Economics Thread

read marx

read kalecki
delong.typepad.com/kalecki43.pdf
kalecki is underrated in general tbh, technically in terms of priority of publication he beat Keynes to the punch on much of what Keynes is famous for.

No he checks out, looked up his publication record.
Eh I mean the institute pumps out some pretty stupid shit sometimes:
mises.org/library/myth-nazi-capitalism

If you insist, its a bit length (few pages). Not my best debate since the medium isn't great and I've been answering questions sporadically during lulls in work. Post mostly though so you can see just the innate level of misunderstanding this guy displays.

And just to reiterate this isn't like a ego boner stroking thing either, I am just quite concerned that there are legitimate academics out there being paid to pump this shit out to listening masses of students.

Also just worth pointing out, but you will quickly see my problem in this exchange. I simply cannot compete with this guys knowledge of Austrian economists, because frankly I know their philosophy is bullshit I never paid much mind to read it. But it’s clearly a handicap here, since he outright dismissed Marx’s definitions of socialism and only seems to accept Mises’ definitions. Which is why I made this thread, to learn more about resources on this matter.

Appreciate all you guys input thus far

In skimreading this, he really does seem to be an austrian type, certainly regarding definitions. Perhaps I was too kind to Mises. Since obviously I don't know who he is, I can't go further. In being a "legitimate academic" he might be an RDW type token who got picked up by the mostly chicago-type economics department to show that they do have a plurality of opinion (i.e "Our token Austrian" or "Our token Marxist") since even /r/neoliberalism would probably find it silly to argue all forms of collectivism/collectivist "coercion" are socialism, even if they may argue that one is a slippery slope to the other or so on.

In truth the conversation is quite frustrating since it's basically just definition wank. (Also, his "Socialism is when the owners of the means of production control the government" tangent has me baffled and I want to break his nose for "that's why i get paid to teach economics :^)" smugness.)

Reading Smith or Ricardo is not relevant for talking to economists. First of, most current econ profs, even at top universities (or especially those) have virtually no knowledge about classical economics (less than what you get from skimming Wikipedia). What they do is neoclassical economics, for that get the book Debunking Economics by Steve Keen (the chapter about Marxism isn't good though). They have virtually no knowledge about history, so when making a short reference to something like enclosure in Britain being a key thing in history for the development of capitalism, there's a good chance that they don't even roughly understand what you are talking about. Another thing is that economists are extremely dishonest people (which is remarkable given how autistic they often are), so when they don't understand something or don't know about a particular topic, it's unlikely that they'll just say that they don't know about it. Another remarkable thing about econ profs is how little real-world experience they have. So, when they talk about supply curves usually shaping upwards, that is per-unit costs increasing when production is increased, you see this word here: usually – this word doesn't refer to something backed by statistics, it doesn't even refer to cherry-picked real-world examples, rather, it refers to cherry-picked fictional examples. And being this insane isn't just true of far-right ones, "sensible centrists" like Paul Krugman lie all the fucking time about absolutely everything. They are not good for anything. There is basically ZERO performance-based filtering going on where those making the most accurate predictions get crowned winners (sadly, this also applies to the tiny group of Marxian economists). What they do is propaganda.

tl;dr economists are subhuman garbage.

Shaikh book is a 1000 pages of love. My body is not ready, but it seems pretty interesting.

Rejoinder: James Feigenbaum is an Unbearable Fagot by Dr user, PhD and researcher @ the Institute of Butt Science
Somebody with a bit of self-awareness would read the sentence and start having doubts about the quality of how he is categorizing people there. It's disingenuous to draw a lasso around rather distinct groups of people, then recognize that they have many disagreements, and then use this as a criticism, calling that the group's self-refuting positions as if these existed together in the minds of the same people. I can put BLM and the KKK together as one group and then use snippets of statements from different people in this grand BLM-KKK coalition that is a figment of my imagination, and then point out how contradictory that group's opinion about black people is. The only thing making such an argument proves is how much of a fuckhead you are.
Do you think saying this makes a certain person mad? Was that your reason for saying it? Would you show us on the doll where Ron Paul touched you?
I think you shouldn't write while on meth.
I'm opposed to it because if the goal is to set a physical quantity, you have to… set it as a physical quantity. You don't know in advance how much a tax will dampen demand, so in the end you have to fiddle with the tax all the time to get closer to meeting your actual physical target. And of course, you will not get as close as with actually fucking fixing it physically. Making a resource more expensive makes it less attractive at first and incentivizes people to come up with more efficient ways of using it, which in turn makes the resource more attractive than at the point immediately after the enactment of the tax, and this rebound effect can be very strong, you can't make any guarantees here that the people who get incentivized by the tax in the first place don't come up with efficiency increases that make the resource even more attractive than it was before the tax. (When the rebound effect is even stronger than the initially demand-dampening effect of the tax, you have something called a Jevons Paradox. A more modern version of the JP is known as the Khazzoom–Brookes postulate, which states that these effects are likely to happen.) So, if you aren't economically illiterate, you set the goal physically and allow trading with emission rights as that solves it – or rather, would solve it, if corporations more powerful than some countries weren't directly involved in moving these targets away from what actual scientists are recommending. Which is why we need socialism.
Socialists want to add people to productive activity, though I admit it's a puzzle what a James Feigenbaum is good for. My door-stopper thing is defect, I guess he could work as a replacement for that.

