Neokeynesians vs. Postkeynesians | 214 comments (214 topical, editorial, 0 hidden)

Re: Neokeynesians vs. Postkeynesians (4.00 / 9)

Indeed it does. The way it connects is through inflation, which enables a growing nominal economy (which is necessary for the stability of our financial system) to exist in the context of a stationary physical economy (which is necessary for the stability of our planet's carrying capacity).

The quest to protect rentiers from the inflation necessary to balance exponentially growing nominal output with stagnant or declining physical output (to, as von Mises so candidly put it, "make the world safe for international banking") has been the driving force behind a great of economic quackery and charlatanism.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 2nd, 2012 at 07:56:28 AM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (3.50 / 2)

Would it be fair to say, then, that there is a correlation between inflation and equality? Or, in other words, deflationary pressure tends to lead to increased inequality?

by cagatacos on Mon Jul 2nd, 2012 at 08:34:20 AM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (4.00 / 5)

In addition, mild inflation is financially stabilizing. Inflating debt away works wonders for reducing the probability of cascading insolvencies.

Which is why inflation-indexed debt, commodity money, and foreign debt in hard currency are abominations.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 2nd, 2012 at 08:45:12 AM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (none / 0)

Regarding commodity money. What about if it was something that was directly connected to the size of the economy say, energy?

Like this proposal...

by cagatacos on Mon Jul 2nd, 2012 at 08:50:58 AM EST
[ Parent ]

Energy standard (4.00 / 2)

Just as deflationary as the gold standard. You must not allow your legal system to generate claims to more thermodynamic free energy than will be available to mankind over a significant period of time.

Claims over money, which are just claims over more money? Sure. You can have as many of those as you like.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 2nd, 2012 at 08:57:18 AM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (4.00 / 2)

Money is a token of political power. Why would you expect the desirable level of political power tokens to be tied to the availability of kWh? Except, of course, if you were a power company...

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 2nd, 2012 at 09:51:12 AM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (none / 0)

Money as a token of political power, thats it? Shouldn't it be connected somehow to the efficient working of society?

(Yeah, I know "efficient" is a slippery concept, but it is no good to put all money/power in our favourite class and then things do not work - e.g., there is not enough production to feed people).

Far from me to suggest that money and power are not tightly associated, but I would say that there should be space for a definition that in includes society functioning.

by cagatacos on Mon Jul 2nd, 2012 at 11:02:53 AM EST
[ Parent ]

Money as political power (none / 0)

Money is credit. What is credit?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Mon Jul 2nd, 2012 at 11:36:23 AM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (4.00 / 3)

Money as a token of political power, thats it? Shouldn't it be connected somehow to the efficient working of society?

In the same sense and to the same extent that parliament should be connected somehow to the efficient working of society. That does not, however, mean that the number of votes cast in elections, or the number of laws passed in parliament, should be tied to the amount of gold, land or kWh in the economy.

Far from me to suggest that money and power are not tightly associated, but I would say that there should be space for a definition that in includes society functioning.

Well, I should hope that parliament keeps the functioning of society in mind when it conducts its business. That is one of the selling points of democracy, after all.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 2nd, 2012 at 01:05:25 PM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (none / 0)

I should hope that parliament keeps the functioning of society in mind when it conducts its business.

So should I, but the current problem is that the space available for any legislative body to keep 'the functioning of society in mind' is continually being shrunken by the demands of fund raising and the consequences of the choices of from whom to accept such donations.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 2nd, 2012 at 03:14:57 PM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (4.00 / 2)

Would it be fair to say, then, that there is a correlation between inflation and equality?

Njah. Inflation is a necessary condition for an equitable economic distribution. But it is not sufficient (there are inflationary episodes which have done nothing good for social or economic equality, but I am aware of no deflationary episodes which have done anything good for social or economic equality).

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jul 2nd, 2012 at 09:50:15 AM EST
[ Parent ]

Re: Neokeynesians vs. Postkeynesians (4.00 / 2)

Yes. Deflations are typically the time when the wealthy consolidate their positions at the expense of those less wealthy while inflation erodes the wealth of most of the wealthy.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 2nd, 2012 at 11:01:49 AM EST
[ Parent ]

Neokeynesians vs. Postkeynesians | 214 comments (214 topical, 0 editorial, 0 hidden)

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