Seminar: Keen's Debunking Econ: Two Markets

["John Gelles" <jjgelles@xxxxxxxx>]

            My thanks to Steve Keen for his messages in this
            seminar.

            Steve remarked favorably on the following review
            by John Legge. I would like to echo his thoughts.

            In particular, assuming there is a place for markets
            as part of a system of production, we find great
            problems arise in at least two of them. John Legge
            and Hugh Stretton point out:


"Armed with this broad but rational definition of production, Stretton
homes in on two critical markets where the laws of supply and demand
cease to operate in the benevolent form ascribed to them in neoclassical
texts. Neither the credit market nor the labour market can produce
socially efficient outcomes without imposed institutions and controls."

        -- From John Legge's Review of  Hugh Stretton's new text.
            The review is at
        http://www.users.bigpond.com/msn/jlegge/Articles/reviewof.htm

        Whether money prices, derived from supply and demand
        statistics, are benevolent or necessary, compared to some
        adaptation of cost accounting that can substitute for them
        (and does in many instances), is not the focus of the above
        vital truth:  Rather they talk to credit and labor -- things we
        can't live without:
                    Credit must be authorized outside systemic
        laissez faire constraints, if benevolent results are the aim.
                    And both jobs and wages must never be allowed
        to play  second fiddle to laissez faire beliefs that do not
        put food on the table.
                    Archer Daniels Midlands assures us such beliefs
        are keeping food we already have off the table.
                    (And if ADM wrongs us in its operations,
        government can, has in the past, and should in future,
        take them to task to make them green, fair and law
        abiding.)

        Both Steve and John mention "Depression Denial".  I do
        not know if they think of it as going forward -- denying the
        possibility of future depressions, (a belief that serves us
        well, if we do prevent deflation induced depression and
        recession by government spending ); or if they only object
        to "depression denial" as commentary on the great
        depression of the 1930's.  (As I say, a rhetorical denial
        of future depressions may be a good thing.)

        Putting together the credit market, the labor market, the
        institutions and controls required to render them benevolent,
        and any current denial of the "need" for future recession or
        depression, we have the outline of the alternative agenda
        Steve may someday write, (perhaps even in DE):
                    An agenda that is necessary if we would reclaim
        economics from the study of man as an ant colony, (which
        we are not), to the articulation of a material purpose for
        man.  A purpose we know, in good concience, we ought
        to share.

        Remember the old saw: "When your neighbor is out of
        work, that's a recession. When you lose your job, that's
        a depression."
                    Economists must take this old joke seriously.
        A whole new book has been written of the future power
        of indiviudals to bring down the world.  It stresses bio-
        weapons, nano-tech, and the like, in a Ted Kazinsky
        like scenario, where instead of the love bug virus, one
        angry scholar destroys the world.
                    True or not, it is one more reason to establish
        individual economic rights in an age of plenty, an age
        of technology.

        Credit is already an institutional product, made up of
        promises in words and circumscribed by myriad laws,
        regualtions, customs and ancient lore. It can guarantee
        a home for all who want to own one, and is an antidote
        for deflation in any nation willing to study its elements.

        Jobs and wages can be guaranteed by credit. We can
        take just enough of these two crucial markets to make
        the whole system work, (leaving most of their current
        regimes unchanged.)

        In the first agenda I offered on PKT, I left the central
        bank alone. But I added a bank for full employment
        alongside it.
                    The second bank could not be denied funds
        needed to protect individual economic rights, as
        defined by FDR in 1944 and the UN a little later.
                    The central bank could make the rest of the
        economy less prone to inflation than otherwise. But
        it could not deny fundamental economic rights.

        You say, production constraints can deny such
        material rights?
                    That's true.  But in a great many  wealthy
        nations they cannot.
                    In time, economic and political rights would
        set things right everywhere. They are catching, like
        the flu.

                    John Gelles