The hater:
>“There is nothing in the original definition, in the academic definition, or in the dictionary definition about socialism meaning the elimination of property. “ As written by Daniel de Leon of the Socialist Labor Party in 1911: slp.org/pdf/de_leon/e… As written by Ayn Rand: aynrandlexicon.com/lexicon/socialism.html And for a dictionary defintion: britannica.com/topic/socialism Literally read the first line. And you really get paid for this? Come on now… “You are not going to learn what socialism is by reading Marx. Marx never defined socialism.” I’d say Engels did an excellent job at it: marxists.org/archive/marx/works/1880/soc-utop/index.htm. And considering that they collaborated heavily on virtually everything, I’m gonna have to call bullshit here. But it is well accepted that Marx defined socialism as a transitory stage to communist society.
Reply by the professor:

Why are you arguing with this retard about objective definitions? None exist. Just say this is how you and the rest of the socialist movement define it.

not even an economist
read them but know austrian economics is far from mainstream, its mainly used by rightist plebs who dont know math. Neoclassical economics is mainstream rightist economics. try this:
youtube.com/watch?v=Vss3nofHpZI&list=PLOEpD2bjMC9IGqndVCkr7w4IZVJou4z65

That PDF is satire right?

Also posting Anwar Sheikh

You’re telling me man. Just sucks but you can’t communicate if can even agree on basic things like definitions

No it’s real. Dude posted his name above. Can look him up, he’s not at Harvard

Dog it’s booby science

I think you should focus on more modern and to the point economics instead of outdated and fringe (except of Hayek) economists

Henry Hazlitt's Economics in One Lesson for a quick overview
Thomas Sowell's Basic Economics and Economic Facts and Fallacies for more concrete understanding

Here are two of the three, I don't have Basic Econ in PDF.

Was Rothbard /ourguy/?

Hazlitt is a pretty well known Austrian, which is probably worth baring in mind. Not exactly mainstream in economic terms even if he had reasonable popular reach.

it all starts making sense

Hazlitt doesn't really say anything you wouldn't hear from a non-Austria. Everything he said was also in Basic Economics.

I remember actually picking up Econ in one lesson before I was a leftist, it's a gateway drug into neoliberalism and ideology

What made you change your mind? I've just finished it's pretty decent and coherent. Where would you say Hazlitt gets it wrong?

It's more likely to have a lot of sleight-of-hands than definitively wrong things. For example in the analogy about the bridge, it's not actually often the case that people build completely useless bridges. There's always necessary work to do, but the point of the piece is to argue public works undertaken for the secondary gain of boosting employment are bad. It has underlying the whole thing that generalized popular distrust of government and of clever men with big ideas.

But a more interesting thing I like to consider is the impact-distribution of the broken window fallacy. Obviously if I break a prole's window, that's bad because they have to reduce consumption elsewhere to mend it and we're all worse off. It is indeed a good example to discourage that kind of thinking (like "war is good") - but suppose I break the window of a money-hoarder who doesn't work and lives from inheritance? He would then have to pay to have it fixed using someone who does work, which would entail "new" spending and employment, and transfer the money into the hands of a working man who must spend that money to get by day-to-day (or to his employer, which will at least re-invest most of it's money.)

I have a feeling - being Austrian - Hazlitt may indeed counter this by arguing that banks lend out deposits (and thus unless our hoarder keeps money under the bed, his savings are necessary to let others invest by borrowing.) but that's not how it works in reality (see for example the short Bank of England piece bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf , key line One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them. In this view deposits are typically ‘created’ by the saving decisions of households, and banks then ‘lend out’ those existing deposits to borrowers, for example to companies looking to finance investment or individuals wanting to purchase houses. In fact, when households choose to save more money in bank accounts, those deposits come simply at the expense of deposits that would have otherwise gone to companies in payment for goods and services. Saving does not by itself increase the deposits or ‘funds available’ for banks to lend. Indeed, viewing banks simply as intermediaries ignores the fact that, in reality in the modern economy, commercial banks are the creators of deposit money. ) so the basic thought remains valid.

