Re: RE: Krugman.........faux Schumpeterian

["Ian Murray" <seamus2001@xxxxxxxxx>]

----- Original Message -----
From: "Devine, James" <jdevine@xxxxxxx>



"Krugman.........faux Schumpeterian"

I don't get this title: it's pretty clear that PK is
explicitly rejecting
the fashionable and superficial Schumpeterianism of Lindsey
and O'Neill
rather than pretending to be a Schumpeterian.  So how is he
"faux"?

====================

Because of the contradictory notions that come through in
various paragraphs.

"The truth is that key institutions that underpin our
economic system have been corrupted. The only question that
remains is how far and how high the corruption extends."

"Now we have seen a graphic demonstration that the system
that was supposed to provide those assurances doesn't
work."

"It's also a matter of what it takes to make
capitalism work. Investors must be reasonably sure that
reported profits are real, that executives won't use their
positions to enrich themselves at the expense of
stockholders and employees, that when insiders do abuse
their positions their actions will be discovered and
punished."

What was Schumpeter's quote about the rationality developed
within capitalism turning against the rationality *of*
capitalism?

It's in that sense it seems Krugman flirts with the need
for the creative destruction of the those institutional
arrangements that have led to the debacle but he, of
course, doesn't take that logic to it's conclusion. Hence
the reformism that will simply displace the problems
created by the managerial class in the design of incentives
and rewards vis a vis the ownership class.

Oh, and it was just a subject line I needed to think up
quick, 'cause at that time of the evening I'm scouring
lot's sites and sending stuff all over the net to
people....

For me this statement really points out a contradiction:

"But Enron isn't a person; the evildoers here were Enron
executives,
who collectively walked off with at least $1.1 billion."

Under the law Enron does have personhood; that's
*precisely* what the infamous 1 paragraph decision of the
SC in the 1886 Santa Clara case stated. Yet we've heard
nothing about how the whole history of the modern
corporation has followed the same manipulation of the State
as Enron. In this sense there is absolutely nothing unique
about what's going down and lefties need to be pointing
that out to folks. This is why I think one of our weakest
links in thinking through alternatives is in generating a
viable left approach to law and economics that builds on
all the enormous strengths of the Legal Realists. Some of
them absolutely obliterated the public-private distinction
regarding the organization of firms and markets. The
corporation is entirely a creature of the state; the major
loci for opportunities to change the system and shift to a
different structure of ownership-accountability-yaddah
yaddah. All while respecting the current acceptance of
*limited government*. Now we have a gift horse called Enron
looking at us, saying -just like Mr. Ed- "mutate me Wilbur,
class struggle demands it."

Corporate governance for $500, please Alex.

Ian