me: >> Ted, this says absolutely nothing against deLong's assertion that JMK's Tract on Monetary Reform was monetarist. After all, as I've said twice before, one can easily use superficial psychoanalysis to justify Patinkin's insertion of "the love of money" into individual utility functions as a way to reconcile monetarism with Walrasian general equilibrium. <<
Ted: > I did that in the posts preceding this one, the ones where I pointed to Keynes's claims about the effect of an irrational and variable propensity to hoard on the relation between the quantity of money and the price level....< So what? Patinkin also posits an irrational propensity to hoard. His isn't variable, but you didn't explain why it should be variable. Did JMK posit a variable propensity to hoard in the Tract? where? what does it vary in response to? or is it simply a random variable? or is it just a vonstant and therefore essentially irrelevant? To my mind, the key theoretical contribution in the GT is not Keynes' casual dabbling in psychology as much as his introduction of the concept of (true) uncertainty into the story. This is really clear in his article, "the General Theory of Employment." I interpret his somewhat casual discussions of psychology as being mostly about how people respond to uncertainty rather than being based on a dedication to the ideas of Freud or any other psychologist. (does JMK ever quote William James or any other non-Freudian psychologist? if he did, that undermines the idea that he was a follower of Freud in some sense.) By the way, for the mature Keynes (in the GT and after), the break between the quantity of money and the price level is even stronger than what you posit, since he sees the quantity of output as variable. An increase in the money supply can raise real GDP rather than just prices. More importantly, I think it would be useful to get beyond scholasticism, to actually present some economic (or political) logic. Ted: > I've just quoted Marx pointing to irrational Indian hoarding to dispute the claim that changes in the quantity of money change prices in the same proportion.< why is Marx relevant here? We were talking about Keynes and your rejection of his Tract as representing a case of monetarism. Is this a typo, so that meant to say Keynes? In any event, just because he sees irrationality among what many English people at the time thought of as "wogs" does not meant that he say such irrationality as "normal." This kind of Anglocentrism would suggest that it would be very easy for JMK to compartmentalize, seeing hoarding in some of his works but accepting a monetarist framework in the "Tract." Or maybe he added a couple of nuances to the Tract, but I've seen no evidence that the book isn't monetarist. Ted: > As I promised, I'm about to spell this out again and show the changes to Keynes's understanding of this propensity that result from the development of a deeper and more sophisticated knowledge of psychoanalysis, but I've done this many times in the past (I may even be up to the 40 times Henwood sometimes mentions when asked once again to repeat an obvious point).< alas, I don't have time for lbo-talk. > A deeper and more sophisticated analysis is found, for instance, in Keynes's > treatment of "the psychological attitude to liquidity," one of "the three > fundamental psychological factors" that provide the psychological foundation > for the General Theory. A passage that makes this particularly clear is the > one from the 1937 QJE article, "The General Theory of Employment," that I've > many times quoted and attempted to explicate.< Looking at ch. 15 of the GT, I could see nothing especially "Freudian" about the four (not three) motives for holding money. There does not seem to be anything especially Freudian about his later discussion of the "finance" motive for holding money, either. I'm getting the feeling that seeing Freudian psychoanalysis as an essential component of JMK's work (including the Tract) is like seeing the statue of Elvis on Mars. If you want to see it, or have a psychological predisposition to see it, you see it. I guess my psychological predisposition is to not see Freud in JMK's writings, except in the most superficial and inessential ways. Of course, since JMK never presented a complete story of a unified theory that incorporated all of the parts of his writings that he thought were valid, it's hard to tell what was essential or inessential. The joke back then was that if you put three economists in a room you'd get five opinions -- and the JMK would be the source of three of them. He was clearly very creating and insightful, but his thought doesn't seem characterized by tremendous amounts of internal consistency. Ted: > I did that, for example, in attempting to explain why key aspects of the treatment can't be translated into mathematics. <http://archives.econ.utah.edu/archives/pen-l/2007w17/msg00025.htm> < I read that and it still seems to me that the Freudian stuff is mere rhetoric, like a few candy sprinkles on top of a birthday cake. The basic idea is about the role of _uncertainty_, i.e., the possibility of events which cannot be quantified as probabilities. (One way to understand uncertainty vs. risk: we can understand the risk involved in betting on a flipped coin turning up "heads." But we can't predict anything about the possibility that someone will flip a coin nearby or how many time.) Then objective uncertainty seems to be reflected pretty straightforwardly as psychological uncertainty (fear, trembling, etc.) That is, people hold money NOT because they're "irrational" but because the world they live in involves so much uncertainty, especially in a depression-type situation or a financial panic. It's not individuals who are irrational as much as the _world_ they live in, the objective conditions they face. It's the objective circumstances that make so-called rational expectations impossible. You don't present anything by Keynes referring to the complicated kind of psychodynamics that Freud pointed to that would suggest that uncertainty, fear, and irrational expectations would arise from inside the person. Ted: > Though I didn't mention it there, that passage uses psychoanalytic ideas about "symbolism" and its relation to "regression" found in the Ernest Jones paper, "The Theory of Symbolsim," listed in the Treatise on Money reference.