Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
thanks.

what strikes me about modern neoclassical economists is their twin delusion that all wealth is produced by finance and that finance operates on some fundamental laws of nature.

by rootless2 on Sun May 3rd, 2009 at 05:28:22 PM EST
[ Parent ]
It comes from believing that money as such plays no fundamental role in the economy, but is only a veil covering trade in reals.

Perversely, without an ability to model stable macroeconomic levels of output below full employment, financial saving, receiving money incomes and not consuming them, is automatically freeing resources that will then be used in real investment.

With that automagic equation between monetary saving and real investment in place, its a short step to acting as if financial "investment" is identical to real investment.

These are all empirical fallacies that macroeconomists understood quite well after WWII ... there is no automatic tendency toward full employment, there is no automatic association between creation and trading of financial assets and actual investment in productive capacity ... but for decades now, mastery of the marginalist microeconomics at every greater levels of sophistication has been required to become a professional economist, while mastery of the rudiments of actual Keynesian economics has been entirely optional in ever more schools, and in the last two or three decades often entirely unavailable in the grad school curriculum.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun May 3rd, 2009 at 05:57:33 PM EST
[ Parent ]
I also see a belief that everything is fungible and determined by investment price: "Intel constructed this factory for making chips  with $1B investment" does not mean that any wannabe with $1B can make an equivalent factory.
by rootless2 on Sun May 3rd, 2009 at 07:20:16 PM EST
[ Parent ]
well give me a billion and I'll give it a try.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sun May 3rd, 2009 at 08:17:41 PM EST
[ Parent ]
... marginalist modeling tractable when extended to the whole economy. In the real world, there are lots of clumps of strong complements all over the place, and key concepts like the marginal productivity of individual inputs fall apart in the face of strong complements.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Sun May 3rd, 2009 at 08:29:07 PM EST
[ Parent ]

Display:

Occasional Series