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Agreed [1]. But the two notions are inseparable really. To the extent that Keynesian economics demands that the government get involved at every turn to 'fix'

by tc 18y ago

Agreed [1]. But the two notions are inseparable really. To the extent that Keynesian economics demands that the government get involved at every turn to 'fix' things, the only possible outcome is corruption, corporatism, and (if you dare to use the word) fascism. [1] though I prefer to hold the politicians responsible

gabrielroth 18y ago
But Keynesian economics doesn't demand anything of the sort. It suggests that, in a recessive economy, when monetary policy reaches its zero lower bound, temporary fiscal stimulus can make up the output gap.
- tc 18y ago
  We must not be speaking the same language. I read "monetary policy" and "fiscal stimulus" as "the government getting involved with the markets." Now I would hate to conflate Keynesian economics with any one proponent, but John Maynard Keynes himself once half-seriously proposed that the government bury dollar bills in old mines so that the economy could be stimulated by people working to dig them up.
  - deleted 18y ago
    [deleted]
  - gabrielroth 18y ago
    Right. It's the 'at every turn' in your original post, rather than 'under certain very specific conditions,' that I was objecting to.
  - MaysonL 18y ago
    Markets without government are usually more corrupt than markets with government.
- arohner 18y ago
  You're living in a dream world to assume corruption won't happen. You have congressmen in charge of handing out billions of dollars, and who want to be re-elected. Congressmen are happy to send the pork in a specific direction for a bribe ^H^H^H^H donation to fund their re-election campaign. The cost of lobbying is directly measurable: spending $X to lobby for advantageous results, and receiving $Y, where Y >> X. It's all downhill from there.
  - gabrielroth 18y ago
    When did I make that assumption?
- gaius 18y ago
  Yeah, but it's not just giving money to corporations and hoping for the best. It's actually creating valuable artifacts (e.g. roads, dams). Basically Keynes-ism (if that's even a word) works (or worked) because it made stuff people could use to make commerce easier. If the government is going to spend money it could, for example, massively upgrade the rail network.
- nradov 18y ago
  Like many economic concepts, that only works in theory. In practice any "temporary" stimulus tends to become a permanent budget increase and then we're all worse off. Once federal government programs get started they develop constituencies and become near impossible to kill.
- anamax 18y ago
  > But Keynesian economics doesn't demand anything of the sort. If Keynesian economics is proposed as a policy involving humans, it can't honestly ignore how humans will actually implement it. If someone came to you and said "we need to speed up our system so let's buy processors with bigger caches" and you knew that your system was such that bigger caches didn't help, would you really think highly of said proposer? Would it matter if he then demonstrated that the processors with bigger caches were faster on programs that you weren't interested in? If Keynesian economics fails with the political class that we have, it doesn't matter how well it might work with a different political class. (I'm pretty sure that the political class that can successfully pull off Keynsian economics doesn't involve humans.)

by tc 18y ago

gabrielroth 18y ago

But Keynesian economics doesn't demand anything of the sort. It suggests that, in a recessive economy, when monetary policy reaches its zero lower bound, temporary fiscal stimulus can make up the output gap.

tc 18y ago
We must not be speaking the same language. I read "monetary policy" and "fiscal stimulus" as "the government getting involved with the markets." Now I would hate to conflate Keynesian economics with any one proponent, but John Maynard Keynes himself once half-seriously proposed that the government bury dollar bills in old mines so that the economy could be stimulated by people working to dig them up.
- deleted 18y ago
  [deleted]
- gabrielroth 18y ago
  Right. It's the 'at every turn' in your original post, rather than 'under certain very specific conditions,' that I was objecting to.
- MaysonL 18y ago
  Markets without government are usually more corrupt than markets with government.
arohner 18y ago
You're living in a dream world to assume corruption won't happen. You have congressmen in charge of handing out billions of dollars, and who want to be re-elected. Congressmen are happy to send the pork in a specific direction for a bribe ^H^H^H^H donation to fund their re-election campaign. The cost of lobbying is directly measurable: spending $X to lobby for advantageous results, and receiving $Y, where Y >> X. It's all downhill from there.
- gabrielroth 18y ago
  When did I make that assumption?
gaius 18y ago
Yeah, but it's not just giving money to corporations and hoping for the best. It's actually creating valuable artifacts (e.g. roads, dams). Basically Keynes-ism (if that's even a word) works (or worked) because it made stuff people could use to make commerce easier. If the government is going to spend money it could, for example, massively upgrade the rail network.
nradov 18y ago
Like many economic concepts, that only works in theory. In practice any "temporary" stimulus tends to become a permanent budget increase and then we're all worse off. Once federal government programs get started they develop constituencies and become near impossible to kill.
anamax 18y ago
> But Keynesian economics doesn't demand anything of the sort. If Keynesian economics is proposed as a policy involving humans, it can't honestly ignore how humans will actually implement it. If someone came to you and said "we need to speed up our system so let's buy processors with bigger caches" and you knew that your system was such that bigger caches didn't help, would you really think highly of said proposer? Would it matter if he then demonstrated that the processors with bigger caches were faster on programs that you weren't interested in? If Keynesian economics fails with the political class that we have, it doesn't matter how well it might work with a different political class. (I'm pretty sure that the political class that can successfully pull off Keynsian economics doesn't involve humans.)