the text that Louis quoted said: >Businesses [in the US] over 25 years had grown used to assuming that the >federal government would always attempt to pump money into the economy to >offset unemployment. As long as the economy was really growing this was an >all right assumption. But when economic saturation hit and businesses began >to cut back on jobs they also now began to anticipate an expected increase in >the money supply for which they were not prepared to respond by restoring >jobs. Consequently, high inflation occurred alongside of high unemployment.<
the author does not really explain why the US economy is suffering from "economic saturation." Its existence seems to be an assumption, not something to be explained. raghu wrote: > I am curious: from a Marxist perspective what exactly are the > `defects' of Keynes? ... It depends. The theory of the GENERAL THEORY could be seen as an elaborate explanation of the nature of what Marxists call "realization crises," along with the details of the nature of money, the systematic rejection of Say's "Law," the possibility of a high-unemployment equilibrium, etc. As such, it could be used to fill in the blanks in Marx's incomplete theory of crises. (Those who think that Marx presented a single, complete, theory of crisis are wrong, IMHO.) That's my perspective and (I believe) that of Doug Henwood. On the other hand, there's stuff in the GT which doesn't make that much sense, such as Keynes' over-stressing of the subjective element in the "marginal efficiency of capital" (as noted by the author that Louis quotes). GT also presents an essentially static model of the world (and Keynes is explicit here, assuming that technology and the stocks of capital goods are constant) which Keynes somehow can say something about long-term trends. On the third hand, there are various developments of Keynes' ideas, from Robinson or Minsky to the so-called "new Keynesians" such as Greg Mankiw (the Reformed Church of Monetarism). The politically- and academically-dominant form of Keynesianism has suffered from a shot-gun wedding with Walrasian general equilibrium theory, producing such crap as "stochastic dynamic general equilibrium theory." It thus ended up being totally irrelevant from even a Keynesian perspective, saying nothing about the Bubble Economy of the 2000s and the 2008-09 collapse. -- 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
