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I read economics at the very epicentre of Keynesianism (LSE) in the heady years in the overheated run-up to the Great Recession (1999-2003), but I must say that

by qubex 9y ago

I read economics at the very epicentre of Keynesianism (LSE) in the heady years in the overheated run-up to the Great Recession (1999-2003), but I must say that there was no sense of his teachings being in any way obsolete: in some sense, there was a critique of his orthodoxy (I remember an accurate quip to the effect that The General Theory of Employment, Interest, & Money was not general, nor a theory, but a collection of cobbled-together maxims and heuristics), and there was the not unreasonable notion that his observations needed grounding (e.g., with agent-based modelling), but Keynes’ status had not been called into question. If anything, in fabled Third Way Cool Britannia, there was a concerted effort to confirm his relevance in the face of apparent success of the neo-classicists. Time bore him out, of course, and the Austerity policies that set in right thereafter pretty much have served as confirmatory particle-accelerators of the economists’ creed.

tarikjn 9y ago
I believe it is a bit too early to declare it a success. Can we exclude that it is not accelerating rising cost of living and economic inequality, and the general weakness of the middle class? Also, what is top-down imposed austerity with no option of bankruptcy? To me it is also a form of Keynesianism. The general consensus is that things are headed in a better direction for Iceland or Detroit than they are for Greece.
- qubex 9y ago
  ”Austerity with no possibility of bankruptcy” doesn’t strike me as anything doctrinarian, really. As for declaring it a non-success, and bemoaning, the supposed death of the middle class, you couldn’t be more wrong: it might be faltering in the West, and we might observe a local pressure upon the middle class, but in the Far East (China, India) the latter is very much ascendant.
  - lifty 9y ago
    Are you suggesting that the rise of the middle class in the Far East was caused by monetary policy? If you do, then I would have to disagree with you. It seems to me more likely that it was caused by the increase in global trade and the massive transition of the means of production from west to east.
    - qubex 9y ago
      Yes, I am — and that growth of the Eastern middle class is itself a (probably involuntary) product (or side-effect) of monetary policy of the net importers (the West): in a protectionist context, globalism wouldn’t have taken hold, and ”Factory China” wouldn’t have arisen if protectionist paradigms had been dominant.
Nokinside 9y ago
'Keynesian' is not strongly tied to Keynes the person or his thinking or writings. Keynesian's have buried Keynes long time ago. Anti-Keynesians are still carrying his corpse around. Neo-Keynesian theories formulated and grounded Keynes's ideas better than he did and the field moved on. Today New classical macroeconomics and New Keynesian macroeconomics contribute methods to each other. 'Keynesian' today is just tendency or general direction. If you want to spot dead ends in the economic thinking, you must look at schools who study the teachings of the founder and never improve upon them ('X said', 'X thought') Keynesian economics is not one of them.
- qubex 9y ago
  Quite true. Modern ’Keynesians’ took his imprimatur and ran with it, they did not fossilise themselves upon the dicta of the Great One. That’s why it remains relevant today (at least in some guise or another) and why it incorporates methods the totemic founder would have never even contemplated (agent-based modelling, behaviourist economics, and globalisation).
- cmurf 9y ago
  Galambosians. Anarcho-capitalists. More extreme by far than anti-government libertarians. http://www.harrybrowne.org/articles/Galambos.htm http://www.harrybrowne.org/articles/Galambos.htm
- tim333 9y ago
  >Anti-Keynesians are still carrying his corpse around. The thing I've seen more is Keyenes ideas got adopted by left wingers and used as a justification to expand government and then the anti-keynesians react against that. The actual Keyenes was quite capitalistic and his ideas are not incompatible with small govenment.
conanbatt 9y ago
The Great Recession is 2007-2009. Also we have to bear in mind Keynes was a free market ideologue, and said taxes should be at tops 25% of GDP. Keynes truly helped model how to get out of recession, but he did not know the danger of government not being able to go back to a smaller state. Hayek and Friedman were more confident that it was a bad path.
dnautics 9y ago
Can you give an example of one of these austerity policies? So far as I can tell, no country after the great recession has decreased their soverign debt load (as in, budget surplus, not deficit reduction). Moreover, an austerity policy is terrible for the working class if you choose to direct it at social services instead of directing it at greasing cronies, which so far as I can tell is what every country that has undergone "austerity" has done.

by qubex 9y ago

tarikjn 9y ago

I believe it is a bit too early to declare it a success. Can we exclude that it is not accelerating rising cost of living and economic inequality, and the general weakness of the middle class? Also, what is top-down imposed austerity with no option of bankruptcy? To me it is also a form of Keynesianism. The general consensus is that things are headed in a better direction for Iceland or Detroit than they are for Greece.

qubex 9y ago
”Austerity with no possibility of bankruptcy” doesn’t strike me as anything doctrinarian, really. As for declaring it a non-success, and bemoaning, the supposed death of the middle class, you couldn’t be more wrong: it might be faltering in the West, and we might observe a local pressure upon the middle class, but in the Far East (China, India) the latter is very much ascendant.
- lifty 9y ago
  Are you suggesting that the rise of the middle class in the Far East was caused by monetary policy? If you do, then I would have to disagree with you. It seems to me more likely that it was caused by the increase in global trade and the massive transition of the means of production from west to east.
  - qubex 9y ago
    Yes, I am — and that growth of the Eastern middle class is itself a (probably involuntary) product (or side-effect) of monetary policy of the net importers (the West): in a protectionist context, globalism wouldn’t have taken hold, and ”Factory China” wouldn’t have arisen if protectionist paradigms had been dominant.

Nokinside 9y ago

'Keynesian' is not strongly tied to Keynes the person or his thinking or writings. Keynesian's have buried Keynes long time ago. Anti-Keynesians are still carrying his corpse around. Neo-Keynesian theories formulated and grounded Keynes's ideas better than he did and the field moved on. Today New classical macroeconomics and New Keynesian macroeconomics contribute methods to each other. 'Keynesian' today is just tendency or general direction. If you want to spot dead ends in the economic thinking, you must look at schools who study the teachings of the founder and never improve upon them ('X said', 'X thought') Keynesian economics is not one of them.

qubex 9y ago
Quite true. Modern ’Keynesians’ took his imprimatur and ran with it, they did not fossilise themselves upon the dicta of the Great One. That’s why it remains relevant today (at least in some guise or another) and why it incorporates methods the totemic founder would have never even contemplated (agent-based modelling, behaviourist economics, and globalisation).
cmurf 9y ago
Galambosians. Anarcho-capitalists. More extreme by far than anti-government libertarians. http://www.harrybrowne.org/articles/Galambos.htm http://www.harrybrowne.org/articles/Galambos.htm
tim333 9y ago
>Anti-Keynesians are still carrying his corpse around. The thing I've seen more is Keyenes ideas got adopted by left wingers and used as a justification to expand government and then the anti-keynesians react against that. The actual Keyenes was quite capitalistic and his ideas are not incompatible with small govenment.

conanbatt 9y ago

The Great Recession is 2007-2009. Also we have to bear in mind Keynes was a free market ideologue, and said taxes should be at tops 25% of GDP. Keynes truly helped model how to get out of recession, but he did not know the danger of government not being able to go back to a smaller state. Hayek and Friedman were more confident that it was a bad path.

dnautics 9y ago

Can you give an example of one of these austerity policies? So far as I can tell, no country after the great recession has decreased their soverign debt load (as in, budget surplus, not deficit reduction). Moreover, an austerity policy is terrible for the working class if you choose to direct it at social services instead of directing it at greasing cronies, which so far as I can tell is what every country that has undergone "austerity" has done.