< But you don't quote Keynes actually using those concepts to say anything different from any other economist. It seems like hand-waving. Is there any quote where JMK explicitly says "Freud (or Jones) taught us that X is true. This is relevant to liquidity preference." Ted: > I've also pointed previously to Keynes's claim that there's "a deep-seated obsession associating idle balances ... with some aspect of current savings" and indicated, as I did in the post your responding to here, where the claim can be found (XIV p. 214, it's not in the General Theory). < He says it's deep-seated, but he doesn't explicitly seat it in Freudian psychodynamics. A modern experimentalist might seat it (deeply?) in inductively-derived concept of "loss aversion" instead. In fact, even if it's "deep-seated," it has no real economic impact (in terms of differentiating JMK from monetarism) if it's also a constant. The key thing in JMK as opposed to Patinkin or the experimentalists -- as I understand his thinking -- is that he say the propensity to hoard as _variable_ in response to objective conditions. The key is not the constant (psychology) as much as the variable (objective reality). This was a crucial factor which meant that capitalism could deviate from Say's Law/full employment persistently. Ted: > On one occasion (again in discussing the limitations "internal relations" place on mathematical representation) I supplied the passage from the paper by Ferenczi listed in the Treatise on Money reference [which Michael Perelman quotes] to show where, in pscyhoanalytic writings Keynes is known on other grounds to have read, the corresponding psychoanalytic idea could be found. <http://archives.econ.utah.edu/archives/pen-l/2007w14/msg00192.htm> < I never said that JMK didn't read Freud or Ferenczi. He clearly was an educated man. But all of the quotes you've dredged up seem to be inessential to his economics. Sure many kids like to hold their poop inside them (as my son used to do, but not all kids do). But what does that say in terms of the nuts & bolts of JMK's theory? So far, I haven't heard anything to differentiate JMK from Patinkin. If JMK had been more explicit in his use of Freud's psychoanalytic conceptions, then maybe a large number of people wouldn't have misinterpreted his views. However, I think the problem was instead that he was a bit unclear _in general_ about what he was talking about (as Robinson suggested). Part of the problem was that JMK wasn't prepared to make a full break from the neoclassicals in the GT, so he assumed there that the "first postulate of classical economics" (i.e., that "The [product] wage is equal to the [notional] marginal product of labour") applied even though he rejected the second postulate (i.e., that "The utility of the [real] wage when a given volume of labour is employed is equal to the marginal disutility of that amount of employment."). He should have rejected both postulates from the start, as Kalecki did. Ted: > "Superficial" isn't the right word to describe an idea of psychoanalysis that would have it providing a justification for Pantinkin's insertion of money into individual utility functions or capable of elaboration in any way through the idea of utility functions.< I don't see what the point is of this sneering at Patinkin (if indeed that's what you're doing here). What I'm saying is that I'm not convince that JMK was any less superficial than he was. Please convince me. Ted: > I take it your own idea of an appropriate use of psychoanalysis is found in the paper to which you once pointed on this list, "The Positive Political Economy of Individualism and Collectivism: ...," e.g. in the following passage from that paper: [elided]< I have never pretended that this passage was a true representation of either Freud or of an appropriate use of psychoanalysis. All I did was to appropriate the popular translation of three of Freud's terms and then use them to analyze (as it were) one implication of an individual having conflicting motives. (BTW, as noted in the web-page to which my paper is attached, my explanation of the "voters paradox" in my paper (which you quoted here) was in error.) I would never claim to provide a "true" understanding of what Freud, Rousseau, Plato, or JMK "really" thought about any issue. Most likely they were like everyone else, i.e., a bit (or a lot) confused. Worse, for people like Freud, Rousseau, and Plato didn't write in English, so that English-speakers such as myself are dependent on translations, which are invariably imperfect. Even JMK's 1936 English may have different meanings that our 2008 version of English. Even if individual words have exactly the same meaning between eras, they have different meanings in context. So any effort to say "what JMK (really) said" simply sets off a cascade of purely academic and therefore useless debates. To pretend to present a "true" understanding of what anyone says assumes god-like abilities. Instead of claiming to tell anyone what the true thoughts of famous intellectuals was, I try to figure out what interesting insights great thinkers have that might help us understand the real world. If it turns out that the insight is useful, it _doesn't matter_ whether or not the translation/interpretation is correct. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
