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"Keynesian economics optimizes for production and growth over efficiency and sustainability." This sounds made up. How is optimized production different from

"Keynesian economics optimizes for production and growth over efficiency and sustainability." This sounds made up. How is optimized production different from efficiency? How is growth unsustainable? An economy without growth is by definition zero-sum; is that what is sustainable, no more Pareto efficiency, that someone must lose for another to gain? "If you want loads of shiny new gadgets every year, and want it so most people spend their entire lives working just to pay rent and only a lucky few escape with "fuck you" money, then it's the system for you. If you want the average person to have the economic freedom to work less, and actually get time to enjoy their discretionary purchases, then debt-based slavedriving is not what you " Keynesianism has nothing to do with private debt or private spending habits, nor weekly work hours. You can blame many for such problems, I don't know why Keynes would have anything to do with this. "Deflation isn't scary, only the transition to it is (like any change). Deflation is actually the natural tendency, as doing things cheaper is precisely what market competition is based on (see: the entire technology sector)." That's not deflation. Deflation is when the entire broad based market across products and services lowers their prices for the same products and services. It in practice causes depressions very similar (and deeper) than what we just experienced. The tech sector lowers prices in a specfic sector by using new technology. By definition this is about classic creative destruction and reallocating of resources. Deflation is what happens when there is not enough demand for the supply, and therefore everyone stops spending money, people lose their jobs. Interest rates fall to 0, and prices fall across the board. In other words, very close to what happened in 2008-2009. Deflation was something that theoretically shouldn't happen by classical models until Keynes showed it does, and we saw it in earnest in Japan during the 90s.

mindslight 11y ago
> How is optimized production different from efficiency? Erm, this is a well known general trade off. Driving 55mph vs 80mph on the highway - the former uses less fuel for the same distance, the latter gets you further in the same amount of time. > How is growth unsustainable? If something is growing, eventually it becomes constrained by some sort of limit. If the expectation is that it is continually growing, hitting a limit means that it has "failed". Both of these general juxtapositions are quite common, so your picking apart of them seems quite defensive rather than understanding. > Keynesianism has nothing to do with private debt or private spending habits, nor weekly work hours ... I don't know why Keynes would have anything to do with this. Which is it - are you sure Keynesianism has nothing to do with them, or do you not know? When interest rates are low (or nonexistant, like the past 6 years), people are discouraged from saving in cash. If they have a significant surplus, they budget month to month and put the surplus into opaque long-term "investments" (retirement fund at the wall st casino, etc). They don't perceive the cash value and treat the account like a lock box, so they base their spending power on monthly income rather than savings. Their utility curve remains fixed (they need that monthly income), giving them less bargaining power with employers so their wages remain low. > An economy without growth is by definition zero-sum ... that someone must lose for another to gain? Zero-sum is an awfully strong term, given that we're talking about production rates. Durable goods stick around - if a person receives 1 house/yr for a single year, and then someone else receives that 1 house/yr instead, are you really going to characterize this as "zero-sum" ? In general, it seems that you're conflating production with the integral of production. This is a general theme of Keynesianism, given that it is explicitly about maximizing output by maximizing work. Given that the major economic phenomenon of our time is robots taking over historically human work, we should probably rethink this goal. My point regarding deflation is that what happens in the tech sector is just a more pronounced version of what should be happening everywhere. Prices may rise in the short term (eg a discontinuity from depleting a source of a natural resource), but in general market competition should cause all prices to be trending down in the long term.
- parasubvert 11y ago
  "Erm, this is a well known general trade off. Driving 55mph vs 80mph on the highway - the former uses less fuel for the same distance, the latter gets you further in the same amount of time." If you're using "production" as a synonym for "output", that's my misunderstanding of the words used. I get that it's a resource vs. output tradeoff. I had thought we were talking about productivity, i.e. lower rate of a unit of resource for the same output. "If something is growing, eventually it becomes constrained by some sort of limit. If the expectation is that it is continually growing, hitting a limit means that it has "failed"." Are limits fundamental and eternal? I mean, economic growth is basically the science of human achievement, the ability to accomplish more for fewer resources. And while certainly there are physical limits on Earth, which will temporarily halt growth at some point, is there a limit on innovation or on seeking out new resources? It's a big universe. "Both of these general juxtapositions are quite common, so your picking apart of them seems quite defensive rather than understanding." No, I genuinely find your point of view fascinatingly bizarre. "Which is it - are you sure Keynesianism has nothing to do with them, or do you not know?" I am quite sure about what Keynesianism thinks on this matter, and find your arguments confusing. "In general, it seems that you're conflating production with the integral of production. This is a general theme of Keynesianism, given that it is explicitly about maximizing output by maximizing work. Given that the major economic phenomenon of our time is robots taking over historically human work, we should probably rethink this goal." I'm not so convinced the current wave of robots taking over human work is all that different as the early industrial revolution in the late 18th century through Fordism and Taylorism in the late 19th/early 20th century. However, I'll admit, if this time it truly is different, i.e. we're heading for an AI singularity or whatnot, we do need to rethink the goals of economic policy. "My point regarding deflation is that what happens in the tech sector is just a more pronounced version of what should be happening everywhere. Prices may rise in the short term (eg a discontinuity from depleting a source of a natural resource), but in general market competition should cause all prices to be trending down in the long term." I really can't agree with deflation as a desirable goal in our lifetimes, as it incentivizes doing nothing with capital. Of course, as above, if diminishing returns to capital accumulation vanishes due to basically free automation, this may be worth considering. I think it's overly optimistic about technology to expect this, however.

