorge Morales. 2016. “Ricardo’s Numerical Example versus Ricardian Trade Model: A Comparison of Two Distinct Notions of Comparative Advantage,” July

Schumacher, Reinhard. 2012. Free Trade and Absolute and Comparative Advantage: A Critical Comparison of Two Major Theories of International Trade. Universitätsverlag Potsdam, Potsdam.