Mattick, Jr: "There is no repetition in history—that’s why you can’t learn from the past—so this is an absolutely unique situation: a major depression, but one in which the Keynesian apparatus is no longer available because the money has already been spent. The US has 14 trillion dollars in national debt. So now they just don’t know what to do...Grossman pointed out that, since the government is not an economic actor—it does not own economic resources—government involvement in the economy can only be at the expense of the private economy."
Yes but this hardly responds to the Keynesian argument that the government could borrow now on rather cheap terms and engage in deficit spending that would actually bolster the private economy as a whole and that it is not doing so due to what Krugman just called the power of the rentier or bond holding class. This is the kind of assertion that DeLong is using to discredit Marxists theoretically and politically. The argument has to be made much more carefully if it can be made at all. In fact it is important to remember that Grossman thought wars could reignite the accumulation process by using up and destroying what had become excess capacity, thereby preparing the economy for a bout of accumulation. Also I would not describe Hayek as a mathematically sophisticated economist; I read him as a critic of the mathematical sophistication of general equilibrium theory.
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