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Economics and Morality - NYTimes.com

Mark Thoma directs me to Eric Schoeneberg, who argues that the right is winning economic debates because people believe, wrongly, that there's something inherently moral about free-market outcomes. My guess is that this is only part of the story; there's more than a bit of Ayn Randism on the right, but there's also the appeal of simplicity: goldbuggism is intellectually easy, Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it.

Still, Schoeneberg is right about the tendency to ascribe moral value to market values, and the need for a counter-narrative. I'm going to think about that

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Wed Jan 12th, 2011 at 10:31:48 AM EST
[ Parent ]
In this I disagree with Krugman.. for me gold-nonsense was intellectually hard... on the other hand the Keynessian feedback loop where activity is reduced by the reduction in cosnumption which reduces activity...leading to a large multiplier in the aggregate demand was dead easy to understand.

Actually, when I started reading macro, anything which was not Keynessianism was extremelly difficult for me to get... on the other hand...Keynnes was dead easy.

Then, I agree that understanding what money is nor easy at all , and the interaction of money, goods and inflation is much more complex that what even Krugman suggests. Liquidity trap is a good model , but the fact that there is no inflation in printing money seems general under certain general conditions.

For example, imagine that you print money purely to demand something which is made in two or three factories which are working at 50%  because there is not enough demand ..because people are making a shift in their customs. I will bet that this will not create inflation at all in any sector if the unemployment is not too low. Actually, even if unemployment is low or high, it would depend on the "unemployment-employment" on the market of people with the skills necessary to run the factory.

For example, I am not sure if printing money and transfering this money in the form of food stamps can create inflation. the food market right now has a huge amount of products which are not consumed, disregarded and a lot of possible iddle production. I would bet that food stamps would only put those idle resources at use with possible a reduction in the price of food. just think of a market where there is a barrier to increasing the production but once you cross that barrier, then the costs actually goes down faster than before.

I know I know.. this sound like physics, but I think this is how a lot of European microeconomy works.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Wed Jan 12th, 2011 at 11:32:04 AM EST
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There are different kinds of thinkers... people like you and I gravitate to seeing systems... and for us, Keynes ideas make instinctive sense.

Other people think in a different way and for them Keynes is hard, where the notion that keeping money "fixed" as gold appeals to them.

by Metatone (metatone [a|t] gmail (dot) com) on Tue Jan 18th, 2011 at 06:27:20 AM EST
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If you're 18 and think in systems you're not going to study economics, you're going to study physics or engineering.

Keynes was a mathematician by training.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman

by Migeru (migeru at eurotrib dot com) on Tue Jan 18th, 2011 at 06:49:43 AM EST
[ Parent ]


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