The Silly Season 2 – Manly Romantic Advances, Eighties Style

Male primates exhibited a wide range of mating behaviors during the eighties. Freewheeling, intimidation tactics, overconfidence, guilt trips, and wailing and gnashing of teeth all played their parts. The collective response to these advances was somewhat mixed. All this is evident in the pop music of the day.

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The Silly Season 1 – Heteconomist in the Gematria Code

Okay, I’m in holiday mode now, even though every hard-working blogger knows that there are no holidays for a blogger. If I think of something serious to post between now and the New Year, I will certainly do so, but sprinkled throughout will probably be a couple of posts fit for the silly season. Hopefully there will be some music, although I’m struggling to find anything sufficiently “on point”. Or maybe there will be a bit of film, or comedy. In the meantime, we will have to satisfy ourselves with a smattering of numerology. Actually, that might not be accurate. Whatever it is will soon become clear.

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Exercising Currency Sovereignty Under Self-Imposed Constraints

A currency-issuing government is not revenue constrained. It is always able to purchase whatever is available for sale in its own currency. This simple reality is partially concealed by a variety of contrived hoops through which modern day governments require themselves to jump. There are at least two different ways in which we can see past the confusion. The easiest way is to stand back and look at the big picture, both from the standpoint of logic and by considering the monetary and fiscal authorities as two parts of the same entity, the consolidated government sector. For the eagle eyed, this approach may appear to overlook potentially consequential details in the way governments actually spend. In practice, the monetary authority plays one set of roles, the fiscal authority plays another, and many governments have introduced various restrictions on the way in which the two can interact. The present post begins with a bird’s eye view of government spending, and then turns to a more detailed consideration of the way in which self-imposed constraints and convoluted operational procedures complicate but do not undermine the sovereignty of a currency-issuing government. The case of the US government is taken throughout as an example, but much of the discussion is also broadly applicable to other currency-issuing governments.

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The Accelerator, Profitability, Financial Instability and the State

I’ve been pondering whether it is possible to reconcile a number of notions within the same economic story about long-run growth and accumulation:

  1. An accelerator-type determination of private investment;
  2. A possible tendency, under laissez-faire capitalism, for profitability to fall as accumulation proceeds;
  3. Capitalism as prone to financial instability;
  4. A state able either to attenuate crisis tendencies or, cajoled by democratic pressure from below, push the system beyond capitalism;
  5. A capitalist state able to “manage”, to a degree, the rate of profit.

It is possibly a tall order. The following is intended as just a rough sketch of what I have in mind. I might go deeper into some aspects of the argument in future posts, as it raises various questions, but think it would be better to catch any glaring faults now before carrying the exercise further.

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Marx’s View of Production in Relation to MMT and Taxes

An effect of being trained in mainstream economics but then encountering alternative approaches is to experience a growing realization — or at least a creeping suspicion — that most of what has been taught is the opposite of the truth. Even when the story told contains some truth, it is likely to have been turned on its head. Thanks to Kalecki and Keynes, for example, it becomes clear that demand (spending) determines supply (income), including in the long run. Spending, in a monetary production economy, must come before production can commence. Thanks to Post Keynesians, it becomes evident that loans create deposits, not the reverse. There could be no deposit prior to the decision to extend the first private or public loan (unless through government spending). Thanks especially to Sraffians, it has been established that profit cannot be a remuneration for (marginal) productive contribution. We can conceptualize profit as unpaid labor (Marx) or due to ownership (Sraffians, Post Keynesians).

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Maybe It’s Just That Most People Are Really Quite Right Wing

[Preface. If this post seems confused, it reflects my own confusion. If at times it seems pessimistic, it reflects a sense of pessimism that not often, but occasionally, afflicts me. If its conclusion seems wildly optimistic, it is because in the end I am optimistic.]

On the left, it sometimes feels as if we spend a lot of time in a losing battle. When the general population rejects or shows little interest in our latest set of progressive proposals and votes for political candidates even more right wing than the last, it’s common to engage in a little hand wringing, accuse ourselves of having failed to devise or effectively articulate a practical vision, and go back to the drawing board wondering how we can do things better next time. Meanwhile, the general population continues along a well trodden path of embracing war, environmental destruction, extreme inequality, mass unemployment and mean-spirited attacks on the poor along with policies tinged with racist or nationalistic overtones.

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It Doesn’t Have To Be This Way

Most economies around the world have been in the doldrums since the Global Financial Crisis of 2007/8 and the Great Recession that followed. Unemployment in some European nations has been at levels not seen since the Great Depression. Although the situation is not as dire in all nations, economic activity remains well below potential virtually everywhere. The result is needless human suffering.

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The Diverse Economy: Part Capitalist, Part Socialist, Part Communist

A diverse culture is best served by an economy that can cater to diverse needs and interests. In our societies, perspectives differ widely when it comes to (among other things) the following five areas:

1. Competition and cooperation. Some people enjoy competition in pursuit of external rewards. Others prefer cooperation and feeling a part of something bigger than themselves. Most enjoy both competition and cooperation, just in varying degrees.

2. Personal motivation. Some people would largely lose interest in productive activity if it were not for the potential of private profit or a high salary. Others prefer to work in a not-for-profit environment and are more or less unmotivated by material gain.

3. Attitudes on inequality. Some people want to have more than others. Some would prefer not to. Some care if others have more than them. Some don’t as long as everyone has enough and the inequality is not so extreme as to undermine democracy.

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