If you are of a certain age, you likely played Commander Keen. Cane’s run in the video embedded below was a world record at the time, but has since been beaten in a near flawless run by CapnClever. Even so, I like this video because of the amusing running commentary and chat that is conducted during game play. (There are some expletives, so any children watching might need to cover their parents’ ears.) The ‘death exit’ at the beginning of the second level is a glitch in which the player can allow Keen to die at the edge of the game’s map and then immediately save and reload to complete the level.
It’s that time of year again to try our hand at Holiday Time. It’s not easy, after fixating on economics, to switch our attention to something else. It seems advisable to do so only in stages. Accordingly, the first video installment below retains a distinctly economics flavor, perhaps leaning more toward the business end of the discipline. After that, though, things are likely to go somewhat haywire.
Have you noticed how things we used to be able to do are beyond our capabilities now?
We finally reached a point where we were able to provide free university education. Then we grew wealthier, and some countries couldn’t afford it anymore.
Some of us still have universal public health care systems, but they’re increasingly a chronic burden. Maybe they made sense once, but it’s only a matter of time before they go. Sure, Cuba can do it, but they’re poorer than us.
If we were to believe most politicians, we’d be under the mistaken impression that government not investing today does future generations a favor. Leaving communications systems underdeveloped, road and transport networks crumbling, education and public health systems deteriorating, our cultural institutions eroding, developments in science and technology stagnating, and so on, will supposedly free future generations of any burden that might otherwise be imposed upon them.
There appears to be a considerable degree of compatibility between Marx and various Kalecki- and Keynes-influenced approaches to macroeconomics. Compatibility, of course, does not imply that all these theoretical approaches stand or fall together. It simply suggests, to the extent that the compatibility exists, that it is possible to see them all as fitting within an overarching, open analytical framework. In this post, the compatibility is considered in relation to the private-sector monetary circuit of a capitalist economy.
We saw in parts 2 and 3 that funds initially enter the economy through either government spending or bank lending. In the future, we will take a closer look at these activities. For now, it is enough to understand that these funds, once created, can be used for various purposes, including spending.
It was seen in parts 1 and 2 that government, as our collective agent, is able to use its currency to attract some workers and resources to the public sector. This enables it to carry out important functions. One of these functions is to shape and regulate the monetary and banking system.
Practice exam question. “Capitalism is unstable, but not that unstable.” Explain and discuss this statement with special reference to Harrod’s knife-edge problem and modern developments in growth theory. (Please take this exercise seriously and treat like a real exam. You will be glad you did come finals. R.M.S.)
Student response. Roy Harrod’s famous ‘knife edge’ (though he is said frequently to have denied it being a knife edge) suggested a capitalist susceptibility to extreme instability in which, other than at the ‘warranted’ rate of growth, the economy would either shrink to zero or explode toward hyperinflationary infinity. Because capitalism, though unstable, is clearly not that unstable, economists scrambled to find a reason for the system’s track record of not being that unstable.
For government to carry out its functions, it needs to employ some people and obtain various resources.
Most national governments coordinate the division of resources between public and private use through the operation of a currency that they themselves issue.
A national currency can be established through a few steps.
Many activities require cooperation at the society-wide level.
As a community, we need to agree upon a set of rules and regulations, and arrange for their supervision and enforcement.
Questions that arise include: