I oft make blog rounds in search for things to write ‘bout & decided to check on Lord Keynes’s continuing brain rot into what could only be called “reactionary liberalism” — moderate liberal economics matched with backward social politics. I guess this was popular in the 50s, when many European countries had that postwar boom o’ theirs. That Nordic countries are now doing the best while also being the most socially liberal & some o’ the most tolerant o’ foreign cultures breaks this crude “causation = correlation”, but whatever.
Anyway, I was hoping I’d finally see our precious Hairpiece-supporter eat crow & admit that the President who supported tax cuts, tried to sabotage Obamacare, & is now planning to slice food stamps isn’t the “Keynesian” gainst that vile neoclassical, Clinton, who wouldn’t have done these things. But, ‘course, he’s been conspicuously silent on Hairpiece for the past year or so. There has been plenty o’ racist woo masquerading as science, by cranks like Charles Murray — the Bell Curve guy, whose conclusions based on ( accurate, but not new ) statistics are illogical & based on backward biology. Same goes for Nicholas Wade, not a scientist @ all, whose book has been refuted by most o’ the actual scientists whose research he cited.
But then, that’s easy to keep up without refutation: just declare any refutation, no matter how much evidence is ’hind it, as being “liberal-biased”, or whatever the Realist Left™ equivalent is, based on some sentimental inability to see cold, hard reality. That this is the same thought process that Keynes mocked conservative economists for is rich in irony. I will settle for discovering a new logical fallacy: “Appeal to Bad Consequences”, the opposite o’ “Appeal to Consequences”. This is the idea that we should believe in something that’s ugly ’cause it’s ugly, regardless o’ evidence or reality, ’cause this makes us feel “stronger” & less sentimental. ( That proponents o’ these ideas are ne’er harmed themselves by these “harsh truths”, we need not focus on… )
Anyway, I got bored o’ that, & was planning on just moving ‘long, till I stumbled ‘pon him complaining ‘bout some conservative neoclassical tract on economics, which I just used as a platform to muse on what I feel to be the weakness o’ all economic “schools”, Post-Keynesianism included.
(1) “Wealth is not Money”.
This is a meaningless “lesson”, since “wealth” is a vague idea. E’en Lord Keynes falls into ol’-fashioned assumptions like all other economic pundits. He defined “wealth” as “the good [sic] and services we consume”. “Consume” itself is vague: it implies that the “good” or “service” ( ¿how do you eat a “service”? ) is destroyed as one uses it. ¿So if I pay to use something that isn’t destroyed, like living on land for a temporary period, is that “wealth”, or something different?
Money cannot be consumed in the way that commodities can.
Actually, money can be used the same way commodities are. There’s nothing stopping some particularly creative fellow from eating money. Most people just don’t ‘cause in most current societies money has greater value in a different use.
A mo’ serious example: commemorative coins are money, but they are simply used as collectible commodities ( which means they could be bad for the economy, since it’s money that’s added to “currency”, but doesn’t actually run in it, which s’posedly creates inflation; but the connection ‘tween adding money to the economy & inflation are much mo’ mixed — ‘specially since some dollars inevitably get destroyed in the violent scramble to grab them all when they’re dropped from Friedman’s helicopter ).
Libertarians are fond [ sic ] accusing Keynesians of saying that “money is wealth” or that “money creation is wealth creation.”
In a society where there exist mo’ than a few people who believe ( or say they believe ) that the Democrats are touching kiddies in their hoo-haws in Chuck-E-Cheese, it’s not that hard to believe that quite a lot o’ people believe things ‘bout other things simply ‘cause they ne’er deign to actually read such works — which means that any correction will also go unread, making it futile.
But I can’t even recall seeing any left heterodox economists who even say this. The maxim that money is not everything – which many people on the Left are fond of saying – is even a subtle admission of the point.
Both Keynesians & neoclassicals do claim that money is value ( or, in connection, that demand is value ), through their hypocritically-named “subjective theory o’ value”, which is just as wrong.
This is not a lie, since I can use Lord Keynes’s own words to prove it in his immensely flawed critique o’ the immensely flawed labor theory:
In modern economics, value is normally exchange value, that is, something has an economic value when it is traded or bought as a commodity in a market.
“Economic value” is market demand ‘cause it’s specifically defined that way, making “economic value” tautological & meaningless.
&…
It is the demand for goods caused by the subjective desires of people that is the cause of value, not labour.
If one believes that demand — the willingness to pay money for something — creates value, then the only logical conclusion one can make is that creating mo’ money gives people mo’ money to pay, & therefore mo’ value to create. That’s obviously absurd, just as the idea that people wanting things magically makes it appear is absurd.
Anyone with any sense would realize that if value is subjective, then the means to create value is subjective, & therefore can’t be narrowed down to any 1 grand thing — including money or labor. For instance, price can make something mo’ valuable if I want something expensive to show off how rich I am, or for any other social reason. Similarly, I may value something simply ‘cause I worked hard on it, which means that labor did create that thing’s value, & nobody can tell me that I’m wrong ‘cause they have no objective basis on which to judge my values.
To show you how ridiculous this claim is, remember that Lord’s Keynes’s blog doesn’t sell for any price on any market — it has no demand. Lord Keynes is saying outright that his blog has no value.
Some may protest that economists are only talking ‘bout “commodities” — “economic value”. That is to say that economists, both Keynesian & neoclassical ( & Orthodox Marxist1 & Austrian, actually — which is to say, all economists ), prove the market to be integral to economics ( both good & bad ), by simply refusing to acknowledge economics outside o’ the market — that good ol’ “La, la, la, I can’t hear you” argument ( or as they say it in economic parlance, “We don’t talk ‘bout that thing, e’en though it’s perfectly relevant & we truly ought to, ‘cause it might make us question our assumptions like true scientists” ).
(2) “The Economy is not a Zero Sum Competition”.
Lord Keynes’s critique isn’t bad — & his general conclusion that it’s a mix is just ‘bout right. But his examples are a small speck o’ what could be said in this immensely complex issue. He focuses on small, isolated examples like gambling, & 1 major ( but still not fundamental ) example, finance. I have much mo’ fundamental problems with it.
The most important problem with this idea is that it contradicts subjective value: if value can be anything anyone deems it to be, then basic logic tells us that either there must be cases where certain values conflict with others, creating a zero-sum game, or that we can all get anything we want at the same time, which is obvious fantasy.
This is so hypocritical ‘cause this argument is used to argue gainst certain people’s values. People use this to argue gainst things like economic redistribution; ¿but what if I highly value relative wealth? Then I can either have my value or economists can have theirs — we have a zero-sum game.
‘Gain, economists try to argue that value is only their narrow “economic value”, but it isn’t: value is anything — economic, political, spiritual, aesthetic, personal, emotional, psychological, technological, social… Economics affects all these things, so economists can’t ignore these if they want to talk ‘bout economics in a complete way. If an economy that creates lots o’ “economic value” conflicts with, say, an equal society with high “political value”, then these 2 contradict each other & one must pick 1. For economists to say that they prefer “economic value” simply ‘cause they’re economists is to say that economists are just arbitrary pundits — propagandists. A true scientist isn’t objective within “their particular field”, but o’er everything.
(3) “International Trade is not a Zero Sum Game.
This involves the typical moderate-left critique that Lord Keynes’s readers should already be sick o’ reading a million times. The fundamental idea that he hints at, but doesn’t specifically say, is that neoclassical “efficiency” assumes that efficiency comes from minimizing costs now, disregarding the long-term ( which is ironic, considering their strawman criticism o’ Keynes & his economically-poisonous homosexuality — ne’er live down that classic, Forbes ). This applies in general to any “race to the bottom” situation.
He points out that this idea relies on the assumption that workers can retrain instantly. This is true, but ironically falls into the same problem he criticizes elsewhere: that efficiency must come immediately. It’s perfectly consistent to acknowledge both that workers can’t retrain instantly but that they should for long-term efficiency — e’en when things change rapidly. A perfect example is an industry I’m quite familiar with, web design. That’s an industry wherein workers voluntarily retrain themselves constantly ‘cause they see that in most cases taking the extra time to learn new things is worth lessening e’en mo’ time spent doing the same thing that can be automated from what they learned. Not only that, but retraining can actually in itself be a mo’ rewarding type o’ work, since it adds variety to something that’d otherwise be monotonous — it ironically takes them outside o’ the assembly line that capitalism is notorious for — & ‘cause learning is developing, personal growth.
‘Course, middle-class web developers are quite different from the working class. For 1, web development isn’t a particularly capitalist industry: there is relatively low capital investment ( the education needed is probably a’least 40 times the cost; the rest is just a computer, software, — which you can just download open-source or pirate — & internet ), & thus much mo’ competition. Most web development “businesses” are individuals or groups working for their own salary. Thus, they benefit directly from the efficiency.
The problem with this effect on working class people is the same problem the effect that “efficiency” has on a country in general: there’s no guarantee that all parties will be allowed to share in the efficiency. It’s not that workers shouldn’t retrain to mo’ efficient skills; it’s that in real-world economics, workers aren’t given the option; they’re just laid off & sent into unemployment, where they don’t have the resources to retrain.
In this situation, like many, both neoclassicals & Keynesians are wrong on the solution: the solution is neither to let a tiny few rich people get e’en mo’ money while the majority are made worse off or to stifle development to benefit the majority, but to use government funds to keep poor people healthy & well ( both physically & mentally ) — think a mandatory minimum living salary, or whatever they call it — while offering them tools to retrain them so they can get better jobs.
The failure to understand the efficiency & social benefits o’ this idea come from a common contradictory sentiment: 1. the ( right ) idea that efficiency comes not from working mo’, but from working less — rather that labor creating value, eliminating labor is what creates the most value, & 2. the idea that we should demand people work to make money, else we’ll be inefficient. That workers being unemployed to train off the government dole so that they can do mo’ productive work in the future is mo’ efficient than having them continue to do work they’re not good at doing as others is beyond them, which is strange, since this is how college works for many people.
This particularly annoys me ‘cause these jobs that these modern Luddite Keynesians try to keep are the kind that are least appropriate for humans. The kind o’ jobs that can be automated are the most mind-numbingly dumb & monotonous — hence why mentally inferior machines can do them. While socialists bemoan the inhuman way capitalists turn workers into cogs in a machine, ¡Keynesians panic that humans won’t be able to be cogs anymo’! ( But then, Keynesians have ne’er had much respect for working-class people, so maybe they’re not so interested in treating them like fellow humans as they are protecting the stability o’ their own station ).
This leads to a central conundrum for philosophers to debate: what’s worse, an Austrian dystopia where workers are starved off, or a Keynesian dystopia where workers are trapped in a dour living that makes them wish for death.
His claim that Ricardo’s 3rd point, “it does not matter what you produce (e.g., you could produce pottery), as long as you do it in a way that gives you comparative advantage” is “utter nonsense” is vague. ¿Is he claiming that certain goods are intrinsically better than others? ( i.e. that value is objective ). It’s amazing how much a tricky idea like value being subjective can utterly trip up economists everywhere.
He also seems to assume that manufacturing is where true economic development comes from, which is ( ironicly, considering his repeated criticism ) an outdated Marxist idea. If value is subjective, than “development” is just as much — ‘specially when that “development” comes @ huge environmental costs. Much as efficiency comes from minimizing labor, not making more o’ it, efficiency comes mo’ from creating value from as li’l manufacturing as possible, rather than trying to maximize it. Thus, the obvious reason developed countries, which are still much better off than developing countries, are mo’ & mo’ “service-based” economies.
Despite Lord Keynes’s racist conspiracies, developing countries aren’t outsmarting developed countries; developed countries as wholes are still benefiting mo’ from shifting their dirty industries to poorer countries while keeping most o’ the profits within the developed countries — e’en in the long run. E’en if we acknowledge that only a tiny minority o’ rich westerners benefit from the profits, basic logic would tell you that redistributing this larger chunk o’ wealth to the displaced working class is better than forcing working class people to work crappy jobs for a ( almost certainly smaller ) share o’ a smaller chunk o’ wealth while people in developing countries starve from a lack o’ jobs for themselves.
An e’en better, though unlikely, solution: make laws that force western businesses to pay foreign workers a minimum wage & have western standards o’ safety & worker well being & foreign workers will lose their competitive “advantage” while also allowing foreign workers to make mo’ money & develop their economies mo’ so that they don’t have to rely on western companies for technology just so their people don’t starve — but then, we have to remember that in Lord Keynes’s fever dreams, Chinese workers are living like kings with their wonderful 12-hour sewing jobs without safety regulations while unemployed westerners with better safety nets are the true victims.
Or maybe it’s that protectionists like Lord Keynes don’t care ’bout Chinese people, or the rest o’ the vast majority o’ working class people who aren’t a part o’ the narrow western 17%. Then ’gain, considering LK’s views on women’s rights, that would include half o’ that percentage, & e’en less considering his views on nonwhites — quite a niche populism you have there, LK. It would seem absurd to anyone who wants to defend the lowest classes ( not white, male westerners ) or the mass majority ( also not white, male westerners ), which is what that word “leftism” that LK likes to claim himself to be the only true follower o’ has traditionally meant… ¡till they realize that questioning this makes them on the side o’ the corrupt neoclassical bourgeosie Nazis! ( The most transparent o’ ad-hominem is also serious empirical science that the silly SJW poopy-heads refuse to acknoledge ).
(4) Say’s Law.
His critique here is absurd & hypocritical. He notes that “The Academic Agent” defines Say’s Law differently from Keynes & his worshippers & acknowledges that many economists agree that Say himself didn’t believe in what Keynes claimed was “his” law, but then asserts that Keynes’s definition is the right 1, ‘cause he’s God apparently. He then diverts the subject to Keynes’s critique o’ how Adam Smith & John Stuart Mills interpreted “Say’s Law”, with 1 point also believed by Ricardo. This adds a hitch to Lord Keynes’s critique: this is s’posed to be an o’er-all attack on classical & neoclassical economics, which are s’posedly very similar; but neoclassicals reject “Say’s Law”, since they have incorporated some elements o’ Keynesianism. &, in fact, not e’en all o’ what Keynes called “classical” is included here, ‘cause classical socialists like Proudhon & Marx also didn’t believe in “Say’s Law”.
But he doesn’t go far ‘nough in his critique gainst whatever “The Academic Agent” claims is “Say’s Law”: “(2) supply and demand are not independent of one another, but dependent in the sense that factor payments by producers or income to producers provide the source of demand for other goods.”. He claims that “no serious economist even disputes” this, but only adds that “credit money” adds to demand. Since demand is based on money paid for things, this should be obvious ( it’s supply that it has the risk o’ hurting by creating too much consumption, a problem rare in developed countries, but still real in developing countries, as Venezuela shows ). Not only is this point vague on what counts as a “producer” or what “sense” these are dependent, it’s limited: maybe payment to “producers” can provide demand — if they chose to buy things. Since this is a point Keynes made, it’s odd that the Lord o’ Keynes neglects to mention this.
(5) “Every part of the economy is connected to the whole of economy… .” [ I have no idea why this period & ellipsis are formatted so oddly ]
“Connected” is so vague, it’s meaningless, & this is clearly a “law” that can be “proven” by twisting the word “connected” so that this point is proven by it. I’m not e’en sure what context this is based on — ¿what concrete point is it trying to prove?
Lord Keynes’s rebuke seems ridiculous:
While this is true, this does not vindicate Léon Walras’ Neoclassical economics, which “The Academic Agent” cites as his source for this insight, which has quite specific assertions about capitalist economies.
“Walras may be right ‘bout this thing, but his other irrelevant ideas are wrong”.
I actually looked @ the video, — it’s such strong Dunning-Kruger syndrome that I can’t bear to watch the whole thing — & the video glosses o’er “general equilibrium” & ’stead talks ’bout e’en stupider shit, all in haphazard trawls o’ logic. ¿Why doesn’t LK make fun o’ this other stuff? For instance, he complains ’bout how interest caps s’posedly mostly affects poor people being able to get loans ( no evidence, or e’en Libertarian-style simplistic “logic”, to back that up — like most o’ this video, it’s just a Biblical commandment ), e’en though the 2008 recession showed exactly why blocking poor people from getting loans they can’t pay back may be very much positive. He also parrots Milton Friedman ( who isn’t a classical economist ) saying, “There’s no such thing as free lunch”, which is 1 o’ those sayings that sounds profound, but is vague & almost certainly wrong. Saying that you can’t gain without loss is equivalent to saying that there’s no such thing as profit or growth, which is obviously wrong & contradicts point 2: if every gain comes with an equal cost, then the sum will be 0. Either “The Academic Agent” didn’t proof-read his smug shit or he doesn’t understand basic math. Either way, “The Academic Agent” should stick with foiling terrorist plots by Blofeld in exotic countries & leave economic thought to people who bother to read their own work, much less the work o’ other economists.
[B]oth Austrian and Neoclassical theory ultimately hold that free markets have a tendency towards general equilibrium
He’s mistaken ‘bout Austrian-schoolers — something he should be well aware o’, since he wrote ’bout it before. Many Austrian-schoolers acknowledge that their incoherent conception o’ “free” markets can go into disequilibrium; they simply say that this is just ‘nother example o’ capitalism’s marvelous mysteriousness. The INVISIBLE HAND works in mysterious ways.
No mention, by the way, o’ how inconsistent the concept o’ a “free” market is that we can’t e’en truly define it in a concrete, cohesive way — we just use a jargon word. “Freedom”, ‘course, is a paradoxical concept, since it requires force to keep round, which is why e’en the “freest” countries have police & governments. Economies, too, need governments to run them, or else some other authority just as authoritarian will take its place in the ensuing vacuum.
[M]arket systems are complex human systems subject to degrees of non-calculable probability and future uncertainty
The question no economic school, e’en Post-Keynesians, has the bravery to answer: if economics is so subjective, so non-calculable, & so uncertain, ¿how could anyone devise an objective, certain science that could predict ways to make society better off in the future? This should not lead one to Post-Keynesianism, but an anti-economics — a complete deconstruction o’ the whole branch, just as a “Science o’ Art” has been rendered nonsensical.
(6) “Marginal Utility”.
“The Academic Agent” ends with pointing out the “value” in the sense of desiring or evaluating commodities is subjective. This is true, but does not take you very far.
It takes one quite far if they actually follow it consistently. The problem is that every bozo who squawks ‘bout value being subjective — Marxists included, by the way — then falls onto their own pet preference for the “true” source o’ value & simultaneously proclaims it objective.
He’s right on diminishing returns, though: it mostly applies, but not always, & doesn’t refute government intervention. In fact, applied to money itself ( which is logical — you know the story ‘bout the person so rich they use $ bills as tissue ), it shows that income redistribution literally creates value. This applies intuitively, too: a poor person can have their whole world rocked by gaining just $1000, while someone in the upper 1% whole hardly notice if they gained it or lost it. A minuscule loss paired with a huge gain is the very definition o’ efficiency.
One thing that bugs me ‘bout Post-Keynesians is that they love parroting the same tiny, isolated points in their disparate soup o’ a framework, but don’t go deeper than the floor panels under the carpet. They blow up ‘bout “endogenous money”, prices being based on the cost o’ production rather than supply & demand ( ne’ermind that they already debunk neoclassical supply & demand, making this point redundant ), & all those hokey moral plays by their god Keynes, but ignore the deeper problems with market economics in general that make the foundation ‘pon these questions debatable themselves. Post-Keynesians still treat money in the same superstitious way every other economist does2, as if it follows natural laws & isn’t something humans made up. ( That this invention may be practical is fine to acknowledge — but debating whether a human invention works a certain way as if it had gained sentience & turned gainst its master like AI is ridiculous ).
In short, I’m sick o’ all these conservatives scribbling out how their narrow laws ‘bout how their “capitalism” works when run by robots with no self-awareness; I want to know ‘bout economics its fundamental self.
Addendum
I mostly wrote ’bout this blog article, not the video, ’cause I couldn’t stand the video, but can I reiterate how ignorant the video is ’bout the history o’ economics. I’m not e’en saying what he’s saying is wrong ( it’s definitely made-up assumptions worthy o’ a religious Bible ): he mixes up the history o’ the development o’ economic thought, mixing up neoclassical & classical economics. Ironically, this mixup comes from that devil himself, Keynes, who admits he pulled the definition out o’ his ass. E’en mo’ ironic, the term “classical economist” originates from that e’en mo’ devilish o’ devils, Karl Marx; & his main basis for definition was belief in the so-called labor theory, which this video doesn’t mention @ all.
So LK writes this blog post as if he’s arguing gainst some serious economists, & I finally realize that it’s just some fringe crank on the YooToobs right next to videos o’ 20-year-ols screaming @ their video games who read some fringe crank websites from some think tanks & think they actually know anything ’bout economics.
It also took me this long to realize it’s a fucking listicle video, too. I’ll stick to YouTube Poop next time, LK. Thanks, though.