It's also perhaps worth noting that in many real world cases - most notably the UK - the end of full employment (vis chapter on full employment being a fetish) coincided with the decision to say "fuck it" to production. Now Britain has people in idleness (being badgered into looking for work that doesn't exist), jobs that need done (a massive social care crisis for example), and a persistent trade deficit (most notably in goods, but even if you factor services Britain simply does not pay her way in the world.)

Does math have a place in economics, or was its office invented?

Your list is pretty good. I would add The General Theory by Keynes and Basic Economics by Sowell.

Read a macro textbook, like Krugman's haynes.jpschools.org/wp-content/uploads/sites/119/2013/07/Krugmans-Economics-for-AP-Text-Book.pdf
Read "Modern macroeconomics" by Snowdon and Vane macroeconomiauca.files.wordpress.com/2012/05/snowdon-vane-modern_macroeconomics.pdf
Read Anwar Shaikh's magnum opus libgen.io/book/index.php?md5=DD0B27231F6E7CABEF184B616A59DAFE or watch lectures youtube.com/playlist?list=PLB1uqxcCESK6B1juh_wnKoxftZCcqA1go
Read /r/badeconomics

I'd rather not

How do you feel about MMT and other sort of "noe-Keynesian" economists? Though I don't know if they'd always describe themselves as such, though they like to take Keynes back from people like Krugman and the neoclassicals that claimed Keynes after WW2. Keen seems to enjoy an amount of heterodoxy, for instance, though he has stated he basically agrees with MMT economists everywhere that it matters, which might make him "neo-Keynesian".

Milton Friedman - Capitalism is Freedom

Piketty's "Capital in the 21st century" is interesting in understanding the wank over "Muh 1%" and the push for UBI. It is modern liberalism to a T: it identifies the disparity in wealth caused by the ownership of capital, and says the solution is just a massive wealth tax.

the full employment gang will be visiting

Keen I like, though I'd call him Post-Keynesian and use Neo-Keynesian to describe the Neoclassical-Keynesian mix that cropped up after WW2. (and then Krugman is New-Keynesian, which is supremely confusing when you consider that Neo- and New- mean basically the same thing.)
MMT I'm positive about, but haven't read much more than the general idea of. Inflation and inputs (i.e. labour+resources) rather money itself as the primary constraint on output is quite an appealing idea (and when you think about it, pretty intuitive), if not necessarily exclusive to MMT.
The view of how money is created in the Bank of England PDF I linked is post-Keynesian, so it's quite optimistic to see it gaining acceptance in a central bank. (While central banks have sometimes come to this conclusion before, the BoE's paper is intended for laymen to read, which is a more interesting recognition than a research paper shoved at the back to be ignored while trying monetarist bloodletting or such instead.)

...

MMT guys are okay (though they have a bid of science-fiction about them: Here is this totally insane reality we live in, and here is this proposal that would fix it, if the government cared about fixing it). They are not what Neo-Keynesian usually refers to though: People who start from standard neoclassical econ and then do some adhoc fuckery with friction or sticky prices to reduce the gap between model and reality. Strangely enough, that type of economist is described early on in the General Theory by Keynes and he distanced his own position from that. So, since the term NK is already used by those people, the people who are actually closer to Keynes have to call themselves Post-Keynesians.

but in that paper kalecki says that bourgs would undermine any efforts to achieve full employment

I've been shilling them a lot recently in liberal circles, though obviously my terms are fucked up since I confused post-Keynesian with neo-Keynesian. But you're right, the conceptual framework is very intuitive and not that hard to explain I think. The main two things I think are important about it are that it could have some predictive power as relates to implementation of fiscal policy which would be relevant to anybody who would want to see something like UHC be implemented in America, and I think it is a decent lubricant for shaking up ideological fixation on the reality of capitalism.

For instance, several of them claim that their rejection of the conventional wisdom about "gotta raise revenues for programs" would lead to a decent argument for not raising taxes in the case of UHC implementation in America, but possibly lowering taxes in order to offset any drop in aggregate demand from out of work insurance workers (and other indirect workers), which would ideally prop up an increase in demand to create new space for them in the private sector. This obviously sounds like an appealing policy pitch, and of course the opposite proposal is considered actually dangerous because raising taxes after a deflationary shake up of the insurance industry could exacerbate unemployment and slow the economy. And in the second place I think the fact this goes against conventional wisdom would maybe cause some more progressive leaning liberals to really internalize how arbitrary the market economy can be compared to widespread neoliberal ideology that "there isn't enough" "we need to cut back" "I wish we could do X but there just isn't enough money" etc. On a side note, unless I'm missing something, having looked more at other case studies now of foreign economies I'm confused why the hell Japan took a credit rating hit a couple of years ago when their bond market is stable, they have incredibly low inflation, high employment and their government can't default. What process is used to determine credit-worthiness of states? Did they literally just look at the size of the debt and say "that can't be good"?

Hopefully that would be a stepping stone into beginning to think of the economy as something WE make collectively. But like the second poster said, I think MMT's policy approach (I.e. claiming the government and everybody else is just ignorant, if only everyone knew how money and fiscal policy truly functioned we could have sanity) is pretty idealistic since it rests on the whole "if only they knew" and doesn't give as much importance to willful corruption as I think should be accounted for.

Also, I feel like the logic of MMT would lead one to think that many industries could be nationalized to make the economy leaner and more politically controllable. Not in an austerity sense, but in an efficiency sense. If you consider that UHC could call for lower short term taxes in order to make space for unemployed workers to move around, you realize what you are really doing when making a national healthcare system is cutting down on all the wasteful peripheral market activity. Many progressives may sort of think this way, but I'm not sure they fully realize it's implications. Just about any market where diversity is not desired could be made more "lean" in this sense. That includes many telecommunications, maybe even energy and raw materials infrastructure in which you literally just want a quality and uniform input for your products. And speaking of the latter, nationalized energy would mean you could reject carbon taxes and jump directly into dismantling and reforming as much of the energy infrastructure to renewables as a political act, not necessarily a market induced economic one, since the government may now directly control more of the industry. You could confidently say many backbone industries could be nationalized.

Mainstream economics is the alchemy of the 21st century. Its theoretical dissonance means you can get pretty much whatever conclusion you want from the theories. That´s why it´s allowed to exist.

Stay smart.

Stay smart.

...

I think you should read actual economics texts, at least at the undergrad level.

Do basic macro, basic micro.
Then you can move into a basic text on political economy.

Then you can go buck wild. Read some heterodox folks, like Samuel Bowles or Suresh Naidu. Do what you want.

It’s good to have some understanding of how the social science is actually practiced, that way when you wax about its flaws you can be effective.

Read advanced economics

he's fundamentally optimistic that somehow we'd square that circle in my reading.
Alas the new institutions developed were generally those designed to make a return to full employment as arduous as possible. If you want to read Kalecki as a pessimist: he still likes full employment, he just thinks the bourgs will ruin it.
In Schumpeter's words:

As far as I recall, Credit Ratings are basically arbitrary.
I mean, ratings agencies have a bunch of criteria, but as far as I know they're private organisations doing the assessments which is (in part) why you had the fun situation of financial WMDs being labelled AAA safe, even if there was a seemingly plausible mathematical explanation behind it if you want to assume good faith.

Reminds me of one of the quaintest conversational cycles that can come up when it comes to US healthcare.
1. We must reject Universal Healthcare on the basis it would be laughably inefficient, hiring 15 people to do the work currently done by 1 in our lean, private system, taxes would go up by more than insurance costs and there'd be long waiting lists.
2. Even if universal healthcare was good, my town has two private insurance providers and the universal service would certainly rationalise that down to one, increasing unemployment and devastating the local economy.

I don't know if this is actually a "general economics" thread, but does anybody know if there is any reason a bank couldn't turn excess reserves above central bank minimum requirements into profits? I don't know anything extensive about the regulations of banking or how banks typically operate, and I figure there must be something that makes a bank differentiate what is going to be considered "reserves" and what is profit. I don't know where that difference lies. Reserves seem like a cost of doing business as a bank, and so if you looked at your total revenues minus your wages, depreciations, reserve requirements etc. you'd be left over with your profits. Yet excess reserves are/were at least considered a problem for interest rate targets because all banks with excess reserves would want to loan them out overnight, and if the banking system has a net excess of reserves you're ultimately going to lend out till you reach zero interest and are just holding bags. Is it at that point that a bank would just pocket reserves for shareholders? Or do they hold some of them in anticipation of interest rate increase in the near future?

I get that in many modern central banking systems, the central bank will pay interest on excess reserves to hit overnight rate targets, so that could be a reason you might choose to keep some of your revenues as excess reserves, but otherwise is there any incentive to hold excess reserves?

out

Are you sure the guy is actually a professor, did he provide any proof?