Thank you for being polite while putting me on my place, however; when in the seventy's keynesism turned sour, it was nothing to do with a bored electorate, but the facts, that capitalism needs extra growth and extra profit to temporarily being able to finance a bit of human face. The welfare state rested and what's left of it still rests on the exploitation of the third world for cheap raw materials, cheap energy cheap labour, and limitless-looking world markets and than I had not mentioned the total ignorance about environmental care/sustainability in those happy days. Do you really think all this could happen again - and should it happen, even if miraculously there was any economic base for it to happen? Eva > > I know that playing the fool is a recognized polemical technique, and > playing the fool nicely may even be an endearing trait in polite > argumentation ... But, come off it. > > You ask whether market mechanisms and regulation can work together. > Experience of reasonable people in the real world (not only in the ideal > world) indicates that this is indeed possible, and desirable. It > doesn't mean that it always work, and it doesn't mean that it is always > implemented or implemented to the extent that one would want to see it > done. In times when common sense, reason, and social concern prevail, > the extent and methods of regulation of the market will be subjects of > debate and competing political pressures. The market system can also > work together with more drastic measures of government involvement in > the economy: e.g., selective state ownership of enterprises (e.g. public > power companies), or non-state alternatives to ownership which still > operate within a generalized market economy (e.g. cooperative > enterprises, such as the coooerative s that at one time existed in > Britain -- I don't know whether they exist still, the Grain Growers' > Coops (grain storage and marketing, and spinoff enterprises including > insurance companies, financial enterprises, and general stores) in > Canada, etc.. We used to call this a "mixed economy" and I believe many > of us (not just myself) would like to get back to it. But it still haas > a significant foundation in market economics, most of the time, for most > purposes. It also has the advantage of leaving government the time and > the energy to run programs where the governmental role is really > essential, rather than trying to micro-manage enterprise. > > I think that the "either-or" argument is essentially an argument > exploited today by the radical right (the Ayn Randist influence) or by > cunning simplifiers (not directed at you, heaven forbid), who by gulling > people into the idea of either/or think they will get them to accept the > pure market economy as the only viable alternative. I don't think that, > and I don't think you do either -- so you shouldn't lend comfort and > support to that position, even inadvertently. > > I hope this allays your concerns, and answers your question. > > Sincerely, > > Saul Silverman > > PS: Overproduction is inherent in capitalist systems, but is not > necessarily socially regressive. It provides an incentive, in the > self-interest of the owners and employees of productive enterprises, to > engage in mass production and lower prices, and/or to support using part > of the social-economic surplus (through government) to create new levels > of consumption by enabling the poor to enjoy some portion of the results > of production. The corporate cash register doesn't distinguish between > the customer who pays with "his/her own" money and the customer who is > partly subsidized by government-directed programs. In crude form, that > was one of Keyne's central insights (anticipated by the turn of the > century Russian economist who first directed attention to the > overproduction/underconsumption problem, at the turn of the century: > Tugan-Baranovsky). Keynesian methods, regulation of the market, and > other approaches to government intervention do not solve the problems of > the economic system "in the long run," but as Keynes said, "In the long > run, we're all dead." The question of what happens to capitalism, in > the Keynesian system, is not an ultimate question; what is necessary is > to keep the system going from one short run period to the next, making > expedient adjustments (e.g. via social programs, etc.). The problem is > not that Keynesianism doesn't woirk and that the crises that you talk > about occur *because* it doesn't work. The problem is, that after it > has worked for some considerable time, the public gets bored with it and > takes it for granted, the decision-makers stop paying paying close > attention to its lessons and do stupid things (like the Johnson > Administration's efforts to finance an expensive war without being > willing to face the consequences, politically, morally, or financially), > and the ground is cleared for the blandishments of stupid > pseudo-economists (e.g. Mr. Reagan, who pitted his college course in > simplified classical economics against the Keynesian model and who > argue, "Ah, shucks, folks, this economics thing is as simple as pie. > Just lean back in your rocking chair, and let the market take over." In > sum, only in your simple model of the market economy (and Mr. Reagan's > mirror image of the market economy) is regulation either unnecessary or > impossible. As for the rest of us, I think we do better by taking our > stand with Keynes. > [EMAIL PROTECTED]
