Re: Why economists do not care about high rates of unemployment w

[Paul Davidson <PB108928%UTKVM1.BITNET@xxxxxxxxxxxxxxxxx>]

FROM:  Paul Davidson
"      Economics Department
"      523 Stokely Management Center  (615) 974-4221
Doug Henwood has it exactly right! "They" are well funded, control government
grants through peer review processes, etc snazzier nonlinear math, VAR, hys-
eresis,etc. doesn't solve the problem--since, as Clower ecognizes, they merely
co-opt these tools to provide ad hoc constraints for the basic theoretical
and (Doug), ideological model. But just because they are powered by an
ideologoical "invisible" hand that controls the major sources of research
funding as well as the job market for new Ph. Ds, does not mean that
"we" must be ideological in the reverse (Marxian) direction.
       Steve Keen has correctly noted that a precursor to some of Keynes's
analytical framework was Marx's M-C-M' circulation. In fact, as I note in
my Post Keynesian Macroeconomic Theory Keynes in his 1930's lectures at
Cambridge is quoted as stating that in an entrepreneurial economy, the business
firm has but one objective  -- to end the production cycle with more money than
it started with, i.e., M-C-M'.

That does not mean we must therefore accept all the ideological baggage that go
es with Marx's M-C-M'. All it means is that there is an element of truth
here that can be captured in an analytical model of an entrepreneurial
economy -- without saying this is bad or good -- just that this is how the
world that we live in works.

Have a good day!____Paul Davidson
))))_ fax # (615) 974-1686