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Brett,
True.
But in the field of post-Bretton
Woods world monetary arrangements, which have been of special interest to me on
account of my long-time (1966-1989) service in the IMF, the absence of common
sense was no less rampant among economic scholars than it was among the
decision-makers.
And, once the World Financial Crisis
which has been brewing since the early 1970s is upon us, the question must be
asked, What on earth were the world's foremost economic scholars 'thinking' when
they, first, acted as cheer-leaders for a hands-off approach to world monetary
arrangements before, during, and after the early 1970s and, second, kept their
silence as the dangers thereof became plain as daylight?
Gunnar
----- Original Message -----
Sent: Friday, August 30, 2002 5:59
PM
Subject: RE: Income distribution
Gunnar,
the majority of those who makes the decisions lack this commom
sense.
Re. the following:
The problem is the system - the
framework of political and economic institutions that is our political
economy- and unless we understand it, how it works and what makes it like it
is, we can't fix it.
Agree.
But that is precisely why we need
"economic theory and methodology" - or, more generally, since the former is
inconceivable without the latter, we need "economic theory" of the kind of
which Keynes wrote (1922):
"The Theory of Economics does not
furnish a body of settled conclusions immediately applicable to a
policy. It is a method rather than a doctrine, an apparatus of the
mind, a technique of thinking, which helps its possessor to draw correct
conclusions."
Absent such theory, there is no way the system
can be fixed except by trial and error.
In the context of Paul Davidson's
point the other day, "deductive logic" is of the essence for working out the
inner structure of such "doctrine" or "apparatus of the mind."
But, since theory so construed
"does not furnish a body of settled conclusions immediately applicable to a
policy", fixing the system is essentially dependent on "plain common
sense".
Gunnar
----- Original Message -----
Sent: Friday, August 30, 2002 1:16
PM
Subject: Income distribution
With referance to income
distribution. Income distribution is a matter of politics and
ideology at least as much as it is economics. Restricting
discussion of economics in general, or income distribution in
particular, to economic theory and methodology may make for
intellectually amusing intercourse, but it is about as useful as doing the
cross word puzzles.
Income distribution is
largely determined by the interplay of politics and
economics within the framework of our political economy. Our system may be, and is, a lot better that many other
systems, but it can be argued that it has a long way to go to achieve
satisfactory standards of fairness and justice.
The problem is the system - the framework of
political and economic institutions that is our political economy- and
unless we understand it, how it works and what makes it like it is, we
can't fix it.
It seems to me that this is less methodology
than plain common sense and common observation, besides I am
suggesting specifically that we pay some attention what David
Ricardo in the opening lines of his Principles of Political Economy
said was the principal problem in political economy, namely income
distribution.
Harry L.
Cook
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