RE: PKT seminar

["Steve Keen" <stevekeen10@xxxxxxxxxxx>]

Dear John,

Many thanks for this post. You had me worried for a while there--from a
capitalist marketing point of view!--that Stretton and I had produced very
similar books; but I take your comment in your article--that it is an
Institutional work--defines a complementarity rather than a rivalry.

I also loved your line that:

"Holocaust denial arouses contempt wherever it is practised, but Depression
denial is a commonplace of modern economics teaching"

and will cite that, if that's OK by you, in my book.

On that note, I've seen possibly the most outrageous and thick-headed
example of just that recently in a piece by Prescott for the Minneapolis Fed
Review:

http://woodrow.mpls.frb.fed.us/research/qr/qr2312.pdf

where he states that the Great Depression was caused by "changes in
eco-nomic institutions that lowered the normal or steady-state market hours
per person over 16."

i.e., the Depression occurred because people worked less.

His conclusion is so outrageous that it warrants quoting in full:

"The Marxian view is that capitalistic economies are
inherently unstable and that excessive accumulation of
capital will lead to increasingly severe economic crises.
Growth theory, which has proved to be empirically successful,
says this is not true. The capitalistic economy is
stable, and absent some change in technology or the rules
of the economic game, the economy converges to a constant
growth path with the standard of living doubling
every 40 years. In the 1930s, there was an important
change in the rules of the economic game. This change
lowered the steady-state market hours. The Keynesians had
it all wrong. In the Great Depression, employment was not
low because investment was low. Employment and investment
were low because labor market institutions and
industrial policies changed in a way that lowered normal
employment."

Such is science, my friends.

By the way, I recommend a read of John's piece in Dissent, which he linked
in post (and which is repeated below).

Cheers,
Steve
PS John, this may not get to PKT because I'm using a hotmail account while
travelling; if so, would you mind forwarding it for me?
> From: "John M. Legge" <jlegge@xxxxxxxxxx>
> To: "'Post Keynesian Theory'" <pkt@xxxxxxxxxxxxxxxx>
> Subject: RE: PKT seminar
> Date: Fri, 19 May 2000 17:07:30 +1000
>
>
> Hacking pieces out of the orthodox relieves the spirit.  Hopefully they
> will
> eventually notice that their feet of clay have been hosed away entirely,
> but
> as Steve noted, when dealing with religious maniacs logic does not carry
> you
> very far.
>
> I draw your attention to Hugh Stretton's new text, and my review:
> http://www.users.bigpond.com/msn/jlegge/Articles/reviewof.htm
>
> I offer the review rather than an extract or summation as my initial
> contribution to the discussion.
>
> JML

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