mindslight 11y ago

> How is optimized production different from efficiency? Erm, this is a well known general trade off. Driving 55mph vs 80mph on the highway - the former uses less fuel for the same distance, the latter gets you further in the same amount of time. > How is growth unsustainable? If something is growing, eventually it becomes constrained by some sort of limit. If the expectation is that it is continually growing, hitting a limit means that it has "failed". Both of these general juxtapositions are quite common, so your picking apart of them seems quite defensive rather than understanding. > Keynesianism has nothing to do with private debt or private spending habits, nor weekly work hours ... I don't know why Keynes would have anything to do with this. Which is it - are you sure Keynesianism has nothing to do with them, or do you not know? When interest rates are low (or nonexistant, like the past 6 years), people are discouraged from saving in cash. If they have a significant surplus, they budget month to month and put the surplus into opaque long-term "investments" (retirement fund at the wall st casino, etc). They don't perceive the cash value and treat the account like a lock box, so they base their spending power on monthly income rather than savings. Their utility curve remains fixed (they need that monthly income), giving them less bargaining power with employers so their wages remain low. > An economy without growth is by definition zero-sum ... that someone must lose for another to gain? Zero-sum is an awfully strong term, given that we're talking about production rates. Durable goods stick around - if a person receives 1 house/yr for a single year, and then someone else receives that 1 house/yr instead, are you really going to characterize this as "zero-sum" ? In general, it seems that you're conflating production with the integral of production. This is a general theme of Keynesianism, given that it is explicitly about maximizing output by maximizing work. Given that the major economic phenomenon of our time is robots taking over historically human work, we should probably rethink this goal. My point regarding deflation is that what happens in the tech sector is just a more pronounced version of what should be happening everywhere. Prices may rise in the short term (eg a discontinuity from depleting a source of a natural resource), but in general market competition should cause all prices to be trending down in the long term.

parasubvert 11y ago
"Erm, this is a well known general trade off. Driving 55mph vs 80mph on the highway - the former uses less fuel for the same distance, the latter gets you further in the same amount of time." If you're using "production" as a synonym for "output", that's my misunderstanding of the words used. I get that it's a resource vs. output tradeoff. I had thought we were talking about productivity, i.e. lower rate of a unit of resource for the same output. "If something is growing, eventually it becomes constrained by some sort of limit. If the expectation is that it is continually growing, hitting a limit means that it has "failed"." Are limits fundamental and eternal? I mean, economic growth is basically the science of human achievement, the ability to accomplish more for fewer resources. And while certainly there are physical limits on Earth, which will temporarily halt growth at some point, is there a limit on innovation or on seeking out new resources? It's a big universe. "Both of these general juxtapositions are quite common, so your picking apart of them seems quite defensive rather than understanding." No, I genuinely find your point of view fascinatingly bizarre. "Which is it - are you sure Keynesianism has nothing to do with them, or do you not know?" I am quite sure about what Keynesianism thinks on this matter, and find your arguments confusing. "In general, it seems that you're conflating production with the integral of production. This is a general theme of Keynesianism, given that it is explicitly about maximizing output by maximizing work. Given that the major economic phenomenon of our time is robots taking over historically human work, we should probably rethink this goal." I'm not so convinced the current wave of robots taking over human work is all that different as the early industrial revolution in the late 18th century through Fordism and Taylorism in the late 19th/early 20th century. However, I'll admit, if this time it truly is different, i.e. we're heading for an AI singularity or whatnot, we do need to rethink the goals of economic policy. "My point regarding deflation is that what happens in the tech sector is just a more pronounced version of what should be happening everywhere. Prices may rise in the short term (eg a discontinuity from depleting a source of a natural resource), but in general market competition should cause all prices to be trending down in the long term." I really can't agree with deflation as a desirable goal in our lifetimes, as it incentivizes doing nothing with capital. Of course, as above, if diminishing returns to capital accumulation vanishes due to basically free automation, this may be worth considering. I think it's overly optimistic about technology to expect this, however.